[Federal Register Volume 76, Number 228 (Monday, November 28, 2011)]
[Rules and Regulations]
[Pages 73025-73474]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-28597]



[[Page 73025]]

Vol. 76

Monday,

No. 228

November 28, 2011

Part II





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Parts 410, 414, 415, et al.





Medicare Program; Payment Policies Under the Physician Fee Schedule, 
Five-Year Review of Work Relative Value Units, Clinical Laboratory Fee 
Schedule: Signature on Requisition, and Other Revisions to Part B for 
CY 2012; Final Rule

Federal Register / Vol. 76, No. 228 / Monday, November 28, 2011 / 
Rules and Regulations

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 410, 414, 415, and 495

[CMS-1524-FC and CMS-1436-F]
RINs 0938-AQ25 and 0938-AQ00


Medicare Program; Payment Policies Under the Physician Fee 
Schedule, Five-Year Review of Work Relative Value Units, Clinical 
Laboratory Fee Schedule: Signature on Requisition, and Other Revisions 
to Part B for CY 2012

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

ACTION: Final rule with comment period.

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SUMMARY: This final rule with comment period addresses changes to the 
physician fee schedule and other Medicare Part B payment policies to 
ensure that our payment systems are updated to reflect changes in 
medical practice and the relative value of services. It also addresses, 
implements or discusses certain statutory provisions including 
provisions of the Patient Protection and Affordable Care Act, as 
amended by the Health Care and Education Reconciliation Act of 2010 
(collectively known as the Affordable Care Act) and the Medicare 
Improvements for Patients and Providers Act (MIPPA) of 2008. In 
addition, this final rule with comment period discusses payments for 
Part B drugs; Clinical Laboratory Fee Schedule: Signature on 
Requisition; Physician Quality Reporting System; the Electronic 
Prescribing (eRx) Incentive Program; the Physician Resource-Use 
Feedback Program and the value modifier; productivity adjustment for 
ambulatory surgical center payment system and the ambulance, clinical 
laboratory, and durable medical equipment prosthetics orthotics and 
supplies (DMEPOS) fee schedules; and other Part B related issues.

DATES: Effective date: These regulations are effective on January 1, 
2012.
    Implementation date: The 3-day payment window policy provisions 
specified in section V.B.3.a. of this final rule with comment period 
will be implemented by July 1, 2012.
    Comment date: To be assured consideration, comments on the items 
listed in the ``Comment Subject Areas'' section of this final rule with 
comment period must be received at one of the addresses provided below, 
no later than 5 p.m. Eastern Standard Time on January 3, 2012.

ADDRESSES: In commenting, please refer to file code CMS-1524-FC. 
Because of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed):
    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the instructions for 
``submitting a comment.''
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-1524-FC, P.O. Box 8013, 
Baltimore, MD 21244-8013.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address only: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-1524-FC, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    4. By hand or courier. If you prefer, you may deliver (by hand or 
courier) your written comments before the close of the comment period 
to either of the following addresses:
    a. For delivery in Washington, DC--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Room 445-G, Hubert 
H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 
20201.

(Because access to the interior of the Hubert H. Humphrey Building is 
not readily available to persons without Federal government 
identification, commenters are encouraged to leave their comments in 
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing 
by stamping in and retaining an extra copy of the comments being 
filed.)
    b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    If you intend to deliver your comments to the Baltimore address, 
please call telephone number (410) 786-1066 in advance to schedule your 
arrival with one of our staff members.
    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and received after the comment 
period.

FOR FURTHER INFORMATION CONTACT: Ryan Howe, (410) 786-3355 or Chava 
Sheffield, (410) 786-2298, for issues related to the physician fee 
schedule practice expense methodology and direct practice expense 
inputs.
    Elizabeth Truong, (410) 786-6005, or Sara Vitolo, (410) 786-5714, 
for issues related to potentially misvalued services and interim final 
work RVUs.
    Ken Marsalek, (410) 786-4502, for issues related the multiple 
procedure payment reduction and pathology services.
    Sara Vitolo, (410) 786-5714, for issues related to malpractice 
RVUs.
    Michael Moore, (410) 786-6830, for issues related to geographic 
practice cost indices.
    Ryan Howe, (410) 786-3355, for issues related to telehealth 
services.
    Elizabeth Truong, (410) 786-6005, for issues related to the 
sustainable growth rate, or the anesthesia or physician fee schedule 
conversion factors.
    Bonny Dahm, (410) 786-4006, for issues related to payment for 
covered outpatient drugs and biologicals.
    Glenn McGuirk, (410) 786-5723, for issues related to the Clinical 
Laboratory Fee Schedule (CLFS) signature on requisition policy.
    Claudia Lamm, (410) 786-3421, for issues related to the 
chiropractic services demonstration budget neutrality issue.
    Jamie Hermansen, (410) 786-2064, or Stephanie Frilling, (410) 786-
4507 for issues related to the annual wellness visit.
    Christine Estella, (410) 786-0485, for issues related to the 
Physician Quality Reporting System, incentives for Electronic 
Prescribing (eRx) and Physician Compare.
    Gift Tee, (410) 786-9316, for issues related to the Physician 
Resource Use Feedback Program and physician value modifier.
    Stephanie Frilling, (410) 786-4507 for issues related to the 3-day 
payment window.
    Pam West, (410) 786-2302, for issues related to the technical 
corrections or the therapy cap.
    Rebecca Cole or Erin Smith, (410) 786-4497, for issues related to 
physician payment not previously identified.

SUPPLEMENTARY INFORMATION:
    Comment Subject Areas: We will consider comments on the following 
subject areas discussed in this final rule with comment period that are 
received by the date and time indicated in the DATES section of this 
final rule with comment period:

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    (1) The interim final work, practice expense, and malpractice RVUs 
(including the physician time, direct practice expense (PE) inputs, and 
the equipment utilization rate assumption) for new, revised, 
potentially misvalued, and certain other CY 2012 HCPCS codes. These 
codes and their CY 2012 interim final RVUs are listed in Addendum C to 
this final rule with comment period.
    (2) The physician self-referral designated health services codes 
listed in Tables 83 and 84.
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period on the regulations.gov 
Web site (http://www.regulations.gov) as soon as possible after they 
have been received. Follow the search instructions on that Web site to 
view public comments.
    Comments received timely will also be available for public 
inspection as they are received, generally beginning approximately 3 
weeks after publication of a document, at the headquarters of the 
Centers for Medicare & Medicaid Services, 7500 Security Boulevard, 
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 
a.m. to 4 p.m. To schedule an appointment to view public comments, 
phone 1-(800) 743-3951.

Table of Contents

    To assist readers in referencing sections contained in this 
preamble, we are providing a table of contents. Some of the issues 
discussed in this preamble affect the payment policies, but do not 
require changes to the regulations in the Code of Federal Regulations 
(CFR). Information on the regulations' impact appears throughout the 
preamble and, therefore, is not discussed exclusively in section IX. of 
this final rule with comment period.

I. Background
    A. Development of the Relative Value System
    1. Work RVUs
    2. Practice Expense Relative Value Units (PE RVUs)
    3. Resource-Based Malpractice RVUs
    4. Refinements to the RVUs
    5. Application of Budget Neutrality to Adjustments of RVUs
    B. Components of the Fee Schedule Payment Amounts
    C. Most Recent Changes to Fee Schedule
II. Provisions of the Rule for the Physician Fee Schedule
    A. Resource-Based Practice Expense (PE) Relative Value Units 
(RVUs)
    1. Overview
    2. Practice Expense Methodology
    a. Direct Practice Expense
    b. Indirect Practice Expense per Hour Data
    c. Allocation of PE to Services
    (1) Direct Costs
    (2) Indirect Costs
    d. Facility and Nonfacility Costs
    e. Services With Technical Components (TCs) and Professional 
Components (PCs)
    f. PE RVU Methodology
    (1) Setup File
    (2) Calculate the Direct Cost PE RVUs
    (3) Create the Indirect Cost PE RVUs
    (4) Calculate the Final PE RVUs
    (5) Setup File Information
    (6) Equipment Cost per Minute
    3. Changes to Direct PE Inputs
    a. Inverted Equipment Minutes
    b. Labor and Supply Input Duplication
    c. AMA RUC Recommendations for Moderate Sedation Direct PE 
Inputs
    d. Updates to Price and Useful Life for Existing Direct Inputs
    4. Development of Code-Specific PE RVUs
    5. Physician Time for Select Services
    B. Potentially Misvalued Services Under the Physician Fee 
Schedule
    1. Valuing Services Under the PFS
    2. Identifying, Reviewing, and Validating the RVUs of 
Potentially Misvalued Services Under the PFS
    a. Background
    b. Progress in Identifying and Reviewing Potentially Misvalued 
Codes
    c. Validating RVUs of Potentially Misvalued Codes
    3. Consolidating Reviews of Potentially Misvalued Codes
    4. Public Nomination Process
    5. CY 2012 Identification and Review of Potentially Misvalued 
Services
    a. Code Lists
    b. Specific Codes
    (1) Codes Potentially Requiring Updates to Direct PE Inputs
    (2) Codes Without Direct Practice Expense Inputs in the Non-
Facility Setting
    (3) Codes Potentially Requiring Updates to Physician Work
    6. Expanding the Multiple Procedure Payment Reduction (MPPR) 
Policy
    a. Background
    b. CY 2012 Expansion of the MPPR Policy to the Professional 
Component of Advance Imaging Services
    c. Further Expansion of MPPR Policies Under Consideration for 
Future Years
    d. Procedures Subject to the OPPS Cap
    C. Overview of the Methodology for Calculation of Malpractice 
RVUs
    D. Geographic Practice Cost Indices (GPCIs)
    1. Background
    2. GPCI Revisions for CY 2012
    a. Physician Work GPCIs
    b. Practice Expense GPCIs
    (1) Affordable Care Act Analysis and Revisions for PE GPCIs
    (A) General Analysis for the CY 2012 PE GPCIs
    (B) Analysis of ACS Rental Data
    (C) Employee Wage Analysis
    (D) Purchased Services Analysis
    (E) Determining the PE GPCI Cost Share Weights
    (i) Practice Expense
    (ii) Employee Compensation
    (iii) Office Rent
    (iv) Purchased Services
    (v) Equipment, Supplies, and Other Miscellaneous Expenses
    (vi) Physician Work and Malpractice GPCIs
    (F) PE GPCI Floor for Frontier States
    (2) Summary of CY 2012 PE Proposal
    c. Malpractice GPCIs
    d. Public Comments and CMS Responses Regarding the CY 2012 
Proposed Revisions to the 6th GPCI Update
    e. Summary of CY 2012 Final GPCIs
    3. Payment Localities
    4. Report From the Institute of Medicine
    E. Medicare Telehealth Services for the Physician Fee Schedule
    1. Billing and Payment for Telehealth Services
    a. History
    b. Current Telehealth Billing and Payment Policies
    2. Requests for Adding Services to the List of Medicare 
Telehealth Services
    3. Submitted Requests for Addition to the List of Telehealth 
Services for CY 2012
    a. Smoking Cessation Services
    b. Critical Care Services
    c. Domiciliary or Rest Home Evaluation and Management Services
    d. Genetic Counseling Services
    e. Online Evaluation and Management Services
    f. Data Collection Services
    g. Audiology Services
    4. The Process for Adding HCPCS Codes as Medicare Telehealth 
Services
    5. Telehealth Consultations in Emergency Departments
    6. Telehealth Originating Site Facility Fee Payment Amount 
Update
    III. Addressing Interim Final Relative Value Units From CY 2011 
and Establishing Interim Relative Value Units for CY 2012
    A. Methodology
    B. Finalizing CY 2011 Interim and Proposed Values for CY 2012
    1. Finalizing CY 2011 Interim and Proposed Work Values for CY 
2012
    a. Refinement Panel
    (1) Refinement Panel Process
    (2) Proposed and Interim Final Work RVUs Referred to the 
Refinement Panels in CY 2011
    b. Code-Specific Issues
    (1) Integumentary System: Skin, Subcutaneous, and Accessory 
Structures (CPT Codes 10140-11047) and Active Wound Care Management 
(CPT Codes 97597 and 97598)
    (2) Integumentary System: Nails (CPT Codes 11732-11765)
    (3) Integumentary System: Repair (Closure) (CPT Codes 11900-
11901, 12001-12018, 12031-13057, 13100-13101, 15120-15121, 15260, 
15732, 15832))
    (4) Integumentary System: Destruction (CPT Codes 17250-17286)
    (5) Integumentary System: Breast (CPT Codes 19302-19357)
    (6) Musculoskeletal: Spine (Vertebral Column) (CPT Codes 22315-
22851)

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    (7) Musculoskeletal: Forearm and Wrist (CPT Codes 25116-25605)
    (8) Musculoskeletal: Femur (Thigh Region) and Knee Joint (CPT 
Codes 27385-27530)
    (9) Musculoskeletal: Leg (Tibia and Fibula) and Ankle Joint (CPT 
Codes 27792)
    (10) Musculoskeletal: Foot and Toes (CPT Codes 28002-28825)
    (11) Musculoskeletal: Application of Casts and Strapping (CPT 
Codes 29125-29916)
    (12) Respiratory: Lungs and Pleura (CPT Codes 32405-32854)
    (13) Cardiovascular: Heart and Pericardium (CPT Codes 33030-
37766)
    (14) Digestive: Salivary Glands and Ducts (CPT Codes 42415-
42440)
    (15) Digestive: Esophagus (CPT Codes 43262-43415)
    (16) Digestive: Rectum (CPT Codes 45331)
    (17) Digestive: Biliary Tract (CPT Codes 47480-47564)
    (18) Digestive: Abdomen, Peritoneum, and Omentum (CPT Codes 
49082-49655)
    (19) Urinary System: Bladder (CPT Codes 51705-53860)
    (20) Female Genital System: Vagina (CPT Codes 57155-57288)
    (21) Maternity Care and Delivery (CPT Codes 59400-59622)
    (22) Endocrine System: Thyroid Glad (CPT Codes 60220-60240)
    (23) Endocrine System: Parathyroid, Thymus, Adrenal Glands, 
Pancreas, and Cartoid Body (CPT Codes 60500)
    (24) Nervous System: Skull, Meninges, Brain and Extracranial 
Peripheral Nerves and Autonomic Nervous System (CPT Codes 61781-
61885, 64405-64831)
    (25) Nervous system: Spine and Spinal Cord (CPT Codes 62263-
63685)
    (26) Eye and Ocular Adnexa: Eyeball (CPT Codes 65285)
    (27) Eye and Ocular Adnexa: Posterior Segment (CPT Codes 67028)
    (28) Diagnostic Radiology: Chest, Spine, and Pelvis (CPT Codes 
71250, 72114-72131)
    (29) Diagnostic Radiology: Upper Extremities (CPT Codes 73080-
73700)
    (30) Diagnostic Ultrasound: Extremities (CPT Codes 76881-76882)
    (31) Radiation Oncology: Radiation Treatment Management (CPT 
Codes 77427-77469)
    (32) Nuclear Medicine: Diagnostic (CPT Codes 78226-78598)
    (33) Pathology and Laboratory: Urinalysis (CPT Codes 88120-
88177)
    (34) Immunization Administration for Vaccines/Toxoids (CPT Codes 
90460-90461)
    (35) Gastroenterology (CPT Codes 91010-91117)
    (36) Opthalmology: Special Opthalmological Services (CPT Codes 
92081-92285)
    (37) Special Otorhinolaryngologic Services (CPT Codes 92504-
92511)
    (38) Special Otorhinolaryngologic Services: Evaluative and 
Therapeutic Services (CPT Codes 92605-92618)
    (39) Cardiovascular: Therapeutic Services and Procedures (CPT 
Codes 92950)
    (40) Neurology and Neuromuscular Procedures: Sleep Testing (CPT 
Codes 95800-95811)
    (41) Osteopathic Manipulative Treatment (CPT Codes 98925-98929)
    (42) Evaluation and Management: Initial Observation Care (CPT 
Codes 99218-99220)
    (43) Evaluation and Management: Subsequent Observation Care (CPT 
Codes 99224-99226)
    (44) Evaluation and Management: Subsequent Hospital Care (CPT 
Codes 99234-99236)
    2. Finalizing CY 2011 Interim Direct PE RVUs for CY 2012
    a. Background and Methodology
    b. Common Refinements
    (1) General Equipment Time
    (2) Supply and Equipment Items Missing Invoices
    c. Code-Specific Direct PE Inputs
    (1) CT Abdomen and Pelvis
    (2) Endovascular Revascularization
    (3) Nasal/Sinus Endoscopy
    (4) Insertion of Intraperitoneal Catheter
    (5) In Situ Hybridization Testing
    (6) External Mobile Cardivascular Telemetry
    3. Finalizing CY 2011 Interim Final and CY 2012 Proposed 
Malpractice RVUs
    a. Finalizing CY 2011 Interim Final Malpractice RVUs
    b. Finalizing CY 2012 Proposed Malpractice RVUs, Including 
Malpractice RVUs for Certain Cardiothoracic Surgery Services
    4. Payment for Bone Density Tests
    5. Other New, Revised, or Potentially Misvalued Codes With CY 
2011 Interim Final RVUs or CY 2012 Proposed RVUs Not Specifically 
Discussed in the CY 2012 Final Rule With Comment Period
    C. Establishing Interim Final RVUs for CY 2012
    1. Establishing Interim Final Work RVUs for CY 2012
    a. Code-Specific Issues
    (1) Integumentary System: Skin, Subcutaneous, and Accessory 
Structures (CPT Codes 10060-10061, 11056)
    (2) Integumentary System: Nails (CPT Codes 11719-11721, and 
G0127)
    (3) Integumentary System: Repair (Closure) (CPT Codes 15271-
15278, 16020, 16025)
    (4) Musculoskeletal: Hand and Fingers (CPT Codes 26341)
    (5) Musculoskeletal: Application of Casts and Strapping (CPT 
Codes 29125-29881)
    (6) Musculoskeletal: Endoscopy/Arthroscopy (CPT codes 29826, 
29880, 29881)
    (7) Respiratory: Lungs and Pleura (CPT Codes 32096-32674)
    (8) Cardiovascular: Heart and Pericardium (CPT Codes 33212-
37619)
    (A) Pediatric Cardiovascular Code (CPT Code 36000)
    (B) Renal Angiography codes (CPT Codes 36251-36254)
    (C) IVC Transcatheter Procedures (CPT Codes 37191-37193)
    (9) Hemic and Lymphatic: General (CPT Codes 38230-38232)
    (10) Digestive: Liver (CPT Codes 47000)
    (11) Digestive: Abdomen, Peritoneum, and Omentum (CPT Codes 
49082-49084)
    (12) Nervous system: Spine and Spinal Cord (CPT Codes 62263-
63685)
    (13) Nervous System: Extracranial Nerves, Peripheral Nerves, and 
Autonomic Nervous System (CPT Codes 64633-64636)
    (14) Diagnostic Radiology: Abdomen (CPT Codes 74174-74178)
    (15) Pathology and Laboratory: Cytopathology (CPT Codes 88101-
88108)
    (16) Psychiatry: Psychiatric Therapeutic Procedures (CPT Codes 
90854, 90867-98069)
    (17) Opthalmology: Special Opthalmological Services (CPT Codes 
92071-92072)
    (18) Special Otorhinolaryngologic Services: Audologic Function 
Tests (CPT Codes 92558-92588)
    (19) Special Otorhinolaryngologic Services: Evaluative and 
Therapeutic Services (CPT Codes 92605 and 92618)
    (20) Cardiovascular: Cardiac Catheterization (CPT Codes 93451-
93568)
    (21) Pulmonary: Other Procedures (CPT Codes 94060-94781)
    (22) Neurology and Neuromuscular Procedures: Nerve Conduction 
Tests (CPT Codes 95885-95887)
    (23) Neurology and Neuromuscular Procedures: Autonomic Function 
Tests (CPT Codes 95938-95939)
    (24) Other CY 2012 New, Revised, and Potentially Misvalued CPT 
Codes Not Specifically Discussed Previously
    2. Establishing Interim Final Direct PE RVUs for CY 2012
    3. Establishing Interim Final Malpractice RVUs for CY 2012
IV. Allowed Expenditures for Physicians' Services and the 
Sustainable Growth Rate
    A. Medicare Sustainable Growth Rate (SGR)
    1. Physicians' Services
    2. Preliminary Estimate of the SGR for 2012
    3. Revised Sustainable Growth Rate for CY 2011
    4. Final Sustainable Growth Rate for CY 2010
    5. Calculation of CYs 2012, 2011, and 2010 Sustainable Growth 
Rates
    a. Detail on the CY 2012 SGR
    (1) Factor 1--Changes in Fees for Physicians' Services (Before 
Applying Legislative Adjustments) for CY 2012
    (2) Factor 2--The Percentage Change in the Average Number of 
Part B Enrollees From CY 2011 to CY 2012
    (3) Factor 3--Estimated Real Gross Domestic Product Per Capita 
Growth in 2012
    (4) Factor 4--Percentage Change in Expenditures for Physicians' 
Services Resulting From Changes in Statute or Regulations in CY 2012 
Compared With CY 2011
    b. Detail on the CY 2011 SGR
    (1) Factor 1--Changes in Fees for Physicians' Services (Before 
Applying Legislative Adjustments) for CY 2011
    (2) Factor 2--The Percentage Change in the Average Number of 
Part B Enrollees From CY 2010 to CY 2011
    (3) Factor 3--Estimated Real Gross Domestic Product Per Capita 
Growth in CY 2011

[[Page 73029]]

    (4) Factor 4--Percentage Change in Expenditures for Physicians' 
Services Resulting From Changes in Statute or Regulations in CY 2011 
Compared With CY 2010
    c. Detail on the CY 2010 SGR
    (1) Factor 1--Changes in Fees for Physicians' Services (Before 
Applying Legislative Adjustments) for CY 2010
    (2) Factor 2--The Percentage Change in the Average Number of 
Part B Enrollees From CY 2009 to CY 2010
    (3) Factor 3--Estimated Real Gross Domestic Product Per Capita 
Growth in CY 2010
    (4) Factor 4--Percentage Change in Expenditures for Physicians' 
Services Resulting From Changes in Statute or Regulations in CY 2010 
Compared With CY 2009
    B. The Update Adjustment Factor (UAF)
    1. Calculation Under Current Law
    C. The Percentage Change in the Medicare Economic Index (MEI)
    D. Physician and Anesthesia Fee Schedule Conversion Factors for 
CY 2012
    1. Physician Fee Schedule Update and Conversion Factor
    a. CY 2012 PFS Update
    b. CY 2011 PFS Conversion Factor
    2. Anesthesia Conversion Factor
V. Other PFS Issues
    A. Section 105: Extension of Payment for Technical Component of 
Certain Physician Pathology Services
    B. Bundling of Payments for Services Provided to Outpatients Who 
Later Are Admitted as Inpatients: 3-Day Payment Window Policy and 
the Impact on Wholly Owned or Wholly Operated Physician Practices
    1. Introduction
    2. Background
    3. Applicability of the 3-Day Payment Window Policy for Services 
Furnished in Physician Practices
    a. Payment Methodology
    b. Identification of Wholly Owned or Wholly Operated Physician 
Practices
    C. Medicare Therapy Caps
VI. Other Provisions of the Final Rule
    A. Part B Drug Payment: Average Sales Price (ASP) Issues
    1. Widely Available Market Price (WAMP)/Average Manufacturer 
Price
    2. AMP Threshold and Price Substitutions
    a. AMP Threshold
    b. AMP Price Substitution
    (1) Inspector General Studies
    (2) Proposal
    (3) Timeframe for and Duration of Price Substitutions
    (4) Implementation of AMP-Based Price Substitution and the 
Relationship of ASP to AMP
    3. ASP Reporting Update
    a. ASP Reporting Template Update
    b. Reporting of ASP Units and Sales Volume for Certain Products
    4. Out of Scope Comments
    B. Discussion of Budget Neutrality for the Chiropractic Services 
Demonstration
    C. Productivity Adjustment for the Ambulatory Surgical Center 
Payment System, and the Ambulance, Clinical Laboratory and DMEPOS 
Fee Schedules
    D. Clinical Laboratory Fee schedule: Signature on Requisition
    1. History and Overview
    2. Proposed Changes
    E. Section 4103 of the Affordable Care Act: Medicare Coverage 
and Payment of the Annual Wellness Visit Providing a Personalized 
Prevention Plan Under Medicare Part B
    1. Incorporation of a Health Risk Assessment as Part of the 
Annual Wellness Visit
    a. Background and Statutory Authority--Medicare Part B Coverage 
of an Annual Wellness Visit Providing Personalized Prevention Plan 
Services
    b. Implementation
    (1) Definition of a ``Health Risk Assessment''
    (2) Changes to the Definitions of First Annual Wellness Visit 
and Subsequent Annual Visit
    (3) Additional Comments
    (4) Summary
    2. The Addition of a Health Risk Assessment as a Required 
Element for the Annual Wellness Visit Beginning in 2012
    a. Payment for AWV Services With the Inclusion of an HRA Element
    F. Quality Reporting Initiatives
    1. Physician Payment, Efficiency, and Quality Improvements--
Physician Quality Reporting System
    a. Program Background and Statutory Authority
    b. Methods of Participation
    (1) Individual Eligible Professionals
    (2) Group Practices
    (A) Background and Authority
    (B) Definition of Group Practice
    (C) Process for Physician Group Practices To Participate as 
Group Practices
    c. Reporting Period
    d. Reporting Mechanisms--Individual Eligible Professionals
    (1) Claims-Based Reporting
    (2) Registry-Based Reporting
    (A) Requirements for the Registry-Based Reporting Mechanism--
Individual Eligible Professionals
    (B) 2012 Qualification Requirements for Registries
    (3) EHR-Based Reporting
    (A) Direct EHR-Based Reporting
    (i) Requirements for the Direct EHR-Based Reporting Mechanism--
Individual Eligible Professionals
    (ii) 2012 Qualification Requirements for Direct EHR-Based 
Reporting Products
    (B) EHR Data Submission Vendors
    (i) Requirements for EHR Data Submission Vendors Based on 
Reporting Mechanism--Individual Eligible Professionals
    (ii) 2012 Qualification Requirements for EHR Data Submission 
Vendors
    (C) Qualification Requirements for Direct EHR-Based Reporting 
Data Submission Vendors and Their Products for the 2013 Physician 
Quality Reporting System
    e. Incentive Payments for the 2012 Physician Quality Reporting 
System
    (1) Criteria for Satisfactory Reporting of Individual Quality 
Measures for Individual Eligible Professionals via Claims
    (2) 2012 Criteria for Satisfactory Reporting of Individual 
Quality Measures for Individual Eligible Professionals via Registry
    (3) Criteria for Satisfactory Reporting of Individual Quality 
Measures for Individual Eligible Professionals via EHR
    (4) Criteria for Satisfactory Reporting of Measures Groups via 
Claims--Individual Eligible Professionals
    (5) 2012 Criteria for Satisfactory Reporting of Measures Groups 
via Registry--Individual Eligible Professionals
    (6) 2012 Criteria for Satisfactory Reporting on Physician 
Quality Reporting System Measures by Group Practices Under the GPRO
    f. 2012 Physician Quality Reporting System Measures
    (1) Statutory Requirements for the Selection of 2012 Physician 
Quality Reporting System Measures
    (2) Other Considerations for the Selection of 2012 Physician 
Quality Reporting System Measures
    (3) 2012 Physician Quality Reporting System Individual Measures
    (A) 2012 Physician Quality Reporting System Core Measures 
Available for Claims, Registry, and/or EHR-Based Reporting
    (B) 2012 Physician Quality Reporting System Individual Measures 
for Claims and Registry Reporting
    (C) 2012 Measures Available for EHR-Based Reporting
    (4) 2012 Physician Quality Reporting System Measures Groups
    (5) 2012 Physician Quality Reporting System Quality Measures for 
Group Practices Selected To Participate in the GPRO (GPRO)
    g. Maintenance of Certification Program Incentive
    h. Feedback Reports
    i. Informal Review
    j. Future Payment Adjustments for the Physician Quality 
Reporting System
    2. Incentives and Payment Adjustments for Electronic Prescribing 
(eRx)--The Electronic Prescribing Incentive Program
    a. Program Background and Statutory Authority
    b. Eligibility
    (1) Individual Eligible Professionals
    (A) Definition of Eligible Professional
    (2) Group Practices
    (A) Definition of ``Group Practice''
    (B) Process To Participate in the eRx Incentive Program--eRx 
GPRO
    c. Reporting Periods
    (1) Reporting Periods for the 2012 and 2013 eRx Incentives
    (2) Reporting Periods for the 2013 and 2014 eRx Payment 
Adjustments
    d. Standard for Determining Successful Electronic Prescribers
    (1) Reporting the Electronic Prescribing Quality Measure
    (2) The Denominator for the Electronic Prescribing Measure
    (3) The Reporting Numerator for the Electronic Prescribing 
Measure
    e. Required Functionalities and Part D Electronic Prescribing 
Standards
    (1) ``Qualified'' Electronic Prescribing System

[[Page 73030]]

    (2) Part D Electronic Prescribing Standards
    f. Reporting Mechanisms for the 2012 and 2013 Reporting Periods
    (1) Claims-Based Reporting
    (2) Registry-Based Reporting
    (3) EHR-Based Reporting
    g. The 2012 and 2013 eRx Incentives
    (1) Applicability of 2012 and 2013 eRx Incentives for Eligible 
Professionals and Group Practices
    (2) Reporting Criteria for Being a Successful Electronic for the 
2012 and 2013 eRx Incentives--Individual Eligible Professionals
    (3) Criteria for Being a Successful Electronic Prescriber 2012 
and 2013 eRx Incentives--Group Practices
    (4) No Double Payments
    h. The 2013 and 2014 Electronic Prescribing Payment Adjustments
    (1) Limitations to the 2013 and 2014 eRx Payment Adjustments--
Individual Eligible Professionals
    (2) Requirements for the 2013 and 2014 eRx Payment Adjustments--
Individual Eligible Professionals
    (3) Requirements for the 2013 and 2014 eRx Payment Adjustments--
Group Practices
    (4) Significant Hardship Exemptions
    (A) Significant Hardship Exemptions
    (i) Inability To Electronically Prescribe Due to Local, State, 
or Federal Law or Regulation
    (ii) Eligible Professionals Who Prescribe Fewer Than 100 
Prescriptions During a 6-Month, Payment Adjustment Reporting Period
    (B) Process for Submitting Significant Hardship Exemptions--
Individual Eligible Professionals and Group Practices
    G. Physician Compare Web site
    1. Background and Statutory Authority
    2. Final Plans
    H. Medicare EHR Incentive Program for Eligible Professionals for 
the 2012 Payment Year
    1. Background
    2. Attestation
    3 The Physician Quality Reporting System--Medicare EHR Incentive 
Pilot
    a. EHR Data Submission Vendor-Based Reporting Option
    b. Direct EHR-Based Reporting Option
    4. Method for EPs To Indicate Election To Participate in the 
Physician Quality Reporting System--Medicare EHR Incentive Pilot for 
Payment Year 2012
    I. Establishment of the Value-Based Payment Modifier and 
Improvements to the Physician Feedback Program
    1. Overview
    2. The Value Based Modifier
    a. Measures of Quality of Care and Costs
    (1) Quality of Care Measures
    (A) Quality of Care Measures for the Value-Modifier
    (B) Potential Quality of Care Measures for Additional Dimensions 
of Care in the Value Modifier
    (i) Outcome Measures
    (ii) Care Coordination/Transition Measures
    (iii) Patient Safety, Patient Experience and Functional Status
    (2) Cost Measures
    (A) Cost Measures for the Value Modifier
    (B) Potential Cost Measures for Future Use in the Value Modifier
    b. Implementation of the Value Modifier
    c. Initial Performance Period
    d. Other Issues
    3. Physician Feedback Program
    a. Alignment of Physician Quality Reporting System Quality Care 
Measures With the Physician Feedback Reports
    b. 2010 Physician Group and Individual Reports Disseminated in 
2011
    J. Physician Self-Referral Prohibition: Annual Update to the 
List of CPT/HCPCS Codes
    1. General
    2. Annual Update to the Code List
    a. Background
    b. Response to Comments
    c. Revisions Effective for 2012
    K. Technical Corrections
    1. Outpatient Speech-Language Pathology Services: Conditions and 
Exclusions
    2. Outpatient Diabetes Self-Management Training and Diabetes 
Outcome Measurements
    a. Changes to the Definition of Deemed Entity
    b. Changes to the Condition of Coverage Regarding Training 
Orders
    3. Practice Expense Relative Value Units (RVUs)
VII. Waiver of Proposed Rulemaking and Collection of Information 
Requirements
    A. Waiver of Proposed Rulemaking and Delay of Effective Date
    B. Collection of Information Requirements
    1. Part B Drug Payment
    2. The Physician Quality Reporting System (Formerly the 
Physician Quality Reporting Initiative (PQRI))
    a. Estimated Participation in the 2010 Physician Quality 
Reporting System
    b. Burden Estimate on Participation in the 2010 Physician 
Quality Reporting System--Individual Eligible Professionals
    (1) Burden Estimate on Participation in the 2012 Physician 
Quality Report System via the Claims-Based Reporting Mechanism--
Individual Eligible Professionals
    (2) Burden Estimate on Participation in the 2012 Physician 
Quality Reporting System--Group Practices
    (3) Burden Estimate on Participation in the Maintenance of 
Certification Program Incentive
    (4) Burden Estimate on Participation in the Maintenance of 
Certification Program Incentive
    3. Electronic Prescribing (eRx) Incentive Program
    a. Estimate on Participation in the 2012, 2013, and 2014 eRx 
Incentive Program
    b. Burden Estimate on Participation in the eRx Incentive 
Program--Individual Eligible Professionals
    (1) Burden Estimate on Participation in the eRx Incentive 
Program via the Claims-Based Reporting Mechanism- Individual 
Eligible Professionals
    (2) Burden Estimate on Participation in the eRx Incentive 
Program via the Registry-Based Reporting Mechanism- Individual 
Eligible Professionals and Group Practices
    (3) Burden Estimate on Participation in the eRx Incentive 
Program via the EHR-Based Reporting Mechanism--Individual Eligible 
Professionals and Group Practices
    (4) Burden Estimate on Participation in the eRx Incentive 
Program--Group Practices
    4. Medicare Electronic Health Record (EHR) Incentive Program for 
Eligible Professionals for the 2012 Payment Year
VIII. Response to Comments
IX. Regulatory Impact Analysis
    A. Statement of Need
    B. Overall Impact
    C. RVU Impacts
    1. Resource-Based Work, PE, and Malpractice RVUs
    2. CY 2012 PFS Impact Discussion
    a. Changes in RVUs
    b. Combined Impact
    D. Effects of Proposal To Review Potentially Misvalued Codes on 
an Annual Basis Under the PFS
    E. Effect of Revisions to Malpractice RUVs
    F. Effect of Changes to Geographic Practice Cost Indices (GPCIs)
    G. Effects of Final Changes to Medicare Telehealth Services 
Under the Physician Fee Schedule H Effects of the Impacts of Other 
Provisions of the Final Rule With Comment Period
    1. Part B Drug Payment: ASP Issues
    2. Chiropractic Services Demonstration
    3. Extension of Payment for Technical Component of Certain 
Physician Pathology Services
    4. Section 4103: Medicare Coverage of Annual Wellness Visit 
Providing a Personalized Prevention Plan: Incorporation of a Health 
Risk Assessment as Part of the Annual Wellness Visit
    5. Physician Payment, Efficiency, and Quality Improvements--
Physician Quality Reporting System
    6. Incentives for Electronic Prescribing (eRx)--The Electronic 
Prescribing Incentive Program
    7. Physician Compare Web site
    8. Medicare EHR Incentive Program
    9. Physician Feedback Program/Value Modifier Payment
    10. Bundling of Payments for Services Provided to Outpatients 
Who Later Are Admitted as Inpatients: 3-Day Window Policy and Impact 
on Wholly Owned or Wholly Operated Physician Offices
    11. Clinical Lab Fee Schedule: Signature on Requisition
    I. Alternatives Considered
    J. Impact on Beneficiaries
    K. Accounting Statement
    L. Conclusion
X. Addenda Referenced in This Rule and Available Only Through the 
Internet on the CMS Web Site
Regulations Text

Acronyms

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


[[Page 73031]]


AA Anesthesiologist assistant
AACE American Association of Clinical Endocrinologists
AACVPR American Association of Cardiovascular and Pulmonary 
Rehabilitation
AADE American Association of Diabetes Educators
AANA American Association of Nurse Anesthetists
ABMS American Board of Medical Specialties
ABN Advanced Beneficiary Notice
ACC American College of Cardiology
ACGME Accreditation Council on Graduate Medical Education
ACLS Advanced cardiac life support
ACP American College of Physicians
ACR American College of Radiology
ACS American Community Survey
ADL Activities of daily living
AED Automated external defibrillator
AFROC Association of Freestanding Radiation Oncology Centers
AFS Ambulance Fee Schedule
AHA American Heart Association
AHFS-DI American Hospital Formulary Service-Drug Information
AHRQ [HHS] Agency for Healthcare Research and Quality
AMA American Medical Association
AMA RUC [AMA's Specialty Society] Relative (Value) Update Committee
AMA-DE American Medical Association Drug Evaluations
AMI Acute Myocardial Infarction
AMP Average Manufacturer Price
AO Accreditation organization
AOA American Osteopathic Association
APA American Psychological Association
APC Administrative Procedures Act
APTA American Physical Therapy Association
ARRA American Recovery and Reinvestment Act (Pub. L. 111-5)
ASC Ambulatory surgical center
ASP Average Sales Price
ASPE Assistant Secretary of Planning and Evaluation (ASPE)
ASRT American Society of Radiologic Technologists
ASTRO American Society for Therapeutic Radiology and Oncology
ATA American Telemedicine Association
AWP Average Wholesale Price
AWV Annual Wellness Visit
BBA Balanced Budget Act of 1997 (Pub. L. 105-33)
BBRA [Medicare, Medicaid and State Child Health Insurance Program] 
Balanced Budget Refinement Act of 1999 (Pub. L. 106-113)
BIPA Medicare, Medicaid, and SCHIP Benefits Improvement Protection 
Act of 2000 (Pub. L. 106-554)
BLS Bureau of Labor and Statistics
BMD Bone Mineral Density
BMI Body Mass Index
BN Budget Neutrality
BPM Benefit Policy Manual
CABG Coronary Artery Bypass Graft
CAD Coronary Artery Disease
CAH Critical Access Hospital
CAHEA Committee on Allied Health Education and Accreditation
CAP Competitive Acquisition Program
CARE Continuity Assessment Record and Evaluation
CBIC Competitive Bidding Implementation Contractor
CBP Competitive Bidding Program
CBSA Core-Based Statistical Area
CDC Centers for Disease Control and Prevention
CEM Cardiac Event Monitoring
CF Conversion Factor
CFC Conditions for Coverage
CFR Code of Federal Regulations
CKD Chronic Kidney Disease
CLFS Clinical Laboratory Fee Schedule
CMA California Medical Association
CMD Contractor Medical Director
CME Continuing Medical Education
CMHC Community Mental Health Center
CMPs Civil Money Penalties
CMS Centers for Medicare & Medicaid Services
CNS Clinical Nurse Specialist
CoP Condition of Participation
COPD Chronic Obstructive Pulmonary Disease
CORF Comprehensive Outpatient Rehabilitation Facility
COS Cost of Service
CPEP Clinical Practice Expert Panel
CPI Consumer Price Index
CPI-U Consumer Price Index for Urban Consumers
CPR Cardiopulmonary Resuscitation
CPT [Physicians] Current Procedural Terminology (4th Edition, 2002, 
copyrighted by the American Medical Association)
CQM Clinical Quality Measures
CR Cardiac Rehabilitation
CRF Chronic Renal Failure
CRNA Certified Registered Nurse Anesthetist
CROs Clinical Research Organizations
CRP Canalith Repositioning
CRT Certified Respiratory Therapist
CSC Computer Sciences Corporation
CSW Clinical Social Worker
CT Computed Tomography
CTA Computed Tomography Angiography
CWF Common Working File
CY Calendar Year
D.O. Doctor of Osteopathy
DEA Drug Enforcement Agency
DHHS Department of Health and Human Services
DHS Designated health services
DME Durable Medical Equipment
DMEPOS Durable medical equipment, prosthetics, orthotics, and 
supplies
DOJ Department of Justice
DOQ Doctors Office Quality
DOS Date of service
DOTPA Development of Outpatient Therapy Alternatives
DRA Deficit Reduction Act of 2005 (Pub. L. 109-171)
DSMT Diabetes Self-Management Training Services
DXA CPT Dual energy X-ray absorptiometry
E/M Evaluation and Management Medicare Services
ECG Electrocardiogram
EDI Electronic data interchange
EEG Electroencephalogram
EGC Electrocardiogram
EHR Electronic health record
EKG Electrocardiogram
EMG Electromyogram
EMTALA Emergency Medical Treatment and Active Labor Act
EOG Electro-oculogram
EPO Erythopoeitin
EPs Eligible Professional
eRx Electronic Prescribing
ESO Endoscopy Supplies
ESRD End-Stage Renal Disease
FAA Federal Aviation Administration
FAX Facsimile
FDA Food and Drug Administration (HHS)
FFS Fee-for-service
FISH In Situ Hybridization Testing
FOTO Focus On Therapeutic Outcomes
FQHC Federally Qualified Health Center
FR Federal Register
FTE Full Time Equivalent
GAF Geographic Adjustment Factor
GAO Government Accountability Office
GEM Generating Medicare [Physician Quality Performance Measurement 
Results]
GFR Glomerular Filtration Rate
GME Graduate Medical Education
GPCIs Geographic Practice Cost Indices
GPO Group Purchasing Organization
GPRO Group Practice Reporting Option
GPS Geographic Positioning System
GSA General Services Administration
GT Growth Target
HAC Hospital-Acquired Conditions
HBAI Health and Behavior Assessment and Intervention
HCC Hierarchal Condition Category
HCPAC Health Care Professionals Advisory Committee
HCPCS Healthcare Common Procedure Coding System
HCRIS Healthcare Cost Report Information System
HDL/LDL High-Density Lipoprotein/Low-Density Lipoprotein
HDRT High Dose Radiation Therapy
HEMS Helicopter Emergency Medical Services
HH PPS Home Health Prospective Payment System
HHA Home Health Agency
HHRG Home Health Resource Group
HHS [Department of] Health and Human Services
HIPAA Health Insurance Portability and Accountability Act of 1996 
(Pub. L. 104-191)
HIT Health Information Technology
HITECH Health Information Technology for Economic and Clinical 
Health Act (Title IV of Division B of the Recovery Act, together 
with Title XIII of Division A of the Recovery Act)
HITSP Healthcare Information Technology Standards Panel
HIV Human Immunodeficiency Virus
HMO Health Maintenance Organization
HOPD Hospital Outpatient Department
HPSA Health Professional Shortage Area
HRA Health Risk Assessment
HRSA Health Resources Services Administration (HHS)
HSIP HPSA Surgical Incentive Program
HUD Department of Housing and Urban Development
HUD Housing and Urban Development
IACS Individuals Access to CMS Systems
IADL Instrumental Activities of Daily Living

[[Page 73032]]

ICD International Classification of Diseases
ICF Intermediate Care Facilities
ICF International Classification of Functioning, Disability and 
Health
ICR Intensive Cardiac Rehabilitation
ICR Information Collection Requirement
IDE Investigational Device Exemption
IDTF Independent Diagnostic Testing Facility
IFC Interim Rinal Rule with Comment Period
IGI IHS Global Insight, Inc.
IME Indirect Medical Education
IMRT Intensity-Modulated Radiation Therapy
INR International Normalized Ratio
IOM Institute of Medicine
IOM Internet Only Manual
IPCI Indirect Practice Cost Index
IPPE Initial Preventive Physical Examination
IPPS Inpatient Prospective Payment System
IRS Internal Revenue Service
ISO Insurance Services Office
IVD Ischemic Vascular Disease
IVIG Intravenous Immune Globulin
IWPUT Intra-service Work Per Unit of Time
JRCERT Joint Review Committee on Education in Radiologic Technology
KDE Kidney Disease Education
LCD Local Coverage Determination
LOPS Loss of Protective Sensation
LUGPA Large Urology Group Practice Association
M.D. Doctor of Medicine
MA Medicare Advantage Program
MAC Medicare Administrative Contractor
MA-PD Medicare Advantage-Prescription Drug Plans
MAV Measure Applicability Validation
MCMP Medicare Care Management Performance
MCP Monthly Capitation Payment
MDRD Modification of Diet in Renal Disease
MedCAC Medicare Evidence Development and Coverage Advisory Committee 
(formerly the Medicare Coverage Advisory Committee (MCAC))
MedPAC Medicare Payment Advisory Commission
MEI Medicare Economic Index
MGMA Medical Group Management Association
MIEA-TRHCA Medicare Improvements and Extension Act of 2006 (that is, 
Division B of the Tax Relief and Health Care Act of 2006 (TRHCA) 
(Pub. L. 109-432)
MIPPA Medicare Improvements for Patients and Providers Act of 2008 
(Pub. L. 110-275)
MMA Medicare Prescription Drug, Improvement, and Modernization Act 
of 2003 (Pub. L. 108-173)
MMEA Medicare and Medicaid Extenders Act of 2010 (Pub. L. 111-309)
MMSEA Medicare, Medicaid, and SCHIP Extension Act of 2007 (Pub. L. 
110-173)
MNT Medical Nutrition Therapy
MOC Maintenance of Certification
MP Malpractice
MPC Multispecialty Points of Comparison
MPPR Multiple Procedure Payment Reduction Policy
MQSA Mammography Quality Standards Act of 1992 (Pub. L. 102-539)
MRA Magnetic Resonance Angiography
MRI Magnetic Resonance Imaging
MSA Metropolitan Statistical Area
MSP Medicare Secondary Payer
MUE Medically Unlikely Edit
NAICS North American Industry Classification System
NBRC National Board for Respiratory Care
NCCI National Correct Coding Initiative
NCD National Coverage Determination
NCQA National Committee for Quality Assurance
NCQDIS National Coalition of Quality Diagnostic Imaging Services
NDC National Drug Codes
NF Nursing facility
NISTA National Institute of Standards and Technology Act
NP Nurse Practitioner
NPI National Provider Identifier
NPP Nonphysician Practitioner
NPPES National Plan & Provider Enumeration System
NQF National Quality Forum
NRC Nuclear Regulatory Commission
NSQIP National Surgical Quality Improvement Program
NTSB National Transportation Safety Board
NUBC National Uniform Billing Committee
OACT [CMS] Office of the Actuary
OBRA Omnibus Budget Reconciliation Act
OCR Optical Character Recognition
ODF Open Door Forum
OES Occupational Employment Statistics
OGPE Oxygen Generating Portable Equipment
OIG Office of the Inspector General
OMB Office of Management and Budget
ONC [HHS] Office of the National Coordinator for Health IT
OPPS Outpatient Prospective Payment System
OSCAR Online Survey and Certification and Reporting
PA Physician Assistant
PACE Program of All-inclusive Care for the Elderly
PACMBPRA Preservation of Access to Care for Medicare Beneficiaries 
and Pension Relief Act of 2010 (Pub. L. 111-192)
PAT Performance Assessment Tool
PC Professional Components
PCI Percutaneous Coronary Intervention
PCIP Primary Care Incentive Payment Program
PDP Prescription Drug Plan
PE Practice Expense
PE/HR Practice Expense per Hour
PEAC Practice Expense Advisory Committee
PECOS Provider Enrollment Chain and Ownership System
PERC Practice Expense Review Committee
PFS Physician Fee Schedule
PGP [Medicare] Physician Group Practice
PHI Protected Health Information
PHP Partial Hospitalization Program
PIM [Medicare] Program Integrity Manual
PLI Professional Liability Insurance
POA Present On Admission
POC Plan Of Care
PODs Physician Owned Distributors
PPATRA Physician Payment And Therapy Relief Act
PPI Producer Price Index
PPIS Physician Practice Expense Information Survey
PPPS Personalized Prevention Plan Services
PPS Prospective Payment System
PPTA Plasma Protein Therapeutics Association
PQRI Physician Quality Reporting Initiative
PR Pulmonary rehabilitation
PRA Paperwork Reduction Act
PSA Physician Scarcity Areas
PT Physical Therapy
PTA Physical Therapy Assistant
PTCA Percutaneous Transluminal Coronary Angioplasty
PVBP Physician and Other Health Professional Value-Based Purchasing 
Workgroup
QDCs (Physician Quality Reporting System) Quality Data Codes
RA Radiology Assistant
RAC Medicare Recovery Audit Contractor
RBMA Radiology Business Management Association
RFA Regulatory Flexibility Act
RHC Rural Health Clinic
RHQDAPU Reporting Hospital Quality Data Annual Payment Update 
Program
RIA Regulatory Impact Analysis
RN Registered Nurse
RNAC Reasonable Net Acquisition Cost
RPA Radiology Practitioner Assistant
RRT Registered Respiratory Therapist
RUC [AMA's Specialty Society] Relative (Value) Update Committee
RVRBS Resource-Based Relative Value Scale
RVU Relative Value Unit
SBA Small Business Administration
SCHIP State Children's Health Insurance Programs
SDW Special Disability Workload
SGR Sustainable Growth Rate
SLP Speech-Language Pathology
SMS [AMAs] Socioeconomic Monitoring System
SNF Skilled Nursing Facility
SOR System of Record
SRS Stereotactic Radiosurgery
SSA Social Security Administration
SSI Social Security Income
STARS Services Tracking and Reporting System
STATS Short Term Alternatives for Therapy Services
STS Society for Thoracic Surgeons
TC Technical Components
TIN Tax Identification Number
TJC Joint Commission
TRHCA Tax Relief and Health Care Act of 2006 (Pub. L. 109-432)
TTO Transtracheal Oxygen
UAF Update Adjustment Factor
UPMC University of Pittsburgh Medical Center
URAC Utilization Review Accreditation Committee
USDE United States Department of Education
USP-DI United States Pharmacopoeia-Drug Information
VA Department of Veterans Affairs
VBP Value-Based Purchasing
WAC Wholesale Acquisition Cost
WAMP Widely Available Market Price
WHO World Health Organization

[[Page 73033]]

Addenda Available Only Through the Internet on the CMS Web Site

    In the past, the Addenda referred to throughout the preamble of our 
annual PFS proposed and final rules with comment period were included 
in the printed Federal Register. However, beginning with the CY 2012 
PFS proposed rule, the PFS Addenda no longer appear in the Federal 
Register. Instead these Addenda to the annual proposed and final rules 
with comment period will be available only through the Internet. The 
PFS Addenda along with other supporting documents and tables referenced 
in this final rule with comment period are available through the 
Internet on the CMS Web site at http://www.cms.gov/PhysicianFeeSched/. 
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 2012 PFS final rule with 
comment period, refer to item CMS-1524-FC. For complete details on the 
availability of the Addenda referenced in this final rule with comment 
period, we refer readers to section X. of this final rule with comment 
period. Readers who experience any problems accessing any of the 
Addenda or other documents referenced in this final rule with comment 
period and posted on the CMS Web site identified above should contact 
Rebecca Cole at (410) 786-1589 or Erin Smith at (410) 786-4497.

CPT (Current Procedural Terminology) Copyright Notice

    Throughout this final rule with comment period, we use CPT codes 
and descriptions to refer to a variety of services. We note that CPT 
codes and descriptions are copyright 2010 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. Background

    Since January 1, 1992, Medicare has paid for physicians' services 
under section 1848 of the Social Security Act (the Act), ``Payment for 
Physicians' Services.'' The Act requires that payments under the 
physician fee schedule (PFS) are based on national uniform relative 
value units (RVUs) based on the relative resources used in furnishing a 
service. Section 1848(c) of the Act requires that national RVUs be 
established for physician work, practice expense (PE), and malpractice 
expense. Before the establishment of the resource-based relative value 
system, Medicare payment for physicians' services was based on 
reasonable charges. We note that throughout this final rule with 
comment period, unless otherwise noted, the term ``practitioner'' is 
used to describe both physicians and nonphysician practitioners (such 
as physician assistants, nurse practitioners, clinical nurse 
specialists, certified nurse-midwives, psychologists, or clinical 
social workers) that are permitted to furnish and bill Medicare under 
the PFS for their services.

A. Development of the Relative Value System

1. Work RVUs
    The concepts and methodology underlying the PFS were enacted as 
part of the Omnibus Budget Reconciliation Act (OBRA) of 1989 (Pub. L. 
101-239), and OBRA 1990, (Pub. L. 101-508). The final rule, published 
on November 25, 1991 (56 FR 59502), set forth the fee schedule for 
payment for physicians' services beginning January 1, 1992. Initially, 
only the physician work RVUs were resource-based, and the PE and 
malpractice RVUs were based on average allowable charges.
    The physician work RVUs established for the implementation of the 
fee schedule in January 1992 was developed with extensive input from 
the physician community. A research team at the Harvard School of 
Public Health developed the original physician work RVUs for most codes 
in a cooperative agreement with the Department of Health and Human 
Services (DHHS). In constructing the code-specific vignettes for the 
original physician work RVUs, Harvard worked with panels of experts, 
both inside and outside the Federal government, and obtained input from 
numerous physician specialty groups.
    Section 1848(b)(2)(B) of the Act specifies that the RVUs for 
anesthesia services are based on RVUs from a uniform relative value 
guide, with appropriate adjustment of the conversion factor (CF), in a 
manner to assure that fee schedule amounts for anesthesia services are 
consistent with those for other services of comparable value. We 
established a separate CF for anesthesia services, and we continue to 
utilize time units as a factor in determining payment for these 
services. As a result, there is a separate payment methodology for 
anesthesia services.
    We establish physician work RVUs for new and revised codes based, 
in part, on our review of recommendations received from the American 
Medical Association's (AMA's) Specialty Society Relative Value Update 
Committee (RUC).
2. Practice Expense Relative Value Units (PE RVUs)
    Section 121 of the Social Security Act Amendments of 1994 (Pub. L. 
103-432), enacted on October 31, 1994, amended section 
1848(c)(2)(C)(ii) of the Act and required us to develop resource-based 
PE RVUs for each physicians service beginning in 1998. We were to 
consider general categories of expenses (such as office rent and wages 
of personnel, but excluding malpractice expenses) comprising PEs.
    Section 4505(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L. 
105-33), amended section 1848(c)(2)(C)(ii) of the Act to delay 
implementation of the resource-based PE RVU system until January 1, 
1999. In addition, section 4505(b) of the BBA provided for a 4-year 
transition period from charge-based PE RVUs to resource-based RVUs.
    We established the resource-based PE RVUs for each physician's 
service in a final rule with comment period, published November 2, 1998 
(63 FR 58814), effective for services furnished in 1999. Based on the 
requirement to transition to a resource-based system for PE over a 4-
year period, resource-based PE RVUs did not become fully effective 
until 2002.
    This resource-based system was based on two significant sources of 
actual PE data: the Clinical Practice Expert Panel (CPEP) data and the 
AMA's Socioeconomic Monitoring System (SMS) data. The CPEP data were 
collected from panels of physicians, practice administrators, and 
nonphysician health professionals (for example, registered nurses 
(RNs)) nominated by physician specialty societies and other groups. The 
CPEP panels identified the direct inputs required for each physician's 
service in both the office setting and out-of-office setting. We have 
since refined and revised these inputs based on recommendations from 
the AMA RUC. The AMA's SMS data provided aggregate specialty-specific 
information on hours worked and PEs.
    Separate PE RVUs are established for procedures that can be 
performed in both a nonfacility setting, such as a physician's office, 
and a facility setting, such as a hospital outpatient department 
(HOPD). The difference between the facility and nonfacility RVUs 
reflects the fact that a facility typically receives separate payment 
from Medicare for its costs of providing the service, apart from 
payment under the PFS. The nonfacility RVUs reflect all

[[Page 73034]]

of the direct and indirect PEs of providing a particular service.
    Section 212 of the Balanced Budget Refinement Act of 1999 (BBRA) 
(Pub. L. 106-113) directed the Secretary of Health and Human Services 
(the Secretary) to establish a process under which we accept and use, 
to the maximum extent practicable and consistent with sound data 
practices, data collected or developed by entities and organizations to 
supplement the data we normally collect in determining the PE 
component. On May 3, 2000, we published the interim final rule (65 FR 
25664) that set forth the criteria for the submission of these 
supplemental PE survey data. The criteria were modified in response to 
comments received, and published in the Federal Register (65 FR 65376) 
as part of a November 1, 2000 final rule. The PFS final rules with 
comment period published in 2001 and 2003, respectively, (66 FR 55246 
and 68 FR 63196) extended the period during which we would accept these 
supplemental data through March 1, 2005.
    In the calendar year (CY) 2007 PFS final rule with comment period 
(71 FR 69624), we revised the methodology for calculating direct PE 
RVUs from the top-down to the bottom-up methodology beginning in CY 
2007 and provided for a 4-year transition for the new PE RVUs under 
this new methodology. This transition ended in CY 2010 and direct PE 
RVUs are calculated in CY 2012 using this methodology, unless otherwise 
noted.
    In the CY 2010 PFS final rule with comment period (74 FR 61749), we 
updated the PE/hour (PE/HR) data that are used in the calculation of PE 
RVUs for most specialties. For this update, we used the Physician 
Practice Information Survey (PPIS) conducted by the AMA. The PPIS is a 
multispecialty, nationally representative, PE survey of both physicians 
and nonphysician practitioners (NPPs) using a survey instrument and 
methods highly consistent with those of the SMS and the supplemental 
surveys used prior to CY 2010. We note that in CY 2010, for oncology, 
clinical laboratories, and independent diagnostic testing facilities 
(IDTFs), we continued to use the supplemental survey data to determine 
practice expense per hour (PE/HR) values (74 FR 61752). Beginning in CY 
2010, we provided for a 4-year transition for the new PE RVUs using the 
updated PE/HR data. In CY 2012, the third year of the transition, PE 
RVUs are calculated based on a 75/25 blend of the new PE RVUs developed 
using the PPIS data and the previous PE RVUs based on the SMS and 
supplemental survey data.
3. Resource-Based Malpractice RVUs
    Section 4505(f) of the BBA amended section 1848(c) of the Act to 
require that we implement resource-based malpractice RVUs for services 
furnished on or after CY 2000. The resource-based malpractice RVUs were 
implemented in the PFS final rule with comment period published 
November 2, 1999 (64 FR 59380). The MP RVUs were based on malpractice 
insurance premium data collected from commercial and physician-owned 
insurers from all the States, the District of Columbia, and Puerto 
Rico. In the CY 2010 PFS final rule with comment period (74 FR 61758), 
we implemented the Second Five-Year Review and update of the 
malpractice RVUs. In the CY 2011 PFS final rule with comment period, we 
described our approach for determining malpractice RVUs for new or 
revised codes that become effective before the next Five-Year Review 
and update (75 FR 73208). Accordingly, to develop the CY 2012 
malpractice RVUs for new or revised codes we crosswalked the new or 
revised code to the malpractice RVUs of a similar source code and 
adjusted for differences in work (or, if greater, the clinical labor 
portion of the fully implemented PE RVUs) between the source code and 
the new or revised code.
4. Refinements to the RVUs
    Section 1848(c)(2)(B)(i) of the Act requires that we review all 
RVUs no less often than every 5-years. The First Five-Year Review of 
Work RVUs was published on November 22, 1996 (61 FR 59489) and was 
effective in 1997. The Second Five-Year Review of Work RVUs was 
published in the CY 2002 PFS final rule with comment period (66 FR 
55246) and was effective in 2002. The Third Five-Year Review of Work 
RVUs was published in the CY 2007 PFS final rule with comment period 
(71 FR 69624) and was effective on January 1, 2007. The Fourth Five-
Year Review of Work RVUs was initiated in the CY 2010 PFS final rule 
with comment period where we solicited candidate codes from the public 
for this review (74 FR 61941). Proposed revisions to work RVUs and 
corresponding changes to PE and malpractice RVUs affecting payment for 
physicians' services for the Fourth Five-Year Review of Work RVUs were 
published in a separate Federal Register notice on June 6, 2011 (76 FR 
32410). We have reviewed public comments, made adjustments to our 
proposals in response to comments, as appropriate, and included final 
values in this final rule with comment period, effective for services 
furnished beginning January 1, 2012.
    In 1999, the AMA RUC established the Practice Expense Advisory 
Committee (PEAC) for the purpose of refining the direct PE inputs. 
Through March 2004, the PEAC provided recommendations to CMS for over 
7,600 codes (all but a few hundred of the codes currently listed in the 
AMA's Current Procedural Terminology (CPT) codes). As part of the CY 
2007 PFS final rule with comment period (71 FR 69624), we implemented a 
new bottom-up methodology for determining resource-based PE RVUs and 
transitioned the new methodology over a 4-year period. A comprehensive 
review of PE was undertaken prior to the 4-year transition period for 
the new PE methodology from the top-down to the bottom-up methodology, 
and this transition was completed in CY 2010. In CY 2010, we also 
incorporated the new PPIS data to update the specialty-specific PE/HR 
data used to develop PE RVUs, adopting a 4-year transition to PE RVUs 
developed using the PPIS data.
    In the CY 2005 PFS final rule with comment period (69 FR 66236), we 
implemented the First Five-Year Review of the malpractice RVUs (69 FR 
66263). Minor modifications to the methodology were addressed in the CY 
2006 PFS final rule with comment period (70 FR 70153). The Second Five-
Year Review and update of resource-based malpractice RVUs was published 
in the CY 2010 PFS final rule with comment period (74 FR 61758) and was 
effective in CY 2010.
    In addition to the Five-Year Reviews, beginning for CY 2009, CMS 
and the AMA RUC have identified and reviewed a number of potentially 
misvalued codes on an annual basis based on various identification 
screens. This annual review of work and PE RVUs for potentially 
misvalued codes was supplemented by section 3134 of the Affordable Care 
Act, which requires the agency to periodically identify, review and 
adjust values for potentially misvalued codes with an emphasis on the 
following categories: (1) Codes and families of codes for which there 
has been the fastest growth; (2) codes or families of codes that have 
experienced substantial changes in practice expenses; (3) codes that 
are recently established for new technologies or services; (4) multiple 
codes that are frequently billed in conjunction with furnishing a 
single service; (5) codes with low relative values, particularly those 
that are often billed multiple times for a single treatment; (6) codes 
which have not been subject to review

[[Page 73035]]

since the implementation of the RBRVS (the so-called `Harvard valued 
codes'); and (7) other codes determined to be appropriate by the 
Secretary.
5. Application of Budget Neutrality to Adjustments of RVUs
    Budget neutrality typically requires that expenditures not increase 
or decrease as a result of changes or revisions to policy. However, 
section 1848(c)(2)(B)(ii)(II) of the Act requires adjustment only if 
the change in expenditures resulting from the annual revisions to the 
PFS exceeds a threshold amount. Specifically, adjustments in RVUs for a 
year may not cause total PFS payments to differ by more than $20 
million from what they would have been if the adjustments were not 
made. In accordance with section 1848(c)(2)(B)(ii)(II) of the Act, if 
revisions to the RVUs cause expenditures to change by more than $20 
million, we make adjustments to ensure that expenditures do not 
increase or decrease by more than $20 million.

B. Components of the Fee Schedule Payment Amounts

    To calculate the payment for every physician's service, the 
components of the fee schedule (physician work, PE, and malpractice 
RVUs) are adjusted by geographic practice cost indices (GPCIs). The 
GPCIs reflect the relative costs of physician work, PE, and malpractice 
in an area compared to the national average costs for each component.
    RVUs are converted to dollar amounts through the application of a 
CF, which is calculated by CMS' Office of the Actuary (OACT).
    The formula for calculating the Medicare fee schedule payment 
amount for a given service and fee schedule area can be expressed as:

Payment = [(RVU work x GPCI work) + (RVU PE x GPCI PE) + (RVU 
Malpractice x GPCI Malpractice)] x CF.

C. Most Recent Changes to the Fee Schedule

    The CY 2011 PFS final rule with comment period (75 FR 73170) 
implemented changes to the PFS and other Medicare Part B payment 
policies. It also finalized many of the CY 2010 interim RVUs and 
implemented interim RVUs for new and revised codes for CY 2011 to 
ensure that our payment systems are updated to reflect changes in 
medical practice and the relative values of services. The CY 2011 PFS 
final rule with comment period also addressed other policies, as well 
as certain provisions of the Affordable Care Act and the Medicare 
Improvements for Patients and Providers Act of 2008 (MIPPA).
    In the CY 2011 PFS final rule with comment period, we announced the 
following for CY 2011: the total PFS update of -10.1 percent; the 
initial estimate for the sustainable growth rate of -13.4 percent; and 
the conversion factor (CF) of $25.5217. These figures were calculated 
based on the statutory provisions in effect on November 2, 2010, when 
the CY 2011 PFS final rule with comment period was issued.
    On December 30, 2010, we published a correction notice (76 FR 1670) 
to correct several technical and typographical errors that occurred in 
the CY 2011 PFS final rule with comment period. This correction notice 
announced a revised CF for CY 2011 of $25.4999, which was in accordance 
with the statutory provisions in effect as of November 2, 2010, the 
date the CY 2011 PFS final rule with comment period was issued.
    On November 30, 2010, the Physician Payment and Therapy Relief Act 
of 2010 (PPATRA) (Pub. L. 111-286) was signed into law. Section 3 of 
Pub. L. 111-286 modified the policy finalized in the CY 2011 PFS final 
rule with comment period (75 FR 73241), effective January 1, 2011, 
regarding the payment reduction applied to multiple therapy services 
provided to the same patient on the same day in the office setting by 
one provider and paid for under the PFS (hereinafter, the therapy 
multiple procedure payment reduction (MPPR)). The PPATRA provision 
changed the therapy MPPR percentage from 25 to 20 percent of the PE 
component of payment for the second and subsequent ``always'' therapy 
services furnished in the office setting on the same day to the same 
patient by one provider, and excepted the payment reductions associated 
with the therapy MPPR from budget neutrality under the PFS.
    On December 15, 2010, the Medicare and Medicaid Extenders Act of 
2010 (MMEA) (Pub. L. 111-309) was signed into law. Section 101 of the 
MMEA provided for a 1-year zero percent update for the CY 2011 PFS. As 
a result of the MMEA, the CY 2011 PFS conversion factor was revised to 
$33.9764.

II. Provisions of the Final Rule for the Physician Fee Schedule

A. Resource-Based Practice Expense (PE) Relative Value Units (RVUs)

1. Overview
    Practice expense (PE) is the portion of the resources used in 
furnishing the service that reflects the general categories of 
physician and practitioner expenses, such as office rent and personnel 
wages but excluding malpractice expenses, as specified in section 
1848(c)(1)(B) of the Act. Section 121 of the Social Security Amendments 
of 1994 (Pub. L. 103-432), enacted on October 31, 1994, required us to 
develop a methodology for a resource-based system for determining PE 
RVUs for each physician's service. We develop PE RVUs by looking at the 
direct and indirect physician practice resources involved in furnishing 
each service. Direct expense categories include clinical labor, medical 
supplies, and medical equipment. Indirect expenses include 
administrative labor, office expense, and all other expenses. The 
sections that follow provide more detailed information about the 
methodology for translating the resources involved in furnishing each 
service into service-specific PE RVUs. In addition, we note that 
section 1848(c)(2)(B)(ii)(II) of the Act provides that adjustments in 
RVUs for a year may not cause total PFS payments to differ by more than 
$20 million from what they would have been if the adjustments were not 
made. Therefore, if revisions to the RVUs cause expenditures to change 
by more than $20 million, we make adjustments to ensure that 
expenditures do not increase or decrease by more than $20 million. We 
refer readers to the CY 2010 PFS final rule with comment period (74 FR 
61743 through 61748) for a more detailed history of the PE methodology.
2. Practice Expense Methodology
a. Direct Practice Expense
    We use a bottom-up approach to determine the direct PE by adding 
the costs of the resources (that is, the clinical staff, equipment, and 
supplies) typically required to provide each 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 based on our review of 
recommendations received from the AMA RUC. For a detailed explanation 
of the bottom-up direct PE methodology, including examples, we refer 
readers to the Five-Year Review of Work Relative Value Units Under the 
PFS and Proposed Changes to the Practice Expense Methodology proposed 
notice (71 FR 37242) and the CY 2007 PFS final rule with comment period 
(71 FR 69629).
b. Indirect Practice Expense per Hour Data
    We use survey data on indirect practice expenses incurred per hour 
worked in developing the indirect

[[Page 73036]]

portion of the PE RVUs. Prior to CY 2010, we primarily used the 
practice expense per hour (PE/HR) by specialty that was obtained from 
the AMA's Socioeconomic Monitoring Surveys (SMS). The AMA administered 
a new survey in CY 2007 and CY 2008, the Physician Practice Expense 
Information Survey (PPIS), which was expanded (relative to the SMS) to 
include nonphysician practitioners (NPPs) paid under the PFS.
    The PPIS is a multispecialty, nationally representative, PE survey 
of both physicians and NPPs using a consistent 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 healthcare professional 
groups. We believe the PPIS is the most comprehensive source of PE 
survey information available to date. Therefore, we used the PPIS data 
to update the PE/HR data for almost all of the Medicare-recognized 
specialties that participated in the survey for the CY 2010 PFS.
    When we changed over to the PPIS data beginning in CY 2010, we did 
not change the PE RVU methodology itself or the manner in which the PE/
HR data are used in that methodology. We only updated the PE/HR data 
based on the new survey. Furthermore, as we explained in the CY 2010 
PFS final rule with comment period (74 FR 61751), because of the 
magnitude of payment reductions for some specialties resulting from the 
use of the PPIS data, we finalized a 4-year transition (75 percent old/
25 percent new for CY 2010, 50 percent old/50 percent new for CY 2011, 
25 percent old/75 percent new for CY 2012, and 100 percent new for CY 
2013) from the previous PE RVUs to the PE RVUs developed using the new 
PPIS data.
    Section 303 of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (MMA) (Pub. L. 108-173) added section 
1848(c)(2)(H)(i) of the Act, which 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.
    We do not use the PPIS data for reproductive endocrinology, sleep 
medicine, and spine surgery since these specialties are not separately 
recognized by Medicare, nor do we have a method to blend these data 
with Medicare-recognized specialty data.
    Supplemental survey data on independent labs, from the College of 
American Pathologists, were implemented for payments 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 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 medical oncology, independent 
laboratories, and IDTFs were updated to CY 2006 using the MEI to put 
them on a comparable basis with the PPIS data.
    Previously, we have 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 use the PPIS-based PE/HR. We continue 
previous crosswalks for specialties that did not participate in the 
PPIS. However, beginning in CY 2010 we changed the PE/HR crosswalk for 
portable x-ray suppliers from radiology to IDTF, a more appropriate 
crosswalk because these specialties are more similar to each other with 
respect to physician time.
    For registered dietician services, the resource-based PE RVUs have 
been calculated in accordance with the final policy that crosswalks the 
specialty to the ``All Physicians'' PE/HR data, as adopted in the CY 
2010 PFS final rule with comment period (74 FR 61752) and discussed in 
more detail in the CY 2011 PFS final rule with comment period (75 FR 
73183).
    There are four specialties whose utilization data will be newly 
incorporated into ratesetting for CY 2012. We proposed to use proxy PE/
HR values for these specialties by crosswalking values from other, 
similar specialties as follows: Speech Language Pathology from Physical 
Therapy; Hospice and Palliative Care from All Physicians; Geriatric 
Psychiatry from Psychiatry; and Intensive Cardiac Rehabilitation from 
Cardiology. Additionally, since section 1833(a)(1)(K) of the Act (as 
amended by section 3114 of the Affordable Care Act) requires that 
payment for services provided by a certified nurse midwife be paid at 
100 percent of the PFS amount, this specialty will no longer be 
excluded from the ratesetting calculation. We proposed to crosswalk the 
PE\HR data from Obstetrics/gynecology to Certified Nurse Midwife. These 
proposed changes were reflected in the ``PE HR'' file available on the 
CMS Web site under the supporting data files for the CY 2012 PFS 
proposed rule at http://www.cms.gov/PhysicianFeeSched/.
    Comment: Several commenters supported the proposals to incorporate 
the data into ratesetting for CY 2012. Most of these commenters also 
supported the proposed proxy PE/HR value crosswalks. One commenter, 
however, objected to using the Psychiatry PE/HR crosswalk for Geriatric 
Psychiatry. The commenter noted that many of the specific geriatric 
issues such as mobility, hearing impairments, and cognitive impairments 
that increase the expenses for geriatrician's treating frail adults 
also apply to the practice expenses for geriatric psychiatrists. 
Therefore, the commenter argued that CMS should use a blend of 
information from Geriatric Medicine and Psychiatry as the PE/HR 
crosswalk.
    Response: We appreciate the broad support for the proposal to 
incorporate utilization data from these specialties into ratesetting 
for CY 2012. We understand the commenters' concerns in terms of 
geriatric psychiatry and agree that in many ways the patient population 
for geriatric psychiatry may resemble the patient population for 
geriatric medicine. However, the primary drivers of the indirect 
practice expense per hour for these specialties are the administrative 
staff category and the office rent category. We disagree with the 
commenter that the administrative staff and office space requirements 
for geriatric psychiatrists more closely resemble the administrative 
staff and office space requirements for geriatrics than for psychiatry. 
In general, these categories are more likely to be driven by the types 
of services provided than the patient population served.
    After consideration of the public comments we received, we are 
finalizing our CY 2012 proposals to update the PE/HR data as reflected 
in the ``PE HR'' file available on the CMS Web site under the 
supporting data files for the CY 2012 PFS final rule with comment 
period at http://www.cms.gov/PhysicianFeeSched/.
    As provided in the CY 2010 PFS final rule with comment period (74 
FR 61751), CY 2012 is the third year of the 4-year transition to the PE 
RVUs calculated using the PPIS data.

[[Page 73037]]

Therefore, in general, the CY 2012 PE RVUs are a 25 percent/75 percent 
blend of the previous PE RVUs based on the SMS and supplemental survey 
data and the new PE RVUS developed using the PPIS data as described 
previously.
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, equipment, and supplies) typically required to provide the 
services. The costs of these resources are calculated from the refined 
direct PE inputs in our PE database. For example, if one service has a 
direct cost sum of $400 from our PE database and another service has a 
direct cost sum of $200, the direct portion of the PE RVUs of the first 
service would be twice as much as the direct portion of the PE RVUs for 
the second service.
(2) Indirect Costs
    Section II.A.2.b. of this final rule with comment period describes 
the current data sources for specialty-specific indirect costs used in 
our PE calculations. We allocate the indirect costs to the code level 
on the basis of the direct costs specifically associated with a code 
and the greater of either the clinical labor costs or the physician 
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 described 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 perform the service to determine an initial indirect 
allocator. For example, if the direct portion of the PE RVUs for a 
given service were 2.00 and direct costs, on average, represented 25 
percent of total costs for the specialties that performed the service, 
the initial indirect allocator would be 6.00 since 2.00 is 25 percent 
of 8.00 and 6.00 is 75 percent of 8.00.
     We then 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 work RVUs of 4.00 and 
the clinical labor portion of the direct PE RVUs was 1.50, we would add 
6.00 plus 4.00 (since the 4.00 work RVUs are greater than the 1.50 
clinical labor portion) 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.
     We next incorporate the specialty-specific indirect PE/HR 
data into the calculation. As a relatively extreme example for the sake 
of simplicity, assume in our previous example that, based on the survey 
data, the average indirect cost of the specialties performing the first 
service with an allocator of 10.00 was half of the average indirect 
cost of the specialties performing the second service with an indirect 
allocator of 5.00. In this case, the indirect portion of the PE RVUs of 
the first service would be equal to that of the second service.
d. Facility and Nonfacility Costs
    For procedures that can be furnished in a physician's office, as 
well as in a hospital or facility setting, we establish two PE RVUs: 
facility and nonfacility. The methodology for calculating PE RVUs is 
the same for both the facility and nonfacility RVUs, but is applied 
independently to yield two separate PE RVUs. Because Medicare makes a 
separate payment to the facility for its costs of furnishing a service, 
the facility PE RVUs are generally lower than the nonfacility PE RVUs.
e. Services With Technical Components (TCs) and Professional Components 
(PCs)
    Diagnostic services are generally comprised of two components: a 
professional component (PC) and a technical component (TC), each of 
which may be performed independently or by different providers, or they 
may be performed together as a ``global'' service. When services have 
PC and TC components that can be billed separately, the payment for the 
global component equals the sum of the payment for the TC and PC. This 
is a result of using a weighted average of the ratio of indirect to 
direct costs across all the specialties that furnish the global 
components, TCs, and PCs; that is, we apply the same weighted average 
indirect percentage factor to allocate indirect expenses to the global 
components, PCs, and TCs for a service. (The direct PE RVUs for the TC 
and PC sum to the global under the bottom-up methodology.)
f. PE RVU Methodology
    For a more detailed description of the PE RVU methodology, we refer 
readers to the CY 2010 PFS final rule with comment period (74 FR 61745 
through 61746).
(1) Setup File
    First, we create a setup file for the PE methodology. The setup 
file contains the direct cost inputs, the utilization for each 
procedure code at the specialty and facility/nonfacility place of 
service level, and the specialty-specific PE/HR data from the surveys.
(2) 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.
    Apply a scaling adjustment to the direct inputs.
    Step 2: Calculate the current aggregate pool of direct PE costs. 
This is the product of the current aggregate PE (aggregate direct and 
indirect) RVUs, the CF, and the average direct PE percentage from the 
survey data.
    Step 3: Calculate the aggregate pool of direct costs. This is the 
sum of the product of the direct costs for each service from Step 1 and 
the utilization data for that service.
    Step 4: Using the results of Step 2 and Step 3 calculate a direct 
PE scaling adjustment so that the aggregate direct cost pool does not 
exceed the current aggregate direct cost pool and apply it to the 
direct costs from Step 1 for each service.
    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 2 
and Step 5. Different CFs will result in different direct PE scaling 
factors, but this has no effect on the final direct cost PE RVUs since 
changes in the CFs and changes in the associated direct scaling factors 
offset one another.
(3) 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

[[Page 73038]]

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 components.
    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 PE RVUs, and the work RVUs. For most services the indirect 
allocator is: Indirect percentage * (direct PE RVUs/direct percentage) 
+ work RVUs.
    There are two situations where this formula is modified:
     If the service is a global service (that is, a service 
with global, professional, and technical components), then the indirect 
allocator is: indirect percentage (direct PE RVUs/direct percentage) + 
clinical 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 percentage (direct PE RVUs/direct percentage) + clinical PE 
RVUs.

(Note: For global services, the indirect allocator is based on both the 
work RVUs and the clinical labor PE RVUs. We do this to recognize that, 
for the PC service, indirect PEs will be allocated using the work RVUs, 
and for the TC service, indirect PEs will be allocated using the direct 
PE RVUs and the clinical labor PE RVUs. This also allows the global 
component RVUs to equal the sum of the PC and TC RVUs.)

    For presentation purposes in the examples in Table 2, 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 RVUs, clinical PE RVUs, 
or both depending on whether the service is a global service and 
whether the clinical PE RVUs exceed the work RVUs (as described earlier 
in this step).
    Apply a scaling adjustment to the indirect allocators.
    Step 9: Calculate the current aggregate pool of indirect PE RVUs by 
multiplying the current aggregate pool of PE RVUs 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 physician time for the service, and the 
specialty's utilization for the service across all services performed 
by the specialty.
    Step 14: Using the results of Step 12 and Step 13, calculate the 
specialty-specific indirect PE scaling factors.
    Step 15: Using the results of Step 14, calculate an indirect 
practice cost index at the specialty level by dividing each specialty-
specific indirect scaling factor by the average indirect scaling factor 
for the entire PFS.
    Step 16: Calculate the indirect practice cost index at the service 
level to ensure the capture of all indirect costs. Calculate a weighted 
average of the practice cost index values for the specialties that 
furnish the service.
(Note: For services with TCs and PCs, we calculate the indirect 
practice cost index across the global components, 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 
component.)
    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.
(4) Calculate the Final PE RVUs
    Step 18: Add the direct PE RVUs from Step 6 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 results 
of Step 18 to the current pool of PE RVUs. This final BN adjustment is 
required primarily because certain specialties are excluded from the PE 
RVU calculation for ratesetting purposes, but all specialties are 
included for purposes of calculating the final BN adjustment. (See 
``Specialties excluded from ratesetting calculation'' later in this 
section.)
(5) Setup File Information
     Specialties excluded from ratesetting calculation: For the 
purposes of calculating the PE RVUs, we exclude certain specialties, 
such as certain nonphysician practitioners paid at a percentage of the 
PFS and low-volume specialties, from the calculation. These specialties 
are included for the purposes of calculating the BN adjustment. They 
are displayed in Table 1. We note that since specialty code 97 
(physician assistant) is paid at a percentage of the PFS and therefore 
excluded from the ratesetting calculation, this specialty has been 
added to the table for CY 2012.
BILLING CODE 4120-01-P

[[Page 73039]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.000

BILLING CODE 4120-01-C
     Crosswalk certain low volume physician specialties: 
Crosswalk the utilization of certain specialties with relatively low 
PFS utilization to the associated specialties.
     Physical therapy utilization: Crosswalk the utilization 
associated with all physical therapy services to the specialty of 
physical therapy.
     Identify professional and technical services not 
identified under the usual TC and 26 modifiers: Flag the services that 
are PC and TC services, but do not use TC and 26 modifiers (for 
example, electrocardiograms). This flag associates the PC and TC with 
the associated global code for use in creating the indirect PE RVUs. 
For example, the professional service, CPT code 93010 
(Electrocardiogram, routine ECG with at least 12 leads; interpretation 
and report only), is associated with the global service, CPT code 93000 
(Electrocardiogram, routine ECG with at least 12 leads; with 
interpretation and report).
     Payment modifiers: Payment modifiers are accounted for in 
the creation of the file. 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.
     Work RVUs: The setup file contains the work RVUs from this 
final rule with comment period.
(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)- 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 = equipment utilization assumption; 0.75 for certain expensive 
diagnostic imaging equipment (see 74 FR 61753 through 61755 and 
section II.A.3. of the

[[Page 73040]]

CY 2011 PFS final rule with comment period) and 0.5 for others.
price = price of the particular piece of equipment.
interest rate = 0.11.
life of equipment = useful life of the particular piece of 
equipment.
maintenance = factor for maintenance; 0.05.

This interest rate was proposed and finalized during rulemaking for CY 
1998 PFS (62 FR 33164). We solicit comment regarding reliable data on 
current prevailing loan rates for small businesses.
    Comment: Several commenters, including the AMA RUC stated that CMS 
should establish a periodic review of the interest rate assumption for 
equipment costs using current interest rate data from the Small 
Business Association and the Federal Reserve and allow for public 
comment on periodic updates. The RUC also noted that current market 
volatility exacerbates the need to establish such a process. One 
commenter noted that exaggerated assumptions about equipment interest 
rates inflates services with high equipment cost inputs relative to 
services without high equipment cost inputs, such as most primary care 
services. Therefore, CMS should update the equipment interest rate 
assumption.
    In addition to examining the interest rate assumption, the RUC 
requested that CMS review the assumptions regarding useful life of 
equipment and yearly maintenance costs associated with maintaining high 
cost equipment and allow for comment on the methodologies used in 
developing these assumptions.
    Response: We appreciate the public comments we received in response 
to our request regarding reliable data on current prevailing loan rates 
for small businesses. We will examine the suggestions of the AMA RUC 
and the other commenters in order to inform any future rulemaking on 
this issue.
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BILLING CODE 4120-01-C
3. Changes to Direct PE Inputs
    In this section, we discuss other specific CY 2012 proposals and 
changes related to direct PE inputs. The changes we proposed and are 
finalizing are included in the proposed CY 2012 direct PE database, 
which is available on the CMS Web site under the supporting data files 
for the CY 2012 PFS final rule with comment period at http://www.cms.gov/PhysicianFeeSched/.
a. Inverted Equipment Minutes
    It came to our attention that the minutes allocated for two 
particular equipment items have been inverted. This inversion affected 
three codes: 37232 (Revascularization, endovascular, open or 
percutaneous, tibial/peroneal artery, unilateral, each additional 
vessel; with transluminal angioplasty (List separately in addition to 
code for primary procedure)), 37233 (Revascularization, endovascular, 
open or percutaneous, tibial/peroneal artery, unilateral, each 
additional vessel; with atherectomy, includes angioplasty within the 
same vessel, when performed (List separately in addition to code for 
primary procedure)), and 37234 (Revascularization, endovascular, open 
or percutaneous, tibial/peroneal artery, unilateral, each additional 
vessel; with transluminal stent placement(s), includes angioplasty 
within the same vessel, when performed (List separately in addition to 
code for primary procedure)). In each case, the number of minutes 
allocated to the ``printer, dye sublimation (photo, color)'' (ED031) 
should have been appropriately allocated to the ``stretcher'' (EF018). 
The number of minutes allocated to the stretcher should have been 
appropriately allocated to the printer. Therefore, we proposed input 
corrections to the times associated with the two equipment items in the 
three codes.
    Comment: Several commenters agreed with these corrections as 
proposed.
    Response: We appreciate the support for these proposed revisions, 
as well as the information provided that allowed us to make them.
    After consideration of the public comments we received, we are 
finalizing our CY 2012 proposal to modify the direct PE database by 
correcting the input errors associated with the two equipment items in 
the three codes. The CY 2012 direct PE database reflects these changes 
and is available on the CMS Web site under the supporting data files 
for the CY 2012 PFS final rule with comment period at http://www.cms.gov/PhysicianFeeSched/.
b. Labor and Supply Input Duplication
    We recently identified a number of CPT codes with inadvertently 
duplicated labor and supply inputs in the PE database. We proposed to 
remove the duplicate labor and supply inputs in the CY 2012 database as 
detailed in Table 3.
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[[Page 73043]]

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    Comment: Many commenters agreed with the proposal to remove the 
duplicate labor and supply inputs from the direct PE database. One 
commenter agreed with the proposal but also stated that the inputs for 
CPT code 76813 may not reflect the use of current technology.
    Response: We appreciate the broad support for the proposal. We 
refer stakeholders who do not believe that the direct PE database 
reflects current use technology for particular codes to the public 
process for nominating potentially misvalued codes in section II.B. of 
this final rule with comment period.
    After consideration of the public comments we received, we are 
finalizing our CY 2012 proposal to remove the duplicate labor and 
supply inputs in the CY 2012 database as detailed in Table 3. The CY 
2012 direct PE database reflects these changes and is available on the 
CMS Web site under the supporting data files for the CY 2012 PFS final 
rule with comment period at http://www.cms.gov/PhysicianFeeSched/.
c. AMA RUC Recommendations for Moderate Sedation Direct PE Inputs
    For services described by certain codes, the direct PE database 
includes nonfacility inputs that reflect the assumption that moderate 
sedation is inherent in the procedure. These codes

[[Page 73044]]

are listed in Table 4. The AMA RUC has recently provided CMS with a 
recommendation that standardizes the nonfacility direct PE inputs that 
account for moderate sedation as typically furnished as part of these 
services. Specifically, the RUC recommended that the direct PE inputs 
allocated for moderate sedation include the following:
     Clinical Labor Inputs: Registered Nurse (L051A) time that 
includes two minutes of time to initiate sedation, the number of 
minutes associated with the physician intra-service work time, and 15 
minutes for every hour of patient recovery time for post-service 
patient monitoring. Supply Inputs: ``Pack, conscious sedation'' (SA044) 
that includes: an angiocatheter 14g-24g, bandage, strip 0.75in x 3in, 
catheter, suction, dressing, 4in x 4.75in (Tegaderm), electrode, ECG 
(single), electrode, ground, gas, oxygen, gauze, sterile 4in x 4in, 
gloves, sterile, gown, surgical, sterile, iv infusion set, kit, iv 
starter, oxygen mask (1) and tubing (7ft), pulse oximeter sensor probe 
wrap, stop cock, 3-way, swab-pad, alcohol, syringe 1ml, syringe-needle 
3ml 22-26g, tape, surgical paper 1in (Micropore), tourniquet, and non-
latex 1in x 18in.
     Equipment Inputs: ``Table, instrument, mobile'' (EF027), 
``ECG, 3-channel (with SpO2, NIBP, temp, resp)'' (EQ011), ``IV infusion 
pump'' (EQ032), ``pulse oxymetry recording software (prolonged 
monitoring)'' (EQ212), and ``blood pressure monitor, ambulatory, w-
battery charger'' (EQ269).
    We have reviewed this recommendation and generally agree with these 
inputs. However, we note that the equipment item ``ECG, 3-channel (with 
SpO2, NIBP, temp, resp)'' (EQ011) incorporates the functionality of the 
equipment items ``pulse oxymetry recording software (prolonged 
monitoring)'' (EQ212), and ``blood pressure monitor, ambulatory, w-
battery charger'' (EQ269). Therefore, we did not include these two 
items as standard nonfacility inputs for moderate sedation in our 
proposal to accept the AMA RUC recommendation with the refinement as 
stated.

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BILLING CODE 4120-01-C
    Comment: Several commenters, including the AMA RUC, agreed with 
CMS' proposal to accept the recommendations for moderate sedation 
direct PE inputs with the stated refinements. One commenter suggested 
that a particular code on the list should be removed since moderate 
sedation is not typically performed when that service is furnished.
    Response: We appreciate the support for our proposal to accept the

[[Page 73049]]

recommendation as well as those in favor of our refinements. We 
acknowledge and appreciate the perspectives of the commenter who 
suggested that a particular code should not include moderate sedation. 
However, we note that we generally include nonfacility direct PE inputs 
for moderate sedation for all services valued in the nonfacility 
setting and reported using CPT codes that are identified by the CPT 
Editorial Panel as having moderate sedation as inherent to the 
procedure.
    After consideration of the public comments we received, we are 
finalizing our CY 2012 proposal to accept the AMA RUC recommendation 
with the refinement as stated. The CY 2012 direct PE database reflects 
these changes and is available on the CMS Web site under the supporting 
data files for the CY 2012 PFS final rule with comment period at http://www.cms.gov/PhysicianFeeSched/.
d. Updates to Price and Useful Life for Existing Direct 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 final rule with comment period.
    During 2010, we received a request to update the price of ``tray, 
bone marrow biopsy-aspiration'' (SA062) from $24.27 to $34.47. The 
request included multiple invoices that documented updated prices for 
the supply item. We also received a request to update the useful life 
of ``holter monitor'' (EQ127) from 7 years to 5 years, based on its 
entry in the AHA's publication, ''Estimated Useful Lives of Depreciable 
Hospital Assets,'' which we use as a standard reference. In each of 
these cases, we proposed to accept the updated inputs, as requested. 
The CY 2012 direct PE database reflects these proposed changes and is 
available on the CMS Web site under the supporting data files for the 
CY 2012 PFS final rule with comment period at http://www.cms.gov/PhysicianFeeSched/.
    Comment: Several commenters expressed support for the proposal to 
update the supply items as proposed. MedPAC expressed continued 
misgivings that this process for updating prices is flawed because it 
relies on voluntary requests from stakeholders who have a financial 
stake in the process. Therefore, MedPAC believes that stakeholders are 
unlikely to provide CMS with evidence that prices for supplies and 
equipment have declined because it would lead to lower RVUs for 
particular services. MedPAC also called for CMS to establish an 
objective process to regularly update the prices of medical supplies 
and equipment to reflect market prices, especially for expense items.
    Response: We appreciate the general support for the proposal. We 
also appreciate MedPAC's comments and understand the commission's 
concerns. As we have previously stated, we continue to believe it is 
important to establish a periodic and transparent process to update the 
cost of high-cost items to reflect typical market prices in our 
ratesetting methodology, and we continue to study the best way to 
establish such a process. We remind stakeholders that we have 
previously stated our difficulty in obtaining accurate pricing 
information, and this transparent process offers the opportunity for 
the community to object to increases in price inputs for particular 
items by providing accurate information about lower prices available to 
the practitioner community. We remind stakeholders that PFS payment 
rates are developed within a budget neutral system, and any increases 
in price inputs for particular supply items result in corresponding 
decreases to the relative value of all other direct practice expense 
inputs. Had any interested stakeholder presented information that 
indicated that increasing the price input for the bone marrow biopsy-
aspiration was inappropriate, we would have considered evidence of 
lower available prices prior to amending the price input in the CY 2012 
direct PE database.
    After consideration of the public comments we received, we are 
finalizing our CY 2012 proposal to accept the updated inputs, as 
requested. The CY 2012 direct PE database reflects these changes and is 
available on the CMS Web site under the supporting data files for the 
CY 2012 PFS final rule with comment period at http://www.cms.gov/PhysicianFeeSched/.
4. Development of Code-Specific PE RVUs
    When creating G codes, we often develop work, PE, and malpractice 
RVUs by crosswalking the RVUs from similar (reference) codes. In most 
of these cases, the PE RVUs are directly crosswalked pending the 
availability of utilization data. Once that data is available, we 
crosswalk the direct PE inputs and develop PE RVUs using the regular 
practice expense methodology, including allocators that are derived 
from utilization data. For CY 2012, we are using this process to 
develop PE RVUs for the following services: G0245 (Initial physician 
evaluation and management of a diabetic patient with diabetic sensory 
neuropathy resulting in a loss of protective sensation (LOPS) which 
must include: (1) The diagnosis of LOPS, (2) a patient history, (3) a 
physical examination that consists of at least the following elements: 
(a) Visual inspection of the forefoot, hindfoot and toe web spaces, (b) 
evaluation of a protective sensation, (c) evaluation of foot structure 
and biomechanics, (d) evaluation of vascular status and skin integrity, 
and (e) evaluation and recommendation of footwear and (4) patient 
education); G0246 (Follow-up physician evaluation and management of a 
diabetic patient with diabetic sensory neuropathy resulting in a loss 
of protective sensation (LOPS) to include at least the following: (1) A 
patient history, (2) a physical examination that includes: (a) Visual 
inspection of the forefoot, hindfoot and toe web spaces, (b) evaluation 
of protective sensation, (c) evaluation of foot structure and 
biomechanics, (d) evaluation of vascular status and skin integrity, and 
(e) evaluation and recommendation of footwear, and (3) patient 
education); G0247 (Routine foot care by a physician of a diabetic 
patient with diabetic sensory neuropathy resulting in a loss of 
protective sensation (LOPS) to include, the local care of superficial 
wounds (for example, superficial to muscle and fascia) and at least the 
following if present: (1) Local care of superficial wounds, (2) 
debridement of corns and calluses, and (3) trimming and debridement of 
nails); G0341 (Percutaneous islet cell transplant, includes portal vein 
catheterization and infusion); G0342 (Laparoscopy for islet cell 
transplant, includes portal vein catheterization and infusion); G0343 
(Laparotomy for islet cell transplant, includes portal vein 
catheterization and infusion); and G0365 (Vessel mapping of vessels for 
hemodialysis access (services for preoperative vessel mapping prior to 
creation of hemodialysis access using an autogenous hemodialysis 
conduit, including arterial inflow and venous outflow)). The values in 
Addendum B reflect the updated PE RVUs.
    In addition, there is a series of G-codes describing surgical 
pathology services with PE RVUs historically valued outside of the 
regular PE methodology. These codes are: G0416 (Surgical pathology, 
gross and microscopic examination for prostate needle saturation biopsy 
sampling, 1-20 specimens); G0417 (Surgical pathology, gross and 
microscopic examination for prostate needle saturation biopsy

[[Page 73050]]

sampling, 21-40 specimens); G0418 (Surgical pathology, gross and 
microscopic examination for prostate needle saturation biopsy sampling, 
41-60 specimens); and G0419 (Surgical pathology, gross and microscopic 
examination for prostate needle saturation biopsy sampling, greater 
than 60 specimens.) The PE RVUs for these codes were established as 
described in the CY 2009 PFS final rule with comment period (73 FR 
69751). In reviewing these values for CY 2012, we noted that because 
the PE RVUs established through rulemaking in CY 2009 were neither 
developed using the regular PE methodology nor directly crosswalked 
from other codes, the PE RVUs for these codes were not adjusted to 
account for the CY 2011 MEI rebasing and revising, which is discussed 
in the CY 2011 PFS final rule with comment period (75 FR 73262). While 
it was technically appropriate to insulate the PE RVUs from that 
adjustment in CY 2011, upon further review, we believe adjusting these 
PE RVUs would result in more accurate payment rates relative to the 
RVUs for other PFS services. Therefore, we proposed to adjust the PE 
RVUs for these codes by 1.182, the adjustment rate that accounted for 
the MEI rebasing and revising for CY 2011. The PE RVUs in Addendum B to 
the CY 2011 PFS proposed rule reflected the proposed updates.
    Comment: In general, commenters were supportive of the proposal to 
develop PE RVUs for these services through the PE methodology. Several 
commenters, however, urged CMS to reconsider using the standard PE 
methodology to develop PE RVUs for this service since the resulting 
payment rate for G0365 would be significantly lower than the current 
rate.
    Response: We appreciate the general support for proposal. We are 
also grateful to those commenters who alerted us to the significant 
change in PE RVUs for G0365. In developing the proposal, we did not 
expect the newly developed PE RVUs for G0365 to change significantly 
from those previously established outside the methodology. In re-
examining the disparities between the CY 2011 PE RVUs and those that 
appeared in the proposed rule, we discovered that an inadvertent data 
entry error in the proposed direct PE database had led to the 
development and display of erroneous PE RVUs. Because the commenters' 
objections to the proposal in methodology resulted directly from 
concerns about the resulting PE RVUs, we believe that those concerns 
are addressed by the correction of direct PE database error and the 
development of PE RVUs for G0365 that are more similar to the current 
PE RVUs.
    After consideration of the public comments we received, we are 
finalizing our CY 2012 proposal to develop PE RVUs through the 
methodologies explained in the proposal. The final CY 2012 RVUs for 
these codes are displayed in Addendum B to this final rule with comment 
period.
5. Physician Time for Select Services
    As we describe in section II.A.2.f. of this final rule with comment 
period, in creating the indirect practice cost index, we 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 physician time for the service, and the specialty's 
utilization for the service across all services performed by the 
specialty.
    During a review of the physician time data for the CY 2012 PFS 
rulemaking, we noted an anomaly regarding the physician time allotted 
to a series of group service codes that are listed in Table 5. We 
believe that the time associated with these codes reflects the typical 
amount of time spent by the practitioner in furnishing the group 
service. However, because the services are billed per patient receiving 
the service, the time for these codes should be divided by the typical 
number of patients per session. In reviewing the data used in the 
valuation of work RVUs for these services, we noted that in one 
vignette for these services, the typical group session consisted of 6 
patients. Therefore we proposed adjusted times for these services based 
on 6 patients. However, we sought comment on the typical number of 
patients seen per session for each of these services.
[GRAPHIC] [TIFF OMITTED] TR28NO11.007

    Comment: Several commenters alerted CMS to inaccurate post-service 
times and rounding discrepancies in the physician time file that did 
not correspond with the intent of the proposal. Specifically, 
commenters urged CMS to recalculate the times for group education/
therapy to ensure they reflect the intent of the proposal.
    Response: We appreciate being informed of these inaccuracies and 
discrepancies. As the commenters noted, the physician time file as 
displayed in the supporting web files for the CY 2012 PFS proposed rule 
included inappropriate post-service times and rounding discrepancies 
for some of the codes addressed in the proposal. We have addressed 
these issues in the physician time file used in developing the PE RVUs 
for CY 2012.

[[Page 73051]]

    Comment: Several commenters, including the AMA RUC, submitted 
useful information regarding the typical group size for particular 
services. In many cases, however, commenters expressed concerns about 
this proposal that stretched beyond the scope of the proposed rule, 
including concerns about detrimental effect on work RVUs for the 
services, inappropriate clinical comparisons of unrelated services by 
CMS, or Medicare or other payment policy changes regarding appropriate 
group sizes for billing or coverage purposes.
    Response: We did not propose any changes to the work RVUs or other 
policies related to these services. Our proposal related to the 
physician time data as used in the practice expense methodology as we 
describe in section II.A.2.f. of this final rule with comment period. 
In creating the indirect practice cost index, we 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 physician time for the service, and the specialty's 
utilization for the service across all services performed by the 
specialty. The proposal addresses the times associated for these codes 
only insofar as they contribute to the aggregate pools of indirect PE 
at the specialty level. In formulating the proposal, we addressed these 
services together because we believe that these group services share 
particular coding, not clinical, characteristics that complicate the 
use of time data in the practice expense methodology. If appropriate, 
we would address any changes to the work RVUs or other polices in 
future rulemaking.
    We appreciate all of the comments regarding this proposal. In the 
following paragraphs, we address how we will use this submitted 
information in order to set final time values for these codes--
     90849 (Multiple-family group psychotherapy);
     90853 (Group psychotherapy (other than of a multiple-
family group); and
     90857 (Interactive group psychotherapy).
    Comment: The AMA RUC recommended that CMS postpone any changes to 
the physician times for these codes since these services are currently 
under revision by the CPT Editorial Panel and the AMA RUC intends to 
provide CMS with new recommendations in the near future.
    Response: We appreciate that CPT and the AMA RUC are both examining 
these services, and we will consider any codes or recommendations 
regarding these services. Until then, we continue to believe that 
because these services are billed per patient, the physician time for 
the corresponding codes should be divided by the typical number of 
patients per session in order to arrive at more appropriate PE RVUs 
across the PFS. We note that the vignette for 90853 includes a typical 
group session of 6 patients. Therefore, pending new recommendations 
from the AMA RUC, we believe it would be appropriate to establish 
physician time for this code as 2 pre-service minutes, 14 intra-service 
minutes, and 8 post-service minutes with the understanding that the 
total resulting minutes is the product of these and the number of 
patients in the group.
    We believe that the typical group session may be similar for 90857 
based on similar code descriptors, work RVUs, and clinical vignettes. 
Therefore, pending new recommendations from the AMA RUC, we believe it 
would be appropriate to establish physician time for this code as 3 
pre-service minutes, 9 intra-service minutes, and 10 post-service 
minutes with the understanding that the total resulting minutes is the 
product of these and the number of patients in the group.
    For 90849, we believe that it would be most appropriate to wait for 
the new recommendations prior to adjusting the physician time because 
the typical group size and typical patient size is different, and we 
received no information regarding the typical group size.
     92508 (Treatment of speech, language, voice, 
communication, and/or auditory processing disorder; group, 2 or more 
individuals)
    Comment: Several commenters pointed out that the CPT 92508 was 
recently reviewed by the HCPAC and that the recommended physician times 
already are considered the appropriate proration by the number of 
patients in the group.
    Response: We agree with the commenter's assessment and therefore, 
believe it would be appropriate to discard our proposed physician time 
changes for CPT 92508 and maintain the current time of 2 minutes pre-
time, 17 minutes intra-time and 3 minutes post-time for CY 2012.
     96153 (Health and behavior intervention, each 15 minutes, 
face-to-face; group (2 or more patients))
    Comment: The AMA RUC reported that because the February 2001 HCPAC 
recommendation indicated that the typical number of people receiving 
this service per group was 6 individuals, CMS' proposal to divide the 
physician time by six is appropriate.
    Response: We appreciate the information submitted by the AMA RUC 
and thank them for pointing out initially the inaccuracy in the post 
service minutes. Considering this information, we believe it is 
appropriate to amend the physician time for CPT code 96153 to 1 pre-
service minute, 3 intra-service minutes, and 1 post-service minute with 
the understanding that the total resulting minutes is the product of 
these and the number of patients in the group.
     97150 (Therapeutic procedure(s), group (2 or more 
individuals))
    Comment: In its comment, the AMA RUC noted that this code is 
scheduled to be reviewed by the RUC early in 2012. Therefore, the AMA 
RUC recommends that CMS postpone any changes until receiving the new 
recommendation. Another commenter informed CMS that the typical group 
size is two for this procedure.
    Response: We appreciate the AMA RUC's comments and we will consider 
any codes or recommendations regarding these services. Until then, we 
continue to believe that, because these services are billed per 
patient, the physician time for the corresponding codes should be 
divided by the typical number of patients per session in order to 
arrive at more appropriate PE RVUs across the PFS. We also appreciate 
the other commenter's information that two patients are the typical 
group size for this service. Therefore, pending the new recommendation 
from the AMA RUC, we believe it would be appropriate to establish 
physician time for this code as 1 pre-service minute, 12 intra-service 
minutes, and 2 post-service minutes with the understanding that the 
total resulting minutes is the product of these and the number of 
patients in the group.
     97804 (Medical nutrition therapy; group (2 or more 
individual(s)), each 30 minutes)
    Comment: The AMA RUC suggested that CMS should rely on information 
provided by the American Dietetic Association for a specific typical 
number of individuals in a group for CPT code 97804. The American 
Dietetic Association commented that groups of four to six patients were 
typical when this service is furnished.
    Response: We appreciate the information provided by the commenters. 
Considering this information, we believe it is appropriate to amend the 
physician time for CPT code 97804 to 2 pre-service minutes, 6 intra-
service minutes, and 2 post-service minutes with the understanding that 
the total resulting minutes is the product of these and the number of 
patients in the group.
     G0109 (Diabetes outpatient self-management training 
services, group session (2 or more), per 30 minutes)

[[Page 73052]]

    Comment: A commenter submitted information supporting a typical 
group size of 6 patients for this service and urged CMS to use that 
number in determining the appropriate physician time associated with 
the code.
    Response: We appreciate the commenter's response. Considering this 
information, we believe it is appropriate to amend the physician time 
for CPT code 97804 to 2 pre-service minutes, 5 intra-service minutes, 
and 2 post-service minutes with the understanding that the total 
resulting minutes is the product of these and the number of patients in 
the group.
     G0271 (Medical nutrition therapy, reassessment and 
subsequent intervention(s) following second referral in same year for 
change in diagnosis, medical condition, or treatment regimen (including 
additional hours needed for renal disease), group (2 or more 
individuals), each 30 minutes), and G0421 (Face-to-face educational 
services related to the care of chronic kidney disease; group, per 
session, per one hour)
    We received no comments regarding the typical group time for these 
services. However, given the similarities of these services to CPT code 
97804 (Medical nutrition therapy; group (2 or more individual(s)), each 
30 minutes), we believe it would be appropriate to use the times for 
that code as a reasonable crosswalk and establish physician time for 
these codes as 2 pre-service minutes, 6 intra-service minutes, and 2 
post-service minutes with the understanding that the total resulting 
minutes is the product of these and the number of patients in the 
group.
    After consideration of the public comments and related information, 
we are finalizing our proposed updates to the physician time file, as 
amended for certain codes as explicitly addressed in this section. The 
final time values for these codes can be found in the final CY 2012 
Physician Time file, which is available on the CMS Web site under the 
supporting data files for the CY 2012 PFS proposed rule at http://www.cms.gov/PhysicianFeeSched/.
    As a result of our review, we also proposed to update our physician 
time file to reflect the physician time associated with certain G-codes 
that had previously been missing from the file.
    We received no comments regarding our proposal to update the 
physician time file to reflect the physician time associated with the 
G-codes that were previously missing from the file. Therefore, we are 
finalizing our updates to the physician time file. The final time 
values can be found in the final CY 2012 Physician Time file, which is 
available on the CMS Web site under the supporting data files for the 
CY 2012 PFS proposed rule at http://www.cms.gov/PhysicianFeeSched/.

B. Potentially Misvalued Services Under the Physician Fee Schedule

1. Valuing Services Under the PFS
    As discussed in section I. of this final rule with comment period, 
in order to value services under the PFS, section 1848(c) of the Act 
requires the Secretary to determine relative values for physicians' 
services based on three components: work, practice expense (PE), and 
malpractice. Section 1848(c)(1)(A) of the Act defines the work 
component to include ``the portion of the resources used in furnishing 
the service that reflects physician time and intensity in furnishing 
the service.'' Additionally, the statute provides that the work 
component shall include activities that occur before and after direct 
patient contact. Furthermore, the statute specifies that with respect 
to surgical procedures, the valuation of the work component for the 
code must reflect a ``global'' concept in which pre-operative and post-
operative physicians' services related to the procedure are also 
included.
    In addition, section 1848(c)(2)(C)(i) of the Act specifies that 
``the Secretary shall determine a number of work relative value units 
(RVUs) for the service based on the relative resources incorporating 
physician time and intensity required in furnishing the service.'' As 
discussed in detail in sections I.A.2. and I.A.3. of this final rule 
with comment period, the statute also defines the PE and malpractice 
components and provides specific guidance in the calculation of the 
RVUs for each of these components. Section 1848(c)(1)(B) of the Act 
defines the PE component as ``the portion of the resources used in 
furnishing the service that reflects the general categories of expenses 
(such as office rent and wages of personnel, but excluding malpractice 
expenses) comprising practice expenses.''
    Section 1848(c)(2)(C)(ii) of the Act specifies that the ``Secretary 
shall determine a number of practice expense relative value units for 
the services for years beginning with 1999 based on the relative 
practice expense resources involved in furnishing the service.'' 
Furthermore, section 1848(c)(2)(B) of the Act directs the Secretary to 
conduct a periodic review, not less often than every 5 years, of the 
RVUs established under the PFS. On March 23, 2010, the Affordable Care 
Act was enacted, further requiring the Secretary to periodically 
identify and review potentially misvalued codes, and make appropriate 
adjustments to the relative values of those services identified as 
being potentially misvalued. Section 3134(a) of the Affordable Care Act 
added a new section 1848(c)(2)(K) to the Act which 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 3134(a) of the Affordable 
Care Act also added a new section 1848(c)(2)(L) to the Act which 
requires the Secretary to develop a process to validate the RVUs of 
certain potentially misvalued codes under the PFS, identified using the 
same criteria used to identify potentially misvalued codes, and to make 
appropriate adjustments.
    As discussed in section I.A.1. of this final rule with comment 
period, we generally establish physician work RVUs for new and revised 
codes based on our review of recommendations received from the American 
Medical Association Specialty Society Relative Value Scale Update 
Committee (AMA RUC). We also receive recommendations from the AMA RUC 
regarding direct PE inputs for services, which we evaluate in order to 
develop the PE RVUs under the PFS. The AMA RUC also provides 
recommendations to us on the values for codes that have been identified 
as potentially misvalued. To respond to concerns expressed by MedPAC, 
the Congress, and other stakeholders regarding accurate valuation of 
services under the PFS, the AMA RUC created the Five-Year Review 
Identification Workgroup in 2006. In addition to providing 
recommendations to us for work RVUs and physician times, the AMA RUC's 
Practice Expense Subcommittee reviews direct PE inputs (clinical labor, 
medical supplies, and medical equipment) for individual services.
    In accordance with section 1848(c) of the Act, we determine 
appropriate adjustments to the RVUs, taking into account the 
recommendations provided by the AMA RUC and MedPAC, explain the basis 
of these adjustments, and respond to public comments in the PFS 
proposed and final rules. 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, in addition to taking into account the results of 
consultations with organizations representing physicians.

[[Page 73053]]

2. Identifying, Reviewing, and Validating the RVUs of Potentially 
Misvalued Services Under the PFS
a. Background
    In its March 2006 Report to the Congress, MedPAC noted that 
``misvalued services can distort the price signals 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 for a number of reasons: For example, 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.'' That is, the amount of physician work 
needed to furnish an existing service may decrease when new 
technologies are incorporated. Services can also become overvalued when 
practice expenses decline. This can happen when the costs of equipment 
and supplies fall, or when equipment is used more frequently, reducing 
its cost per use. Likewise, services can become undervalued when 
physician work increases or practice expenses rise. In the ensuing 
years since MedPAC's 2006 report, additional groups of potentially 
misvalued services have been identified by the Congress, CMS, MedPAC, 
the AMA RUC, and other stakeholders.
    In recent years CMS and the AMA RUC have taken increasingly 
significant steps to address potentially misvalued codes. As MedPAC 
noted in its March 2009 Report to the Congress, in the intervening 
years since MedPAC made the initial recommendations, ``CMS and the AMA 
RUC have taken several steps to improve the review process.'' Most 
recently, section 1848(c)(2)(K)(ii) of the Act (as added by section 
3134(a) of the Affordable Care Act) directed the Secretary to 
specifically examine, as determined appropriate, potentially misvalued 
services in seven categories as follows:
     Codes and families of codes for which there has been the 
fastest growth.
     Codes and families of codes that have experienced 
substantial changes in practice expenses.
     Codes that are recently established for new technologies 
or services.
     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 which have not been subject to review since the 
implementation of the RBRVS (the so-called `Harvard-valued codes').
     Other codes determined to be 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 the RVUs with the periodic review 
described in section 1848(c)(2)(B) of the Act. Finally, section 
1848(c)(2)(K)(iii)(V) of the Act specifies that the Secretary may make 
appropriate coding revisions (including using existing processes for 
consideration of coding changes) which may include consolidation of 
individual services into bundled codes for payment under the physician 
fee schedule.
b. Progress in Identifying and Reviewing Potentially Misvalued Codes
    Over the last several years, CMS, in conjunction with the AMA RUC, 
has identified and reviewed numerous potentially misvalued codes in all 
seven of the categories specified in section 1848(c)(2)(K)(ii) of the 
Act, and we plan to continue our work examining potentially misvalued 
codes in these areas over the upcoming years, consistent with the new 
legislative requirements on this issue. In the current process, we 
request the AMA RUC to review potentially misvalued codes that we 
identify and to make recommendations on revised work RVUs and/or direct 
PE inputs for those codes to us. The AMA RUC, through its own 
processes, also might identify and review potentially misvalued 
procedures. We then assess the recommended revised work RVUs and/or 
direct PE inputs and, in accordance with section 1848(c) of the Act, we 
determine if the recommendations constitute appropriate adjustments to 
the RVUs under the PFS.
    Since CY 2009, as a part of the annual potentially misvalued code 
review, we have reviewed over 700 potentially misvalued codes to refine 
work RVUs and direct PE inputs in addition to continuing the 
comprehensive Five-Year Review process. We have adopted appropriate 
work RVUs and direct PE inputs for these services as a result of these 
reviews.
    Our prior reviews of codes under the potentially misvalued codes 
initiative have included codes in all seven categories specified in 
section 1848(c)(2)(K)(ii) of the Act. That is, we have reviewed and 
assigned more appropriate values to certain--
     Codes and families of codes for which there has been the 
fastest growth;
     Codes and families of codes that have experienced 
substantial changes in practice expenses;
     Codes that were recently established for new technologies 
or services;
     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 which had not been subject to review since the 
implementation of the RBRVS (`Harvard valued'); and
     Codes potentially misvalued as determined by the 
Secretary.
    In this last category, we have previously proposed policies in CYs 
2009, 2010, and 2011, and requested that the AMA RUC review codes for 
which there have been shifts in the site-of-service (that is, codes 
that were originally valued as being furnished in the inpatient 
setting, but that are now predominantly furnished on an outpatient 
basis), as well as codes that qualify as ``23-hour stay'' outpatient 
services (these services typically have lengthy hospital outpatient 
recovery periods). We note that a more detailed discussion of the 
extensive prior reviews of potentially misvalued codes is included in 
the CY 2011 PFS final rule with comment period (75 FR 73215 through 
73216).
    In CY 2011, we identified additional codes under section 
1848(c)(2)(K)(ii) of the Act that we believe are ripe for review and 
referred them to the AMA RUC (75 FR 73215 through 73216). Specifically, 
we identified potentially misvalued codes in the category of ``Other 
codes determined to be appropriate by the Secretary,'' referring lists 
of codes that have low work RVUs but that are high volume based on 
claims data, as well as targeted key

[[Page 73054]]

codes that the AMA RUC uses as reference services for valuing other 
services (termed ``multispecialty points of comparison'' services).
    Since the publication of the CY 2011 PFS final rule with comment 
period, we released the Fourth Five-Year Review of Work (76 FR 32410), 
which discussed the identification and review of an additional 173 
potentially misvalued codes. We initiated the Fourth Five-Year Review 
of work RVUs by soliciting public comments on potentially misvalued 
codes for all services included in the CY 2010 PFS final rule with 
comment period that was published in the Federal Register on November 
25, 2009. In addition to the codes submitted by the commenters, we 
identified a number of potentially misvalued codes and requested the 
AMA RUC review and provide recommendations. Our identification of 
potentially misvalued codes for the Fourth Five-Year Review focused on 
two Affordable Care Act categories: site-of-service anomaly codes and 
Harvard valued codes. As discussed in the Fourth Five-Year Review of 
Work (76 FR 32410), we sent the AMA RUC an initial list of 219 codes 
for review. Consistent with our past practice, we requested the AMA RUC 
to review codes on a ``family'' basis rather than in isolation in order 
to ensure that appropriate relativity in the system was retained. 
Consequently, the AMA RUC included additional codes for review, 
resulting in a total of 290 codes for the Fourth Five-Year Review of 
Work. Of those 290 codes, 53 were subsequently sent by the AMA RUC to 
the CPT Editorial Panel to consider coding changes, 14 were not 
reviewed by the AMA RUC (and subsequently not reviewed by us) because 
the specialty society that had originally requested the review in its 
public comments on the CY 2010 PFS final rule with comment period 
elected to withdraw the codes, 36 were not reviewed by the AMA RUC 
because their values were set as interim final in the CY 2011 PFS final 
rule with comment period, and 14 were not reviewed by us because they 
were noncovered services under Medicare. Therefore, the AMA RUC 
reviewed 173 of the 290 codes initially identified for the Fourth Five-
Year Review of Work, and provided the recommendations that were 
addressed in detail in the Fourth Five-Year Review of Work (76 FR 
32410). In addition, under the Fourth Five-Year Review of Work, we 
reviewed recommendations for five additional potentially misvalued 
codes from the Health Care Professionals Advisory Committee (HCPAC), a 
deliberative body of nonphysician practitioners that also convenes 
during the AMA RUC meeting. The HCPAC represents physician assistants, 
chiropractors, nurses, occupational therapists, optometrists, physical 
therapists, podiatrists, psychologists, audiologists, speech 
pathologists, social workers, and registered dieticians.
    In summary, since CY 2009, CMS and the AMA RUC have addressed a 
number of potentially misvalued codes. For CY 2009, the AMA RUC 
recommended revised work values and/or PE inputs for 204 misvalued 
services (73 FR 69883). For CY 2010, an additional 113 codes were 
identified as misvalued and the AMA RUC provided us new recommendations 
for revised work RVUs and/or PE inputs for these codes to us as 
discussed in the CY 2010 PFS final rule with comment period (74 FR 
61778). For CY 2011, CMS reviewed and adopted more appropriate values 
for 209 codes under the annual review of potentially misvalued codes. 
For CY 2012, we recently released the Fourth Five-Year Review of Work, 
which discussed the review of 173 potentially misvalued codes and 
proposed appropriate adjustments to RVUs. In section II.B.5.of this 
final rule with comment period, we also provide a list of codes 
identified for future consideration as part of the potentially 
misvalued codes initiative, that is, in addition to the codes that are 
part of the Fourth Five-Year Review of Work, as discussed in that 
section, we are requesting the AMA RUC review these codes and submit 
recommendations to us.
c. Validating RVUs of Potentially Misvalued Codes
    In addition to identifying and reviewing potentially misvalued 
codes, section 3134(a) of the Affordable Care Act added a new section 
1848(c)(2)(L) of the Act, which specifies that the Secretary shall 
establish a formal process to validate RVUs under the PFS. The 
validation process may include validation of work elements (such as 
time, mental effort and professional judgment, technical skill and 
physical effort, and stress due to risk) involved with furnishing a 
service and may include validation of the pre-, post-, and intra-
service components of work. The Secretary is directed to validate a 
sampling of the work RVUs of codes identified through any of the seven 
categories of potentially misvalued codes specified by section 
1848(c)(2)(K)(ii) of the Act. Furthermore, the Secretary may conduct 
the validation using methods similar to those used to review 
potentially misvalued codes, including conducting surveys, other data 
collection activities, studies, or other analyses as the Secretary 
determines to be appropriate to facilitate the validation of RVUs of 
services.
    In the CY 2011 PFS proposed rule (75 FR 40068), we solicited public 
comments on possible approaches and methodologies that we should 
consider for a validation process. We received a number of comments 
regarding possible approaches and methodologies for a validation 
process. As discussed in the CY 2011 PFS final rule with comment period 
(75 FR 73217), some commenters were skeptical that there could be 
viable alternative methods to the existing AMA RUC code review process 
for validating physician time and intensity that would preserve the 
appropriate relativity of specific physician's services under the 
current payment system. These commenters generally urged us to rely 
solely on the AMA RUC to provide valuations for services under the PFS.
    While a number of commenters strongly opposed our plans to develop 
a formal validation process, many other commenters expressed support 
for the development and establishment of a system-wide validation 
process of the work RVUs under the PFS. As noted in the CY 2011 PFS 
final rule with comment period (75 FR 73217 through 73218), these 
commenters commended us for seeking new approaches to validation, as 
well as being open to suggestions from the public on this process. A 
number of commenters submitted technical advice and offered their time 
and expertise as resources for us to draw upon in any examination of 
possible approaches to developing a formal validation process.
    However, in response to our solicitation of comments regarding time 
and motion studies, a number of commenters opposed the approach of 
using time and motion studies to validate estimates of physician time 
and intensity, stating that properly conducted time and motion studies 
are extraordinarily expensive and, given the thousands of codes paid 
under the PFS, it would be unlikely that all codes could be studied. As 
we stated in the CY 2011 PFS final rule with comment period (75 FR 
73218), we understand that these studies would require significant 
resources and we remain open to suggestions for other approaches to 
developing a formal validation process. We noted that MedPAC suggested 
in its comment letter that we should consider ``collecting data on a 
recurring basis from a cohort of practices and other facilities where 
physicians and nonphysician clinical practitioners

[[Page 73055]]

work'' (75 FR 73218). As we stated previously, we intend to establish a 
more extensive validation process of RVUs in the future in accordance 
with the requirements of section 1848(c)(2)(L) of the Act.
    While we received a modest number of comments specifically 
addressing technical and methodological aspects of developing a 
validation system, we believe it would be beneficial to provide an 
additional opportunity for stakeholders to submit comments on data 
sources and possible methodologies for developing a system-wide 
validation system. In the proposed rule, we solicited comments on data 
sources and studies which may be used to validate estimates of 
physician time and intensity that could be factored into the work RVUs, 
especially for services with rapid growth in Medicare expenditures, 
which is one of the Affordable Care Act categories that the statute 
specifically directs us to examine. We also solicited comments 
regarding MedPAC's suggestion of ``collecting data on a recurring basis 
from a cohort of practices and other facilities where physicians and 
nonphysician clinical practitioners work.'' We note that after our 
proposed rule was released, MedPAC further discussed its continuing 
concerns regarding accurate data. ``In our June 2011 Report to the 
Congress, we expressed deep concern in particular about the accuracy of 
the fee schedule's time estimates--estimates of the time that 
physicians and other health professionals spend furnishing services. 
These estimates are an important factor in determining the RVUs for 
practitioner work. However, research for CMS and for the Assistant 
Secretary for Planning and Evaluation has shown that the time estimates 
are likely too high for some services. In addition, anecdotal evidence 
and the experience of clinicians on the Commission raises questions 
about the time estimates'' (MedPAC Report to the Congress ``Medicare 
and the Health Care Delivery System, June 2011'').
    We plan to discuss the validation process in more detail in a 
future PFS rule once we have considered the matter further in 
conjunction with the public comments received on the CY 2011 
rulemaking, as well as comments received on this final rule with 
comment period. We note that any proposals we would make on the formal 
validation process would be subject to public comment, and we would 
consider those comments before finalizing the policies.
    Comment: We received a number of comments and suggestions on 
developing a system-wide validation process, including stakeholders' 
reactions to MedPAC's suggestion of data collection from a cohort of 
physician practices.
    Response: We thank the commenters for their suggestions on 
developing a system-wide validation system and, as we noted previously, 
we plan to discuss the development of the validation process in more 
detail in a future PFS rule.
3. Consolidating Reviews of Potentially Misvalued Codes
    As previously discussed, we are statutorily required under section 
1848(c)(2)(B) of the Act to review the RVUs of services paid under the 
PFS no less often than every 5 years. In the past, we have satisfied 
this requirement by conducting separate periodic reviews of work, PE, 
and malpractice RVUs for established services every 5-years in what is 
commonly known as CMS' Five-Year Reviews of Work, PE, and Malpractice 
RVUs. On May 24, 2011, we released the proposed notice regarding the 
Fourth Five-Year Review of Work RVUs. The most recent comprehensive 
Five-Year Review of PE RVUs occurred for CY 2010; the same year we 
began using the Physician Practice Information Survey (PPIS) data to 
update the PE RVUs. The last Five-Year Review of Malpractice RVUs also 
occurred for CY 2010. These Five-Year Reviews have historically 
included codes identified and nominated by the public for review, as 
well as those identified by CMS and the AMA RUC.
    In addition to the Five-Year Reviews, beginning for CY 2009, CMS 
and the AMA RUC have identified and reviewed a number of potentially 
misvalued codes on an annual basis using various identification 
screens, such as codes with high growth rates, codes that are 
frequently billed together in one encounter, and codes that are valued 
as inpatient services but that are now predominately furnished as 
outpatient services. These annual reviews have not included codes 
identified by the public as potentially misvalued since, historically, 
the public has the opportunity to submit potentially misvalued codes 
during the Five-Year Review process.
    With the enactment of the Affordable Care Act in 2010, which 
endorsed our initiative to identify and review potentially misvalued 
codes and emphasized the importance of our ongoing work in this area to 
improve accuracy and appropriateness of payments under the PFS, we 
believe that continuing the annual identification and review of 
potentially misvalued codes is necessary. Given that we are engaging in 
extensive reviews of work RVUs and direct PE inputs of potentially 
misvalued codes on an annual basis, we believe that separate and 
``freestanding'' Five-Year Reviews of Work and PE may have become 
redundant with our annual efforts. Therefore, for CY 2012 and forward, 
we proposed to consolidate the formal Five-Year Review of Work and PE 
with the annual review of potentially misvalued codes. That is, we 
would begin meeting the statutory requirement to review work and PE 
RVUs for potentially misvalued codes at least once every 5-years 
through an annual process, rather than once every 5-years. Furthermore, 
to allow for public input and to preserve the public's ability to 
identify and nominate potentially misvalued codes for review, we 
proposed a process by which the public could submit codes for our 
potential review, along with supporting documentation, on an annual 
basis. Our review of these codes would be incorporated into our 
potentially misvalued codes initiative. This proposed public process is 
further discussed in section II.B.4. of this final rule with comment 
period. In the CY 2012 proposed rule, we solicited comments on our 
proposal to consolidate the formal Five-Year Reviews of Work and PE 
with the annual review of potentially misvalued codes.
    Comment: Commenters overwhelmingly supported the proposal to 
consolidate review of potentially misvalued codes into one annual 
process. Commenters also agreed that the review should include both 
work and practice expense, and encouraged CMS to continue its efforts 
to ensure that professional liability valuations are as current as 
possible. However, some commenters were concerned that the number of 
codes that CMS and the public, through the proposed code nomination 
process, could potentially bring forward for review would create 
significant burden on specialty societies in terms of time, manpower, 
and financial resources on specialty societies. The commenters urged 
CMS to recognize that a reasonable timeline is required for specialty 
societies to conduct a credible evaluation of potentially misvalued 
services, especially as specialty societies already have a sizable 
number of pending requests for reviews of services previously 
identified under the potentially misvalued code initiative.
    To alleviate concerns that the consolidation could result in 
requiring specialty societies to survey a large

[[Page 73056]]

volume of codes every year, commenters offered several suggestions for 
limiting the number of codes reviewed each year. Commenters requested 
that CMS consider establishing a timeframe under which codes could be 
resurveyed. That is, a number of commenters suggested that the 
physician work of a code should not be re-reviewed within a certain 
timeframe, such as a 3- or 5-year period after it was last reviewed. 
Commenters also asked that CMS consider a ``cap'' on the number of 
codes and/or code families that we would require any given specialty to 
review in a calendar year. Furthermore, some commenters were worried 
that in substituting an annual review process for one that previously 
occurred once every five years, the burden of reviewing codes 
identified as potentially misvalued would be distributed inequitably 
among the various specialties, leading to a perception of unfairness in 
the process which the commenters believed would undermine CMS' 
potentially misvalued codes initiative. These commenters urged CMS to 
establish a 3-year timetable for the review of potentially misvalued 
services where a comparable proportion of codes for each specialty each 
year would be specified in advance so that the specialty societies may 
be able to allocate resources more predictably and efficiently.
    Commenters also expressed concern that CMS is proposing to review 
potentially misvalued codes on the same time frame as the review of new 
and revised codes where CMS has historically issued interim final 
values for these codes in the final rule with comment period. The 
commenters asserted they need to have the opportunity to review CMS' 
response to AMA RUC recommendations, comment on CMS' proposed values, 
and receive a response from CMS to these comments prior to January 1 of 
the year the revised RVUs will be used to pay physician claims. A 
commenter noted ``physicians should not be penalized by having to 
receive potentially incorrect reimbursement for a procedure for as much 
as 12 months because of the government's timing of its notice and 
comment processes.'' Other commenters, while supportive of CMS' 
proposal to consolidate reviews, stressed that the process should not 
be condensed so much that there is not time for thoughtful comment and 
consideration. Consequently, commenters urged CMS to work with the AMA 
RUC so that all recommendations for a given year are received by an 
earlier deadline, allowing for publication in that year's proposed rule 
and for comments to be addressed by CMS in that year's final rule 
before changes that affect payment are implemented.
    Response: We appreciate the support commenters expressed for our 
proposed consolidated annual review of codes and thank the commenters 
for their comments and suggestions. We understand the commenters' 
concerns regarding the potential burden that some specialty societies 
may be expecting from this process. We agree with commenters that a 
reasonable timeline should be allowed for evaluation of services. 
Therefore, to address commenters' concern regarding the potential 
burden, we will be sensitive to the number of codes identified as 
potentially misvalued for any given specialty society, and we will 
prioritize codes for immediate review if the specialty society makes 
such a request to us. Since we cannot predict with certainty the number 
of codes that will be identified as potentially misvalued, nor the 
distribution of those codes among specialty societies for review, we do 
not believe we should predetermine ``caps'' or place time limitations 
on the review process that may unintentionally hinder the rapid 
progress of our potentially misvalued codes initiative. However, we may 
revisit the commenters' suggestions at a later date if the volume of 
codes to be reviewed becomes an issue.
    To respond to the commenters who were worried that codes identified 
through the potentially misvalued codes process may not be equitably or 
``fairly'' distributed among specialty societies and have suggested 
that CMS review a comparable proportion of codes for each specialty 
each year, we note that, based on our previous experience, the 
objective screens we have used to identify potentially misvalued codes 
do not produce lists of codes that are evenly distributed among the 
specialties that furnish them. Rather, the screens have tended to 
identify certain types of services more frequently than others (for 
example, due to rapidly changing technology) and therefore yield 
disproportionate numbers of potentially misvalued codes to be reviewed 
by the various specialty societies. However, we have received similar 
comments in previous rules regarding distribution among specialty 
societies. Consequently, in the CY 2012 proposed rule, we explicitly 
identified a list of potentially misvalued high expenditure codes that 
spans most specialties discussed in II.B.5.a. of this final rule with 
comment period.
    Finally, to respond to the comments regarding the code review 
cycle, we note that the timing of CMS' current review process is 
constrained by the CPT Editorial Panel's scheduled release of new and 
revised codes by October 1 and the receipt of the complete AMA RUC's 
recommendations later in the year, which are at odds with the PFS 
rulemaking cycle. As we have indicated for many years in our PFS final 
rules with comment period, most recently in the CY 2011 rule (75 FR 
73170), before adopting interim RVUs for new and revised codes, we have 
the opportunity to review and consider AMA RUC recommendations which 
are based on input from the medical community. If we did not adopt RVUs 
for new and revised codes in the initial year on an interim final 
basis, we would either have to delay using the codes for a year or 
permit each Medicare contractor to establish their own payment rate for 
the codes. We believe it would be contrary to the public interest to 
delay adopting values for new and revised codes for the initial year, 
especially since we have an opportunity to receive significant input 
from the medical community before adopting the values, and the 
alternatives could produce undesirable levels of uncertainty and 
inconsistency in payment for a year. We understand the preference of 
some commenters for the review of potentially misvalued codes to be 
conducted within a single rulemaking year in order to avoid payment 
under interim values for the coming year. However, we continue to 
believe that it is important to consolidate the work and PE reviews for 
all codes (new, revised, and potentially misvalued) into one cycle. As 
we have explained in several previous PFS final rules with comment 
period, most recently in the CY 2011 PFS final rule with comment period 
(75 FR 73170), we believe it is in the public interest to adopt interim 
final revised RVUs for codes that have been identified as misvalued. 
Similar to the new and revised codes, before making any changes to RVUs 
for potentially misvalued codes, we have an opportunity to review input 
from the medical community in the form of the AMA RUC recommendations 
for the codes. We believe a delay in implementing revised values for 
codes that have been identified as misvalued would perpetuate payment 
for the services at a rate that does not appropriately reflect the 
relative resources involved in furnishing the service and would 
continue unwarranted distortion in the payment for other services 
across the PFS.

[[Page 73057]]

    We note that it is often difficult to draw definitive lines between 
the codes that are being reviewed as new, revised, or potentially 
misvalued. For example, CMS may identify a code as potentially 
misvalued in a given year and refer the family of codes to the AMA RUC 
for review. Subsequently, the AMA RUC may send the family of codes to 
the CPT Editorial Panel for revision because upon an initial review, 
the AMA RUC may have concluded that the family of services has evolved 
to the point that the code descriptors are no longer appropriate. The 
CPT Editorial Panel may revise the code(s) descriptors or may create 
entirely new codes to better define the service. In this final rule 
with comment period, we reviewed several new codes initially referred 
to the AMA RUC for review through our potentially misvalued codes 
initiative, and we believe that this trend likely will increase in the 
near future. Additionally, since CMS reviews and assigns interim values 
to new and revised codes in the PFS final rule with comment period for 
the coming year, consolidating the review of potentially misvalued 
codes with the new and revised codes is a more efficient and 
transparent process, and reduces the burden on both specialty societies 
and other stakeholders who would otherwise be called upon to consider, 
review and comment on the same family of codes in multiple rules. 
Moreover, consolidation of our review of new, revised, and potentially 
misvalued codes in one cycle allows for codes in a family to be 
reviewed together, resulting in more consistent valuation within code 
families and a better opportunity to maintain appropriate relativity 
within code families which, as we discuss in this section of this final 
rule with comment period, is a high priority.
    Therefore, given the considerable overall support commenters 
expressed, we are finalizing our proposal without modification to 
consolidate periodic reviews of work and PE RVUs under section 
1848(c)(2)(B) of the Act and of potentially misvalued codes under 
section 1848(c)(2)(K) of the Act into one annual process.
    We note that while we proposed to review the physician work RVUs 
and direct PE inputs of potentially misvalued codes on an annual basis, 
we did not propose at this time to review malpractice RVUs on an annual 
basis. As discussed in section II.C. of this final rule with comment 
period, in general, malpractice RVUs are based on malpractice insurance 
premium data on a specialty level. The last comprehensive review and 
update of the malpractice RVUs occurred for CY 2010 using data obtained 
from the PPIS data. Since it is not feasible to conduct such extensive 
physician surveys to obtain updated specialty level malpractice 
insurance premium data on an annual basis, we believe the comprehensive 
review of malpractice RVUs should continue to occur at 5-year 
intervals.
    Furthermore, in identifying and reviewing potentially misvalued 
codes on an annual basis, we note that this new proposed process 
presents us with the opportunity to review simultaneously both the work 
RVUs and the direct PE inputs for each code. Heretofore, the work RVUs 
and direct PE inputs of potentially misvalued codes were commonly 
reviewed separately and at different times. For example, a code may 
have been identified as potentially misvalued based solely on its work 
RVUs so the AMA RUC would have reviewed the code and provided us with 
recommendations on the physician times and work RVUs. However, the 
direct PE inputs of the code would not necessarily have been reviewed 
concurrently and therefore, the AMA RUC would not necessarily have 
provided us with recommendations for any changes in the direct PE 
inputs of the code that would have been warranted to ensure that the PE 
RVUs of the code are determined more appropriately. Therefore, while 
this code may have been recently reviewed and revised under the 
potentially misvalued codes initiative for physician work, the PE 
component of the code could still be potentially misvalued. Going 
forward, we believe combining the reviews of both physician work and PE 
for each code under our potentially misvalued codes initiative will 
align the review of these codes and lead to more accurate and 
appropriate payments under the PFS.
    Finally, it is important to note that the code-specific resource 
based relative value framework under the PFS system is one in which 
services are ranked relative to each other. That is, the work RVUs 
assigned to a code are based on the physician time and intensity 
expended on that particular service as compared to the physician time 
and intensity of the other services paid under the PFS. This concept of 
relativity to other services also applies to the PE RVUs, particularly 
when it comes to reviewing and assigning correct direct PE inputs that 
are relative to other similar services. Consequently, we are 
emphasizing the need to review both the work and PE components of codes 
that are identified as part of the potentially misvalued initiative to 
ensure that appropriate relativity is constructed and maintained in 
several key relationships:
     The work and PE RVUs of codes are ranked appropriately 
within the code family. That is, the RVUs of services within a family 
should be ranked progressively so that less intensive services and/or 
services that require less physician time and/or require fewer or less 
expensive direct PE inputs should be assigned lower work or PE RVUs 
relative to other codes within the family. For example, if a code for 
treatment of elbow fracture is under review under the potentially 
misvalued codes initiative, we would expect the work and PE RVUs for 
all the codes in the family also be reviewed in order to ensure that 
relativity is appropriately constructed and maintained within this 
family. Furthermore, as we noted in the CY 2010 PFS final rule with 
comment period (74 FR 61941), when we submit codes to the AMA RUC and 
request its review, in order to maintain relativity, we emphasized the 
importance of reviewing the base code of a family. The base code is the 
most important code to review because it is the basis for the valuation 
of other codes within the family and allows for all related codes to be 
reviewed at the same time (74 FR 61941).
     The work and PE RVUs of codes are appropriately relative 
based on a comparison of physician time and/or intensity and/or direct 
inputs to other services furnished by physicians in the same specialty. 
To continue the example discussed previously, if a code for treatment 
of elbow fracture is under review, we would expect this code to be 
compared to other codes, such as codes for treatment of humerus 
fracture, or other codes furnished by physicians in the same specialty, 
in order to ensure that the work and PE RVUs are appropriately relative 
within the specialty.
     The work and PE RVUs of codes are appropriately relative 
when compared to services across specialties. While it may be 
challenging to compare codes that describe completely unrelated 
services, since the entire PFS is a budget neutral system where payment 
differentials are dependent on the relative differences between 
services, it is essential that services across specialties are 
appropriately valued relative to each other. To illustrate the point, 
if a service furnished primarily by dermatology is analogous in 
physician time and intensity to another service furnished primarily by 
allergy/immunology, then we would expect the work RVUs for the two 
services to be

[[Page 73058]]

similar, even though the two services may be otherwise unrelated.
4. Public Nomination Process
    Under the previous Five-Year Reviews, the public was provided with 
the opportunity to nominate potentially misvalued codes for review. To 
allow for public input and to preserve the public's ability to identify 
and nominate potentially misvalued codes for review under our annual 
potentially misvalued codes initiative, we proposed a process by which 
on an annual basis the public could submit codes, along with 
documentation supporting the need for review. We proposed that 
stakeholders may nominate potentially misvalued codes by submitting the 
code with supporting documentation during the 60-day public comment 
period following the release of the annual PFS final rule with comment 
period. We would evaluate the supporting documentation and decide 
whether the nominated code should be reviewed as potentially misvalued 
during the following year. If we were to receive an overwhelming number 
of nominated codes that qualified as potentially misvalued in any given 
year, we would prioritize the codes for review and could decide to hold 
our review of some of the potentially misvalued codes for a future 
year. We noted that we may identify additional potentially misvalued 
codes for review by the AMA RUC based on the seven statutory categories 
under section 1848(c)(2)(K)(ii) of the Act.
    We encouraged stakeholders who believe they have identified a 
potentially misvalued code, supported by documentation, to nominate 
codes through the public process. We emphasized that in order to ensure 
that a nominated code will be fully considered to qualify as a 
potentially misvalued code to be reviewed under our annual process, 
accompanying documentation must be provided to show evidence of the 
code's inappropriate valuation, either in terms of inappropriate 
physician times, work RVUs, and/or direct PE inputs. The AMA RUC 
developed certain ``Guidelines for Compelling Evidence'' for the Third 
Five-Year Review which we believe could be applicable for members of 
the public as they gather supporting documentation for codes they wish 
to nominate for the annual review of potentially misvalued codes. The 
specific documentation that we would seek under this proposal includes 
the following:
     Documentation in the peer reviewed medical literature or 
other reliable data that there have been changes in physician work due 
to one or more of the following:
    ++ Technique.
    ++ Knowledge and technology.
    ++ Patient population.
    ++ Site-of-service.
    ++ Length of hospital stay.
    ++ Physician time.
     An anomalous relationship between the code being proposed 
for review and other codes. For example, if code ``A'' describes a 
service that requires more work than codes ``B,'' ``C,'' and ``D,'' but 
is nevertheless valued lower. The commenter would need to assemble 
evidence on service time, technical skill, patient severity, 
complexity, length of stay and other factors for the code being 
considered and the codes to which it is compared. These reference 
services may be both inter- and intra-specialty.
     Evidence that technology has changed physician work, that 
is, diffusion of technology.
     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 physician time, work RVU, or direct PE inputs 
using other data sources (for example, Department of Veteran Affairs 
(VA) National Surgical Quality Improvement Program (NSQIP), the Society 
for Thoracic Surgeons (STS), and the Physician Quality Reporting System 
(PQRS) databases).
     National surveys of physician time and intensity from 
professional and management societies and organizations, such as 
hospital associations.
    We noted that when a code is nominated, and supporting 
documentation is provided, we would expect to receive a description of 
the reasons for the code's misvaluation with the submitted materials. 
That is, we would require a description and summary of the evidence is 
required that shows how the service may have changed since the original 
valuation or may have been inappropriately valued due to an incorrect 
assumption. We would also appreciate specific Federal Register 
citations, if they exist, where commenters believe the nominated codes 
were previously valued erroneously. We also proposed to consider only 
nominations of active codes that are covered by Medicare at the time of 
the nomination.
    As proposed in the CY 2012 proposed rule, after we receive the 
nominated codes during the 60-day comment period following the release 
of the annual PFS final rule with comment period, we would review the 
supporting documentation and assess whether they appear to be 
potentially misvalued codes appropriate for review under the annual 
process. We proposed that, in the following PFS proposed rule, we would 
publish a list of the codes received under the public nomination 
process during the previous year and indicate whether the codes would 
be included in the current review of potentially misvalued codes. We 
would also indicate the publicly nominated codes that we would not be 
including in the current review (whether due to insufficient 
documentation or for other reasons). Under this proposed process, the 
first opportunity for the public to nominate codes would be during the 
public comment period for this CY 2012 PFS final rule with comment 
period. We would publish in the CY 2013 PFS proposed rule, the list of 
nominated codes, and indicate whether they will be reviewed as 
potentially misvalued codes. We would request that the AMA RUC review 
these potentially misvalued codes along with any other codes identified 
by CMS as potentially misvalued, and provide to us recommendations for 
appropriate physician times, work RVUs, and direct PE inputs. We 
requested public comments on this proposed code nomination process and 
indicated that we would consider any suggestions to modify and improve 
the proposed process.
    Comment: The vast majority of commenters supported CMS' proposal to 
develop a public nomination process for potentially misvalued codes. 
The commenters noted that the proposed process would provide a way for 
the public to participate in the identification of potentially 
misvalued procedures. Commenters were enthusiastic that the proposal 
allows for stakeholders to propose a code for review on an immediate 
basis which is a significant improvement to the current process, noting 
that previously, only ``CMS and the RUC could bring a code forward for 
review whenever they have reason to believe it may be misvalued; 
however, physicians, other healthcare providers, specialty societies 
and other stakeholders are restricted to a five-year cycle.'' On the 
other hand, another commenter ``does not agree with the

[[Page 73059]]

once-a-year opportunity to nominate codes [and] * * * recommends that 
there should be greater opportunity for public comment.''
    A number of commenters stated that they believe the supporting 
documentation criteria would ensure that all requests are considered 
fairly and urged CMS to conduct a rigorous review of public comments 
and supporting documentation when determining whether a publicly 
nominated code should be reviewed as a potentially misvalued code, 
especially when a code is nominated by only a few commenters or even a 
single commenter. Other commenters thought CMS should provide 
``guidelines'' to justify bringing a code(s) forward for review in 
order to prevent a member of the public from asking that every single 
code paid under the Medicare PFS be reviewed. Some commenters noted 
that ``professional associations participating on the RUC frequently 
struggle with the concept and documentation of `Compelling Evidence.' 
'' Consequently, the commenters believed that the public will likewise 
struggle with the concept of submitting evidence to substantiate 
potentially misvalued codes. Other commenters noted that the public 
nomination process proposed by CMS requires that commenters nominating 
codes include supportive evidence to show that the resource use related 
to the delivery of a service has changed in a way to suggest a code's 
RVUs may be misvalued, whereas CMS is not obligated to follow this same 
standard. The commenters suggested that CMS should be required to 
adhere to the supporting documentation that the public would need to 
provide when nominating a potentially misvalued code for review through 
the proposed public nomination process.
    Several commenters believed that CMS should not restrict which 
codes could be nominated or referred. A number of commenters objected 
to CMS' proposal to consider only nominations of active codes that are 
covered by Medicare at the time of the nomination. The commenters 
believed this proposal was unfair to those specialties that do not 
serve a predominantly Medicare-aged population but who must also rely 
on the the resource based relative value scale. The commenters asserted 
that CMS has historically published the relative value recommendations 
from the AMA RUC for preventive services and other non-covered 
services. Commenters recommended that all valid CPT codes should remain 
open to comment and review. Commenters also believed as long as a 
stakeholder could provide adequate supporting documentation to support 
the nomination of the code, CMS should allow for the review of any 
code, including any codes that went through refinement in the past.
    Commenters also expressed appreciation that CMS proposed to 
disclose in the PFS proposed rule the list of codes identified as 
potentially misvalued (including those that originated from the public 
nomination process) for future review because publishing the misvalued 
codes list provides some notice to affected parties who may wish to 
provide input during the review process. Some commenters suggested that 
following the nomination process, specialty societies should have 
another opportunity to review and comment on any relevant nominations 
before CMS decides to include the codes on the list of potentially 
misvalued codes in the proposed rule.
    Response: We appreciate the enthusiasm expressed by commenters who 
welcome the opportunity to participate with us in the identification of 
potentially misvalued codes. We also acknowledge the commenters' 
concern that our requirements for accompanying documentation to show 
how the code is potentially misvalued may be viewed as burdensome and 
could pose a barrier to the public in nominating some codes. We 
provided guidelines in the proposed rule for such documentation in 
order to help the public to develop a strong case and assemble 
sufficient documentation when nominating a code. Although some 
commenters viewed the requirement to provide evidence of potential 
misvaluation as overly burdensome, it is important to demonstrate that 
a nominated code is not only potentially misvalued, but that improved 
accuracy in payment for the code would improve the overall accuracy of 
the physician fee schedule. As commenters have pointed out, reviewing 
potentially misvalued codes is resource intensive for the AMA RUC, 
specialty societies, CMS, and the public, and we must ensure that codes 
we refer as potentially misvalued warrant the requested review.
    However, to respond to the commenters who suggested we should be 
required to follow the same process as the public for nominating 
potentially misvalued codes, we note that we have longstanding 
statutory authority to identify and review the RVUs of services no less 
often than every 5-years and that we frequently have exercised our 
discretion to prioritize codes for review.
    We understand commenters' concerns about the burden that reviewing 
codes entails. We believe that by ranking codes in order of interest to 
CMS for review over a reasonable timeframe, we can help to reduce some 
of that burden. For this year, we have prioritized the review of codes 
to those that have some degree of significant financial impact on the 
PFS. Specifically, we have proposed a list of high expenditure codes 
for review in CY 2012. We also are limiting the review of RVUs to codes 
that are active, covered by Medicare, and for which the RVUs are used 
for payment purposes under the PFS so that resources are not expended 
on the review of codes with RVUs that have no financial impact on the 
PFS. We note that while we have published the AMA RUC relative value 
recommendations for non-covered services as a courtesy, these codes 
historically have not been reviewed by CMS and the RVUs are not valid 
for Medicare payment purposes. Therefore, while we will continue our 
historical practice of publishing the AMA RUC relative value 
recommendations for non-covered services, we will not be accepting for 
review either inactive or non-covered codes (for which the RVUs will 
have no financial impact on the PFS) through the public nomination 
process. We will consider any other active and Medicare covered 
services that are nominated by the public and supported by 
documentation of the nature described previously in this section.
    Finally, we note that all timely comments received on the final 
rule with comment period can be accessed and reviewed by the public 
through http://www.regulations.gov/ after the final rule's comment 
period closes. Therefore, anyone who wishes to look though the public 
comments can identify the codes that have been nominated by the public 
as potentially misvalued, as well as the accompanying supporting 
documentation. CMS will assess the list of publicly nominated codes, 
taking into consideration the documentation provided as well as the 
list of codes the agency has identified for review, and will identify 
and publish in the following year's proposed rule the list of nominated 
codes and codes selected for review. Accordingly, we are finalizing the 
proposed public nomination process without modification.
5. CY 2012 Identification and Review of Potentially Misvalued Services
a. Code Lists
    While we anticipate receiving nominations from the public for 
potentially misvalued codes in conjunction with rulemaking, we believe 
it is imperative that we continue

[[Page 73060]]

the work of the review initiatives over the last several years and 
drive the agenda forward to identify, review, and adjust values for 
potentially misvalued codes for CY 2012.
    In the CY 2011 PFS proposed rule (75 FR 40068 through 40069), we 
identified and referred to the AMA RUC a list of potentially misvalued 
codes in three areas:
     Codes on the AMA RUC's multi-specialty points of 
comparison (MPC) list (used as reference codes in the valuation of 
other codes),
     Services with low work RVUs that are billed in multiples 
(a statutory category); and
     Codes that have low work RVUs for which CMS claims data 
show high volume (that is, high utilization of these codes represents a 
significant dollar impact in the payment system).
    Our understanding is that the AMA RUC is currently working towards 
reviewing these codes at our request. We intend to provide an update 
and discuss any RVU adjustments to codes that have been identified as 
potentially misvalued in the CY 2012 PFS final rule, as they move 
through the review process.
    Meanwhile, for CY 2012, we are continuing with our work to identify 
and review additional services under the potentially misvalued codes 
initiative. Stakeholders have noted that many of the services 
previously identified under the potentially misvalued codes initiative 
were concentrated in certain specialties. To develop a robust and 
representative list of codes for review under the potentially misvalued 
codes initiative, we examined the highest PFS expenditure services by 
specialty (based on our most recently available claims data and using 
the specialty categories listed in the PFS specialty impact table, see 
Table 84 in section IX.B. of this final rule with comment period) and 
identified those that have not been reviewed since CY 2006 (which was 
the year we completed the Third Five-Year Review of Work and before we 
began our potentially misvalued codes initiative).
    In our examination of the highest PFS expenditure codes for each 
specialty (we used the specialty categories listed in the PFS specialty 
impact table, see Table 84 in section IX.B. of this final rule with 
comment period), we noted that Evaluation and Management (E/M) services 
consistently appeared in the top 20 high PFS expenditure services. We 
noted as well that most of the E/M services have not been reviewed 
since the comprehensive review of services for the Third Five-Year 
Review of Work in CY 2006. Therefore, after an examination of the 
highest PFS expenditure codes for each specialty, we have developed two 
code lists of potentially misvalued codes which we proposed to refer to 
the AMA RUC for review.
    First, we proposed to request that the AMA RUC conduct a 
comprehensive review of all E/M codes, including the codes listed in 
Table 6. As shown previously, E/M services are commonly among the 
highest PFS expenditure services. Additionally in recent years, there 
has been significant interest in delivery system reforms, such as 
patient-centered medical homes and making the primary care physician 
the focus of managing the patient's chronic conditions. The chronic 
conditions challenging the Medicare population include heart disease, 
diabetes, respiratory disease, breast cancer, allergy, Alzheimer's 
disease, and factors associated with obesity. Thus, as the focus of 
primary care has evolved from an episodic treatment-based orientation 
to a focus on comprehensive patient-centered care management in order 
to meet the challenges of preventing and managing chronic disease, we 
believed a more current review of E/M codes was warranted. We note that 
although physicians in primary care specialties bill a high percentage 
of their services using the E/M codes, physicians in non-primary care 
specialties also bill these codes for many of their services.
    Since we believe the focus of primary care is evolving to meet the 
challenges of preventing and managing chronic disease, we noted in the 
proposed rule that we would like the AMA RUC to prioritize review of 
the E/M codes and provide us with recommendations on the physician 
times, work RVUs, and direct PE inputs of at least half of the E/M 
codes listed in Table 6 by July 2012 in order for us to include any 
revised valuations for these codes in the CY 2013 PFS final rule with 
comment period. We also noted that we would expect the AMA RUC to 
review the remaining E/M codes listed in Table 6 by July 2013 in order 
for us to complete the comprehensive re-evaluation of E/M services and 
include the revised valuations for these codes in the CY 2014 PFS final 
rule with comment period.
BILLING CODE 4120-01-P

[[Page 73061]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.008


[[Page 73062]]


[GRAPHIC] [TIFF OMITTED] TR28NO11.009

BILLING CODE 4120-01-C
    Comment: Many commenters did not believe that reviewing the work 
RVUs and direct PE inputs of all E/M services is warranted at this 
time. A significant number of commenters generally agreed that health 
care delivery has changed, that chronic disease management has led to 
increases in physician time and effort, and that primary care 
physicians provide valuable services to Medicare beneficiaries that are 
not captured appropriately in the E/M services. Some commenters did not 
believe that the resource-based relative value scale is the appropriate 
system to account for

[[Page 73063]]

changes in health care delivery models. A smaller number of commenters 
did not believe that physician work for E/M services had changed since 
the codes were last reviewed.
    The majority of commenters requested that CMS withdraw its proposal 
to review all E/M codes because the current E/M codes, as written, do 
not fully encompass the work associated with patient-centered care 
management. The commenters noted that there are many codes that have 
been reviewed and valued by the AMA RUC for such services, including 
medical team conference, comprehensive preventive evaluation, physician 
supervision of a hospice patient, international normalized ratio 
management, smoking and alcohol counseling, case management, monthly 
medical home management, anticoagulation management, and phone or 
electronic evaluation. Some commenters noted that the AMA RUC has 
previously provided recommendations to value telephone and electronic 
evaluation services that complement coordinated care. While Medicare 
either does not pay separately for or does not cover many of these 
services, the commenters believed these services are part of a patient 
centered care management model and are necessary services for managing 
patients with chronic conditions. The commenters urged CMS to provide 
explicit payment for these coordination services rather than attempt to 
address the primary care issue through the comprehensive review of 
current E/M code values. For example, commenters suggested CMS ``work 
with the medical community to develop and implement the patient-
centered medical home, reward prevention and wellness, eliminate 
fragmentation and duplication, and produce a cohesive system of care 
that prevents unnecessary complications from acute or chronic illness, 
hospitalizations, and other avoidable expenses.''
    Some commenters asserted that the current E/M codes have code 
descriptors and documentation requirements that do not capture the work 
necessary for chronic disease management. Commenters noted that the 
current E/M codes were developed 20 years ago and describe care of 
patients with acute problems. In addition, the commenters believed the 
current E/M codes do not describe care to treat chronic medical 
problems of patients in skilled nursing facilities which were treated 
in the hospital a few years ago. Commenters asserted that physicians 
are now caring for an increasingly complex elderly population with 
multiple chronic problems who require services such as extensive care 
coordination that was not part of standard medical practice when many 
of the E/M codes were created. Thus, while the commenters agreed that 
care coordination would help better manage chronic diseases in the 
elderly, they believed this care would be better described by new 
codes, and not the current E/M codes. Accordingly, the commenters 
recommended that CMS undertake a comprehensive review of the existing 
E/M service codes in collaboration with the AMA RUC and the CPT 
Editorial Panel. That is, the commenters envisioned and supported an 
extensive review that considers revisions to these codes that will 
better recognize the work of primary care physicians and cognitive 
specialists who provide care for patients with acute and chronic 
conditions before focusing on the valuation of the codes.
    Many commenters, representing different medical specialties, noted 
that CMS' focus on primary care as the locus for care coordination and 
chronic disease management is misplaced. Commenters asserted that 
patient care coordination, prevention, performance measurement and the 
adoption of health information technology affects the entire medical 
community. These commenters argued that that these trends and 
initiatives will pose challenges for specialty medicine as well. 
Specifically, a commenter stated, ``We believe that high quality 
provision of such services is not defined by the specialty of the 
provider and thus we cannot support policy options that focus on 
provider specialty rather than on the content and the quality of the 
service being provided.''
    Other commenters noted that the E/M codes are used by many surgeons 
and other specialists because nearly every procedural CPT code involves 
one or more E/M service within the code's global period. Commenters 
suggested that CMS unbundle E/M services from surgical codes in order 
to ensure that surgical patients received the appropriate follow-up 
care and management of post-procedure activity to achieve desired 
outcomes. That is, CMS should apply zero-day global periods to surgical 
codes, such that post-operative hospital and office visits must meet 
the medical necessity and documentation requirements for evaluation and 
management coding in order to be paid separately.
    Finally, some commenters noted that the previous comprehensive 
review of the evaluation and management codes in 2006 did not improve 
the emphasis on chronic care management, stating that ``the third 5-
Year Review failed to achieve the goals of properly compensating 
primary physicians for chronic care management, so there is no 
expectation that another review within the existing system will result 
in a different outcome.'' A few commenters supported the proposal to 
review the E/M codes and they ``consider the review and re-evaluation 
of E&M codes as a critical immediate step to ensure patient access to 
care and to maintaining the viability of the [their] workforce.''
    Response: We thank the commenters for their comments on our 
proposal to review E/M services and address the evolving challenges of 
chronic care management. We also appreciate commenters' support for 
recognizing the importance of primary care and care coordination, and 
appropriately valuing such care within Medicare's statutory structure 
for physician payment and quality reporting. We understand some 
commenters' concerns about the ability of the current E/M coding and 
documentation system to appropriately value primary care services and 
improved care coordination. We understand that many commenters would 
prefer that we consider paying separately for non-face-to-face care 
coordination activities, such as telephone calls and medical team 
conferences, rather than finalize the proposal to request that the AMA 
RUC review all 91 E/M codes at this time. We will continue to explore 
valuations of E/M services and other potential refinements to the PFS 
that would appropriately value these services. We are also examining 
many other programs that may contribute to more appropriate valuation 
of services and better health care outcomes.
    We would like to assure the commenters that we, as well as the HHS' 
Assistant Secretary for Planning and Evaluation (ASPE), are actively 
researching our current coding and payment systems to appropriately 
value these services. As detailed in the proposed rule (75 FR 42917), 
we are considering several approaches to improve coordinated care and 
health care transitions to reduce readmissions or subsequent illnesses, 
improve beneficiary outcomes, and avoid additional financial burden on 
the health care system. We are committed to achieving better care for 
individuals, better health for populations, and reduced expenditure 
growth. Reforms such as Accountable Care Organizations and Medical 
Homes and reforms of our current fee-for-service payment system are 
designed to achieve these goals.

[[Page 73064]]

    As an example, we recently launched the Partnership for Patients 
(in April 2011), a national public-private patient safety initiative 
for which more than 6,000 organizations--including physician and 
nurses' organizations, consumer groups, employers and over 3,000 
hospitals--have pledged to help achieve the Partnership's goals of 
reducing hospital complications and improving care transitions. The 
Partnership for Patients includes the Community-Based Care Transitions 
Program, which provides funding to community-based organizations 
partnering with eligible hospitals to coordinate a continuum of post-
acute care in order to test models for improving care transitions for 
high risk Medicare beneficiaries. Achieving the goals of the 
Partnership for Patients will take the combined effort of many key 
stakeholders across the health care system--physicians, nurses, 
hospitals, health plans, employers and unions, patients and their 
advocates, as well as the Federal and State governments. Many important 
stakeholders have already pledged to join this Partnership in a shared 
effort to save thousands of lives, stop millions of injuries and take 
important steps toward a more dependable and affordable health care 
system. We are currently working with these stakeholders to improve 
care processes and systems, enhance communication and coordination to 
reduce complication for patients, raise public awareness and develop 
information, tools and resources to help patients and families 
effectively engage with their providers to avoid preventable 
complications, and provide the incentives and support that will enable 
clinicians and hospitals to deliver high-quality health care to their 
patients, with minimal burdens. (For more information regarding the 
Partnership for Patients Initiative, we refer readers to http://www.healthcare.gov/compare/partnership-for-patients/index.html.)
    Additionally, the Center for Medicare and Medicaid Innovation 
(Innovation Center) of CMS has undertaken several demonstrations to 
support care coordination and primary care. Most recently, on September 
28, 2011, we released a request for applications for the Comprehensive 
Primary Care Initiative, a CMS-led multipayer initiative to provide 
enhanced support for comprehensive primary care. A primary care 
practice is a key point of contact for patients' health care needs. In 
recent years, new ways have emerged to strengthen primary care by 
improving care coordination, making it easier to work together, and 
helping clinicians spend more time with their patients. Under the 
Comprehensive Primary Care Initiative, we intend to pay primary care 
providers a monthly care management fee on behalf of Medicare fee-for-
service beneficiaries and, in participating states, Medicaid fee-for-
service beneficiaries for improved and comprehensive care management. 
Specifically, participating primary care practices will be given 
support to better coordinate primary care for their Medicare patients, 
including creating personalized care plans for patients with serious or 
chronic diseases follow personalized care plans, give patients 24-hour 
access to care and health information, more preventive care, and more 
patient centered care management. The work of the Comprehensive Primary 
Care Initiative could inform and help further develop innovative 
revisions to the PFS. (For more information regarding the Comprehensive 
Primary Care Initiative, we refer readers to http://innovations.cms.gov/areas-of-focus/seamless-and-coordinated-care-models/cpci/.)
    Further, HHS' ASPE has convened a Technical Expert Panel (TEP) to 
conduct studies that could inform efforts to accurately align physician 
payments in Medicare, which may help expand the supply of primary care 
physicians and improve the value of care for beneficiaries. One of the 
major tasks being undertaken by this TEP is to develop new approaches 
to defining visits and paying for primary care services under the 
physician fee schedule. There are a number of services that are 
increasingly viewed as key to high-quality primary care but that do not 
require a face-to-face encounter with the patient. While the valuations 
of current E/M services include care coordination, communication and 
other management, this project will consider how visits are defined and 
will examine whether we need to adjust payments to appropriately pay 
for primary care activities. It makes sense to reassess how visits are 
defined because it is becoming increasingly more common for primary 
care physicians to be engaged in the management of multiple established 
chronic conditions rather than evaluation and treatment of acute, new 
problems. The complexity and time for the physician is more often 
associated with decision-making than with the history-taking and 
physicals. Further, the chronic care model involves much greater 
attention to teaching patient self-management skills, doing more 
proactive care coordination, and anticipation of health care needs. We 
believe the TEP findings could provide us with improved information for 
the valuation of primary care services, including care coordination, 
which may be more effective than simply reviewing the work RVUs and 
direct PE inputs of current E/M services. In addition to ASPE's efforts 
that are focused directly on physician payment, they also have a second 
project underway to research effective methods for increasing the 
supply of primary care providers and services. This project will 
analyze what is known about the relative effectiveness of various 
strategies to increase the supply of primary care providers and 
services in order to meet these future health system needs.
    Accordingly, given the significant concern expressed by the 
majority of commenters over the possible inadequacies of the current E/
M coding and documentation structure to address evolving chronic care 
management and support primary care and our ongoing research on how to 
best provide payment for primary care and patient-centered care 
management, we are not finalizing the proposal to review the list of 91 
E/M codes at this time. Instead, we believe allowing time for 
consideration of the findings of the Comprehensive Primary Care 
Initiative, the ASPE research on balancing physician incentives and 
evaluating payment for primary care services, demonstrations that we 
have undertaken on care coordination, as well as other initiatives 
assessing how to value and encourage primary care will provide improved 
information for the valuation of chronic care management, primary care, 
and care transitions. We also will continue to consider the numerous 
policy alternatives that commenters offered, such as separate E/M codes 
for established visits for patients with chronic disease versus a post-
surgical follow-up office visits. We intend to continue to work with 
stakeholders on how to value and pay for primary care and patient-
centered care management, and we continue to welcome ideas from the 
medical community for how to improve care management through the 
provision of primary care services. Second, we also proposed providing 
a select list of high PFS expenditure procedural codes representing 
services furnished by an array of specialties, as listed in Table 7. 
These procedural codes have not been reviewed since CY 2006 (before we 
began our potentially misvalued codes initiatives in CY 2008) and, 
based on the most recently available data, have CY 2010 allowed charges 
of greater than $10 million at the specialty level (based on the

[[Page 73065]]

specialty categories listed in the PFS specialty impact table and CY 
2010 Medicare claims data). A number of the codes in Table 7 would not 
otherwise be identified as potentially misvalued services using the 
screens we have used in recent years with the AMA RUC or based on one 
of the six specific statutory categories under section 
1848(c)(2)(k)(ii) of the Act. However, we identified the potentially 
misvalued codes listed in Table 7 under the seventh statutory category, 
``other codes determined to be appropriate by the Secretary.'' We 
selected these codes based on the fact that they have not been reviewed 
for at least 6 years, and in many cases the last review occurred more 
than 10 years ago. They represent high Medicare expenditures under the 
PFS; thus, we believe that a review to assess changes in physician work 
and update direct PE inputs is warranted. Furthermore, since these 
codes have significant impact on PFS payment on a specialty level, a 
review of the relativity of the codes to ensure that the work and PE 
RVUs are appropriately relative within the specialty and across 
specialties, as discussed previously, is essential. For these reasons, 
we have identified these codes as potentially misvalued and proposed to 
request the AMA RUC review the codes listed in Table 7 and provide us 
with recommendations on the physician times, work RVUs and direct PE 
inputs in a timely manner. That is, similar to our proposal for the AMA 
RUC to review E/M codes in a timely manner, we proposed to request that 
the AMA RUC review at least half of the procedural codes listed in 
Table 7 by July 2012 in order for us to include any revised valuations 
for these codes in the CY 2013 PFS final rule with comment period.
BILLING CODE 4210-01-P

[[Page 73066]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.010


[[Page 73067]]


[GRAPHIC] [TIFF OMITTED] TR28NO11.011

BILLING CODE 4120-01-C
    Comment: Some commenters did not believe that high expenditure/high 
volume was an appropriate criterion for us to use to identify the codes 
for the potentially misvalued codes initiative, stating ``simply 
because a service is frequently performed, does not indicate that the 
service may be overvalued.'' Additionally, the commenters believed that 
selecting codes that have not been reviewed since CY 2006 was arbitrary 
and assumes that the delivery of these services and procedures has 
changed radically over the past 5-years. Other commenters believed CMS 
should provide justification for the revaluation by providing evidence 
of how the delivery of a service or procedure has changed within 5 
years.
    Some commenters agreed that high expenditure codes should be 
reviewed on a periodic basis; however, the commenters suggested that 
the periodic basis should be a reasonably long length of time and 5 (or 
6) years is not a sufficiently long period of time absent other 
evidence of potential changes in the service under review. The 
commenters suggested that CMS could automatically review high 
expenditure procedures every 10 or 15 years. MedPAC, commenting on the 
CY 2012 PFS proposed rule, agreed that accurate payments for high 
expenditure services ``can improve the balance of payments between 
primary care and services such as imaging tests, and other 
procedures.''
    Finally, we received a number of comments on specific codes where 
commenters provided arguments as to why CMS should remove these codes 
from the high expenditure code list. The commenters noted that specific 
codes had been considered by the AMA RUC in the past five years or that 
certain codes are currently scheduled to be considered by either the 
CPT Editorial Panel for new coding or the AMA RUC for revised 
valuations (for work RVUs and/or PE inputs) at an upcoming meeting.
    Response: As we noted previously, it is a long-standing statutory 
requirement that we review RVUs no less often than every 5-years and, 
in conducting these reviews, we have historically exercised our 
discretion to prioritize which codes to review. In proposing to 
prioritize this list of high expenditure codes, we stated that the 
reason we identified these codes is because they have significant 
impact on PFS payment on a specialty level and have not been recently 
reviewed. We believe that the practice of a service can evolve over 
time, as can the technology used to conduct the service, and such 
efficiencies could easily have developed since our last comprehensive 
review of services in 2006 for the third 5-year review. As such, a 
review of the relativity of these codes, which are high expenditure and 
high volume, to ensure that the work and PE RVUs are appropriately 
valued to reflect changes in practice and technology and relative to 
other services within the specialty and across specialties is essential 
to the overall accuracy of the PFS.
    Because of the concerns expressed by commenters about the burden 
associated with code reviews, we believe that it is appropriate to 
prioritize review of codes to a manageable subset that also have a high 
impact on the PFS and work with the specialty society to spread review 
of the remaining codes identified as potentially misvalued over a 
reasonable timeframe. In this spirit, we do not believe it would be 
appropriate to remove codes from the high expenditure list unless we 
find, as some commenters indicated, that we have reviewed both the work 
RVUs and direct PE inputs for the code during the

[[Page 73068]]

specified time period. Also, regarding the suggestion to schedule 
review of high expenditure codes every 10 to 15-years, not only do we 
believe more regular monitoring of codes with high impact on the PFS 
will produce a more accurate and equitable payment system, but we have 
a statutory obligation to review codes at least every 5-years (although 
we do not always conduct a review that involves the AMA RUC). As noted, 
changes in technology and practice evolve for many services more 
rapidly than every 10 to 15-years. We also believe that, with our 
decision not to review the 91 E/M codes at this time, we have relieved 
some of the burden on specialty societies, which should enable them to 
complete their reviews of these high expenditure/high volume codes.
    Finally, in reviewing the code specific comments, we noticed that 
in many cases, the commenters believed that the code should be removed 
from this code list because the work RVU had been reviewed within 6-
years, or the code was recently considered at an AMA RUC meeting. We 
note that while a number of codes have been considered at an AMA RUC 
meeting, until we receive recommendations and review the codes for both 
work and direct PE inputs, we will continue to include these codes on 
the high expenditure list. We think some of the commenters may have 
believed that since a code was discussed at an AMA RUC meeting and sent 
to the CPT editorial panel or the code is being surveyed and prepared 
for a presentation at the AMA RUC, the code should be removed from the 
potentially misvalued high expenditure code list. We are clarifying 
that even if a code is about to be reviewed by the specialty society or 
AMA RUC, or referred to the CPT Editorial Panel, we would continue to 
include the code on our list of codes for review under the potentially 
misvalued codes initiative. Similarly, if a code is being reviewed by 
the CPT editorial panel, we would consider any replacement codes to 
address the potential misvaluation associated with the previous codes.
    Accordingly, we are finalizing the proposed high expenditure/high 
volume list without modification.
Specific Codes
    On an ongoing basis, public stakeholders (including physician 
specialty societies, beneficiaries, and other members of the public) 
bring concerns to us regarding direct PE inputs and physician work. In 
the past, we would consider these concerns and address them through 
proposals in annual rulemaking, technical corrections, or by requesting 
that the AMA RUC consider the issue.
    Since last year's rulemaking, the public has brought a series of 
issues to our attention that relate directly to direct PE inputs and 
physician work. We believe that some of these issues will serve as 
examples of codes that might be brought forward by the public as 
potentially misvalued in the proposed nomination process as discussed 
previously in section II.B.4. of this final rule with comment period.
(1) Codes Potentially Requiring Updates to Direct PE Inputs
    Abdomen and Pelvis CT. For CY 2011, AMA CPT created a series of new 
codes that describe combined CTs of the abdomen and pelvis. Prior to 
2011, these services would have been billed using multiple stand-alone 
codes for each body region. The new codes are: 74176 (Computed 
tomography, abdomen and pelvis; without contrast material); 74177 
(Computed tomography, abdomen and pelvis; with contrast material); and 
74178 (Computed tomography, abdomen and pelvis; without contrast 
material in one or both body regions, followed by with contrast 
material(s) and further sections in one or both body regions.)
    As stated in the CY 2011 PFS final rule with comment period (75 FR 
73350), we accepted the AMA RUC- recommended direct PE inputs for these 
codes, with refinements to the equipment minutes to assure that the 
time associated with the equipment items reflected the time during the 
intra-service period when a clinician is using the piece of equipment, 
plus any additional time the piece of equipment is not available for 
use for another patient due to its use during the designated procedure. 
We believe that the direct PE inputs of the new codes reflect the 
typical resources required to furnish the services in question.
    However, stakeholders have alerted us that the resulting PE RVUs 
for the new codes reflect an anomalous rank order in comparison to the 
previously existing stand-alone codes. Specifically, the PE RVUs for 
the codes that describe CT scans without contrast for either body 
region are greater than the PE RVUs for 74176, which describes a CT 
scan of both body regions. We believe that the anomalous rank order of 
the PE RVUs for this series of codes may be the result of outdated 
direct PE inputs for the previously existing stand-alone codes. The 
physician work for those codes was last reviewed by the AMA RUC during 
the Third Five-Year Review of Work for CY 2007. However, the direct PE 
inputs for the codes have not been reviewed since 2003. Therefore, we 
are requesting that the AMA RUC review both the direct PE inputs and 
work values of the following codes in accordance with the consolidated 
approach to reviewing potentially misvalued codes as outlined in 
section II.B.2.c. of this final rule with comment period:
     72192 Computed tomography, pelvis; without contrast 
material.
     72193 Computed tomography, pelvis; with contrast 
material(s).
     72194 Computed tomography, pelvis; without contrast 
material, followed by contrast material(s) and further sections.
     74150 Computed tomography, abdomen; without contrast 
material.
     74160 Computed tomography, abdomen; with contrast 
material(s).
     74170 Computed tomography, abdomen; without contrast 
material, followed by contrast material(s) and further sections.
    Comment: Several commenters suggested that the rank order anomalies 
resulted from a series of issues unrelated to the direct PE inputs for 
the existing component codes. These commenters argued that the anomaly 
resulted from CMS' refinement of equipment minutes in the new codes, 
errors in CMS' direct PE database, and the longstanding CMS policy that 
new codes are not subject to practice expense transitions. Furthermore, 
the commenters asserted that the AMA RUC reviewed the component code 
direct PE inputs when developing the direct PE inputs for the combined 
codes. Therefore, the commenters asked that CMS withdraw its request 
that the AMA RUC review the direct PE inputs of the existing codes.
    Response: We refer readers to section III.B.2 of this final rule 
with comment period. There, we address interim final direct PE inputs 
from CY 2011, including accurate allocation of equipment minutes and, 
specifically, the direct PE inputs for CPT codes 74176, 74177, and 
74178. In that section we finalize the interim direct PE inputs as 
published in the CY 2011 PFS final rule, with a minor refinement to the 
clinical labor inputs. We note that the refined PE RVUs for the 
combined codes do not significantly alter payment.
    While we acknowledge the occasional irregularities that result from 
the application of broad-based payment transitions, our longstanding 
policy in a PFS transition payment year is that if the CPT Editorial 
Panel creates a new code for that year, the new code would be paid at 
its fully implemented PFS amount and not at a transition rate for that 
year.

[[Page 73069]]

    While the commenters suggested that the RUC reviewed the direct PE 
inputs of the component codes recently, we have received no recent 
recommendation from the RUC regarding the direct PE inputs for these 
codes. Had the RUC reviewed the direct PE inputs for the component 
codes and made recommendations either to maintain or amend the current 
direct PE inputs, we would have responded to those recommendations. 
After considering these comments and noting the technical refinements 
to the direct PE inputs of the combined codes, we continue to believe 
that the direct PE inputs of the component codes should be reviewed. 
Therefore, we are maintaining our request that the RUC review the 
component codes.
    Tissue Pathology. A stakeholder informed us that the direct PE 
inputs associated with a particular tissue examination code are 
atypical. Specifically, the stakeholder suggested that the AMA RUC 
relied upon an atypical clinical vignette in identifying the direct PE 
inputs for the service associated with CPT code 88305 (Level IV--
Surgical pathology, gross and microscopic examination). The stakeholder 
claims that in furnishing the typical service, the required material 
includes a single block of tissue and 1-3 slides. The stakeholder 
argues that the typical cost of the resources needed to provide the 
service is approximately $18, but the PE RVUs for 2011 result in a 
national payment rate of $69.65 for the technical component of the 
service. Because the direct PE inputs associated with this code have 
not been reviewed since 1999, we are asking that the AMA RUC review 
both the direct PE inputs and work values of this code as soon as 
possible in accordance with the consolidated approach to reviewing 
potentially misvalued codes as outlined in section II.B.2.c. of this 
final rule with comment period though the work for this code was 
reviewed in April 2010.
    Comment: Several commenters disagreed with CMS' request to review 
the work RVU of this code because the most recent extensive review of 
the physician work was conducted by the RUC in April of 2010. The AMA 
RUC expressed concern that CMS would ask the RUC to review the code 
solely on the basis of the stakeholder's assertions about overpayment. 
The AMA RUC asked CMS to consider that the stakeholder's estimates of 
typical costs do not reflect the range of practice costs considered in 
the PE methodology, and that the stakeholder should be directed to 
consider direct practice expense costs instead of full practice expense 
payment rates.
    Response: We understand the commenters' requests to review only the 
direct PE inputs for the code since the physician work for this code 
and for the code family were recently reviewed by the RUC and CMS. We 
maintain that conducting a combined review of both physician work and 
direct PE for each code reviewed under our potentially misvalued codes 
initiative will lead to a more comprehensive evaluation and to more 
accurate and appropriate payments under the PFS. However, we understand 
that the advantages of a simultaneous review of work and direct 
practice may be limited in the case of this code where the work was so 
recently reviewed. Therefore, we believe that a review of the direct PE 
inputs alone is appropriate.
    We acknowledge the RUC's concern that the commenter may have been 
comparing his perception of direct practice expense costs with broader 
practice expense payments for this code. We acknowledge the practice 
expense portion of PFS payment is developed in consideration of both 
direct and indirect practice expense costs. We also concur with the RUC 
that interested stakeholders can review the publicly available direct 
PE inputs associated with each code. Those inputs are available in the 
direct PE database on the CMS Web site under the downloads section for 
the ``CY 2012 PFS final rule with comment period'' at: http://www.cms.gov/PhysicianFeeSched/PFSFRN/list.asp#TopOfPage.
    However, we note that the stakeholder's assessment of the direct 
costs associated with the typical service reported using CPT code 88305 
is significantly lower than the summed direct practice expense inputs 
currently associated with the code. Additionally, as we stated in the 
CY 2012 PFS proposed rule, we are asking the RUC to review the direct 
PE inputs of the code because they have not been reviewed since 1999. 
We also point out that if the stakeholder had not brought the concern 
to us, this code would have appeared on our list of PFS high 
expenditure procedural codes that had not been reviewed since CY 2006. 
After consideration of these comments, we are maintaining our request 
that the RUC review CPT code 88305, but in the case of this code, we 
are only asking for a review of direct PE inputs.
    In Situ Hybridization Testing. We received comments from the Large 
Urology Group Practice Association (LUGPA) regarding two new 
cytopathology codes that describe in situ hybridization testing of 
urine specimens. Prior to CY 2011, in situ hybridization testing was 
coded and billed using CPT Codes 88365 (In situ hybridization (e.g., 
FISH), each probe), 88367 (Morphometric analysis, in situ hybridization 
(quantitative or semi-quantitative) each probe; using computer-assisted 
technology) and 88368 (Morphometric analysis, in situ hybridization 
(quantitative or semi-quantitative) each probe; manual). The 
appropriate CPT code listed would be billed one time for each probe 
used in the performance of the test, regardless of the medium of the 
specimen (that is, blood, tissue, tumor, bone marrow or urine).
    For CY 2011, the AMA's CPT Editorial Panel created two new 
cytopathology codes that describe in situ hybridization testing using 
urine samples: CPT code 88120 (Cytopathology, in situ hybridization 
(e.g., FISH), urinary tract specimen with morphometric analysis, 3-5 
molecular probes, each specimen; manual) and CPT code 88121 
(Cytopathology, in situ hybridization (e.g., FISH), urinary tract 
specimen with morphometric analysis, 3-5 molecular probes, each 
specimen; using computer-assisted technology).
    Because the descriptors indicate that the new codes account for 
approximately four probes, whereas 88367 and 88368 describe each probe, 
there are more PE RVUs associated with the new codes than with the 
previously existing codes that are currently still used for any 
specimen except for urine. However, because the previously existing 
codes are billed per probe, the payment for a test using a different 
specimen type could vary depending upon the number of probes. For 
example, a practitioner furnishing a test involving a blood specimen 
and using three probes would bill CPT code 88368 (total RVUs: 6.28) 
three times with the result of 18.84 RVUs. A practitioner furnishing 
the same test but using a urine sample instead of a blood sample would 
receive payment based on the 13.47 RVUs associated with CPT code 88120.
    We accepted the RUC-recommended work values and direct PE inputs, 
without refinement, for the two new cytopathology codes that describe 
in situ hybridization testing using urine samples. We reviewed the 
direct PE recommendations made by the AMA RUC and considered the inputs 
to be appropriate. However, we shared LUGPA's concerns regarding the 
potential payment discrepancies between the codes that describe the 
same test using different specimen media. Therefore, in the CY 2012 PFS 
proposed rule, we asked the AMA RUC to review the both the direct PE 
inputs and work values of the following codes

[[Page 73070]]

in accordance with the consolidated approach to reviewing potentially 
misvlaued codes as outlined in section II.B.2.c. of this final rule 
with comment period: CPT codes 88365 (In situ hybridization (e.g., 
FISH), each probe); 88367 (Morphometric analysis, in situ hybridization 
(quantitative or semi-quantitative) each probe; using computer-assisted 
technology); and 88368 (Morphometric analysis, in situ hybridization 
(quantitative or semi-quantitative) each probe; manual).
    Comment: Several commenters urged CMS to remove the in situ 
hybridization codes from its request for review since the RUC reviewed 
the work values for those codes when valuing the new codes.
    Response: We believe that these codes exemplify the need to conduct 
simultaneous review of direct PE inputs and physician work and time. As 
we explained in the proposal, maintaining appropriate relativity among 
payment rates, and PE RVUs in particular, requires the assignment of 
correct direct PE inputs relative to similar services. We understand 
that the RUC recommended maintaining the work RVUs for the existing 
codes in the context of the recommendation regarding the new codes, but 
the recommendations did not address the direct PE inputs of the 
existing codes that now describe similar tests using specimen media 
other than urine.
    Comment: LUGPA urged CMS to resolve the payment discrepancies by 
amending the direct PE inputs for 88120 and 88121 in order to equalize 
payment with the payment rates with 88367 and 88368. Additionally, the 
association suggested that CMS should equalize the work and malpractice 
RVUs for these codes with 88367 and 88368. The association also 
reasserted the claim that the information which CMS accepted in its 
totality from the RUC and the CPT Editorial Panel, with respect to both 
the existence of and values for the new codes, is erroneous and 
unsupportable.
    Response: We do not agree with the commenter's assertion that the 
technical resources required in conducting the urinary tract specimen 
test with and without the use of computer-assisted technology are 
exactly the same. We believe that using computer-assisted technology 
inherently alters the kind and amount of direct practice expense 
resources typically used in furnishing services. Therefore, we believe 
it would be inappropriate to use the direct inputs for the manual code 
in the calculation of PE RVUs for the code that describes the service 
when furnished using computer-assisted technology.
    However, we continue to share the commenter's concerns regarding 
the potential payment discrepancies between the codes that describe the 
same test using different specimen media. If the direct resources 
required for conducting the test using urine specimens are different 
from the direct resources required for conducting the test using other 
specimen media, we do not believe it would be appropriate to assume the 
typical direct practice expense inputs for the non-specific specimen 
media codes that were previously valued based upon all the specimen 
media including urine are still accurate now that services using urine 
will be reported using different codes.
    Therefore, we maintain our request as stated in the in the CY 2012 
PFS proposed rule (76 FR 42795 and 42796) that the AMA RUC review both 
the direct PE inputs and work values of the existing codes that 
describe the test using specimen media other than urine.
    After consideration of these comments, and in anticipation of 
forthcoming review of codes 88365, 88367, and 88368, we are maintaining 
for CY 2012 the current direct PE inputs for CPT codes 88120 and 88121 
on an interim basis subject to public comment.
    Ultrasound Equipment. A stakeholder has raised concerns about 
potential inconsistencies with the inputs and the prices related to 
ultrasound equipment in the direct PE database. Upon reviewing inputs 
and prices for ultrasound equipment, we have noted that there are 17 
different pieces of ultrasound and ultrasound-related equipment in the 
database that are associated with 110 CPT Codes. The price inputs for 
ultrasound equipment range from $1,304.33 to $466,492.00. Therefore, we 
are asking the AMA RUC to review the ultrasound equipment included in 
those codes as well as the way the equipment is described and priced in 
the direct PE database.
    In the past, the AMA RUC has provided us with valuable 
recommendations regarding particular categories of equipment and supply 
items that are used as direct PE inputs for a range of codes. For 
example, in the 2011 PFS final rule (75 FR 73204), we made changes to a 
series of codes following the RUC's review of services that include the 
radiographic fluoroscopic room (CMS Equipment Code EL014) as a direct 
PE input. The RUC review revealed the use of the item to no longer be 
typical for certain services in which it had been specified within the 
direct cost inputs. These recommendations have often prompted our 
proposals that have served to maintain appropriate relativity within 
the PFS, and we hope that the RUC will continue to address issues 
relating to equipment and supply inputs that affect many codes. 
Furthermore, we believe that in these kinds of cases, it may be 
appropriate to make changes to the related direct PE inputs for a 
series of codes without reevaluating the physician work or other direct 
PE inputs for the individual codes. In other words, while we generally 
believe that both the work and the direct practice expense inputs 
should be reviewed whenever the RUC makes recommendations regarding 
either component of a code's value, we recognize the value of discrete 
RUC reviews of direct PE items that serve as inputs for a series of 
service codes.
    Comment: Many commenters expressed agreement with CMS' interest in 
establishing consistency regarding direct PE inputs for ultrasound 
equipment. The RUC agreed to review the types of equipment and the 
assignment to individual codes but reiterated that the RUC does not 
make recommendations related to specific prices used in the practice 
expense RVU calculations. A few commenters urged CMS and the RUC to 
provide manufacturers and other stakeholders the opportunity to provide 
input and feedback to the AMA RUC regarding descriptive and other 
information related to this equipment during any review.
    Response: We appreciate the support for this request and the 
efforts of the RUC in taking on this review. We remind commenters that 
because the AMA RUC is an independent committee, concerned stakeholders 
should communicate directly with the AMA RUC regarding its professional 
composition. We note that we alone are responsible for all decisions 
about the direct PE inputs for purposes of PFS payment so, while the 
AMA RUC provides us with recommendations based on its broad expertise, 
we ultimately remain responsible for determining the direct PE inputs 
for all PFS services. Additionally, we note that any changes to the 
equipment inputs related to ultrasound services will be made through 
rulemaking and be subject to public comment. Finally, we remind 
interested stakeholders that throughout the year we meet with parties 
who want to share their views on topics of interest to them. These 
discussions may provide us with information regarding changes in 
medical practice and afford opportunities for the public to bring to 
our attention issues they believe we should consider for future 
rulemaking. (2) Codes Without Direct Practice

[[Page 73071]]

Expense Inputs in the Non-Facility Setting Certain stakeholders have 
requested that we create nonfacility PE values for a series of 
kyphoplasty services CPT codes:
     22523 (Percutaneous vertebral augmentation, including 
cavity creation (fracture reduction and bone biopsy included when 
performed) using mechanical device, 1 vertebral body, unilateral or 
bilateral cannulation (e.g., kyphoplasty); thoracic),
     22524 (Percutaneous vertebral augmentation, including 
cavity creation (fracture reduction and bone biopsy included when 
performed) using mechanical device, 1 vertebral body, unilateral or 
bilateral cannulation (e.g., kyphoplasty); lumbar).
     22525 (Percutaneous vertebral augmentation, including 
cavity creation (fracture reduction and bone biopsy included when 
performed) using mechanical device, 1 vertebral body, unilateral or 
bilateral cannulation (e.g., kyphoplasty); each additional thoracic or 
lumbar vertebral body (List separately in addition to code for primary 
procedure)).
    In the case of these codes, we are asking the RUC to make 
recommendations regarding the appropriateness of creating nonfacility 
direct PE inputs. If the RUC were to make direct PE recommendations, we 
would review those recommendations as part of the annual process.
    Comment: Several commenters asserted that determining the 
appropriateness of creating nonfacility direct PE inputs for particular 
services is not the role of the RUC. In response to this request, the 
RUC provided CMS with recommended direct PE inputs for CY 2012, but 
asserted that the RUC does not believe that it is within the 
Committee's expertise to determine whether a service can be performed 
safely or effectively in the office setting.
    Response: We appreciate the commenter's' perspectives and 
understand the RUC's position. Since the RUC submitted nonfacility 
direct PE input recommendations with its annual recommendations on new, 
revised, and potentially misvalued codes for CY 2012, we priced the 
services on an interim basis in the nonfacility setting for CY 2012. 
However, we note that the valuation of a service under the PFS in 
particular settings does not address whether those services are 
medically reasonable and necessary in the case of individual patients, 
including being furnished in a setting appropriate to the patient's 
medical needs and condition. We address the nonfacility direct PE input 
recommendations for these codes in section III.B.2. of this final rule 
with comment period.
(3) Codes Potentially Requiring Updates to Physician Work
    Cholecystectomy. We received a comment regarding a potential 
relativity problem between two cholecystectomy (gall bladder removal) 
CPT codes. CPT code 47600 (Cholecystectomy;) has a work RVU of 17.48, 
and CPT code 47605 (Cholecystectomy; with cholangiography) has a work 
RVU of 15.98. Upon examination of the physician time and visits 
associated with these codes, we found that CPT code 47600 includes 115 
minutes of intra-service time and a total time of 420 minutes, 
including 3 office visits, 3 subsequent hospital care days, and 1 
hospital discharge management day. CPT code 47605 includes 90 minutes 
of intra-service time and a total time of 387 minutes, including 2 
office visits, 3 subsequent hospital care days, and 1 hospital 
discharge management day. We believe that the difference in physician 
time and visits is the cause for the difference in work RVU for these 
codes. However, upon clinical review, it does not appear that these 
visits appropriately reflect the relativity of these two services, as 
CPT code 47600 should not have more time and visits associated with the 
service than CPT code 47605. Therefore, we are asking the AMA RUC to 
review these two cholecystectomy CPT codes, 47600 and 47605.
    Comment: Commenters did not disagree with us that there is a work 
RVU rank order anomaly between codes 47600 and 47605 but they believed 
47605 is undervalued. The commenters agreed that these services should 
be reviewed together.
    Response: We look forward to receiving recommendations from the AMA 
RUC and reviewing these codes. We note again that it is essential to 
value codes in the context of the code family and to consider the 
relativity with other services of similar time and intensity outside of 
the code family.
    We thank the public for bringing these issues to our attention and 
kindly request that the public continue to do so.
6. Expanding the Multiple Procedure Payment Reduction (MPPR) Policy
a. Background
    Medicare has a longstanding policy to reduce payment by 50 percent 
for the second and subsequent surgical procedures furnished to the same 
patient by the same physician on the same day, largely based on the 
presence of efficiencies in the practice expense (PE) and pre- and 
post-surgical physician work. Effective January 1, 1995, the MPPR 
policy, with the same percentage reduction, was extended to nuclear 
medicine diagnostic procedures (CPT codes 78306, 78320, 78802, 78803, 
78806, and 78807). In the CY 1995 PFS final rule with comment period 
(59 FR 63410), we indicated that we would consider applying the policy 
to other diagnostic tests in the future.
    Consistent with recommendations of MedPAC in its March 2005 Report 
to the Congress on Medicare Payment Policy, under the CY 2006 PFS, the 
MPPR policy was extended to the technical component (TC) of certain 
diagnostic imaging procedures performed on contiguous areas of the body 
in a single session (70 FR 70261). The reduction recognizes that, for 
the second and subsequent imaging procedures, there are some 
efficiencies in clinical labor, supplies, and equipment time. In 
particular, certain clinical labor activities and supplies are not 
duplicated for subsequent procedures and, because equipment time and 
indirect costs are allocated based on clinical labor time, those would 
also be reduced accordingly.
    The imaging MPPR policy originally applied to computed tomography 
(CT) and computed tomographic angiography (CTA), magnetic resonance 
imaging (MRI) and magnetic resonance angiography (MRA), and ultrasound 
services within 11 families of codes based on imaging modality and body 
region. When we adopted the policy in CY 2007, we stated that we 
believed efficiencies were most likely to occur when imaging procedures 
are performed on contiguous body areas because the patient and 
equipment have already been prepared for the second and subsequent 
procedures, potentially yielding resource savings in areas such as 
clerical time, technical preparation, and supplies (70 FR 45850). The 
MPPR policy originally applied only to procedures furnished in a single 
session involving contiguous body areas within a family of codes, not 
across families. Additionally, while the MPPR policy applies to TC-only 
services and to the TC of global services, it does not apply to 
professional component (PC) services.
    Under the current imaging MPPR policy, full payment is made for the 
TC of the highest paid procedure, and payment is reduced by 50 percent 
of the TC for each additional procedure when an MPPR scenario applies. 
We originally planned to phase in the imaging MPPR policy over a 2-year 
period, with a 25 percent reduction in CY 2006 and a 50 percent 
reduction in

[[Page 73072]]

CY 2007 (70 FR 70263). However, the Deficit Reduction Act of 2005 (DRA) 
(Pub. L. 109-171) amended the statute to place a cap on the PFS payment 
amount for most imaging procedures at the amount paid under the 
hospital outpatient prospective payment system (OPPS). In view of the 
new OPPS payment cap added by the DRA, we decided in the PFS final rule 
with comment period for 2006 that it would be prudent to retain the 
imaging MPPR at 25 percent while we continued to examine the 
appropriate payment levels (71 FR 69659). The DRA also exempted reduced 
expenditures attributable to the imaging MPPR policy from the PFS 
budget neutrality provision. Effective July 1, 2010, section 3135(b) of 
the Affordable Care Act amended the statute to increase the MPPR on the 
TC of imaging services under the policy established in the CY 2006 PFS 
final rule with comment period from 25 to 50 percent, and exempted the 
reduced expenditures attributable to this further change from the PFS 
budget neutrality provision.
    In the July 2009 GAO report entitled, ``Medicare Physician 
Payments: Fees Could Better Reflect Efficiencies Achieved when Services 
are Provided Together,'' the GAO recommended that we take further steps 
to ensure that fees for services paid under the PFS reflect 
efficiencies that occur when services are furnished by the same 
physician to the same beneficiary on the same day. The GAO recommended 
the following: (1) expanding the existing imaging MPPR policy for 
certain services to the PC to reflect efficiencies in physician work 
for certain imaging services; and (2) expanding the MPPR to reflect PE 
efficiencies that occur when certain nonsurgical, nonimaging services 
are furnished together. The GAO report also encouraged us to focus on 
service pairs that have the most impact on Medicare spending.
    In its March 2010 report, MedPAC noted its concerns about 
mispricing of services under the PFS. MedPAC indicated that it would 
explore whether expanding the unit of payment through packaging or 
bundling would improve payment accuracy and encourage more efficient 
use of services.
    In the CYs 2009 and 2010 PFS proposed rules (73 FR 38586 and 74 FR 
33554, respectively), we stated that we planned to analyze nonsurgical 
services commonly furnished together (for example, 60 to 75 percent of 
the time) to assess whether an expansion of the MPPR policy could be 
warranted. MedPAC encouraged us to consider duplicative physician work, 
as well as PE, in any expansion of the MPPR policy.
    Section 1848(c)(2)(K) of the Act (as added by section 3134(a) of 
the Affordable Care Act) specifies that the Secretary shall identify 
potentially misvalued codes by examining multiple codes that are 
frequently billed in conjunction with furnishing a single service, and 
review and make appropriate adjustments to their relative values. As a 
first step in applying this provision, in the CY 2010 final rule with 
comment period, we implemented a limited expansion of the imaging MPPR 
policy to additional combinations of imaging services.
    Effective January 1, 2011 the imaging MPPR applies regardless of 
code family; that is, the policy applies to multiple imaging services 
furnished within the same family of codes or across families. This 
policy is consistent with the standard PFS MPPR policy for surgical 
procedures that does not group procedures by body region. The current 
imaging MPPR policy applies to CT and CTA, MRI and MRA, and ultrasound 
procedure services furnished to the same patient in the same session, 
regardless of the imaging modality, and is not limited to contiguous 
body areas.
    We note that section 1848(c)(2)(B)(v)(VI) of the Act (as added by 
section 3135(b) of the Affordable Care Act) specifies that reduced 
expenditures attributable to the increase in the imaging MPPR from 25 
to 50 percent (effective for fee schedules established beginning with 
2010 and for services furnished on or after July 1, 2010) are excluded 
from the PFS budget neutrality adjustment. That is, the reduced 
payments for code combinations within a family of codes (contiguous 
body areas) are excluded from budget neutrality. However, this 
exclusion only applies to reduced expenditures attributable to the 
increase in the MPPR percentage from 25 to 50 percent, and not to 
reduced expenditures attributable to our policy change regarding 
additional code combinations across code families (non-continguous body 
areas) that are subject to budget neutrality under the PFS
    The complete list of codes subject to the CY 2012 MPPR policy for 
diagnostic imaging services is included in Addendum F.
    As a further step in applying the provisions of section 3134(a) of 
the Affordable Care Act, effective January 1, 2011, we implemented an 
MPPR for therapy services. The MPPR applies to separately payable 
``always therapy'' services, that is, services that are only paid by 
Medicare when furnished under a therapy plan of care. Contractor-priced 
codes, bundled codes, and add-on codes are excluded because an MPPR 
would not be applicable for ``always therapy'' services furnished in 
combination with these codes. The complete list of codes subject to the 
MPPR policy for therapy services is included in Addendum H.
    In the CY 2011 proposed rule (75 FR 44075), we proposed to apply a 
50 percent payment reduction to the PE component of the second and 
subsequent therapy services for multiple ``always therapy'' services 
furnished to a single patient in a single day. However, in response to 
public comments, in the CY 2011 PFS final rule with comment period (75 
FR 73232), we adopted a 25 percent payment reduction to the PE 
component of the second and subsequent therapy services for multiple 
``always therapy'' services furnished to a single patient in a single 
day.
    Subsequent to publication of the CY 2011 PFS final rule with 
comment period, section 3 of the Physician Payment and Therapy Relief 
Act of 2010 (Pub. L. 111-286) revised the payment reduction percentage 
from 25 percent to 20 percent for therapy services furnished in office 
settings. The payment reduction percentage remains at 25 percent for 
services furnished in institutional settings. Section 4 of the 
Physician Payment and Therapy Relief Act of 2010 exempted the reduced 
expenditures attributable to the therapy MPPR policy from the PFS 
budget neutrality provision. Under our current policy as amended by the 
Physician Payment and Therapy Relief Act, for institutional services, 
full payment is made for the service or unit with the highest PE and 
payment for the PE component for the second and subsequent procedures 
or additional units of the same service is reduced by 25 percent. For 
non-institutional services, full payment is made for the service or 
unit with the highest PE and payment for the PE component for the 
second and subsequent procedures or additional units of the same 
service is reduced by 20 percent.
    The MPPR policy applies to multiple units of the same therapy 
service, as well as to multiple different services, when furnished to 
the same patient on the same day. It applies to services furnished by 
an individual or group practice or ``incident to'' a physician's 
service. The MPPR applies when multiple therapy services are billed on 
the same date of service for one patient by the same practitioner or 
facility under the same National Provider Identifier (NPI), regardless 
of whether the services are furnished in one therapy discipline or 
multiple

[[Page 73073]]

disciplines, including, physical therapy, occupational therapy, or 
speech-language pathology.
    The MPPR policy applies in all settings where outpatient therapy 
services are paid under Part B. This includes both services paid under 
the PFS that are furnished in the office setting, as well as to 
institutional services paid at the PFS rates that are furnished by 
outpatient hospitals, home health agencies, comprehensive outpatient 
rehabilitation facilities (CORFs), and other entities that are paid 
under Medicare Part B for outpatient therapy services.
    In its June 2011 Report to the Congress, MedPAC further discussed 
its concern about the significant growth in ancillary services, 
specifically services for which physicians can self-refer under the in 
office ancillary exceptions list for the Ethics in Patient Referrals 
Act (also known as the Stark Law) including imaging, other diagnostic 
tests, and therapeutic services such as physical therapy and radiation 
therapy. MedPAC argues, in its June 2011 Report, that inaccurate 
pricing has played a role in this growth, and that there are additional 
efficiencies to be achieved in pricing imaging services notwithstanding 
a series of payment adjustments for imaging services over the past 
several years. MedPAC specifically recommended a multiple procedure 
payment reduction to the professional component of diagnostic imaging 
services provided by the same practitioner in the same session.
b. CY 2012 Expansion of the MPPR Policy to the Professional Component 
of Advanced Imaging Services
    Over the past few years, as part of the potentially misvalued 
service initiative, the AMA RUC has examined several services that are 
billed together 75 percent or more of the time as part of the 
potentially misvalued service initiative. In several cases, the AMA 
RUC-recommended work values for new codes that describe the combined 
services, and those recommended values reflected the expected 
efficiencies. For example, for CY 2011, the AMA RUC valued the work for 
a series of new codes that describe CT of the abdomen and pelvis, 
specifically CPT codes:
     74176 (Computed tomography, abdomen and pelvis; without 
contrast material).
     74177 (Computed tomography, abdomen and pelvis; with 
contrast material).
     74178 (Computed tomography, abdomen and pelvis; without 
contrast material in one or both body regions, followed by with 
contrast material(s) and further sections in one or both body regions).
    We accepted the work values recommended by the AMA RUC for these 
codes in the CY 2011 PFS final rule with comment period (75 FR 73229). 
The recommended work values reflected an expected efficiency for the 
typical combined service that paralleled the reductions that would 
typically result from a MPPR adjustment. For example, in support of the 
recommended work value of 1.74 RVUs for 74176, the AMA RUC explained 
that the full value of 74150 (Computed tomography, abdomen; without 
contrast material) (Work RVU = 1.19) plus half the value of 72192 
(Computed tomography, pelvis; without contrast material) (\1/2\ Work 
RVU = 0.55) equals 1.74 work RVUs. The AMA RUC stated that its 
recommended valuation was appropriate even though the combined current 
work RVUs for of 74150 and 72192 would result in a total work RVU of 
2.28. Furthermore, the AMA RUC validated its estimation of work 
efficiency for the combined service by comparing the code favorably 
with the work value associated with 74182 (Magnetic resonance, for 
example, proton imaging, abdomen; with contrast material(s)) (Work RVU 
= 1.73), which has a similar intra-service time, 20 minutes. Thus, we 
believe our current and final MPPR formulations are consistent with the 
AMA RUC's work to review code pairs for unaccounted-for efficiencies 
and to appropriately value comprehensive codes for a bundle of 
component services.
    We continue to believe that there may be additional imaging and 
other diagnostic services for which there are efficiencies in work when 
furnished together, resulting in potentially excessive payment for 
these services under current policy. MedPAC also made this same 
observation in their recent June 2011 Report to the Congress.
    As noted, Medicare has a longstanding policy to reduce payment by 
50 percent for the second and subsequent surgical procedures and 
nuclear medicine diagnostic procedures furnished to the same patient by 
the same physician on the same day.
    In continuing to apply the provisions of section 3134(a) of the 
Affordable Care Act, for CY 2012 we proposed to expand the MPPR to the 
PC of Advanced Imaging Services (CT, MRI, and Ultrasound), that is, the 
same list of codes to which the MPPR on the TC of advanced imaging 
already applies (see Addendum F). Thus, the MPPR would apply to the PC 
and the TC of the codes. Specifically, we proposed to expand the 50 
percent payment reduction currently applied to the TC to apply also to 
the PC of the second and subsequent advanced imaging services furnished 
in the same session. Full payment would be made for the PC and TC of 
the highest paid procedure, and payment would be reduced by 50 percent 
for the PC and TC for each additional procedure furnished to the same 
patient in the same session. This proposal was based on the expected 
efficiencies in furnishing multiple services in the same session due to 
duplication of physician work--primarily in the pre- and post-service 
periods, with smaller efficiencies in the intra-service period.
    The proposal is consistent with the statutory requirement for the 
Secretary to identify, review, and adjust the relative values of 
potentially misvalued services under the PFS as specified by section 
3134(a) of the Affordable Care Act. The proposal is also consistent 
both with our longstanding policy on surgical and nuclear medicine 
diagnostic procedures, which apply a 50 percent reduction to second and 
subsequent procedures. Furthermore, it is responsive to continued 
concerns about significant growth in imaging spending, and to MedPAC 
(March 2010, June 2011) and GAO (July 2009) recommendations regarding 
the expansion of MPPR policies under the PFS to account for additional 
efficiencies.
    Finally, as noted, the proposal is consistent with the AMA RUC's 
recent methodology and rationale in valuing the work for a combined CT 
of the pelvis (CPT codes 72192, 72193 and 72194), and abdomen (CPT 
codes 74150, 74160 and 74170) where the AMA RUC assumed the work 
efficiency for the second service was 50 percent. Savings resulting 
from this proposal would be redistributed to other PFS services as 
required by the general statutory PFS budget neutrality provision.
    Comment: Overall, most commenters opposed the expansion of the 
imaging MPPR policy to the PC. While many commenters acknowledged that 
there may be minimal efficiencies in the PC of second and subsequent 
procedures, they stated a 50 percent reduction was excessive. 
Commenters who agreed that some efficiencies exist indicated that 
activities with potential for duplication included: Review of medical 
history and prior imaging studies; review of the final report; and 
discussion of findings with the referring physician.
    In contrast, a few commenters, including MedPAC, supported the 
proposal. MedPAC indicated that the proposal is consistent with the 
recommendation from its June 2011

[[Page 73074]]

Report to the Congress; noted that recent recommendations from the AMA 
RUC offer additional support; and agreed with a proposal to align the 
MPPR policy for the technical and professional portions of an imaging 
service.
    Commenters opposed to our proposal raised several issues about the 
basis for CMS' proposed 50 percent reduction to the professional 
component for second and subsequent imaging services Many commenters 
cited a recent article entitled, ``Professional Component Payment 
Reductions for Diagnostic Imaging Examinations When More Than One 
Service Is Rendered by the Same Provider in the Same Session: An 
Analysis of Relevant Payment Policy,'' published June 29, 2011, in the 
Journal of the American College of Radiology''. The article argues that 
efficiencies within the professional component of advanced diagnostic 
imaging services including radiography and fluoroscopy, ultrasound, 
nuclear medicine, CT, and MRI are minimal and vary greatly across 
modalities. The article was authored by a group of radiologists that 
also participate in AMA RUC activities. They reached their conclusion 
after a review of the work for codes in the AMA RUC Resource Based 
Relative Value Scale Data Manager database. The authors focused their 
review on pre-service and post-service activities and did not review 
intra-service activities. The authors point out that pre- and post-
service time is not a significant portion of time for imaging studies, 
unlike surgical procedures. The maximum percentage of potentially 
duplicated pre-service and post-service activity that this team 
identified ranged from 19 percent for nuclear medicine to 24 percent 
for ultrasound. The authors found a maximum percentage work reduction 
by modality ranging from 4.32 percent for CT to 8.15 percent for 
ultrasound. This translates to a maximum reduction in the professional 
component of only 2.96 percent for CT to 5.45 percent for ultrasound.
    Commenters point out that neither GAO nor MedPAC supported a 
specific percentage reduction, but recommended that CMS conduct a 
review and analysis to determine the extent of efficiencies associated 
with the PC of multiple imaging services, and suggested that such 
efficiencies may vary by modality. Commenters highlighted several 
perceived deficiencies in the GAO's technical methodology, including a 
failure to distinguish between pre- post- and intra- physician work 
intensity, failure to recognize the wide variability in pre- and post- 
service time allocation among varied imaging services which makes a 
blanket policy more imprecise, and failure to consider clinical 
practice. Commenters argued that CMS provided no analysis to support 
the proposed MPPR level of 50 percent and did not identify potential 
areas of duplication in the pre-, post- and intra-service periods.
    Commenters expressed views regarding our reference to the AMA RUC 
valuation of the work for bundled codes for CT of the pelvis and 
abdomen. Many commenters did not believe it was appropriate to propose 
a 50 percent MPPR to the PC for all advanced imaging services based on 
the AMA RUC's 50 percent reduction in work RVUs when valuing the 
combined pelvis and abdomen CT codes. Commenters indicated that the 
bundled code pair is not representative of most code pairs in that it 
is a focused contiguous body area using the same modality with 
significant overlap in the regions evaluated. Commenters noted that the 
AMA RUC has not consistently found a 50 percent reduction in physician 
work when imaging services are performed together.
    The AMA RUC also objected to CMS using its recommended work values 
for the CT of Abdomen/Pelvis to substantiate our proposal. The AMA RUC 
asserted that it developed the recommended physician work values by 
estimating the magnitude of the physician work of the surveyed codes 
relative to physician work values of MRI, MRA, and evaluation and 
management services. When valuing the code for CT of Abdomen/Pelvis, 
the AMA RUC did not believe that the recommended physician work RVUs 
should be lower than the total RVUs resulting from applying a 50 
percent MPPR to the professional component of the second and subsequent 
imaging service in the CT Abdomen/Pelvis code pair. The AMA RUC pointed 
out that the committee arrived at the recommended values using 
magnitude estimation and did not sum values for the component codes as 
suggested by CMS in the proposed rule.
    Some commenters acknowledged that there are some efficiencies in 
the combined CT of the abdomen and pelvis, noting that overlapping 
images on a CT of the abdomen and pelvis may require less scrutiny. 
Commenters also noted that the physician has to review the patient 
history and provide dictation only once for multiple scans. Other 
commenters rejected the idea that there are efficiencies in the CT of 
the abdomen and pelvis. Commenters indicated that the service included 
only about 75 images 5 years ago. Today, it includes approximately 375 
images, with the addition of thinner slice images and multiplanar 
reformatting.
    Many commenters maintained that the proposed 50 percent MPPR for 
the PC of advanced imaging services is based on erroneous assumptions 
and a misunderstanding of the practice of medicine. These commenters 
argued that, generally, patients who are having multiple imaging 
studies on the same day tend to be patients who are seriously ill or 
injured patients, including cancer, trauma and stroke patients who 
invariably have significantly more complex pathology, requiring more 
time, rather than less. In some cases, the image using an initial 
modality may be inconclusive, requiring use of another imaging 
modality. Commenters argued that there are no efficiencies in physician 
work for interpretation of multiple advanced imaging scans for trauma 
and cancer patients, where images are less likely to be of contiguous 
anatomic areas.
    Commenters maintained that, on average, studies with comparisons 
take longer than those that do not have comparison studies. The 
radiologists must look at more films and, when abnormalities are 
present, must compare each finding to the previous exam. The more 
studies there are, the more time it takes to interpret each one. 
Commenters asserted that radiologists are morally and professionally 
obligated to spend an equal amount of time, effort, and skill on 
interpreting images, irrespective of whether previous examinations have 
been performed on the same patient on the same day.
    Finally, several commenters argued that technological advances in 
imaging have increased the intra-service work requiring radiologists to 
review many more images and more complex images than when the services 
were originally valued. They argue that contrary to the CMS proposal, 
clinical practice has become more time consuming because of the need to 
review hundreds of images per study compared to earlier imaging methods 
which took far fewer images. In addition to axial images, there 
frequently are coronal, sagittal, and oblique sequences as well as 
maximal intensity 3D images with each study. Images of non-contiguous 
body areas, for example, a CT of the brain and abdomen, are unrelated 
and are often read by different specialists, each separately requiring 
dedicated time for interpretation. Further, the search patterns used to 
identify possible issues in the images are different; technical aspects 
of viewing non-contiguous images are different; and the mental process 
used to formulate differential diagnoses are often unrelated. In some 
cases, such as when it is necessary to re-review prior images, 
commenters stated

[[Page 73075]]

that more time may be required compared to the time required to review 
a single image.
    Response: We appreciate the many comments submitted on this 
proposal. However, we continue to believe that some level of 
duplication exists in the PC service for second and subsequent advanced 
imaging services. While our initial proposal was developed with 
reference to existing MPPR policies and supported by the AMA RUC 
valuation of new bundled CT imaging codes, as commenters recommended, 
we have performed additional analysis for this final rule with comment 
period. Specifically, we have reviewed the vignettes in the AMA RUC 
database for 12 high volume code pairs where vignettes were available. 
The codes we reviewed appear in Table 8 and constituted about 30 
percent of utilization for the advanced imaging codes performed on the 
same day in CY 2010 claims data. Although our analysis did not include 
code pairs with different modalities, we note that our claims data 
indicate that such code pairs represent only 3 percent of expenditures 
for advanced imaging codes. Therefore, we do not believe the typical 
multiple advanced imaging scenario involves more than one modality. We 
also note that our analysis did not include ultrasound code pairs as 
there are no vignettes or specific physician times for these services 
in the AMA RUC database. To identify potential duplication in the PC of 
the code combinations for which vignettes and physician times were 
available, we performed a clinical assessment to identify the level of 
duplication in the typical case and assigned a reduction percentage of 
either 0, 25, 50, 75 or 100 to each vignette component in the pre-, 
post-, and intra-service periods.
    Our claims analysis revealed that the majority of multiple imaging 
studies were for contiguous anatomic areas including thorax and 
abdomen/pelvis, and head/brain and neck/spine, and utilized the same 
modality. This suggests that multiple studies are typically performed 
to view a single underlying pathology that spans either multiple 
regions or lies in the region of overlap where a single study might be 
suboptimal. If the reasons for the studies were relatively unrelated, 
the observed association between contiguous areas and same modality 
would not exist. Conversely, the observation of this firm association 
between multiple studies on the same day implies that there are some 
efficiencies in interpreting history; predicting pathology; selecting 
protocols; reviewing scout and technique scans; focusing on particular 
tissue types and imaging windows; reviewing overlapping fields; 
reporting preliminary if not final results; and follow-up discussions 
with patients, staff and physicians. In contrast to the analysis 
published by the ACR, we found--
     Significant duplication in the pre-service work, which 
consists of reviewing patient history and any prior imaging studies, 
and determining the protocol and communicating that protocol with 
technologists;
     Significant duplication in the post-service work, which 
almost always consists of reviewing and signing a final report and 
discussing findings with the referring physician; and
     Moderate efficiencies in intra-service work. Specifically, 
supervising contrast (where appropriate), interpreting the examination 
and comparing it to other studies, and dictating the report for the 
medical record.
    In conclusion, our analysis showed that, after applying a reduction 
percentage to each vignette component for the second and subsequent 
scans, identified as the code(s) in the code pair with the lower 
professional component RVU, and adjusting for intensity differences 
between pre-service and post-service work and intra-service work, the 
total RVU reduction ranges from 27.3 to 43.1 percent for second and 
subsequent procedures in the 12 code pairs.
BILLING CODE 4120-01-P

[[Page 73076]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.012

BILLING CODE 4120-01-C

[[Page 73077]]

    Based on our further analysis and in response to comments, we 
believe that a 25 percent reduction would more appropriately capture 
the range of physician work efficiencies for second and subsequent 
imaging services furnished by the same physician (including physicians 
in the same group practice) to the same patient in the same session on 
the same day.
    Commenters expressed concerns that there is wide variation in the 
potential efficiencies among different code pairs that such variability 
precludes broad application of a single percentage reduction, and that 
establishing new combined codes is the only mechanism for capturing 
accurate payment, for multiple imaging services. In general, we believe 
that MPPR policies capture efficiencies when several services are 
furnished in the same session and that it is appropriate to apply a 
single percentage reduction to second and subsequent procedures to 
capture those efficiencies. Because of the myriad potential 
combinations of advanced imaging scans, establishing new combined codes 
for each combination of advanced imaging scans is unwieldy and 
impractical. An MPPR policy is not precise, but reflects efficiencies 
in the aggregate, such as common patient history, interpretation of 
multiple images involving the same patient and same anatomical 
structures, and, typically, same modality. Our analysis of the specific 
activities included in furnishing advanced imaging scans together 
supports a reduction between 27.3 and 43.1 percent. The implementation 
of a 25 percent reduction in the PC for second and subsequent imaging 
services furnished by the same physician in the same session is less 
than range of reductions we observed for second and subsequent scans in 
our analysis. Therefore, while we acknowledge that efficiencies may 
vary across code pairs, we believe that a 25 percent reduction in the 
PC is reasonable and supported by our analysis. We note that, as with 
many of our policies, we will continue to review this MPPR policy and 
refine it as needed in future years to ensure that we continue to 
provide accurate payments under the PFS.
    We disagree with commenters' assertions that there are no 
efficiencies in physician work for the interpretation of multiple 
advanced imaging scans for trauma and cancer patients. As noted 
previously, our analysis indicates that the typical multiple imaging 
case involves contiguous body areas, and only a very small percentage 
involve more than one modality. We note that this analysis included all 
claims data, including trauma and cancer patient imaging studies. In 
addition, we used conservative estimates of the reduction percentages 
for the observed efficiencies for second and subsequent procedures in 
our analysis. Finally, we believe there are efficiencies in work for 
all multiple imaging studies, including the review of medical history 
and prior imaging studies; contrast administration; review of the final 
report; and discussion of findings with the referring physician, 
regardless of the type of injury or patient's diagnosis.
    Concerning comparison studies, we note that when interpreting 
previous studies, the radiologist would interpret not just the prior 
image itself, but also the patient history or, at a minimum, the 
portfolio of similar available studies. While we understand that time 
spent reviewing prior studies adds work by requiring the radiologist to 
review such studies, we believe that the availability of prior studies 
may also reduce work by creating a baseline against which new images 
can be quickly compared.
    Commenters were also concerned with technological advances that may 
exponentially multiply the number of images that are produced in a 
single imaging session. While we agree with commenters that technology 
has multiplied the number of images produced, we note that that same 
technology has vastly improved viewability. The use of shuttles to scan 
through a series of images along imaged axis, 3-D rendering to allow 
visualization, rotation and zoom, and modeling to enhance suspect 
findings and increase the utility of pattern recognition all exist to 
improve the efficiency of data extraction that at one time had to be 
visualized entirely in the mind of the radiologist from a series of 
side-by-side flat images. Therefore, we believe that, in the aggregate, 
technological advances in imaging have not significantly increased the 
work of interpretation. Efficiencies resulting from technological 
advances are even more evident in cases of multiple contiguous images, 
where rendering allows joystick maneuvering through a single continuous 
image that may be billed independently, but which may be acquired as a 
single activity. Finally, we note that other commenters, and the study 
cited by the American College of Radiology, have acknowledged some 
efficiencies do exist and are not currently recognized in the coding 
and payment structure of these codes.
    Comment: The AMA RUC requested that CMS continue to support the 
activities of the joint CPT/RUC workgroup to identify services that can 
be bundled together into one comprehensive code and to make sure that 
this bundled code is valued appropriately. The AMA RUC noted that it 
utilizes Medicare claims data to ensure that it understands what 
services are reported in conjunction with the codes that are under 
their review, and to ensure that there is no duplication of pre-service 
and post-service work, or in practice costs. The AMA RUC maintains that 
any duplication in the PC that may exist when performing two or more 
imaging services has already been removed from the individual codes as 
it is assumed that there are a certain number of instances for which 
one service will be furnished and reported with another service. The 
AMA RUC maintains that further expansion of the MPPR to the PC would 
result in unwarranted and unfair reductions to the payment rate. The 
AMA RUC has found, through review of survey data, that when codes are 
commonly reported together (that is, more than 75 percent of the time), 
the duplication in physician work for the second or subsequent services 
is not consistently 50 percent, and may range from anywhere between 0 
percent and 100 percent. The AMA RUC views its current project to 
address efficiencies on an individual basis with bundled codes to be a 
fair and consistent process. Commenters noted that thirteen new bundled 
CPT codes have been developed and valued by the AMA RUC so far, and 
more bundled codes are being developed for the 2013 and 2014 CPT 
cycles. Therefore, the AMA RUC believes its efforts should more than 
address the GAO recommendation to systematically review services 
commonly furnished together, and that CMS' implementation of the 
imaging MPPR policy for the professional component of advanced imaging 
services is not warranted at this time.
    Response: The imaging MPPR is not intended to supersede the AMA RUC 
process of developing recommended values for services described by CPT 
codes. We appreciate the work by the AMA RUC and encourage them to 
continue examining code pairs for duplication based upon the typical 
case, and appropriately valuing new comprehensive codes for bundled 
services that are established by the CPT Editorial Panel. We view the 
AMA RUC process and the MPPR policy as complimentary and equally 
reasonable means to the appropriate valuation and payment for services 
under the PFS. Codes subject to the MPPR that are subsequently bundled 
would no longer be subject to the MPPR when billed alone in a single 
session. At the same

[[Page 73078]]

time, the adoption of the MPPR for the PC of advanced imaging services 
will address duplications in work to ensure that multiple imaging 
services are paid more appropriately. As noted previously, we believe 
that an MPPR policy addresses work efficiencies present when more than 
one advanced imaging service is performed in the same session, and that 
creating new comprehensive codes to capture the myriad of unique 
combinations of advanced imaging services that could be performed in 
the same session would be unwieldy and impractical. In addition, we 
believe that the expansion of the MPPR policy for advanced imaging 
services to the PC is consistent with both the GAO and MedPAC 
recommendations. We note that as more code combinations are bundled 
into a single complete service reported by one CPT code, the MPPR 
policy would no longer apply for the combined services. For example, 
the MPPR no longer applies when the single code is billed for a 
combined CT of the pelvis and abdomen performed in the same session.
    Comment: In the proposed rule, we cited section 3134 of the 
Affordable Care Act, which requires the Secretary identify potentially 
misvalued codes by examining multiple codes that are frequently billed 
in conjunction with furnishing a single service, and to review and make 
appropriate adjustments to their relative values. A commenter believed 
that we inappropriately relied on this authority to justify the 
expansion of the MPPR to PC services. The commenter noted that we 
stated in the PFS final rule for 2011 that ``[b]ecause of the different 
pieces of equipment used for CT/CTA, MRI/MRA, and ultrasound 
procedures, it would be highly unlikely that a single practitioner 
would furnish more than one imaging procedure involving two different 
modalities to one patient in a single session where the proposed MPPR 
would apply.'' Therefore, the commenter concluded that we should not 
rely on the authority under section 3134 of the Affordable Care Act to 
adjust payment for ``codes that are frequently billed in conjunction 
with furnishing a single service'' as the basis to expand the MPPR 
policy to procedures that we conceded are rarely billed together.
    Response: We believe that the application of the MPPR to the PC of 
second and subsequent advanced imaging services furnished in the same 
session to the same patient is fully consistent with section 
1848(c(2)(K) of the Act (as added by section 3134 of the Affordable 
Care Act). Additionally, we believe the proposed MPPR is consistent 
with our authority under section 1848(c)(2)(B) of the Act which 
requires us to review the relative and make adjustments to values for 
physicians' services at least once every 5 years, and with our 
authority to establish ancillary policies under section 1848(c)(4) of 
the Act. As noted previously, we have had several MPPR policies in 
place for many years before the enactment of section 3134 of the 
Affordable Care Act.
    As explained previously, section 1848(c)(2)(K)(i) of the Act 
requires the Secretary to identify services within several specific 
categories as being potentially misvalued, and to make appropriate 
adjustments to their relative values. One of the specific categories 
listed under section 1834(c)(2)(K)(ii) of the Act is ``multiple codes 
that are frequently billed in conjunction with furnishing a single 
service.''
    Therefore, we do not agree with the commenters that the MPPR policy 
undermines the goals of the Affordable Care Act. It appears the 
commenter may have misunderstood the point of the quoted statement from 
the proposed rule that, ``[b]ecause of the different pieces of 
equipment used for CT/CTA, MRI/MRA, and ultrasound procedures, it would 
be highly unlikely that a single practitioner would furnish more than 
one imaging procedure involving two different modalities to one patient 
in a single session where the proposed MPPR would apply.'' The 
commenter is correct that we conceded, in the circumstance where two 
different modalities are used, it is unlikely that two advanced imaging 
codes would be billed by a single physician for a single patient in a 
single session. However, the point of this statement was to indicate 
that the proposed MPPR would not apply in the vast majority of these 
situations. Although there remains the remote possibility that the MPPR 
would apply in a scenario where the codes for multiple advanced imaging 
services are not ``frequently billed in conjunction with furnishing a 
single service,'' we believe this would be exceedingly rare. Moreover, 
we would expect there to be some level of efficiencies in work even in 
these cases. As we indicated in the CY 2011 PFS final rule with comment 
period (75 FR 73231), application of a general MPPR policy to numerous 
imaging service combinations may result in an overestimate of 
efficiencies in some cases and an underestimate in others. But this can 
be true for any service paid under the PFS, and we believe it is 
important to establish a general policy to pay appropriately for the 
typical service or services furnished. Given that, based on our review 
of CY 2010 claims data, 97 percent of second and subsequent advanced 
imaging services furnished to the same patient on the same day involved 
the use of the same imaging modality, and that some of the cases that 
did involve different modalities might have been furnished by different 
physicians in different group practices (in which case the MPPR would 
not apply), we do not believe it is necessary to adjust our MPPR policy 
to address an uncommon scenario. Therefore, we believe the MPPR policy 
is fully consistent with section 1848(c)(2)(K) of the statute, as added 
by section 3134(a) of the Affordable Care Act, and that the policy 
fulfills several of our key statutory obligations by more appropriately 
valuing combinations of imaging services furnished to patients and paid 
under the PFS.
    Comment: Commenters indicated that contemporary radiology is not 
designed to distinguish between imaging procedures performed during the 
``same'' or ``different'' sessions with any degree of reliability. 
There is no practical method to reliably and efficiently make this 
distinction. This challenge is made even more difficult when the issue 
of ``same'' versus ``different'' interpreting physician(s) is taken 
into account. The process will also be challenging to auditors who will 
likely suggest that the burden is on the practice to prove claims 
submitted with a -59 modifier actually occurred in a separate session. 
Commenters are concerned that it is unclear how this can be efficiently 
documented, and request that this be considered before any new policy 
is adopted.
    Commenters noted that imaging tests utilizing different modalities 
are rarely performed in the same session. For example, a patient may 
undergo an ultrasound, which would be interpreted by the physician to 
determine whether the patient requires a CT for further diagnostic 
evaluation. The physician supervises and/or performs and interprets 
each test separately, at different times, and speaks to the patient 
about the results of each test on separate occasions during the 
patient's visit. Also, separate written reports are required for each 
test.
    Commenters further noted that in multiple trauma cases, the same 
radiologist would not interpret the entire series of exams. In 
addition, there are cases when a radiologist determines upon review 
that X-rays were insufficient to determine the problem and, therefore, 
recommends another type of imaging study be performed. The same 
radiologist may review the results of this second imaging test for the 
same

[[Page 73079]]

patient later in the same day. In this case, the radiologist needs to 
complete an entire dictation to reflect the subsequent study and 
provide his professional interpretation. Commenters specifically asked 
whether the MPPR would apply when--
     A physician does not read both scans together, for 
example, in emergency situations even though both scans were performed 
in the same session;
     Two physicians with different specialties each read a 
separate scan of a patient, though both scans were taken during the 
same session; and
     Physicians are in the same group practice.
    Response: The MPPR for the PC of advanced imaging services applies 
to procedures furnished to the same patient, in the same session, on 
the same day. For purposes of the MPPR on the PC, scans interpreted at 
widely different times (such as in the emergency situation noted) would 
constitute separate sessions, even though the scans themselves were 
conducted in the same session and the MPPR on the TC would apply. We 
further recognize that in some cases, imaging tests utilizing different 
modalities may be conducted in separate sessions for the TC service, 
such as when the patient must be moved to another floor of the 
hospital; however, the PC services in such cases may, or may not, be 
furnished in separate sessions. As with the MPPR for multiple surgery, 
the MPPR on the PC for advanced imaging services applies in the case of 
multiple procedures furnished by a single physician or by multiple 
physicians in the same group practice. As a general policy, however, 
when multiple scans are conducted on a patient in the same session, we 
would generally consider the interpretations of those scans to be 
furnished in the same session, including cases when furnished by 
different physicians in the same group practice. In cases where the 
physician demonstrates the medical necessity of furnishing 
interpretations in separate sessions, use of the -59 modifier would be 
appropriate. We recognize that it may not always be a simple matter to 
determine whether a service was furnished in the ``same'' session, 
particularly in the case of the PC. The physician will need to exercise 
judgment to determine when it is appropriate to use the -59 modifier 
indicating separate sessions. We do not expect use of the modifier to 
be a frequent occurrence.
    Comment: Some commenters expressed concern that the proposal may 
create an incentive to bypass ultrasound and simply order an advanced 
imaging procedure because, as the lower cost modality, ultrasound 
payment would be reduced. Another commenter indicated that CMS was 
proposing to include ultrasound under the definition of advanced 
imaging services for application of the MPPR, noting that this 
conflicts with the statutory definition of advanced imaging services as 
MRI, CT, PET and nuclear cardiology.
    Response: Clearly, we do not intend the MPPR to encourage 
radiologists to forego ultrasound imaging in favor of advanced imaging 
modalities. We trust that radiologists will continue to utilize the 
modality or modalities that is/are both medically necessary and most 
appropriate, rather than use payment considerations to dictate the 
modality.
    We believe the term ``advanced imaging'' has confused commenters 
because this term has been used to define different sets of imaging 
services for different Medicare initiatives. We have not revised the 
definition of advanced imaging services that we have used for the 
imaging MPPR policy regarding the TC of the second and subsequent 
imaging services Since 2006, for payment under the PFS, the imaging 
MPPR for the TC has included CT, MRI and ultrasound. While ultrasound 
services are included in both the existing imaging MPPR for the TC and 
in the MPPR policy we are finalizing for the PC beginning in CY 2012, 
we do not consider ultrasound services to be advanced imaging 
procedures for purposes of accreditation. Section 135(a) of the 
Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) 
(Pub. L. 110-275) required the Secretary to designate organizations to 
accredit suppliers, including but not limited to physicians, non-
physician practitioners and Independent Diagnostic Testing Facilities 
that furnish the technical component (TC) of advanced diagnostic 
imaging services, which include MRI, CT, and nuclear medicine imaging 
such as positron emission tomography (PET). The MIPPA provision 
expressly excludes ultrasound, X-ray, and fluoroscopy from this 
requirement.
    Comment: Commenters indicated that CMS' proposed MPPR policy for 
the PC would result in a payment reduction that would adversely affect 
both the quality of care and access to care; shift imaging to 
hospitals; jeopardize the integrated, community-based care model; is 
counter-productive to the concept of pay for quality performance; and 
will encourage partial studies to be done over several different 
visits, which is inefficient for everyone involved and detrimental to 
patient care. Several commenters did not condone such an unprofessional 
response, but were concerned that practitioners might begin to 
circumvent this payment policy.
    Response: We have no reason to believe that appropriately valuing 
services for payment under the PFS by revising payment to reflect 
duplication in the PC of multiple imaging services would negatively 
impact quality of care; jeopardize the integrated, community-based care 
model; be counter-productive to the concept of pay for quality 
performance; or limit patients' access to medically reasonable and 
necessary imaging services. We have no evidence to suggest any of the 
adverse impacts identified by the commenters have resulted from the 
implementation of the MPPR on the TC of imaging in 2006. In fact, to 
the contrary, MedPAC's analysis in its June 2011 report indicates there 
has been continued high annual growth in the use of imaging.
    With respect to the ordering and scheduling of imaging services for 
Medicare beneficiaries, we require that Medicare-covered services be 
appropriate to patient needs. We would not expect the adoption of an 
MPPR for the PC of imaging services to result in imaging services being 
furnished on separate days by one provider merely so that the 
practitioner or provider may garner increased payment. We agree with 
the commenters who noted that such an unprofessional response on the 
part of practitioners would be inefficient and inappropriate. We will 
continue to monitor access to care and patterns of delivery for imaging 
services, with particular attention focused on identifying any changes 
in the delivery of same day imaging services that may be clinically 
inappropriate.
    Comment: Commenters maintained that utilization of advanced imaging 
has not declined since implementation of the MPPRs or the OPPS cap 
because the ordering physician has not been impacted by MPPR payment 
policy. Commenters indicated that in order to address issues of over-
utilization of imaging services, it would be more appropriate for CMS 
to address self-referral issues rather than continue to affect the 
payment for physicians performing and interpreting imaging studies 
through an MPPR or payment cap methodology.
    Response: We understand the commenters' concerns and will continue 
to explore ways to appropriately address overutilization. We note that 
in addition to the commmenters' reference to physician self-referral, 
in its June 2011 report, MedPAC noted that numerous factors

[[Page 73080]]

contribute to overutilization include mispricing of services under the 
PFS.
    In summary, after consideration of the public comments received, we 
are adopting our CY 2012 proposal to apply an MPPR to the PC of 
advanced imaging services, with a modification to apply a 25 percent 
reduction for CY 2012 rather than the 50 percent reduction we had 
proposed. We continue to believe that efficiencies exist in the PC of 
multiple imaging services, and we will continue to monitor code 
combinations for possible future adjustments to the reduction 
percentage applied through this MPPR policy.
    Specifically, beginning in CY 2012 we are adopting an MPPR that 
applies a 25 percent reduction to the PC of second and subsequent 
advanced imaging services furnished by the same physician to the same 
patient, in the same session, on the same day. We are proposing to add 
CPT 74174 (Computed tomographic angiography, abdomen and pelvis; with 
contrast material(s), including noncontrast images, if performed, and 
image postprocessing), which is a new code for CY 2012, to the imaging 
MPPR list. This code is being added on an interim final basis and is 
open to public comment on this final rule with comment period. We note 
that the MPPR will apply when the combined new procedure is furnished 
in conjunction with another procedure(s). The complete list of services 
subject to the MPPR for the PC of imaging services is the same as for 
the MPPR currently applied to the TC of imaging services, and is shown 
in Addendum F. The PFS budget neutrality provision is applicable to the 
new MPPR for the PC of advanced imaging services. Therefore, the 
estimated reduced expenditures for imaging services have been 
redistributed to increase payment for other PFS services. We refer 
readers to section IX.C. of this final rule with comment period for 
further discussion of the impact of this policy.
c. Further Expansion of MPPR Policies Under Consideration for Future 
Years
    Currently, the MPPR policies focus only on a select number of 
codes. We will be aggressively looking for efficiencies in other sets 
of codes during the coming years and will consider implementing more 
expansive multiple procedure payment reduction policies in CY 2013 and 
beyond. In the proposed rule, we invited public comment on the 
following MPPR policies which are under consideration. Any proposals 
would be presented in future rulemaking and subject to further public 
comment:
     Apply the MPPR to the TC of All Imaging Services. This 
approach would apply a payment reduction to the TC of the second and 
subsequent imaging services performed in the same session. Such an 
approach could define imaging consistent with our existing definition 
of imaging for purposes of the statutory cap on payment at the OPPS 
rate (including X-ray, ultrasound (including echocardiography), nuclear 
medicine (including positron emission tomography), magnetic resonance 
imaging, computed tomography, and fluoroscopy, but excluding diagnostic 
and screening mammography). Add-on codes that are always furnished with 
another service and have been valued accordingly could be excluded.
    Such an approach would be based on the expected efficiencies due to 
duplication of clinical labor activities, supplies, and equipment time. 
This approach would apply to approximately 530 HCPCS codes, including 
the 119 codes to which the current imaging MPPR applies. Savings would 
be redistributed to other PFS services as required by the statutory PFS 
budget neutrality provision.
     Apply the MPPR to the PC of All Imaging Services. This 
approach would apply a payment reduction to the PC of the second or 
subsequent imaging services furnished in the same encounter. Such an 
approach could define imaging consistent with our existing definition 
of imaging for the cap on payment at the OPPS rate. Add-on codes that 
are always furnished with another service and have been valued 
accordingly could be excluded.
    This approach would be based on efficiencies due to duplication of 
physician work primarily in the pre- and post-service periods, with 
smaller efficiencies in the intra-service period. This approach would 
apply to approximately 530 HCPCS codes, including the 119 codes to 
which the current imaging MPPR applies. Savings would be redistributed 
to other PFS services as required by the statutory PFS budget 
neutrality provision.
     Apply the MPPR to the TC of All Diagnostic Tests. This 
approach would apply a payment reduction to the TC of the second and 
subsequent diagnostic tests (such as radiology, cardiology, audiology, 
etc.) furnished in the same encounter. Add-on codes that are always 
furnished with another service and have been valued accordingly could 
be excluded.
    The approach would be based on the expected efficiencies due to 
duplication of clinical labor activities, supplies, and equipment time. 
The approach would apply to approximately 700 HCPCS codes, including 
the approximately 560 HCPCS codes subject to the OPPS cap. The savings 
would be redistributed to other PFS services as required by the 
statutory PFS budget neutrality provision.
    We received several comments concerning the future expansion of the 
MPPR. We will take the comments under consideration as we develop 
future proposals. Any proposals would be presented in future rulemaking 
and subject to further public comment.
d. Procedures Subject to the OPPS Cap
    We are proposing to add the new codes in Table 9 to the list of 
procedures subject to the OPPS cap, effective January 1, 2012. These 
procedures meet the definition of imaging under section 5102(b) of the 
DRA. These codes are being added on an interim final basis and are open 
to public comment in this final rule with comment period.

[[Page 73081]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.013

C. Overview of the Methodology for the Calculation of Malpractice RVUs

    Section 1848(c) of the Act requires that each service paid under 
the PFS be comprised of three components: work, PE, and malpractice. 
From 1992 to 1999, malpractice RVUs were charge-based, using weighted 
specialty-specific malpractice expense percentages and 1991 average 
allowed charges. Malpractice RVUs for new codes after 1991 were 
extrapolated from similar existing codes or as a percentage of the 
corresponding work RVU. Section 4505(f) of the BBA amended section 
1848(c) of the Act which required us to implement resource-based 
malpractice RVUs for services furnished beginning in 2000. Therefore, 
initial implementation of resource-based malpractice RVUs occurred in 
2000.
    The statute also requires that we review, and if necessary adjust, 
RVUs no less often than every 5-years. The first review and update of 
resource-based malpractice RVUs was addressed in the CY 2005 PFS final 
rule with comment period (69 FR 66263). Minor modifications to the 
methodology were addressed in the CY 2006 PFS final rule with comment 
period (70 FR 70153). In the CY 2010 PFS final rule with comment 
period, we implemented the second review and update of malpractice 
RVUs. For a discussion of the second review and update of malpractice 
RVUs, see the CY 2010 PFS proposed rule (74 FR 33537) and final rule 
with comment period (74 FR 61758).
    As explained in the CY 2011 PFS final rule with comment period, 
malpractice RVUs for new and revised codes effective before the next 
Five-Year Review of Malpractice (for example, effective CY 2011 through 
CY 2014, assuming that the next review of malpractice RVUs occurs for 
CY 2015) are determined either by a direct crosswalk to 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 (75 FR 
73208). For the modified crosswalk approach, we adjust (or ``scale'') 
the malpractice RVU for the new/revised code to reflect the difference 
in work RVU between the source code and the new/revised work value (or, 
if greater, 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 is 10 percent higher than the work RVU for its source code, the 
malpractice RVU for the revised code would be increased by 10 percent 
over the source code RVU. This approach presumes the same risk factor 
for the new/revised code and source code but uses the work RVU for the 
new/revised code to adjust for risk-of-service.

D. Geographic Practice Cost Indices (GPCIs)

1. Background
    Section 1848(e)(1)(A) of the Social Security Act requires us to 
develop separate Geographic Practice Cost Indices (GPCIs) to measure 
resource cost differences among localities compared to the national 
average for each of the three fee schedule components (that is, 
physician work, practice expense (PE), and malpractice). While 
requiring that the PE and malpractice GPCIs reflect the full relative 
cost differences, section 1848(e)(1)(A)(iii) of the Act requires that 
the physician 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 beginning January 1, 2011.
    Section 1848(e)(1)(E) of the Act provides for a 1.0 floor for the 
work GPCIs which was set to expire at the end of 2009 until it was 
extended through December 31, 2010 by section 3102(a) of the Affordable 
Care Act. Because the work GPCI floor was set to expire at the end of 
2010, the GPCIs published in Addendum E of the CY 2011 PFS final rule 
with comment period did not reflect the 1.0 physician work floor. 
However, section 1848(e)(1)(E) of the Act was amended on December 15, 
2010, by section 103 of the Medicare and Medicaid Extenders Act (MMEA) 
of 2010 (P.L. 111-309) to extend the 1.0 work GPCI floor through 
December 31, 2011. Appropriate changes to the CY 2011 GPCIs were made 
to reflect the 1.0 physician work floor required by section 103 of the 
MMEA. Since the work GPCI floor provided in section 1848(e)(1)(E) of 
the Act is set to expire prior to the implementation of the CY 2012 
PFS, the CY 2012 physician work GPCIs, and summarized geographic 
adjustment factors (GAFs), presented in this final rule with comment 
period do not reflect the 1.0 work GPCI floor. As required by section 
1848(e)(1)(G) and section 1848(e)(1)(I) of the Act, the 1.5 work GPCI 
floor for Alaska and the 1.0 PE GPCI floor for frontier States will be 
applicable in CY 2012. Moreover, the limited recognition of cost 
differences in employee compensation and office rent for the PE GPCIs, 
and the related hold harmless provision, required under section 
1848(e)(1)(H) of the Act was only applicable for CY 2010 and CY 2011 
(75 FR 73253) and, therefore, is no longer effective beginning in CY 
2012.
    Section 1848(e)(1)(C) of the Act requires us to review and, if 
necessary, adjust the GPCIs not less often than every 3 years. This 
section also specifies that if more than 1 year has elapsed since the 
last GPCI revision, we must phase in the adjustment over 2 years, 
applying only one-half of any adjustment in the first year.
    As noted in the CY 2011 PFS final rule with comment period (75 FR 
73252 through 73262), for the sixth GPCI update, we updated the data 
used to

[[Page 73082]]

compute all three GPCI components. Specifically, we utilized the 2006 
through 2008 Bureau of Labor Statistics (BLS) Occupational Employment 
Statistics (OES) data to calculate the physician work GPCIs (75 FR 
73252). In addition, we used the 2006 through 2008 BLS OES data to 
calculate the employee compensation sub-component of practice expense 
(75 FR 73255). Consistent with previous updates, we used the 2 bedroom 
residential apartment rent data from HUD (2010) at the 50th percentile 
as a proxy for the relative cost differences in physician office rents 
(75 FR 73256). Lastly, we calculated the malpractice GPCIs using 
malpractice premium data from 2006 through 2007 (75 FR 73256).
    Since more than 1-year had elapsed since the fifth GPCI update, as 
required by law, the sixth GPCI update changes are being phased in over 
a 2-year period. The current CY 2011 GPCIs reflect the first year of 
the transition. The final CY 2012 GPCIs reflect the full implementation 
with modifications reflecting the revisions contained in this final 
rule with comment period.
    The Affordable Care Act requires that we analyze the current 
methodology and data sources used to calculate the PE GPCI component. 
Specifically, section 1848(e)(1)(H)(iv) of the Act (as added by section 
3102(b) of the Affordable Care Act) requires the Secretary to ``analyze 
current methods of establishing practice expense adjustments under 
subparagraph (A)(i) and evaluate data that fairly and reliably 
establishes distinctions in the cost of operating a medical practice in 
different fee schedule areas.'' Section 1848(e)(1)(H)(iv) of the Act 
also requires that such analysis shall include an evaluation of the 
following:
     The feasibility of using actual data or reliable survey 
data developed by medical organizations on the costs of operating a 
medical practice, including office rents and non-physician staff wages, 
in different fee schedule areas.
     The office expense portion of the practice expense 
geographic adjustment; including the extent to which types of office 
expenses are determined in local markets instead of national markets.
     The weights assigned to each area of the categories within 
the practice expense geographic adjustment.
    In addition, the weights for different categories of practice 
expense in the GPCIs have historically matched the weights developed by 
the CMS Office of the Actuary (OACT) for use in the Medicare Economic 
Index (MEI), the measure of inflation used as part of the basis for the 
annual update to the physician fee schedule payment rates. In response 
to comments received on the CY 2011 Physician Fee Schedule proposed 
rule, however, we delayed moving to the new MEI weights developed by 
OACT for CY 2011 pending further analysis.
    Lastly, we asked the Institute of Medicine (IOM) to evaluate the 
accuracy of the geographic adjustment factors used for Medicare 
physician payment. IOM will prepare two reports for the Congress and 
the Secretary of the Department of Health and Human Services. The 
revised first report (Phase I), which includes supplemental 
recommendations to the initial IOM release of June1, 2011, was released 
on September 28, 2011, and includes an evaluation of the accuracy of 
geographic adjustment factors for the hospital wage index and the 
GPCIs, and the methodology and data used to calculate them. The second 
report, expected in spring 2012, will evaluate the effects of the 
adjustment factors on the distribution of the health care workforce, 
quality of care, population health, and the ability to provide 
efficient, high value care. Given the timing of the release of IOM's 
revised report, we are unable to address the full scope of the IOM 
recommendations in this final rule with comment period. These reports 
can be accessed on the IOM's Web site at: http://www.iom.edu/Reports/2011/Geographic-Adjustment-in-Medicare-Payment-Phase-I-Improving-Accuracy.aspx.
    The recommendations that relate to or would have an effect on the 
GPCIs included in IOM's revised Phase I report are summarized as 
follows:
     Recommendation 2-1: The same labor market definition 
should be used for both the hospital wage index and the physician 
geographic adjustment factor. Metropolitan statistical areas and 
Statewide non-metropolitan statistical areas should serve as the basis 
for defining these labor markets.
     Recommendation 2-2: The data used to construct the 
hospital wage index and the physician geographic adjustment factor 
should come from all health care employers.
     Recommendation 5-1: The GPCI cost share weights for 
adjusting fee-for-service payments to practitioners should continue to 
be national, including the three GPCIs (work, practice expense, and 
liability insurance) and the categories within the practice expense 
(office rent and personnel).
     Recommendation 5-2: Proxies should continue to be used to 
measure geographic variation in the physician work adjustment, but CMS 
should determine whether the seven proxies currently in use should be 
modified.
     Recommendation 5-3: CMS should consider an alternative 
method for setting the percentage of the work adjustment based on a 
systematic empirical process.
     Recommendation 5-4: The practice expense GPCI should be 
contructed with the full range of occupations employed in physicians' 
offices, each with a fixed national weight based on the hours of each 
occupation employed in physicians' offices nationwide.
     Recommendation 5-5: CMS and the Bureau of Labor Statistics 
should develop an agreement allowing the Bureau of Labor Statistics to 
analyze confidential data for the Centers for Medicare and Medicaid 
Services.
     Recommendation 5-6: A new source of information should be 
developed to determine the variation in the price of commercial office 
rent per square foot.
     Recommendation 5-7: Nonclinical labor-related expenses 
currently included under practice expense office expenses should be 
geographically adjusted as part of the wage component of the practice 
expense.
2. GPCI Revisions for CY 2012
    The revised GPCI values we proposed were developed by a CMS 
contractor. As mentioned previously, there are three GPCI components 
(physician work, PE, and malpractice), and all GPCIs are developed 
through comparison to a national average for each component. 
Additionally, each of the three GPCIs relies on its own data source(s) 
and methodology for calculating its value. As discussed in more detail 
later in this section, we proposed to revise the PE GPCIs for CY 2012, 
as well as the cost share weights which correspond to all three GPCIs.
a. Physician Work GPCIs
    The physician work GPCIs are designed to capture the relative cost 
of physician labor by Medicare PFS locality. Previously, the physician 
work GPCIs were developed using the median hourly earnings from the 
2000 Census of workers in seven professional specialty occupation 
categories which we used as a proxy for physicians' wages. Physicians' 
wages are not included in the occupation categories because Medicare 
payments are a key determinant of physicians' earnings. That is, 
including physicians' wages in the physician work GPCIs would, in 
effect, have made the indices dependent upon Medicare payments. As 
required by law, the physician work GPCI reflects one quarter of the 
relative wage differences for each locality compared to the national 
average.

[[Page 73083]]

    The physician work GPCI updates in CYs 2001, 2003, 2005, and 2008 
were based on professional earnings data from the 2000 Census. For the 
sixth GPCI update in CY 2011, we used the 2006 through 2008 Bureau of 
Labor Statistics (BLS) Occupational Employment Statistics (OES) data as 
a replacement for the 2000 Census data. We did not propose to revise 
the physician work GPCI data source for CY 2012. However, we note that 
the work GPCIs will be revised to account for the expiration of the 
statutory work floor. The 1.5 work floor for Alaska is permanent and 
will be applicable in CY 2012. In addition, we proposed to revise the 
physician work cost share weight from 52.466 to 48.266 in line with the 
2011 MEI weights, which are based on 2006 data (referred to hereinafter 
as the 2006-based MEI).
b. Practice Expense GPCIs
    (1) Affordable Care Act Analysis and Revisions for PE GPCIs
    (A) General Analysis for the CY 2012 PE GPCIs
    As previously mentioned, section 1848(e)(1)(H)(iv) of the Act (as 
added by section 3102(b) of the Affordable Care Act) requires the 
Secretary to ``analyze current methods of practice expense adjustments 
under subparagraph (A)(i) and evaluate data that fairly and reliably 
establishes distinctions in the cost of operating a medical practice in 
the different fee schedule areas.''
    Moreover, section 1848 (e)(1)(H)(v) of the Act requires the 
Secretary to make appropriate adjustments to the PE GPCIs as a result 
of the required analysis, no later than January 1, 2012. We proposed to 
make four revisions to the PE data sources and cost share weights 
discussed herein effective January 1, 2012. Specifically, we proposed 
to: (1) Revise the occupations used to calculate the employee wage 
component of PE using BLS wage data specific to the office of 
physicians' industry; (2) utilize two bedroom rental data from the 
2006-2008 American Community Survey as the proxy for physician office 
rent; (3) create a purchased service index that accounts for regional 
variation in labor input costs for contracted services from industries 
comprising the ``all other services'' category within the MEI office 
expense and the stand alone ``other professional expenses'' category of 
the MEI; and (4) use the 2006-based MEI (most recent MEI weights 
finalized in the CY 2011 final rule with comment period) to determine 
the GPCI cost share weights. These proposals were based on analyses we 
conducted to address commenter concerns in the CY 2011 final rule with 
comment period and a continuation of our PE evaluation as required by 
the Affordable Care Act. The main comments were related to: (1) the 
occupational groups used to calculate the employee wage component of 
PE, and (2) concerns by commenters stating that regional variation in 
purchased services such as legal and accounting were not sufficiently 
included in the GPCI methodology.
    We began analyzing the current methods and data sources used in the 
establishment of the PE GPCIs during the CY 2011 rulemaking process (75 
FR 40084). With respect to our CY 2011 analysis, we began with a review 
of the Government Accountability Office's (GAO) March 2005 Report 
entitled, ``Medicare Physician Fees: Geographic Adjustment Indices Are 
Valid in Design, but Data and Methods Need Refinement'' (GAO-05-119). 
While we have raised concerns in the past about some of the GAO's GPCI 
recommendations, we noted that with respect to the PE GPCIs, the GAO 
did not indicate any significant issues with the methods underlying the 
PE GPCIs. Rather, the report focused on some of the data sources used 
in the method. For example, the GAO stated that the wage data used for 
the PE GPCIs are not current. Similarly, commenters on previous PE GPCI 
updates predominantly focused on either the data sources used in the 
method or raised issues such as incentivizing the provision of care in 
different geographic areas. However, the latter issue (incentivizing 
the provision of care) is outside the scope of the statutory 
requirement that the PE GPCIs reflect the relative costs of the mix of 
goods and services comprising practice expenses in the different fee 
schedule areas relative to the national average.
    To further analyze the PE office expense in accordance with section 
1848(e)(1)(H)(iv) of the Act, we examined the following issues: the 
appropriateness of expanding the number of occupations included in the 
employee wage index; the appropriateness of replacing rental data from 
the Department of Housing and Urban Development (HUD) with data from 
the 2006-2008 American Community Survey (ACS) two bedroom rental data 
as a proxy for the office rent subcomponent of PE; and the 
appropriateness of adjusting the ``all other services'' and ``other 
professional expenses'' MEI categories for geographic variation in 
labor-related costs. We also examined available ACS occupational group 
data for potential use in determining geographic variation in the 
employee wage component of PE.
    An additional component of the analysis under section 
1848(e)(1)(H)(iv) of the Act is to evaluate the weights assigned to 
each of the categories within the practice expense geographic 
adjustment. As discussed in the CY 2011 final rule with comment period 
(75 FR 73256), in response to concerns raised by commenters and to 
allow us time to conduct additional analysis, we did not revise the 
GPCI cost share weights to reflect the weights used in the revised and 
rebased 2006 MEI that we adopted beginning in CY 2011. In response to 
those commenters who raised many points regarding the appropriateness 
of assigning labor-related costs in the medical equipment and supplies 
and miscellaneous component which do not reflect locality cost 
differentials, we agreed to address the GPCI cost share weights again 
in the CY 2012 PFS proposal. These issues are discussed in greater 
detail in section II.D.2.b.(1).(E). of this final rule with comment 
period that discusses our determination of the cost share weights.
    We also stated in the CY 2011 final rule with comment period that 
we would review the findings of the Secretary's Medicare Geographic 
Payment Summit and the MEI technical advisory panel during future 
rulemaking (75 FR 73256). The Secretary convened the National Summit on 
Health Care Quality and Value on October 4, 2010. This Summit was 
attended by a number of policy experts that engaged in detailed 
discussions regarding geographic adjustment factors and geographic 
variation in payment and the promotion of high quality care. This 
National Summit was useful by informing us on issues that we are 
studying further through two Institute of Medicine studies. In 
accordance with section 3102(b) of the Affordable Care Act, we are also 
continuing to consider these issues in the course of this notice and 
comment rulemaking for the CY 2012 PFS, which includes revisions to the 
GPCI, and through preparation of a report to the Congress that we will 
be submitting later this year in accordance with section 3137(b) of the 
Affordable Care Act on a plan for reforming the hospital wage index. In 
addition, we announced the establishment of the MEI Technical Advisory 
Panel and request for nominations of members on October 7, 2011 (76 FR 
62415 through 62416). We note that the panel will conclude by September 
28, 2012 and we look forward to examining the recommendations of this 
panel once it has issued its report.

[[Page 73084]]

(B) Analysis of ACS Rental Data
    In the CY 2011 final rule with comment period, we finalized our 
policy to use the 2010 Fair Market Rent (FMR) data produced by HUD at 
the 50th percentile as the proxy for relative cost differences in 
physician office rents. However, as part of our analysis required by 
section 1848(e)(1)(H)(iv) of the Act, we have now examined the 
suitability of utilizing 3-year (2006-2008) ACS rental data to serve as 
a proxy for physician office rents. We believe that the ACS rental data 
provide a sufficient degree of reliability and are an appropriate 
source on which to base our PE GPCI office rent proxy. We also believe 
that the ACS data provide a higher degree of accuracy than the HUD data 
since the ACS data are updated annually and not based on data collected 
by the 2000 Census long form. Moreover, it is our understanding that 
the Census ``long form,'' which is utilized to collect the necessary 
base year rents for the HUD Fair Market Rent (FMR) data, will no longer 
be available in future years. Therefore, we proposed to use the 
available 2006 through 2008 ACS rental data for two bedroom residential 
units as the proxy for physician office rent. We also sought comment 
regarding the potential use of 5-year ACS rental data as a proxy for 
physician office rent in future rulemaking.
    We believe the ACS data will more accurately reflect geographic 
variation in the office rent component. As in past GPCI updates, we 
proposed to apply a nationally uniform weight to the office rent 
component. We proposed to use the 2006-based MEI weight for fixed 
capital and utilities as the weight for the office rent category in the 
PE GPCI, and to use the ACS residential rent data to develop the 
practice expense GPCI value.
(C) Employee Wage Analysis
    Accurately evaluating the relative price that physicians pay for 
labor inputs requires both a mechanism for selecting the occupations to 
include in the employee wage index and identifying an accurate measure 
of the wages for each occupation. We received comments during the CY 
2011 rulemaking cycle noting that the current employee wage methodology 
may omit key occupational categories for which cost varies 
significantly across regions. Commenters suggested including 
occupations such as accounting, legal, and information technology in 
the employee wage component of the PE GPCI. To address these concerns, 
we proposed to revise the employee wage index framework within the 
practice expense (PE) GPCI. Under this new methodology, we would only 
select occupational categories relevant to a physician's practice. We 
would use a comprehensive set of wage data from the Bureau of Labor 
Statistics Occupational Employment Statistics (BLS OES) specific to the 
offices of physicians industry. Utilizing wage and national cost share 
weight data from the BLS OES would not only provide a more systematic 
approach to determining which occupations should be included in the 
non-physician employee wage category of the PE GPCI, but would also 
enable us to determine how much weight each occupation should receive 
within the index.
    Due to its reliability, public availability, level of detail, and 
national scope, we proposed to use BLS OES data to estimate both 
occupation cost shares and hourly wages for purposes of determining the 
non-physician employee wage component of the PE GPCI. The OES panel 
data are collected from approximately 200,000 establishments, and 
provide employment and wage estimates for about 800 occupations. At the 
national level, OES provides estimates for over 450 industry 
classifications (using the 3, 4, and 5 digit North American Industry 
Classification System (NAICS)), including the Offices of Physicians 
industry (NAICS 621100). As described in the census, the Offices of 
Physicians industry comprises establishments of health practitioners 
having the degree of M.D. (Doctor of Medicine) or D.O. (Doctor of 
Osteopathy) primarily engaged in the independent practice of general or 
specialized medicine (except psychiatry or psychoanalysis) or surgery. 
These practitioners operate private or group practices in their own 
offices (such as centers, clinics) or in the facilities of others (such 
as hospitals or Health Maintenance Organization (HMO) medical centers). 
The OES data provide significant detail on occupational categories and 
offer national level cost share estimates for the offices of physicians 
industry.
    In the BLS OES data methodology, we weighted each occupation based 
on its share of total labor cost within the offices of physician 
industry. Specifically, each occupation's weight is proportional to the 
product of its occupation's employment share and average hourly wage. 
In this calculation, we used each occupation's employment level rather 
than hours worked, because the BLS OES does not contain industry-
specific information describing the number of hours worked in each 
occupation (see: http://www.bls.gov/oes/current/naics4_621100.htm). 
Our proposed methodology accounted for 90 percent of the total wage 
share in the office of physicians industry. Additionally, our proposed 
strategy produced 33 individual occupations that accounted for many of 
the occupations commenters had stated were historically excluded from 
the employee wage calculation (for example, accounting, auditors, and 
medical transcriptionists).
    We also evaluated available ACS occupational data as a potential 
data source for the non-physician employee wage PE GPCI subcomponent. 
Based on the occupations currently used to calculate employee wages, 
the BLS OES captures occupations with greater relevancy to physician 
office practices and is a more appropriate data source than the 
currently available ACS data. In addition, since our publication of the 
CY 2012 proposed rule, we have conducted an analysis of ACS wage data 
including an expanded mix of occupations. A review of this analysis can 
be found in our contractors ``Revisions to the Sixth Update of the 
Geographic Practice Cost Index: Final Report'' located on the physician 
fee schedule CY 2012 final rule with comment period Web site at: http://www.cms.gov/PhysicianFeeSched/. After careful analysis, we still 
believe that the BLS OES data provide for the most accurate and 
comprehensive measurement of physician non-physician employee wages.
(D) Purchased Services Analysis
    For CY 2012, we proposed to geographically adjust the labor-related 
industries within the ``all other services'' and ``other professional 
expenses'' categories of the MEI. In response to commenters who stated 
that these purchased services were labor-related and should be adjusted 
geographically, we agreed to examine this issue further in the CY 2011 
final rule with comment period and refrained from making any changes. 
Based on our subsequent examination of this issue, we believe it would 
be appropriate to geographically adjust for the labor-related component 
of purchased services within the ``All Other Services'' and ``Other 
Professional Expenses'' categories using BLS wage data. In total, there 
are 63 industries, or cost categories, accounted for within the ``all 
other services'' and ``other professional services'' categories of the 
2006-based MEI. For purposes of the hospital wage index at 74 FR 43845, 
we defined a cost category as labor-related if the cost category is 
defined as being both labor intensive and its costs vary with, or are 
influenced by the local labor market.

[[Page 73085]]

The total purchased services component accounts for 8.095 percent of 
total practice cost. However, only 5.011 percentage points (of the 
total 8.095 percentage points assigned to purchased services) are 
defined as labor-related and thus adjusted for locality cost 
differences. These 5.011 percentage points represent cost categories 
that we believe are labor intensive and have costs that vary with, or 
are influenced by, the local labor market. The labor-related cost 
categories include but are not limited to building services (such as 
janitorial and landscaping), security services, and advertising 
services. The remaining weight assigned to the non labor-related 
industries (3.084 percentage points) represent industries that do not 
meet the criteria of being labor intensive or having their costs vary 
with the local labor market.
    In order to calculate the labor-related and non labor- related 
shares, we would use a similar methodology that is employed in 
estimating the labor-related share of various CMS market baskets. A 
more detailed explanation of this methodology can be found under the 
supporting documents section of the CY 2012 PFS final rule with comment 
period Web page at http://www.cms.gov/PhysicianFeeSched/.
    We believe our analysis, during 2010 and this year, of the current 
methods of establishing PE GPCIs and our evaluation of data that fairly 
and reliably establish distinctions in the cost of operating a medical 
practice in the different fee schedule areas meet the statutory 
requirements of section 1848(e)(1)(H)(iv) of the Act. A more detailed 
discussion of our analysis of current methods of establishing PE GPCIs 
and evaluation of data sources is included in our contractor's draft 
report entitled, ``Proposed Revisions to the Sixth Update of the 
Geographic Practice Cost Index.'' Our contractor's final report and 
associated analysis of the GPCI revisions, including the PE GPCIs, will 
be made publicly available on the CMS Web site. The final report may be 
accessed from the PFS Web site at: http://www.cms.gov/PhysicianFeeSched/ under the ``Downloads'' section of the CY 2012 PFS 
final rule with comment period Web page.
    Additionally, see section IX.F. of this final rule with comment 
period for Table 86, which reflects the GAF impacts resulting from 
these proposals. As the table demonstrates, the primary driver of the 
CY 2012 impact is the expiration of the work GPCI floor which had 
produced non budget-neutral increases to the CY 2011 GPCIs for lower 
cost areas as authorized under the Affordable Care Act the Medicare and 
Medicaid Extenders Act (MMEA).
(E) Determining the PE GPCI Cost Share Weights
    To determine the cost share weights for the CY 2012 GPCIs, we 
proposed to use the weights established in the 2006-based MEI. The MEI 
was rebased and revised in the CY 2011 final rule with comment period 
to reflect the weighted-average annual price change for various inputs 
needed to provide physicians' services. As discussed in detail in that 
section (75 FR 73262 through 73277), the proposed expense categories in 
the MEI, along with their respective weights, were primarily derived 
from data collected in the 2006 AMA PPIS for self-employed physicians 
and selected self-employed non-medical doctor specialties. Since we 
have historically updated the GPCI cost share weights consistent with 
the most recent update to the MEI, and because we have addressed 
commenter concerns regarding the inclusion of the weight assigned to 
utilities with office rent and geographically adjusted for the labor 
intensive industries within the ``all other services'' and ``other 
professional expenses'' MEI categories, we believe it is appropriate to 
adopt the 2006-based MEI cost share weights.
(i) Practice Expense
    For the cost share weight for the CY 2012 PE GPCIs, we used the 
2006-based MEI weight for the PE category of 51.734 percent minus the 
professional liability insurance category weight of 4.295 percent. 
Therefore, we proposed a cost share weight for the PE GPCIs of 47.439 
percent.
(ii) Employee Compensation
    For the employee compensation portion of the PE GPCIs, we proposed 
to use the non-physician employee compensation category weight of 
19.153 percent reflected in the 2006-based MEI.
(iii) Office Rent
    We proposed that the weight for the office rent component be 
revised from 12.209 percent to 10.223 percent. The 12.209 percent 
office rent GPCI weight was set equal to the 2000-based MEI cost weight 
for office expenses, which was calculated using the American Medical 
Association's (AMA) Socioeconomic Monitoring Survey (SMS). The 12.209 
percent reflected the expenses for rent, depreciation on medical 
buildings, mortgage interest, telephone, and utilities. We proposed to 
set the GPCI office rent equal to 10.223 percent reflecting the 2006-
based MEI cost weights (75 FR 73263) for fixed capital (reflecting the 
expenses for rent, depreciation on medical buildings and mortgage 
interest) and utilities. We are no longer including telephone costs in 
the GPCI office rent cost weight because we believe these expenses do 
not vary by geographic area.
    Consistent with the revised and rebased 2006-based MEI which was 
adopted in the CY 2011 final rule with comment period (75 FR 73263), we 
disaggregated the broader office expenses component for the PE GPCI 
into 10 new cost categories. In this disaggregation, the fixed capital 
component is the office expense category applicable to the office rent 
component of the PE GPCI. As discussed in the section dealing with 
office rent, we proposed to use 2006-2008 ACS rental data as the proxy 
for physician office rent. These data represent a gross rent amount and 
includes data on utilities expenditures. Since it is not possible to 
separate the utilities component of rent for all ACS survey 
respondents, it was necessary to combine these two components to 
calculate office rent and by extension, we proposed combining those two 
cost categories when assigning a weight to the office rent component.
(iv) Purchased Services
    As discussed in the previous paragraphs, a new purchased services 
index was created to geographically adjust the labor-related components 
of the ``All Other Services'' and ``Other Professional Expenses'' 
categories of the 2006-based MEI office market basket. In order to 
calculate the purchased services index, we proposed to merge the 
corresponding weights of these two categories to form a combined 
purchased services weight of 8.095 percent. However, we proposed to 
only adjust for locality cost differences of the labor-related share of 
the industries comprising the ``All Other Services'' and ``Other 
Professional Expenses'' categories. We have determined that only 5.011 
percentage points of the 8.095 percentage points would be adjusted for 
locality cost differences (5.011 adjusted purchased service + 3.084 
non-adjusted purchased services = 8.095 total cost share weight).
(v) Equipment, Supplies, and Other Miscellaneous Expenses
    To calculate the proposed medical equipment, supplies, and other 
miscellaneous expenses component, we removed professional liability 
(4.295 percentage points), non-physician employee compensation (19.153 
percentage points), fixed capital/utilities (10.223 percentage points), 
and

[[Page 73086]]

purchased services (8.095 percentage points) from the PE category 
weight (51.734 percent). Therefore, we proposed a cost share weight for 
the medical equipment, supplies, and other miscellaneous expenses 
component of 9.968 percent. Consistent with previous methodology, this 
component of the PE GPCI is not adjusted for geographical variation.
(vi) Physician Work and Malpractice GPCIs
    Furthermore, we proposed to use the physician compensation cost 
category weight of 48.266 percent as the work GPCI cost share weight; 
and we proposed to use the professional liability insurance weight of 
4.295 percent for the malpractice GPCI cost share weight. We believe 
our analysis and evaluation of the weights assigned to each of the 
categories within the PE GPCIs satisfies the statutory requirements of 
section 1848(e)(1)(H)(iv) of the Act.
    The cost share weights for the CY 2012 GPCIs are displayed in Table 
10. For a detailed discussion regarding the GPCI cost share weights and 
how the weights account for local and national adjustments, see our 
contractor's ``Proposed Revisions to the Sixth Update of the Geographic 
Practice Cost Index'' draft report at (http://www.cms.gov/PhysicianFeeSched/). In addition, information regarding the CY 2011 
update to the MEI can be reviewed beginning on 75 FR 73262.
[GRAPHIC] [TIFF OMITTED] TR28NO11.014

(F) 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. There are no changes to those States identified as ``Frontier 
States'' for the CY 2012 final rule with comment period. The qualifying 
States are reflected in Table 11. In accordance with statute, we will 
apply a 1.0 GPCI floor for these States in CY 2012.

    [GRAPHIC] [TIFF OMITTED] TR28NO11.015
    

[[Page 73087]]


(2) Summary of CY 2012 PE GPCI Proposal
    The PE GPCIs include four components: employee compensation, office 
rent, purchased services, and medical equipment, supplies and 
miscellaneous expenses. Our proposals relating to each of these 
components are as follows:
     Employee Compensation: We proposed to geographically 
adjust the employee compensation using the 2006 through 2008 BLS OES 
data specific to the offices of physicians industry along with 
nationwide wage data to determine the employee compensation component 
of the PE GPCIs. The employee compensation component accounts for 
19.153 percent of total practice costs or 40.4 percent of the total PE 
GPCIs.
     Office Rents: We proposed to geographically adjust office 
rent using the 2006 through 2008 ACS residential rental data for two 
bedroom units as a proxy for the relative cost differences in physician 
office rents. In addition, we proposed to consolidate the utilities 
into the office rent weight to account for the utility data present in 
ACS gross rent data. The office rent component accounts for 10.223 
percent of total practice cost or 21.5 percent of the PE GPCIs.
     Purchased Services: We proposed to geographically adjust 
the labor-related component of purchased services within the ``All 
Other Services'' and ``Other Professional Expenses ``categories using 
BLS wage data. The methodology employed to estimate purchased services 
expenses is based on the same data used to estimate the employee wage 
index. Specifically, the purchased services framework relies on BLS OES 
wage data to estimate the price of labor in industries that physician 
offices frequently rely upon for contracted services. As previously 
mentioned, the labor-related share adjustment for each industry was 
derived using a similar methodology as is employed for estimating the 
labor-related shares of CMS market baskets. Furthermore, the weight 
assigned to each industry within the purchased services index was based 
on the 2006-based MEI. A more detailed discussion regarding CMS market 
baskets, as well as the corresponding definitions of a ``labor-related 
share'' and a ``non-labor-related share'' can be viewed at (74 FR 
43845). The total purchased services component accounts for 8.095 
percent of total practice cost or 17.1 percent of the PE GPCI. However, 
the proportion of purchased services that is geographically adjusted 
for locality cost difference is 5.011 percentage points of the 8.095 
percentage points or 10.6 percent of the PE GPCI.
     Medical Equipment, Supplies, and other Miscellaneous 
Expenses: We continue to believe that items such as medical equipment 
and supplies have a national market and that input prices do not vary 
appreciably among geographic areas. As discussed in previous GPCI 
updates in the CY 2008 and CY 2011 PFS proposed rules, specifically the 
fifth GPCI update (72 FR 38138) and sixth GPCI update (75 FR 73256), 
respectively, some price differences may exist, but we believe these 
differences are more likely to be based on volume discounts rather than 
on geographic market differences. For example, large physicians' 
practices may utilize more medical equipment and supplies and therefore 
may or may not receive volume discounts on some of these items. To the 
extent that such discounting may exist, it is a function of purchasing 
volume and not geographic location. The medical equipment, supplies, 
and miscellaneous expenses component was factored into the PE GPCIs 
with a component index of 1.000. The medical equipment, supplies, and 
other miscellaneous expense component account for 9.968 percent of 
total practice cost or 21.0 percent of the PE GPCI.
c. Malpractice GPCIs
    The malpractice GPCIs are calculated based on insurer rate filings 
of premium data for $1 million to $3 million mature ``claims-made'' 
policies (policies for claims made rather than services furnished 
during the policy term). We chose claims-made policies because they are 
the most commonly used malpractice insurance policies in the United 
States. We used claims-made policy rates rather than occurrence 
policies because a claims-made policy covers physicians for the policy 
amount in effect when the claim is made, regardless of the date of 
event in question; whereas an occurrence policy covers a physician for 
the policy amount in effect at the time of the event in question, even 
if the policy is expired. Based on the data we analyzed, we proposed to 
revise the cost share weight for the malpractice GPCI from 3.865 
percent to 4.295 percent.
d. Public Comments and CMS Responses Regarding the CY 2012 Proposed 
Revisions to the 6th GPCI Update
    We received many public comments regarding the CY 2012 proposed 
GPCIs. Summaries of the comments and our responses follow.
Employee Compensation
    Comment: Most commenters agreed with CMS' proposal to expand the 
occupations used to calculate the non-physician employee wage portion 
of the PE GPCI since the updated occupations better reflect the 
occupations found in physician practices. Many commenters indicated 
that BLS was the most appropriate data source since it represents the 
most current data available. Several commenters agreed with IOM's 
recommendation to include the full range of occupations employed in 
physicians' offices (100 percent of total non-physician wage share) 
from the BLS data, rather than the occupations representing 90 percent 
of the total non-physician wage share that we proposed. A few 
commenters did not support the use of BLS data since they do not 
include data describing the number of hours worked. A few commenters 
who provide radiation oncology services recommended adding the salaries 
of medical physicists to the non-physician employee compensation 
calculation based on wage data from the American Association of 
Physicists in Medicine or the American Academy of Pain Medicine. Some 
commenters indicated the occupational weights utilized by CMS are not 
representative of their actual practices or the Medical Group 
Management Association (MGMA) data.
    Response: We agree with the commenters who indicated that the BLS 
is the most current and appropriate data source and disagree with the 
commenters who did not support the use of BLS data since it does not 
include data describing the number of hours worked. We believe that the 
BLS data provide the necessary detail on occupational categories and 
offer national level cost share estimates for the offices of physicians 
industry. In addition, as IOM noted in its report: ``The committee 
finds that independent, health-care specific data from the BLS provide 
the most conceptually appropriate measure of differences in wages for 
health professional labor and clinical and administrative office 
staff.'' (Geographic Adjustment in Medicare Payment: Phase I: Improving 
Accuracy, pp. 5-34, available at http://www.iom.edu/Reports/2011/Geographic-Adjustment-in-Medicare-Payment-Phase-I-Improving-Accuracy.aspx.)
    We also agree with commenters who stated that the updated 
occupations better reflect the occupations found in physician practices 
and those who indicated we should expand the occupations to include the 
full range of

[[Page 73088]]

occupations employed in physician offices as recommended by IOM. As IOM 
noted in its report, ``the expansion of occupations will be a better 
reflection of the current workforce and a broader range of health 
professions, which will help to improve the accuracy of the adjustment. 
In addition, the expansion will anticipate further changes in the 
workforce brought by changes in labor market, including the increased 
demand for expertise in the adoption and use of health information 
technology'' (pp. 5-34). As such, we are modifying our proposal and 
including all (100%) of non-physician occupations in the offices of 
physicians industry in our employee compensation PE calculation. Our 
modification to include the full range of non-physician occupations in 
response to these comments will increase the number of occupations 
captured in our employee wage calculation from 33 to 155.
    We disagree with commenters who provide radiation oncology services 
and suggested that we should include medical physicists wage data from 
the American Association of Physicists in Medicine or the American 
Academy of Pain Medicine. The use of a consistent and contemporaneous 
source for the employment and wage data included in the calculation is 
preferable to a mix of supplemental data sources. Also, while BLS does 
not collect employment and wage data for medical physicists or health 
physicists specifically, it does collect employment and wage data for 
physicists as a whole (SOC code 19-2012 specifically includes 
physicists, see http://www.bls.gov/opub/ooq/2011/summer/art02.pdf, pg. 
20). These data will be included in our calculation now that we are 
incorporating the full range of occupations employed in physician 
offices.
    With respect to the commenters who indicated the occupational 
weights utilized by CMS are not representative of their actual 
practices or the MGMA data, we understand that national occupational 
weights may not match individual practices or subsets of practices. 
However, we agree with IOM's preference for ``a consistent set of 
national weights applied to wage data from the full range of health 
sector occupations so that hourly wage comparisons can be made'' (pp. 
5-34).
Office Rent
    Comment: Some commenters agreed with our proposal to use the ACS 
data instead of the HUD FMR data. Additionally, some commenters stated 
that the 3-year ACS was preferable to the 5-year ACS rental data, 
because it is more recent and thus more likely to reflect current value 
differences in the rapidly changing marketplace. However, most 
commenters reiterated their longstanding opposition to the use of 
residential rent as a proxy for physician office space and indicated 
that a better solution would be for the government to develop actual 
data on the cost of renting medical office space consistent with the 
IOM recommendation. Some commenters recommended a survey of physicians 
to acquire data on medical office rent. Others recommended a continued 
use of HUD data for CY 2012 until the ACS is more robust. Several 
commenters recommended that CMS use data from the MGMA survey to 
develop a medical office rent index. Commenters also raised issues with 
the relative relationship between selected individual counties in the 
ACS data or between the ACS data and CMS' assigned weights, questioning 
the validity of the methodology. These comments noted that the rent 
index in Santa Clara increased 7 percent yet remained unchanged in 
surrounding counties; the rent index in Ft. Lauderdale, Florida, and 
Teton County, Wyoming, are higher than rent index for Manhattan, New 
York; and Polk County, Iowa, and San Francisco County, California, have 
inconsistencies between the ACS-reported median and CMS' assigned 
weights.
    Response: We appreciate all the comments received on our proposal 
to utilize the 3-year (2006-2008) ACS 2 bedroom rental data as our 
proxy for physician office rent. We agree with the commenters who 
stated that the ACS data is preferable to the current HUD FMR data. We 
also agree with commenters that a commercial data source for office 
rent that provided for adequate data representation of urban and rural 
areas would be preferable to a residential rent proxy. As we have 
previously discussed in the CY 2005, CY 2008, and CY 2011 (69 FR 66262, 
72 FR 73257, and 75 FR 73257 respectively) final rules, we recognize 
that apartment rents may not be a perfect proxy for physician office 
rent. We have conducted an exhaustive search for a reliable commercial 
rental data source and have not found any reliable data that meets our 
accuracy standards. We describe in detail our search for a current, 
reliable, and publicly available commercial rent data source in our 
``Final Report on the Sixth Update of the Geographic Practice Cost 
Index for the Medicare Physician Fee Schedule'' viewable at http://www.cms.gov/PhysicianFeeSched/downloads/GPCI_Report.pdf. In addition, 
the IOM in their report titled ``Geographic Adjustment in Medicare 
Payment Phase 1: Improving Accuracy'' (pp 5-35) was unable to identify 
a source for commercial rent data.
    With regards to surveying physicians directly to gather data to 
compute office rent, we note that development and implementation of a 
survey could take several years. Moreover, we have historically not 
sought direct survey data from physicians related to the GPCI to avoid 
issues of circularity and self-reporting bias. Also, in the CY 2011 
final rule with comment period (75 FR 73259) we asked for specific 
public comments regarding the benefits of utilizing physician cost 
reports to potentially achieve greater precision in measuring the 
relative cost difference among Medicare localities. We also asked for 
comments related to the administrative burden of requiring physicians 
to routinely complete these cost reports and whether this should be 
mandatory for physicians practices. We did not receive any feedback 
specifically related to this comment solicitation during the open 
public comment period for the CY 2011 final rule with comment period.
    With regard to comments requesting that CMS use data from the MGMA 
survey to develop the office rent index, as we stated in the CY 2011 
final rule with comment period (75 FR 73257), we have concerns with 
both the sample size and representativeness of the MGMA data. For 
example, the responses represent only about 2,250 (or approximately 1 
percent of physician practices nationwide) and have disproportionate 
sample sizes for each State, suggesting very uneven response rates 
geographically. In addition, we also have concerns that the MGMA data 
have the potential for response bias. The MGMA's substantial reliance 
on its membership base suggests a nonrandom selection into the 
respondent group. Some evidence for such issues in the MGMA data arises 
from the very different sample sizes by State. For example, in the MGMA 
data, 10 States have fewer than 10 observations each, and California, 
New York, and New Jersey have fewer than 10 observations per locality. 
Therefore, we continue to believe the MGMA survey data would not be a 
sufficient rental data source for all PFS localities.
    With regards to comments that rents in Santa Clara increased 7 
percent yet remained unchanged in the surrounding counties (San 
Francisco, San Mateo and Santa Cruz), we contacted the Census Bureau 
and verified that the data were correct. We also checked with the 
Census Bureau regarding commenter observations that the rent index 
value

[[Page 73089]]

for two bedroom rental units is higher in Ft. Lauderdale, Florida, and 
Teton County, Wyoming, than in Manhattan. Census verified that these 
data were correct.
    With regards to comments on rents in Polk County, Iowa, compared to 
San Francisco County, California, Polk County has the second highest 
office rent index of any county in Iowa (at 0.848). In order to 
accurately compare the specific relationship between these two counties 
office rent indices, the Polk County specific office rent index of 
(.848) should be applied. However, the commenters applied the Iowa 
``Statewide'' locality level index of (.696) to Polk County in their 
calculations. Because Iowa is a Statewide locality, the higher office 
rent index for Polk County is reduced when combined with lower cost 
counties in our GPCI methodology.
    As we have stated previously, we did not receive a special 
tabulation from Census in time to analyze 5-year ACS rental data as a 
potential data source for physician office rent for the CY 2012 
rulemaking cycle. We have now received the 5-year ACS special 
tabulation from Census and will examine its suitability as a potential 
proxy for physician office rent. We will also continue our evaluation 
of ACS rental data during the upcoming year, and may propose further 
modifications to our office rent methodology in the CY 2013 PFS 
proposed rule.
    We also note that HUD has proposed a new FMR methodology for 2012 
that abandons the use of Census long-form data, which are no longer 
being collected, and instead relies exclusively on ACS data. We will be 
examining this new proposed methodology to potentially inform future 
rulemaking.
Purchased Services
    Comment: Commenters generally agreed with our proposal to create a 
purchased service index to capture labor-related categories that reside 
within the ``All Other Services'' and ``Other Professional Expenses'' 
MEI categories. In addition, several commenters noted that the 
purchased services index accurately reflects variable professional and 
non-professional labor costs. However, some commenters disagreed with 
the proposal to create a purchased service index. The reasons cited 
included that there is no statutory requirement to add the purchased 
services proxy to the PE GPCI; the proposed methodology does not 
adequately capture geographic variation in purchased services; (for 
example there is no basis to support the assertion that the cost of 
capital is equal across the country) and, the purchased service index 
must be reflective of actual physician practice cost expenses and 
should be based on physician survey data. Lastly, some commenters 
recommend that CMS consult with physicians' organizations and others to 
test its categorizations, methodologies, and assumptions.
    Response: We agree with commenters who stated that the purchased 
services index adds an additional level of precision to our PE GPCI 
calculations. Even though physician practices often purchase 
accounting, legal, advertising, consulting, landscaping, and other 
services from a variety of outside contractors, we have not previously 
included regional variation in the cost of purchased services within 
the current employee wage index. Specifically, the current methodology 
only measures regional variation in wages for workers that physician 
practices employ directly. For these reasons, we worked with our 
contractor to develop our proposed ``purchased services index'' to 
account for the regional labor cost variation within contracted 
services. This index captures labor-related categories residing within 
the ``all other services'' and ``other professional expenses'' MEI 
categories, and addresses the concerns of commenters, who in the CY 
2011 final rule with comment period (75 FR 73258), thought that these 
services needed to be geographically adjusted.
    We disagree with commenters who think there is insufficient 
statutory basis for a purchased services index. The incorporation of a 
purchased services index improves the accuracy of the GPCI consistent 
with the statute. It will allow for the GPCI to account for geographic 
variation in the price of a wider range of inputs.
    We also disagree with commenters who asserted that the proposed 
methodology does not adequately capture geographic variation in 
purchased services, including the cost of capital, and asserted that 
our data sources were inadequate. To adjust for regional variation in 
the labor inputs of purchased services requires four key elements. 
These elements include: Wage data by occupation, industry employment 
levels, labor-related classifications by industry, and the share of 
physician practice expense. We are using a combination of BLS OES data 
and MEI weight data for these elements. The BLS OES data is the best 
currently available data source for this purpose and is used in many 
aspects of the GPCI calculation. The MEI weights represent our 
actuaries' best estimate for the weights for these categories. For a 
fuller discussion of the derivation of the MEI weights, see the CY 2011 
final rule with comment period (75 FR 73262). With respect to capital, 
it is important to note that the proposed purchased services index does 
not assume that the cost of capital for physician practices is constant 
across the nation; instead, it assumes that the cost of capital for 
contracted firms is constant across the nation. Within the purchased 
services index, we assume a constant cost of capital for the purchased 
service firm primarily because we do not believe a reliable data source 
to measure capital costs for each purchased service industry currently 
exists.
    With respect to commenters who recommended that we consult with 
physician organizations and others to test our categorizations, 
methodologies, and assumptions, we have been and will continue to be 
transparent with respect to our calculation of the purchased services 
index. We solicited comments on our proposed approach and have given 
consideration to all comments received.
Updated Cost Share Weights
    Comment: Commenters expressed both support and concern with our 
proposal to update the cost share weights to reflect the 2006-based MEI 
weights finalized in the CY 2011 final rule with comment period. 
Several commenters noted that it was appropriate for CMS to update the 
cost share weights based on the more recent AMA physician survey data 
reflected in the current MEI weights, but not currently reflected in 
the GPCI cost share weights. Other commenters stated that the cost 
share weights should not be adjusted until CMS convenes the MEI 
technical advisory panel. A few commenters indicated that CMS should 
not update the cost share weights but should instead explore the use of 
alternative data sources, such as MGMA or physician surveys, for the 
weights.
    Response: We agree with commenters who supported updating the GPCI 
cost share weights based on the MEI weights, which reflect the most 
recent AMA survey data. We have historically updated the GPCI cost 
share weights consistent with previous adjustments to the MEI. Due 
partly to concerns commenters raised during last year's rulemaking (see 
75 FR 73256) on specific aspects of the GPCI methodology, we delayed 
updating the GPCI cost weights to reflect the updated MEI weights. Our 
CY 2012 changes to the GPCI methodology have addressed these comments 
where appropriate.
    We disagree with commenters who indicated that the cost share 
weights

[[Page 73090]]

should not be adjusted until CMS convenes the MEI technical advisory 
panel. The current MEI cost share weights are based on the most recent 
AMA survey data. The current GPCI cost share weights are based on the 
old MEI weights reflecting older AMA survey data. It would not be 
appropriate to continue to delay the adoption of the current MEI 
weights reflective of more recent AMA survey data in favor of 
continuing to use the old MEI weights reflective of older AMA survey 
data. For additional discussion of the derivation of the MEI weights, 
please see (75 FR 73262). We will study the findings and 
recommendations of the MEI technical advisory panel once the panel has 
had an opportunity to meet and issue its findings. For similar reasons, 
we also disagree with commenters who indicated that CMS should not 
update the cost share weights but should instead explore the use of 
alternative data sources, such as MGMA or physician surveys, for the 
weights. In addition, as discussed earlier, we have concerns with both 
the sample size and representativeness of the MGMA data.
Impacts
    Comment: Many commenters requested that CMS should provide an 
impact table that separately shows the impact of each of our proposals.
    Response: We will provide separate impact tables in our ``Revisions 
to the Sixth Update of the Geographic Practice Cost Index: Final 
Report'' that will individually show the GAF impacts of: Revising the 
GPCI cost share weights to be consistent with the revised and rebased 
2006-based MEI; expanding the occupations used in the calculation of 
non-physician employee wage to reflect the full range of occupations in 
the offices of physicians' industry; implementing a purchased service 
index to account for labor-related services in the ``all other 
services'' and ``other professional services'' MEI categories; and 
utilizing the 2006-2008 ACS for two bedroom units as the proxy for 
physician office rent. This final report is viewable at the following 
Web address: http://www.cms.gov/PhysicianFeeSched/.
Delay Implementation of GPCI Revisions Until IOM Studies Are Completed
    Comment: Many commenters urged us not to move forward with proposed 
changes to the PE GPCI until CMS and various stakeholders have had an 
opportunity to assess the full impacts and recommendations of the IOM 
reports on Medicare geographic adjustments.
    Response: As previously mentioned, section 1848(e)(1)(H)(iv) of the 
Act (as added by section 3102(b) of the Affordable Care Act) requires 
the Secretary to ``analyze current methods of establishing practice 
expense adjustments under subparagraph (A)(i) and evaluate data that 
fairly and reliably establishes distinctions in the cost of operating a 
medical practice in the different fee schedule areas.''
    Moreover, section 1848(e)(1)(H)(v) of the Act requires the 
Secretary to make appropriate adjustments to the PE GPCIs as a result 
of the required analysis no later than January 1, 2012. As a result of 
our analysis, we proposed the four changes to the PE GPCI calculation 
as discussed previously in this section. While we fully intend to 
continue our review of the recently released revised IOM Phase I report 
on the Medicare GPCIs, it is important and consistent with the statute 
to proceed with appropriate improvements to the GPCI methodology in 
conjunction with our review of IOM's reports and IOM's continuing work 
in this area. We may propose further improvements and modifications to 
the GPCIs methodology in future rulemaking once we have had an 
opportunity to assess IOM's recommendations in their entirety.
Budget Neutrality
    Comment: Some commenters stated that the modifications proposed in 
the revised Sixth GPCI Update were not budget neutral. These commenters 
provided tables illustrating the impacts on the single view chest x-ray 
service.
    Response: We disagree that the modifications in the revised Sixth 
GPCI were not budget neutral. Our actuaries have determined that the CY 
2012 GPCIs are budget neutral in the aggregate prior to the application 
of any statutory GPCI provisions (section 1848(e)(1)(G) and section 
1848(e)(1)(I) of the Act) that are exempt by law from budget 
neutrality. The GPCIs are not necessarily budget neutral on an 
individual service by service basis.
Other Issues
    We received other public comments on matters that were not related 
to our proposed CY 2012 changes to the GPCIs. We thank the commenters 
for sharing their views and suggestions. Because we did not make 
proposals regarding these matters, we do not generally summarize or 
respond to such comments in this final rule with comment period. For 
example, we received numerous comments related to the physician work 
GPCI and the aforementioned expiration of the 1.000 work floor. Since 
we only proposed to update the cost share weights attributed to 
physician work, and noted that the statutorily required 1.0 physician 
work floor would be expiring at the end of CY 2011 in the CY 2012 
proposed rule, we will not be responding to comments related to our 
methodologies or calculations of physician work in this final rule with 
comment period. For an in-depth discussion of our most recent physician 
work GPCI update, see the CY 2011 final rule with comment period (75 FR 
73252 and 75 FR 73256 through 73260). We look forward to reviewing and 
evaluating the IOM's recommendations related to physician work included 
in its revised Phase I report. After we have reviewed the IOM's 
recommendations in their entirety, we may propose modifications to the 
physician work GPCI in future rulemaking.
    We also received several comments regarding the calculations and 
methodology used to calculate the MEI, although we did not propose any 
changes in the methodology used to calculate the MEI. Many commenters 
reiterated concerns regarding the assignment of MEI weights to the 10 
office expense subcategories as outlined in the 2011 Medicare physician 
payment schedule final rule with comment period. According to some 
commenters, it is not clear that the AMA PPIS survey expense categories 
match up with the industry-level data from the Bureau of Economic 
Analysis in a way that makes this assignment of subcategory weights 
possible. These commenters further state that the MEI technical 
advisory panel should revisit this issue, and consider whether other 
sources of data are available to split office rent from other types of 
office expenses, and to validate the office rent share as a percent of 
total expense.
    While this issue is outside the scope of this final rule with 
comment, we note that the costs reported in the 2006 AMA PPIS survey 
questions for office expenses were crosswalked as closely as possible 
to the 2002 BEA I/O benchmark categories. The weights for Office 
Expenses found in the MEI were appropriately based on information 
reported by self-employed physicians and selected self-employed non-
medical doctor specialties found in the 2006 American Medical 
Association Physician Practice Information Survey (PPIS). The PPIS was 
developed by medical associations and captures the costs of operating a 
medical practice, including office rents and non-physician wages. The 
survey results were further disaggregated using data from the Bureau of 
Economic Analysis' Benchmark Input/Output tables for Offices of 
Physicians, Dentists, and

[[Page 73091]]

Other Health Professionals. These resulting cost shares, along with the 
methods that were utilized in developing them, were proposed (75 FR 
40087 through 40092) and finalized (75 FR 73262 through 73276) during 
the calendar year 2011, Physician Fee Schedule rule, rulemaking 
process. As stated in the CY 2011 final rule, (75 FR 73270 through 
73276), the MEI technical advisory panel, will be asked to fully 
evaluate the index. In particular, the panel will be evaluating all 
technical aspects of the MEI including the cost categories, their 
associated weights and price proxies, and the productivity adjustment.
e. Summary of CY 2012 Final GPCIs
    After consideration of the public comments received on the GPCIs, 
we are finalizing the revisions to the 6th GPCI update using the most 
current data, with modifications. We are also finalizing the proposal 
to change the GPCI cost share weights for CY 2012. As a result, the 
cost share weight for the physician work GPCI (as a percentage of the 
total) will be 48.266 percent, and the cost share weight for the PE 
GPCI will be 47.439 percent with a change in the employee compensation 
component from 18.654 to 19.153 percentage points. The cost share 
weight for the office rent component of the PE GPCI will be 10.223 
percentage points (fixed capital with utilities), and the medical 
equipment, supplies, and other miscellaneous expenses component will be 
9.968 percentage points. Moreover, the cost share weight for the 
malpractice GPCI will be 4.295 percent. In addition, we are finalizing 
the weight for purchased services at 8.095 percentage points (5.011 
percentage points will be adjusted for geographic cost differences). 
Additionally, we will review the complete findings and recommendations 
from the Institute of Medicine's studies on geographic adjustment 
factors for physician payment and the MEI technical advisory panel once 
that information becomes fully available to CMS. We will once again 
consider the GPCIs for CY 2013 rulemaking in the context of our annual 
PFS rulemaking beginning in CY 2012 based on the information available 
at that time. We are finalizing the use of 2006 through 2008 ACS two 
bedroom rental data as a proxy for the relative cost difference in 
physicians' offices. Moreover, we will examine 5-year ACS rental data 
to determine its appropriateness as a potential data source for 
physician office rent. We will also examine HUDs CY 2012 proposed 
methodology, which utilizes ACS data exclusively, for potential use in 
future rulemaking. We are also finalizing our proposal to create a 
purchased services index to account for labor-related services with the 
``all other services'' and ``other professional expenses'' MEI 
components. In response to public commenters who recommended we utilize 
BLS data to capture the ``full range'' of occupations included in the 
offices of physician industry to calculate employee wage, we are 
modifying our original proposal and expanding the number of occupations 
utilized in our calculation of non-physician employee wages to reflect 
100 percent of the total wage share of non-physician occupations in the 
offices of physicians' industry.
    As we indicated previously in this section, section 103 of the 
Medicare and Medicaid Extenders Act (MMEA) of 2010 (Pub. L. 111-309) 
extended the 1.0 work GPCI floor only through December 31, 2011. 
Therefore, the CY 2012 physician work GPCIs and summarized GAFs do not 
reflect the 1.0 work floor. Moreover, the limited recognition of cost 
differences in employee compensation and office rent for the PE GPCIs, 
and the related hold harmless provision, required under section 1848 
(e)(1)(H) of the Act was only applicable for CY 2010 and CY 2011 (75 FR 
73253) and, therefore under current law, is no longer effective 
beginning in CY 2012. However, the permanent 1.5 work GPCI floor for 
Alaska (as established by section 134(b) of the MIPPA) will remain in 
effect for CY 2012. We are finalizing the CY 2012 GPCIs shown in 
Addendum E. The GPCIs have been budget neutralized to ensure that 
nationwide, total RVUs are not impacted by changes in locality GPCIs. 
The 1.0 PE GPCI floor for frontier States was applied to the budget 
neutralized GPCIs. The frontier States are the following: Montana; 
Wyoming; North Dakota; Nevada; and South Dakota. The CY 2012 updated 
GAFs and GPCIs may be found in Addenda D and E of this final rule with 
comment period.
3. Payment Localities
    The current PFS locality structure was developed and implemented in 
1997. There are currently 89 total PFS localities; 34 localities are 
Statewide areas (that is, only one locality for the entire State). 
There are 52 localities in the other 16 States, with 10 States having 2 
localities, 2 States having 3 localities, 1 State having 4 localities, 
and 3 States having 5 or more localities. The District of Columbia, 
Maryland, Virginia suburbs, Puerto Rico, and the Virgin Islands are 
additional localities that make up the remaining 3 of the total of 89 
localities. The development of the current locality structure is 
described in detail in the CY 1997 PFS proposed rule (61 FR 34615) and 
the subsequent final rule with comment period (61 FR 59494).
    As we have previously noted in the CYs 2008 and 2009 proposed rules 
(72 FR 38139 and 73 FR 38513), any changes to the locality 
configuration must be made in a budget neutral manner within a State 
and can lead to significant redistributions in payments. For many 
years, we have not considered making changes to localities without the 
support of a State medical association in order to demonstrate 
consensus for the change among the professionals whose payments would 
be affected (since such changes would be redistributive, with some 
increasing and some decreasing). However, we have recognized that, over 
time, changes in demographics or local economic conditions may lead us 
to conduct a more comprehensive examination of existing payment 
localities.
    For the past several years, we have been involved in discussions 
with physician groups and their representatives about recent shifts in 
relative demographics and economic conditions. We explained in the CY 
2008 PFS final rule with comment period that we intended to conduct a 
thorough analysis of potential approaches to reconfiguring localities 
and would address this issue again in future rulemaking. For more 
information, we refer readers to the CY 2008 PFS proposed rule (72 FR 
38139) and subsequent final rule with comment period (72 FR 66245).
    As a follow-up to the CY 2008 PFS final rule with comment period, 
we acquired a contractor to conduct a preliminary study of several 
options for revising the payment localities on a nationwide basis. The 
final report entitled, ``Review of Alternative GPCI Payment Locality 
Structures--Final Report,'' is accessible from the CMS PFS Web page 
http://www.cms.hhs.gov/PhysicianFeeSched/10_Interim_Study.asp#TopOfPage under the heading ``Review of Alternative GPCI 
Payment Locality Structures--Final Report.'' The report may also be 
accessed directly from the following link: http://www.cms.gov/PhysicianFeeSched/downloads/Alt_GPCI_Payment_Locality_Structures_Review.pdf.
    We did not make any proposals regarding the PFS locality 
configurations for CY 2012. However, we did receive some comments 
regarding IOM's recommendation to modify Medicare PFS localities to 
reflect metropolitan statistical areas (MSA)-based definitions. We will

[[Page 73092]]

address any changes to Medicare PFS localities in future rulemaking.
4. Report From the Institute of Medicine
    At our request, the Institute of Medicine is conducting a study of 
the geographic adjustment factors in Medicare payment. It is a 
comprehensive empirical study of the geographic adjustment factors 
established under sections 1848(e) (GPCI) and 1886(d)(3)(E) of the Act 
(hospital wage index). These adjustments are designed to ensure 
Medicare payment fees and rates reflect differences in input costs 
across geographic areas. The factors IOM is evaluating include the--
     Accuracy of the adjustment factors;
     Methodology used to determine the adjustment factors, and
     Sources of data and the degree to which such data are 
representative.
    Within the context of the U.S. health care marketplace, the IOM is 
also evaluating and considering the--
     Effect of the adjustment factors on the level and 
distribution of the health care workforce and resources, including--
    ++ Recruitment and retention taking into account mobility between 
urban and rural areas;
    ++ Ability of hospitals and other facilities to maintain an 
adequate and skilled workforce; and
    ++ Patient access to providers and needed medical technologies;
     Effect of adjustment factors on population health and 
quality of care; and
     Effect of the adjustment factors on the ability of 
providers to furnish efficient, high value care.
    The revised first report ``Geographic Adjustment in Medicare 
Payment, Phase I: Improving Accuracy'' that was released September 28, 
2011 and is available on the IOM Web site http://www.iom.edu/Reports/2011/Geographic-Adjustment-in-Medicare-Payment-Phase-I-Improving-Accuracy.aspx. It evaluates the accuracy of geographic adjustment 
factors and the methodology and data used to calculate them, and 
contains supplemental GPCI recommendations that were not contained in 
IOM's initial June 1st report. In its final report, scheduled to be 
released in the spring of 2012, the IOM will consider the role effect 
of Medicare payments in on matters such as the distribution of the 
health care workforce, population health, and the ability of providers 
to produce high-value, high-quality health care.
    The recommendations included in IOM's revised Phase I report that 
relate to or would have an effect on the GPCIs are summarized as 
follows:
     Recommendation 2-1: The same labor market definition 
should be used for both the hospital wage index and the physician 
geographic adjustment factor. Metropolitan statistical areas and 
Statewide non-metropolitan statistical areas should serve as the basis 
for defining these labor markets.
     Recommendation 2-2: The data used to construct the 
hospital wage index and the physician geographic adjustment factor 
should come from all health care employers.
     Recommendation 5-1: The GPCI cost share weights for 
adjusting fee-for-service payments to practitioners should continue to 
be national, including the three GPCIs (work, practice expense, and 
liability insurance) and the categories within the practice expense 
(office rent and personnel).
     Recommendation 5-2: Proxies should continue to be used to 
measure geographic variation in the physician work adjustment, but CMS 
should determine whether the seven proxies currently in use should be 
modified.
     Recommendation 5-3: CMS should consider an alternative 
method for setting the percentage of the work adjustment based on a 
systematic empirical process.
     Recommendation 5-4: The practice expense GPCI should be 
constructed with the full range of occupations employed in physicians' 
offices, each with a fixed national weight based on the hours of each 
occupation employed in physicians' offices nationwide.
     Recommendation 5-5: CMS and the Bureau of Labor Statistics 
should develop an agreement allowing the Bureau of Labor Statistics to 
analyze confidential data for the Centers for Medicare and Medicaid 
Services.
     Recommendation 5-6: A new source of information should be 
developed to determine the variation in the price of commercial office 
rent per square foot.
     Recommendation 5-7: Nonclinical labor-related expenses 
currently included under practice expense office expenses should be 
geographically adjusted as part of the wage component of the practice 
expense.
    We note that the GPCI revisions we are finalizing in this final 
rule with comment period address three of the IOM recommendations 
referenced above. Specifically, our final GPCIs utilize the full range 
of non-physician occupations in the non-physician employee wage 
calculation consistent with IOM recommendation 5-4. Additionally, we 
created a new purchased service index to account for non-clinical 
labor-related expenses similar to IOM recommendation 5-7. Lastly, we 
have consistently used national cost share weights (MEI) to determine 
the appropriate weight attributed to each GPCI component, which is 
supported by recommendation 5-1. We may propose further improvements to 
the GPCI methodology in future rulemaking to address the remaining IOM 
recommendations once we have had an opportunity to assess IOM's 
recommendations in their entirety.

E. Medicare Telehealth Services for the Physician Fee Schedule

1. Billing and Payment for Telehealth Services
a. History
    Prior to January 1, 1999, Medicare coverage for services delivered 
via a telecommunications system was limited to services that did not 
require a face-to-face encounter under the traditional model of medical 
care. Examples of these services included interpretation of an x-ray, 
or electrocardiogram, or electroencephalogram tracing, and cardiac 
pacemaker analysis.
    Section 4206 of the BBA provided for coverage of, and payment for, 
consultation services delivered via a telecommunications system to 
Medicare beneficiaries residing in rural health professional shortage 
areas (HPSAs) as defined by the Public Health Service Act. 
Additionally, the BBA required that a Medicare practitioner 
(telepresenter) be with the patient at the time of a teleconsultation. 
Further, the BBA specified that payment for a teleconsultation had to 
be shared between the consulting practitioner and the referring 
practitioner and could not exceed the fee schedule payment which would 
have been made to the consultant for the service provided. The BBA 
prohibited payment for any telephone line charges or facility fees 
associated with the teleconsultation. We implemented this provision in 
the CY 1999 PFS final rule with comment period (63 FR 58814).
    Effective October 1, 2001, section 223 of the Medicare, Medicaid 
and SCHIP Benefits Improvement Protection Act of 2000 (Pub. L. 106-554) 
(BIPA) added a new section, 1834(m), to the Act which significantly 
expanded Medicare telehealth services. Section 1834(m)(4)(F)(i) of the 
Act defines Medicare telehealth services to include consultations, 
office visits, office psychiatry services, and any additional service 
specified by the Secretary, when delivered via a telecommunications 
system. We first implemented this

[[Page 73093]]

provision in the CY 2002 PFS final rule with comment period (66 FR 
55246). Section 1834(m)(4)(F)(ii) of the Act required the Secretary to 
establish a process that provides for annual updates to the list of 
Medicare telehealth services. We established this process in the CY 
2003 PFS final rule with comment period (67 FR 79988).
    As specified in regulations at Sec.  410.78(b), we generally 
require that a telehealth service be furnished via an interactive 
telecommunications system. Under Sec.  410.78(a)(3), an interactive 
telecommunications system is defined as multimedia communications 
equipment that includes, at a minimum, audio and video equipment 
permitting two-way, real time interactive communication between the 
patient and the practitioner at the distant site. Telephones, facsimile 
machines, and electronic mail systems do not meet the definition of an 
interactive telecommunications system. An interactive 
telecommunications system is generally required as a condition of 
payment; however, section 1834(m)(1) of the Act does allow the use of 
asynchronous ``store-and-forward'' technology in delivering these 
services when the originating site is a Federal telemedicine 
demonstration program in Alaska or Hawaii. As specified in regulations 
at Sec.  410.78(a)(1), store and forward means the asynchronous 
transmission of medical information from an originating site to be 
reviewed at a later time by the practitioner at the distant site.
    Medicare telehealth services may be provided to an eligible 
telehealth individual notwithstanding the fact that the individual 
practitioner providing the telehealth service is not at the same 
location as the beneficiary. An eligible telehealth individual means an 
individual enrolled under Part B who receives a telehealth service 
furnished at an originating site. As specified in BIPA, originating 
sites are limited under section 1834(m)(3)(C) of the Act to specified 
medical facilities located in specific geographic areas. The initial 
list of telehealth originating sites included the office of a 
practitioner, a critical access hospital (CAH), a rural health clinic 
(RHC), a Federally qualified health center (FQHC) and a hospital (as 
defined in Section 1861(e) of the Act). More recently, section 149 of 
the Medicare Improvements for Patients and Providers Act of 2008 (Pub. 
L. 110-275) (MIPPA) expanded the list of telehealth originating sites 
to include hospital-based renal dialysis centers, skilled nursing 
facilities (SNFs), and community mental health centers (CMHCs). In 
order to serve as a telehealth originating site, these sites must be 
located in an area designated as a rural health professional shortage 
area (HPSA), in a county that is not in a metropolitan statistical area 
(MSA), or must be an entity that participates in a Federal telemedicine 
demonstration project that has been approved by (or receives funding 
from) the Secretary of Health and Human Services as of December 31, 
2000. Finally, section 1834(m) of the Act does not require the eligible 
telehealth individual to be presented by a practitioner at the 
originating site.
b. Current Telehealth Billing and Payment Policies
    As noted previously, Medicare telehealth services can only be 
furnished to an eligible telehealth beneficiary in an originating site. 
An originating site is defined as one of the specified sites where an 
eligible telehealth individual is located at the time the service is 
being furnished via a telecommunications system. In general, 
originating sites must be located in a rural HPSA or in a county 
outside of an MSA. The originating sites authorized by the statute are 
as follows:
     Offices of a physician or practitioner.
     Hospitals.
     CAHs.
     RHCs.
     FQHCs.
     Hospital-Based Or Critical Access Hospital-Based Renal 
Dialysis Centers (including Satellites).
     SNFs.
     CMHCs.
    Currently approved Medicare telehealth services include the 
following:
     Initial inpatient consultations.
     Follow-up inpatient consultations.
     Office or other outpatient visits.
     Individual psychotherapy.
     Pharmacologic management.
     Psychiatric diagnostic interview examination.
     End-stage renal disease (ESRD) related services.
     Individual and group medical nutrition therapy (MNT).
     Neurobehavioral status exam.
     Individual and group health and behavior assessment and 
intervention (HBAI).
     Subsequent hospital care.
     Subsequent nursing facility care.
     Individual and group kidney disease education (KDE).
     Individual and group diabetes self-management training 
services (DSMT).
    In general, the practitioner at the distant site may be any of the 
following, provided that the practitioner is licensed under State law 
to furnish the service being furnished via a telecommunications system:
     Physician.
     Physician assistant (PA).
     Nurse practitioner (NP).
     Clinical nurse specialist (CNS);
     Nurse-midwife.
     Clinical psychologist.
     Clinical social worker.
     Registered dietitian or nutrition professional.
    Practitioners furnishing Medicare telehealth services are located 
at a distant site, and they submit claims for telehealth services to 
the Medicare contractors that process claims for the service area where 
their distant site is located. Section 1834(m)(2)(A) of the Act 
requires that a practitioner who furnishes a telehealth service to an 
eligible telehealth individual be paid an amount equal to the amount 
that the practitioner would have been paid if the service had been 
furnished without the use of a telecommunications system. Distant site 
practitioners must submit the appropriate HCPCS procedure code for a 
covered professional telehealth service, appended with the -GT (Via 
interactive audio and video telecommunications system) or -GQ (Via 
asynchronous telecommunications system) modifier. By reporting the -GT 
or -GQ modifier with a covered telehealth procedure code, the distant 
site practitioner certifies that the beneficiary was present at a 
telehealth originating site when the telehealth service was furnished. 
The usual Medicare deductible and coinsurance policies apply to the 
telehealth services reported by distant site practitioners.
    Section 1834(m)(2)(B) of the Act provides for payment of a facility 
fee to the originating site. To be paid the originating site facility 
fee, the provider or supplier where the eligible telehealth individual 
is located must submit a claim with HCPCS code Q3014 (Telehealth 
originating site facility fee), and the provider or supplier is paid 
according to the applicable payment methodology for that facility or 
location. The usual Medicare deductible and coinsurance policies apply 
to HCPCS code Q3014. By submitting HCPCS code Q3014, the originating 
site certifies that it is located in either a rural HPSA or non-MSA 
county or is an entity that participates in a Federal telemedicine 
demonstration project that has been approved by (or receives funding 
from) the Secretary of Health and Human Services as of December 31, 
2000 as specified in section 1834(m)(4)(C)(i)(III) of the Act.
    As previously described, certain professional services that are 
commonly

[[Page 73094]]

furnished remotely using telecommunications technology, but that do not 
require the patient to be present in-person with the practitioner when 
they are furnished, are covered and paid in the same way as services 
delivered without the use of telecommunications technology when the 
practitioner is in-person at the medical facility furnishing care to 
the patient. Such services typically involve circumstances where a 
practitioner is able to visualize some aspect of the patient's 
condition without the patient being present and without the 
interposition of a third person's judgment. Visualization by the 
practitioner can be possible by means of x-rays, electrocardiogram or 
electroencephalogram tracings, tissue samples, etc. For example, the 
interpretation by a physician of an actual electrocardiogram or 
electroencephalogram tracing that has been transmitted via telephone 
(that is, electronically, rather than by means of a verbal description) 
is a covered physician's service. These remote services are not 
Medicare telehealth services as defined under section 1834(m) of the 
Act. Rather, these remote services that utilize telecommunications 
technology are considered physicians' services in the same way as 
services that are furnished in-person without the use of 
telecommunications technology; they are paid under the same conditions 
as in-person physicians' services (with no requirements regarding 
permissible originating sites), and should be reported in the same way 
(that is, without the -GT or -GQ modifier appended).
2. Requests for Adding Services to the List of Medicare Telehealth 
Services
    As noted previously, in the December 31, 2002 Federal Register (67 
FR 79988), we established a process for adding services to or deleting 
services from the list of Medicare telehealth services. This process 
provides the public with an ongoing opportunity to submit requests for 
adding services. We assign any request to make additions to the list of 
Medicare telehealth services to one of the following categories:
     Category 1: Services that are similar to professional 
consultations, office visits, and office psychiatry services that are 
currently on the list of telehealth services. In reviewing these 
requests, we look for similarities between the requested and existing 
telehealth services for the roles of, and interactions among, the 
beneficiary, the physician (or other practitioner) at the distant site 
and, if necessary, the telepresenter. We also look for similarities in 
the telecommunications system used to deliver the proposed service, for 
example, the use of interactive audio and video equipment.
     Category 2: Services that are not similar to the current 
list of telehealth services. Our review of these requests includes an 
assessment of whether the use of a telecommunications system to deliver 
the service produces similar diagnostic findings or therapeutic 
interventions as compared with the in-person delivery of the same 
service. Requestors should submit evidence showing that the use of a 
telecommunications system does not affect the diagnosis or treatment 
plan as compared to in-person delivery of the requested service.
    Since establishing the process to add or remove services from the 
list of approved telehealth services, we have added the following to 
the list of Medicare telehealth services: individual and group HBAI 
services; psychiatric diagnostic interview examination; ESRD services 
with 2 to 3 visits per month and 4 or more visits per month (although 
we require at least 1 visit a month to be furnished in-person by a 
physician, CNS, NP, or PA in order to examine the vascular access 
site); individual and group MNT; neurobehavioral status exam; initial 
and follow-up inpatient telehealth consultations for beneficiaries in 
hospitals and skilled nursing facilities (SNFs); subsequent hospital 
care (with the limitation of one telehealth visit every 3 days); 
subsequent nursing facility care (with the limitation of one telehealth 
visit every 30 days); individual and group KDE; and individual and 
group DSMT services (with a minimum of 1 hour of in-person instruction 
to ensure effective injection training).
    Requests to add services to the list of Medicare telehealth 
services must be submitted and received no later than December 31 of 
each calendar year to be considered for the next rulemaking cycle. For 
example, requests submitted before the end of CY 2011 will be 
considered for the CY 2013 proposed rule. Each request for adding a 
service to the list of Medicare telehealth services must include any 
supporting documentation the requester wishes us to consider as we 
review the request. Because we use the annual PFS rulemaking process as 
a vehicle for making changes to the list of Medicare telehealth 
services, requestors should be advised that any information submitted 
is subject to public disclosure for this purpose. For more information 
on submitting a request for an addition to the list of Medicare 
telehealth services, including where to mail these requests, we refer 
readers to the CMS Web site at http://www.cms.gov/telehealth/.
3. Submitted Requests for Addition to the List of Telehealth Services 
for CY 2012
    We received requests in CY 2010 to add the following services as 
Medicare telehealth services effective for CY 2012: (1) Smoking 
cessation services; (2) critical care services; (3) domiciliary or rest 
home evaluation and management services; (4) genetic counseling 
services; (5) online evaluation and management services; (6) data 
collection services; and (7) audiology services. The following presents 
a discussion of these requests, including our proposals for additions 
to the CY 2012 telehealth list.
a. Smoking Cessation Services
    The American Telemedicine Association and the Marshfield Clinic 
submitted requests to add smoking cessation services, reported by CPT 
codes 99406 (Smoking and tobacco use cessation counseling visit; 
intermediate, greater than 3 minutes up to 10 minutes) and 99407 
(Smoking and tobacco use cessation counseling visit; intensive, greater 
than 10 minutes) to the list of approved telehealth services for CY 
2012 on a category 1 basis.
    Smoking Cessation services are defined as face-to-face behavior 
change interventions. We believe the interaction between a practitioner 
and a beneficiary receiving smoking cessation services is similar to 
the education, assessment, and counseling elements of individual KDE 
reported by HCPCS code G0420 (Face-to-face educational services related 
to the care of chronic kidney disease; individual, per session, per 1 
hour), and individual MNT services, reported by HCPCS code G0270 
(Medical nutrition therapy; reassessment and subsequent intervention(s) 
following second referral in the same year for change in diagnosis, 
medical condition or treatment regimen (including additional hours 
needed for renal disease), individual, face-to-face with the patient, 
each 15 minutes); CPT code 97802 (Medical nutrition therapy; initial 
assessment and intervention, individual, face-to-face with the patient, 
each 15 minutes); and CPT code 97803 (Medical nutrition therapy; re-
assessment and intervention, individual, face-to-face with the patient, 
each 15 minutes), all services that are currently on the telehealth 
list.
    Therefore, we proposed to add CPT codes 99406 and 99407 to the list 
of telehealth services for CY 2012 on a category 1 basis. Additionally, 
we proposed to add HCPCS codes G0436 (Smoking and tobacco cessation

[[Page 73095]]

counseling visit for the asymptomatic patient; intermediate, greater 
than 3 minutes, up to 10 minutes) and G0437 (Smoking and tobacco 
cessation counseling visit for the asymptomatic patient; intensive, 
greater than 10 minutes) to the list of telehealth services for CY 2012 
since these related services are similar to the codes for which we 
received formal public requests.
    Consistent with this proposal, we also proposed to revise our 
regulations at Sec.  410.78(b) and Sec.  414.65(a)(1) to include these 
smoking cessation services as Medicare telehealth services.
    Comment: All commenters expressed support for CMS' proposal to add 
smoking cessation services to the list of Medicare telehealth services 
for CY 2012. One commenter stated that the proposal would contribute to 
ensuring that all Medicare beneficiaries--regardless of where they 
reside--have access to these services that are a valuable step toward 
reducing tobacco use among the Medicare population. Another commenter 
stated that the proposal would go far in helping many rural Americans 
gain access to these services that they would otherwise not have.
    Response: We agree with the commenters that adding smoking 
cessation services to the list of Medicare telehealth services will 
help to provide greater access to the services for beneficiaries in 
rural or other isolated areas.
    After consideration of the public comments we received, we are 
finalizing our CY 2012 proposal to add CPT codes 99406 and 99407 to the 
list of telehealth services for CY 2012 on a category 1 basis. 
Additionally, we are finalizing our proposal to add HCPCS codes G0436 
(Smoking and tobacco cessation counseling visit for the asymptomatic 
patient; intermediate, greater than 3 minutes, up to 10 minutes) and 
G0437 (Smoking and tobacco cessation counseling visit for the 
asymptomatic patient; intensive, greater than 10 minutes) to the list 
of telehealth services for CY 2012 and to revise our regulations at 
Sec.  410.78(b) and Sec.  414.65(a)(1) to include smoking cessation 
services as Medicare telehealth services.
b. Critical Care Services
    The American Telemedicine Association and the Marshfield Clinic 
submitted requests to add critical care service CPT codes 99291 
(Critical care, evaluation and management of the critically ill or 
critically injured patient; first 30-74 minutes) and 99292 (Critical 
care, evaluation and management of the critically ill or critically 
injured patient; each additional 30 minutes) to the list of approved 
telehealth services. We previously received this request for the CY 
2009 and CY 2010 PFS rulemaking cycles (73 FR 38517, 73 FR 69744 and 
69745, 74 FR 33548, and 74 FR 61764) and did not add the codes on a 
category 1 basis due to the acute nature of the typical patient. We 
continue to believe that patients requiring critical care services are 
more acutely ill than those patients typically receiving any service 
currently on the list of telehealth services. Therefore, we cannot 
consider critical care services on a category 1 basis.
    In the CY 2009 PFS proposed rule (73 FR 38517), we explained that 
we had no evidence suggesting that the use of telehealth could be a 
reasonable surrogate for the in-person delivery of critical care 
services; therefore, we would not add the services on a category 2 
basis. Requestors submitted new studies for CY 2012, but none 
demonstrated that comparable outcomes to a face-to-face encounter can 
be achieved using telehealth to deliver these services. The studies we 
received primarily addressed other issues relating to telehealth 
services. Some studies addressed the cost benefits and cost savings of 
telehealth services. Others focused on the positive outcomes of 
telehealth treatment when compared with no treatment at all. One 
submitted study addressed the equivalency of patient outcomes for 
telehealth services delivered to patients in emergency rooms, but the 
study's authors specifically restricted their population to patients 
whose complaints were not considered to be genuine emergencies. Given 
that limitation, it seems unlikely that any of these patients would 
have required critical care services as defined by CPT codes 99291 and 
99292.
    We note that consultations are included on the list of Medicare 
telehealth services and may be billed by practitioners furnishing 
services to critically ill patients These services are described by the 
following HCPCS codes: G0425 (Initial inpatient telehealth 
consultation, typically 30 minutes communicating with the patient via 
telehealth), G0426 (Initial inpatient telehealth consultation, 
typically 50 minutes communicating with the patient via telehealth), 
G0427 (Initial inpatient telehealth consultation, typically 70 minutes 
or more communicating with the patient via telehealth), G0406 (Follow-
up inpatient telehealth consultation, limited, physicians typically 
spend 15 minutes communicating with the patient via telehealth), G0407 
(Follow-up inpatient telehealth consultation, intermediate, physicians 
typically spend 25 minutes communicating with the patient via 
telehealth), and G0408 (Follow-up inpatient telehealth consultation, 
complex, physicians typically spend 35 minutes or more communicating 
with the patient via telehealth). Critical care services, as reported 
by the applicable CPT codes and described in the introductory language 
in the CPT book, consist of direct delivery by a physician of medical 
care for a critically ill or injured patient, including high complexity 
decision-making to assess, manipulate, and support vital system 
functions. Critical care requires interpretation of multiple 
physiologic parameters and/or application of advanced technologies, 
including temporary pacing, ventilation management, and vascular access 
services. The payment rates under the PFS reflect this full scope of 
physician work. To add the critical services to the telehealth list 
would require the physician to be able to deliver this full scope of 
services via telehealth. Based on the code descriptions, we have 
previously believed that it is not possible to deliver the full range 
of critical care services without a physical physician presence with 
the patient.
    We note that there are existing Category III CPT codes (temporary 
codes for emerging services that allow data collection) for remote 
real-time interactive video-conferenced critical care services that, 
consistent with our treatment of other Category III CPT codes, are not 
nationally priced under the PFS. The fact that the CPT Editorial Panel 
created these additional Category III CPT codes suggests to us that 
these video-conferenced critical care services are not the same as the 
in-person critical care services requested for addition to the 
telehealth list.
    Because we did not find evidence that use of a telecommunications 
system to deliver critical care services produces similar diagnostic or 
therapeutic outcomes as compared with the face-to-face deliver of the 
services, we did not propose to add critical care services (as 
described by CPT codes 99291 and 99292) to the list of approved 
telehealth services. We reiterated that our decision not to propose to 
add critical care services to the list of approved telehealth services 
does not preclude physicians from furnishing telehealth consultations 
to critically ill patients using the consultation codes that are on the 
list of Medicare telehealth services.
    Comment: One commenter supported CMS's decision not to add critical 
care services because the use of a telecommunications system to deliver 
critical services is unlikely to produce

[[Page 73096]]

``similar diagnostic findings or therapeutic interventions as compared 
with the in-person delivery of the same service.''
    Response: We appreciate this support for our proposal. As we stated 
in the CY 2012 PFS proposed rule (76 FR 42843), none of the submitted 
requests to add these services included evidence that demonstrated 
delivery via telehealth resulted in comparable outcomes to in-person 
care.
    Comment: One commenter disagreed with CMS' decision not to add 
critical care services to the list of Medicare Telehealth Services. The 
commenter argued that because the patient who requires critical care is 
more acutely ill than patients receiving any of the services currently 
on the list of approved codes, these services should be added to the 
list. This commenter also suggested that the proposal to allow 
consulting physicians to use the inpatient telehealth g-codes to report 
care of critically ill patients through telehealth was inappropriate 
because not all critically ill patients are inpatients.
    Response: We appreciate and share the commenter's concern for 
beneficiary access to care. However, we reiterate that no evidence that 
we received meets the criteria to add these services to the list of 
Medicare telehealth services. Regarding the appropriateness of the 
telehealth consultation g-codes in the emergency department setting, we 
refer the commenter to section II.E.5. of this final rule with comment 
period.
    After consideration of the public comments we received, we are 
finalizing our decision not to add critical care services to the list 
of Medicare telehealth services for CY 2012.
c. Domiciliary or Rest Home Evaluation and Management Services
    The American Telemedicine Association and the Marshfield Clinic 
submitted requests to add the following domiciliary or rest home 
evaluation and management CPT codes to the telehealth list for CY 2012:
     99334 (Domiciliary or rest home visit for the evaluation 
and management of an established patient, which requires at least 2 of 
these 3 key components: A problem focused interval history; a problem 
focused examination; or straightforward medical decision making. 
Counseling and/or coordination of care with other providers or agencies 
are provided consistent with the nature of the problem(s) and the 
patient's and/or family's needs. Usually, the presenting problem(s) are 
self-limited or minor. Physicians typically spend 15 minutes with the 
patient and/or family or caregiver).
     99335 (Domiciliary or rest home visit for the evaluation 
and management of an established patient, which requires at least 2 of 
these 3 key components: An expanded problem focused interval history; 
An expanded problem focused examination; Medical decision making of low 
complexity. Counseling and/or coordination of care with other providers 
or agencies are provided consistent with the nature of the problem(s) 
and the patient's and/or family's needs. Usually, the presenting 
problem(s) are of low to moderate severity. Physicians typically spend 
25 minutes with the patient and/or family or caregiver).
     99336 (Domiciliary or rest home visit for the evaluation 
and management of an established patient, which requires at least 2 of 
these 3 key components: A detailed interval history; a detailed 
examination; medical decision making of moderate complexity. Counseling 
and/or coordination of care with other providers or agencies are 
provided consistent with the nature of the problem(s) and the patient's 
and/or family's needs. Usually, the presenting problem(s) are of 
moderate to high severity. Physicians typically spend 40 minutes with 
the patient and/or family or caregiver).
     99337 (Domiciliary or rest home visit for the evaluation 
and management of an established patient, which requires at least 2 of 
these 3 key components: A comprehensive interval history; a 
comprehensive examination; medical decision making of moderate to high 
complexity. Counseling and/or coordination of care with other providers 
or agencies are provided consistent with the nature of the problem(s) 
and the patient's and/or family's needs. Usually, the presenting 
problem(s) are of moderate to high severity. The patient may be 
unstable or may have developed a significant new problem requiring 
immediate physician attention. Physicians typically spend 60 minutes 
with the patient and/or family or caregiver).
    A domiciliary or rest home is not permitted under current statute 
to serve as an originating site for Medicare telehealth services. 
Therefore, we did not propose to add domiciliary or rest home 
evaluation and management services to the list of Medicare telehealth 
services for CY 2012.
    Comment: One commenter disagreed with our proposal not to add 
domiciliary or rest home evaluation and management services because 
neither domiciliaries nor rest homes are permitted under current statue 
to serve as an originating site for Medicare Telehealth services. The 
commenter argued that because CMS added new ESRD-related G-codes to the 
list of approved Medicare Telehealth services in 2005 despite the fact 
that dialysis centers were not then permitted under statute to serve as 
originating sites, CMS' current reasoning is invalid.
    Comment: We acknowledge that we previously added certain ESRD 
services to the list of Medicare telehealth services when dialysis 
centers were not permitted under statute to serve as telehealth 
originating sites. However, the services in question can also be 
furnished in sites that were eligible originating sites when the codes 
were added to the list. At this time, we do not believe that 
domiciliary or rest home evaluation and management services can be 
furnished outside of domiciliaries or rest homes.
    After consideration of the public comments we received, we are 
finalizing our decision not to add domiciliary or rest home evaluation 
and management services to the list of Medicare telehealth services for 
CY2012.
d. Genetic Counseling Services
    The American Telemedicine Association and the Marshfield Clinic 
submitted requests to add CPT code 96040 (Medical genetics and genetic 
counseling services, each 30 minutes face-to-face with patient/family) 
to the telehealth list for CY 2012. We note that CPT guidance regarding 
reporting genetic counseling and education furnished by a physician to 
an individual directs physicians to evaluation and management (E/M) CPT 
codes and that services described by CPT code 96040 are provided by 
trained genetic counselors. Physicians and nonphysician practitioners 
who may independently bill Medicare for their service and who are 
counseling individuals would generally report office or other 
outpatient evaluation and management (E/M) CPT codes for office visits 
that involve significant counseling, including genetic counseling, and 
these office visit CPT codes are already on the list of telehealth 
services. CPT code 96040 would only be reported by genetic counselors 
for genetic counseling services. These practitioners cannot bill 
Medicare directly for their professional services and they are also not 
on the list of practitioners who can furnish telehealth services 
(specified in section 1834(m)(4)(E) of the Act). As such, we do not 
believe that it would be necessary or appropriate to add CPT code 96040 
to the list of Medicare

[[Page 73097]]

telehealth services. Therefore, we did not propose to add genetic 
counseling services to the list of Medicare telehealth services for CY 
2012.
    Comment: One commenter expressed concerns about beneficiary access 
concerns to genetic counseling but acknowledged the statutory 
constraints faced by CMS.
    Response: We appreciate the commenter's concerns and their 
agreement with our conclusions regarding our statutory limitations.
    After consideration of the public comments we received, we are 
finalizing our decision not to add genetic counseling services to the 
list of Medicare telehealth services for CY 2012.
e. Online Evaluation and Management Services
    The American Telemedicine Association and the Marshfield Clinic 
submitted requests to add CPT code 99444 (Online evaluation and 
management service provided by a physician to an established patient, 
guardian, or health care provider not originating from a related E/M 
service provided within the previous 7 days, using the Internet or 
similar electronic communications network) to the list of Medicare 
telehealth services.
    As we explained in the CY 2008 PFS final rule with comment period 
(72 FR 66371), we assigned a status indicator of ``N'' (Non-covered 
service) to these services because: (1) These services are non-face-to-
face; and (2) the code descriptor includes language that recognizes the 
provision of services to parties other than the beneficiary and for 
whom Medicare does not provide coverage (for example, a guardian).
    According to section 1834(m)(2)(A) of the Act, Medicare is required 
to pay for telehealth services at an amount equal to the amount that a 
practitioner would have been paid had such service been furnished 
without the use of a telecommunications system. As such, we do not 
believe it would be appropriate to make payment for services furnished 
via telehealth when those services would not otherwise be covered under 
Medicare. Because CPT code 99444 is currently noncovered, we did not 
propose to add online evaluation and management services to the list of 
Medicare Telehealth Services for CY 2012.
    Comment: One commenter argued that adding online evaluation and 
management and other services to the list of Medicare telehealth 
services would support chronic care management and care coordination. 
The same commenter also asserted that adding these services would be 
administratively easy for CMS to implement.
    Response: While we appreciate the potential value of maximizing the 
use of communication technology in care coordination and chronic care 
management, we cannot consider adding services that are not otherwise 
payable under the physician fee schedule to the Medicare telehealth 
benefit, as defined in 1834 (m) of the Act. Our decision not to add 
online evaluation and management or any other requested services to the 
list of Medicare telehealth services does not result from concern about 
administrative burden.
    After consideration of the public comments we received, we are 
finalizing our decision not to add online evaluation and management 
services to the list of Medicare telehealth services for CY 2012.
f. Data Collection Services
    The American Telemedicine Association and the Marshfield Clinic 
submitted requests to add CPT codes 99090 (Analysis of clinical data 
stored in computers (e.g., ECGs, blood pressures, hematologic data)) 
and 99091 (Collection and interpretation of physiologic data (e.g., 
ECG, blood pressure, glucose monitoring) digitally stored and/or 
transmitted by the patient and/or caregiver to the physician or other 
qualified health care professional, requiring a minimum of 30 minutes 
of time) to the list of Medicare telehealth services.
    As we explained in the in CY 2002 PFS final rule with comment 
period (66 FR 55309), we assigned a status indicator of ``B'' (Payment 
always bundled into payment for other services not specified) to these 
services because the associated work is considered part of the pre- and 
post-service work of an E/M service. We note that many E/M codes are on 
the list of Medicare telehealth services.
    According to section 1834(m)(2)(A) of the Act, Medicare is required 
to pay for telehealth services an amount equal to the amount that a 
practitioner would have been paid had such service been furnished 
without the use of a telecommunications system. Similar to the point 
noted previously for online E/M services, we do not believe it would be 
appropriate to make separate payment for services furnished via 
telehealth when Medicare would not otherwise make separate payment for 
the services. Moreover, we believe the payment for these data 
collection services should be bundled into the payment for E/M 
services, many of which are already on the Medicare telehealth list. 
Because CPT codes 99090 and 99091 are currently bundled, we did not 
propose to add data collection services to the list of Medicare 
telehealth services for CY 2012.
    Comment: Two commenters argued that CMS should pay separately for 
services like data collection since when furnished they often mitigate 
the need for an in-person visit and in those cases cannot logically be 
considered to be bundled with other services.
    Response: We thank the commenters for conveying their perspective 
on the value of such services. However, we continue to believe it would 
be inappropriate to add services that are not otherwise separately 
payable under the physician fee schedule to the Medicare telehealth 
benefit, as defined in 1834 (m) of the Act.
    After consideration of the public comments we received, we are 
finalizing our decision not to add data collection services to the list 
of Medicare telehealth services for CY 2012.
g. Audiology Services
    The American Academy of Audiology submitted a request that CMS add 
services that audiologists provide for balance disorders and hearing 
loss to the list of Medicare telehealth services. The request did not 
include specific HCPCS codes. Nevertheless, it is not within our 
administrative authority to pay audiologists for services furnished via 
telehealth. The statute authorizes the Secretary to pay for telehealth 
services only when furnished by a physician or a practitioner as 
physician or practitioner are defined in sections 1834(m)(4)(D) and (E) 
of the Act. Therefore, we did not propose to add services that are 
primarily provided by audiologists to the list of Medicare telehealth 
services for CY 2012.
    Comment: Several commenters stated broad support for the value of 
audiology services when furnished through telehealth. These commenters 
urged CMS to consider other ways of implementing programs that allow 
audiology services to be furnished through telehealth.
    Response: We appreciate the commenters' perspective on the value of 
audiology services. The statute authorizes payment for telehealth 
services only when furnished by a physician or practitioner as defined 
in sections 1834(m)(4)(D) and (E) of the Act. Audiologists do not fall 
within either of these definitions, and we do not believe there is 
another way to make

[[Page 73098]]

payment to audiologists for telehealth services.
    After consideration of the public comments we received, we are 
finalizing our decision not to add audiology services to the list of 
Medicare telehealth services for CY 2012.
4. The Process for Adding HCPCS Codes as Medicare Telehealth Services
    Along with its submission of codes for consideration as additions 
to the Medicare telehealth list for CY 2012, the American Telemedicine 
Association (ATA) also requested that CMS consider revising the annual 
process for adding to or deleting services from the list of telehealth 
services. The existing process, adopted in the CY 2003 PFS rulemaking 
cycle (67 FR 43862 through 43863 and 67 FR 79988 through 79989), is 
described in section II.E.1. of this final rule with comment period. 
The following discussion includes a summary of recent requests by the 
ATA and other stakeholders for changes to the established process for 
adding services to the telehealth list, an assessment of our historical 
experience with the current process including the request review 
criteria, and our proposed refinement to the process for adding 
services to the telehealth list that would be used in our evaluation of 
candidate telehealth services beginning for CY 2013.
    The ATA asked CMS to consider two specific changes to the process, 
including--
     Broadening the factors for consideration to include 
shortages of health professionals to provide in-person services, speed 
of access to in-person services, and other barriers to care for 
beneficiaries; and
     Equalizing the standard for adding telehealth services 
with the standard for deleting telehealth services by adopting a 
standard that allows services that are safe, effective or medically 
beneficial when furnished via telehealth to be added to the list of 
Medicare telehealth services. Similarly, we have received 
recommendations that CMS place all codes payable under the PFS on the 
telehealth list and allow physicians and practitioners to make a 
clinical determination in each case about whether a medically 
reasonable and necessary service could be appropriately furnished to a 
beneficiary through telehealth. Under this scenario, stakeholders have 
argued that CMS would only remove services from the telehealth list 
under its existing policy for service removal; specifically, that a 
decision to remove a service from the list of telehealth services would 
be made using evidence-based, peer-reviewed data which indicate that a 
specific service is not safe, effective, or medically beneficial when 
furnished via telehealth (67 FR 79988).
    While we share the interests of stakeholders in reducing barriers 
to health care access faced by some beneficiaries, given that section 
1834(m)(2)(F)(ii) of the Act requires the Secretary to establish a 
process that provides, on an annual basis, for the addition or deletion 
of telehealth services (and HCPCS codes), as appropriate, we do not 
believe it would be appropriate to add all services for which payment 
is made under the PFS to the telehealth list without explicit 
consideration as to whether the candidate service could be effectively 
furnished through telehealth. For example, addition of all codes to the 
telehealth list could result in a number of services on the list that 
could never be furnished by a physician or nonphysician practitioner 
who was not physically present with the beneficiary, such as major 
surgical procedures and interventional radiology services. Furthermore, 
we do not believe it would be appropriate to add services to the 
telehealth list without explicit consideration as to whether or not the 
nature of the service described by a candidate code allows the service 
to be furnished effectively through telehealth. Section 1834(m)(2)(A) 
of the Act requires that the distant site physician or practitioner 
furnishing the telehealth service must be paid an amount equal to the 
amount the physician or practitioner would have been paid under the PFS 
has such service been furnished without the use of a telecommunications 
system. Therefore, we believe that candidate telehealth services must 
also be covered when furnished in-person; and that any service that 
would only be furnished through a telecommunications system would be a 
new service and, therefore, not a candidate for addition to the 
telehealth list. In view of these considerations, we will continue to 
consider candidate additions to the telehealth list on a HCPCS code-
specific basis based on requests from the public and our own 
considerations.
    We also believe it continues to be most appropriate to consider 
candidate services for the telehealth list based on the two mutually 
exclusive established categories into which all services fall--
specifically, services that are similar to services currently on the 
telehealth list (category 1) and services that are not similar to 
current telehealth services (category 2). Under our existing policy, we 
add services to the telehealth list on a category 1 basis when we 
determine that they are similar to services on the existing telehealth 
list with respect to the roles of, and interactions among, the 
beneficiary, physician (or other practitioner) at the distant site and, 
if necessary, the telepresenter (67 FR 43862). Since CY 2003, we have 
added 35 services to the telehealth list on a category 1 basis based on 
public requests and our own identification of such services. We believe 
it is efficient and valuable to maintain the existing policy that 
allows us to consider requests for additions to the telehealth list on 
a category 1 basis and proposed to add them to the telehealth list if 
the existing criteria are met. This procedure expedites our ability to 
identify codes for the telehealth list that resemble those services 
already on this list, streamlining our review process and the public 
request and information-submission process for services that fall into 
this category. Therefore, we believe that any changes to the process 
for adding codes to the telehealth list should be considered with 
respect to category 2 additions, rather than category 1 additions.
    Our existing criteria for consideration of codes that would be 
category 2 additions, specifically those candidate telehealth services 
that are not similar to any current telehealth services, include an 
assessment of whether the use of a telecommunications system to deliver 
the services produces similar diagnostic findings or therapeutic 
interventions as compared with a face-to-face in-person delivery of the 
same service (67 FR 43682). In other words, the discrete outcome of the 
interaction between the clinician and patient facilitated by a 
telecommunications system should correlate well with the discrete 
outcome of the clinician-patient interaction when performed face-to-
face. In the CY 2003 PFS proposed rule (67 FR 43862), we explained that 
requestors for category 2 additions to the telehealth list should 
submit evidence that the use of a telecommunications systems does not 
affect the diagnosis or treatment plan as compared to in-person 
delivery of the service. We indicated that if evidence shows that the 
candidate telehealth service is equivalent when furnished in person or 
through telehealth, we would add it to the list of telehealth services. 
We refer to this standard in further discussion in this final rule with 
comment period as the ``comparability standard.'' We stated in the CY 
2003 PFS proposed rule (67 FR 43862) that if we determine that the use 
of a telecommunications system changes the nature or outcome of the 
service, for

[[Page 73099]]

example, as compared with the in-person delivery of the service, we 
would review the telehealth service addition request as a request for a 
new service, rather than a different method of delivering an existing 
Medicare service. For coverage and payment of most services, Medicare 
requires that a new service must: (1) Fall into a Medicare benefit 
category; (2) be reasonable and necessary in accordance with section 
1862(a)(1)(A) of the Act; and (3) not be explicitly excluded from 
coverage. In such a case, the requestor would have the option of 
applying for a national coverage determination for the new service.
    We believe it is most appropriate to address the ATA and other 
stakeholder requests to broaden the current factors we consider when 
deciding whether to add candidate services to the telehealth list--to 
include factors such as the effects of barriers to in-person care and 
the safety, effectiveness, or medical benefit of the service furnished 
through telehealth, as potential refinements to our category 2 
criteria. We initially established these category 2 criteria in the 
interest of ensuring that the candidate services were safe, effective, 
medically beneficial, and still accurately described by the 
corresponding codes when delivered via telehealth, while also ensuring 
that beneficiaries furnished telehealth services receive high quality 
care that is comparable to in-person care. We believed that the 
demonstration of comparable clinical outcomes (diagnostic findings and/
or therapeutic interventions) from telehealth and in-person services 
would prove to be the best indicator that all of these conditions were 
met. While we continue to believe that safety, effectiveness, and 
medical benefit, as well as accurate description of the candidate 
telehealth services by the CPT or HCPCS codes, are necessary conditions 
for adding codes to the list of Medicare telehealth services, our 
recent experience in reviewing public requests for telehealth list 
additions and our discussions with stakeholders regarding contemporary 
medical practice and potential barriers to care, have led us to 
conclude that the comparability standard for category 2 requests should 
be modified.
    In our annual evaluation of category 2 requests since we adopted 
the process for evaluating additions to the telehealth list almost 10 
years ago, we have consistently observed that requestors have 
difficulty demonstrating that clinical outcomes of a service delivered 
via telehealth are comparable to the outcomes of the in-person service. 
The medical literature frequently does not include studies of the 
outcomes of many types of in-person services that allow for comparison 
to the outcomes demonstrated for candidate telehealth services. 
Furthermore, we know that in some cases the alternative to a telehealth 
service may be no service rather than an in-person service. The 
comparability standard may not sufficiently allow for the opportunity 
to add candidate services to the telehealth list that may be safe, 
effective, and medically beneficial when delivered via telehealth, 
especially to beneficiaries who experience significant barriers to in-
person care. While we continue to believe that beneficiaries receiving 
services through telehealth are deserving of high quality health care 
and that in-person care may be very important and potentially 
preferable for some services when in-person care is possible, we are 
concerned that we have not added any services to the telehealth list on 
a category 2 basis as a result of our reviews. While some candidate 
services appear to have the potential for clinical benefit when 
furnished through telehealth, the requests have not met the 
comparability standard.
    Therefore, we proposed to refine our category 2 review criteria for 
adding codes to the list of Medicare telehealth services beginning in 
CY 2013 by modifying the current requirement to demonstrate similar 
diagnostic findings or therapeutic interventions with respect to a 
candidate service delivered through telehealth compared to in-person 
delivery of the service (the comparability standard). We proposed to 
establish a revised standard of demonstrated clinical benefit when the 
service is furnished via telehealth. We refer to this proposed standard 
in further discussion in this final rule with comment period as the 
``clinical benefit standard.'' To support our review using this revised 
standard, we would ask requestors to specify in their request how the 
candidate telehealth service is still accurately described by the 
corresponding HCPCS or CPT code when delivered via telehealth as 
opposed to in-person.
    We proposed that our refined criteria for category 2 additions 
would be as follows:
     Category 2: Services that are not similar to the current 
list of telehealth services. Our review of these requests would include 
an assessment of whether the service is accurately described by the 
corresponding code when delivered via telehealth and whether the use of 
a telecommunications system to deliver the service produces 
demonstrated clinical benefit to the patient. Requestors should submit 
evidence indicating that the use of a telecommunications system in 
delivering the candidate telehealth service produces clinical benefit 
to the patient.
    The evidence submitted should include both a description of 
relevant clinical studies that demonstrate the service furnished by 
telehealth to a Medicare beneficiary improves the diagnosis or 
treatment of an illness or injury or improves the functioning of a 
malformed body part, including dates and findings and a list and copies 
of published peer-reviewed articles relevant to the service when 
furnished via telehealth. Some examples of clinical benefit include the 
following:
     Ability to diagnose a medical condition in a patient 
population without access to clinically appropriate in-person 
diagnostic services.
     Treatment option for a patient population without access 
to clinically appropriate in-person treatment options.
     Reduced rate of complications.
     Decreased rate of subsequent diagnostic or therapeutic 
interventions (for example, due to reduced rate of recurrence of the 
disease process).
     Decreased number of future hospitalizations or physician 
visits.
     More rapid beneficial resolution of the disease process 
treatment.
     Decreased pain, bleeding, or other quantifiable symptom.
     Reduced recovery time.
    We believe the adoption of this clinical benefit standard for our 
review of candidate telehealth services on a category 2 basis is 
responsive to the requests of stakeholders that we broaden the factors 
taken into consideration to include barriers to care for beneficiaries. 
It allows us to consider the demonstrated clinical benefit of 
telehealth services for beneficiaries who might otherwise have no 
access to certain diagnostic or treatment services. Furthermore, we 
believe the focus on demonstrated clinical benefit in our review of 
category 2 requests for addition to the telehealth lists is equivalent 
to our standard for deleting services from the telehealth list that 
rests upon evidence that a service is not safe, not effective, or not 
medically beneficial. Finally, we believe the proposed clinical benefit 
standard for our review of candidate telehealth services on a category 
2 basis is fully consistent with our responsibility to ensure that 
telehealth services are safe, effective, medically beneficial, and 
still accurately described by the corresponding codes that would be 
used for the services when delivered in-person.

[[Page 73100]]

    We solicited public comments on the proposed refinement to our 
established process for adding codes to the telehealth list, including 
the information that requestors should furnish to facilitate our full 
review of requests in preparation for the CY 2013 PFS rulemaking cycle 
during which we will use the category 2 review criteria finalized in 
this final rule with comment period.
    Comment: Many commenters supported the proposal to revise the 
category 2 criteria to incorporate the clinical benefit standard. Many 
of these commenters stated that they expect the revised criteria to 
result in both an expanded list of telehealth services and better 
medical care for beneficiaries who might otherwise not have access to 
certain diagnostic or treatment services. Several of these commenters 
explicitly stated that the criteria as described in the proposal 
presented a rigorous evidentiary standard for demonstrating clinical 
benefit.
    Response: We appreciate the broad support for the proposal. We 
believe that the proposed clinical benefit standard would allow us to 
consider the demonstrated clinical benefit of telehealth services for 
beneficiaries who might otherwise have no access to certain diagnostic 
or treatment services. We also believe that the proposal would ensure 
that Medicare telehealth services are safe, effective, and medically 
beneficial.
    Comment: Some commenters advocated for eliminating the process for 
adding and deleting codes. These commenters argued that the 
determination of which services can be furnished through telehealth 
should be left to the judgment of individual physicians. One commenter 
suggested that CMS should evaluate clinical equivalence for 
telemedicine procedures by limiting the scope to clinical procedures 
and interventions that would normally be performed in the hospital 
setting as a part of ongoing care. A commenting organization informed 
CMS that it had conducted an extensive study of services and determined 
a list of services that should be eligible based on positive 
correlation of discrete outcomes of those services furnished through 
telehealth and those same services furnished in-person. However, the 
organization did not provide this analysis with their comments.
    Response: We understand the commenters' interests in making broader 
changes to the way that services are added to or deleted from list of 
Medicare telehealth services. As we stated in the proposal, we believe 
that because section 1834(m)(2)(F)(ii) of the Act requires the 
Secretary to establish a process that provides, on an annual basis, for 
the addition or deletion of telehealth services (and HCPCS codes), as 
appropriate, we do not believe it would be appropriate to add all 
services for which payment is made under the PFS to the telehealth list 
without explicit consideration as to whether the candidate service 
could be effectively furnished through telehealth. Furthermore, because 
section 1834(m)(2)(A) of the Act requires that the distant site 
physician or practitioner furnishing the telehealth service must be 
paid an amount equal to the amount the physician or practitioner would 
have been paid under the PFS had such service been furnished without 
the use of a telecommunications system, we do not believe it would be 
appropriate to add services to the telehealth list without explicit 
consideration as to whether or not the nature of the service described 
by a candidate code allows the service to be furnished as effectively 
through telehealth as in an in-person encounter. We believe continuing 
the current annual process, with the proposed amendment to the category 
2 criteria, provides the appropriate opportunity to evaluate whether to 
add or delete specific services to the list of Medicare telehealth 
services. Although Medicare has not received many studies comparing 
clinical outcomes for in-person and telehealth delivery of the same 
service, we encourage stakeholders that conduct such comparison studies 
to submit such evidence to support category 2 requests for the addition 
of particular services to the list.
    Comment: One commenter expressed support for the proposal but urged 
CMS to carefully evaluate its impact if implemented. That commenter 
suggested that the addition of new services under the proposed standard 
could incentivize changes in practice patterns where Medicare 
beneficiaries in remote areas receive consistently a lower level of 
care if clinical benefit has no relationship to the equivalent of an 
in-person visit. Another commenter disagreed with the proposal to amend 
the ``comparability standard'' for adding services to the list of 
Medicare telehealth services. The commenter asserted that telehealth 
services can be effective as a step to help patients get the care they 
need, but should not be used to replace in-person care. The commenter 
argued that paying for telehealth services that may have some minor 
benefit as equivalent to an in-person service is misleading to patients 
and would prevent Medicare beneficiaries from getting the actual in-
person care they need.
    Response: We appreciate these concerns and agree that Medicare 
beneficiaries in remote areas deserve access to high quality health 
care. As we noted in the proposal, we also believe that in-person care 
may be very important and potentially preferable for some services when 
in-person care is possible. However, we also know that in some cases 
the alternative to a telehealth service may be no service rather than 
an in-person service.
    We continue to believe safety, effectiveness, and medical benefit, 
as well as accurate description of the candidate telehealth services by 
the CPT or HCPCS codes, are necessary conditions for adding codes to 
the list of Medicare telehealth services. While we believe that in many 
cases, the existing standard has led to appropriate category 2 
determinations not to add services to the telehealth benefit, we also 
believe that the current standard has prevented consideration of some 
services that could be clinically beneficial because there are no 
studies that compare patient outcomes when services are delivered via 
telehealth versus in person. This does not support our interests in 
identifying beneficial services for the telehealth benefit. 
Specifically, we observe that the medical literature frequently does 
not include studies of the outcomes of many types of in-person services 
that allow for comparison to the outcomes demonstrated for candidate 
telehealth services. We believe that the proposed revision to the 
existing criteria will allow thorough consideration of a greater number 
of requests for addition to the list. We would also remind commenters 
that the annual process will continue to provide stakeholders who 
support or oppose adding particular services to the list the 
opportunity to contribute to our evaluations of particular requests 
through public comment.
    Additionally, we note that the established process for deleting 
services from the list would allow Medicare to consider any available 
evidence suggesting that the addition of particular services to the 
list of Medicare telehealth services had detrimentally changed the 
quality of medical care for Medicare beneficiaries in remote areas. 
Such evidence could be considered in the context of either a public 
request or internally generated proposal to delete services from the 
list of Medicare telehealth services during annual PFS rulemaking. This 
process was

[[Page 73101]]

established during CY 2003 PFS rulemaking. (67 FR 7988)
    Finally, we agree with the commenter that argued that we should not 
add services to the telehealth list based on demonstrated evidence of 
minor benefit. We would like to clarify that our evidentiary standard 
of clinical benefit would not include minor or incidental benefits.
    Comment: Some commenters offered feedback on the specific kind of 
information that requestors should furnish to facilitate CMS review of 
requests to add specific services. One commenter suggested that CMS 
should recognize any biometrics or clinical parameters known to affect 
morbidity/mortality as appropriate supporting evidence. Another 
commenter suggested that CMS should make clear that its list of 
clinical benefits that could be conferred by the use of telehealth 
services, as featured in the proposed rule, is not exhaustive. Rather, 
the list is illustrative. The commenter asked CMS to clarify that there 
are many kinds of clinical benefits that are possible for telehealth 
services as well as face-to-face services, and that CMS will consider 
clinical benefits on a case-by-case basis based on studies submitted by 
requestors. Another commenter expressed concern that the proposed 
evaluation criteria are inappropriate since they resemble the criteria 
for a Medicare coverage determination.
    Response: We agree with the commenter who stated that the list of 
examples of demonstrated clinical benefits as presented in the proposed 
rule (76 FR 42827) is not exhaustive, but rather illustrative. 
Furthermore, we acknowledge that our proposal allows us to consider 
clinical benefits on a case-by-case basis depending on studies 
submitted by requestors, our own internal evaluation, and information 
submitted by commenters. While we acknowledge a similarity between some 
of the examples provided in the proposal and Medicare coverage 
criteria, we believe that such resemblance is appropriate given our 
interest in ensuring that services the Secretary adds to the telehealth 
benefit demonstrate clinical benefit to Medicare beneficiaries.
    Comment: Several commenters requested that CMS provide more 
specific information about how the new criteria will be used to 
evaluate the requests to add services to the list of Medicare 
telehealth services. One of these commenters asked CMS to provide 
workshops and other outreach efforts related to the review criteria.
    Response: We appreciate the commenters' interest in requesting 
greater specificity regarding how the new criteria will be used in 
evaluation of annual requests. In proposing the new category 2 
criteria, we provided some examples of demonstrated benefit instead of 
establishing a series of specified clinical metrics because we expect 
the choice of appropriate evaluation criteria should be identified on a 
case-by-case basis specific to the information submitted with requests 
to add services through the established annual process.
    We believe that establishing more rigid evaluation criteria (for 
example, criteria that rely on measurement of a series of demonstrated 
clinical outcomes specified by CMS) might present as many problems as 
has the current category 2 criteria, because under such a process 
requestors would be required to submit medical literature that passes a 
series of hurdles established by us prior to receiving a particular 
request. We would not be able to assess the benefit of the requested 
service within the context of the submitted evidence and the specific 
services. We also believe that such a process might lead to greater 
administrative burden for requestors and might require constant 
revision through annual rulemaking to adapt any specific criteria to 
changes in medical and communication technology as well as developments 
in medical literature.
    Additionally, we note that the application of the proposed criteria 
to each request will remain subject to public notice and comment. Since 
we implemented the process to add or delete services, including the 
existing category 2 criteria, we have used the PFS notice and comment 
rulemaking process to propose, accept public comments, and ultimately 
explain how the established evaluation criteria apply to each service 
we evaluate for addition to the list of Medicare telehealth services. 
We are not proposing a change to that aspect of the process with this 
proposed change in category 2 criteria.
    Comment: One commenter expressed concern regarding the aspect of 
the proposed criteria that includes CMS' review of whether the service 
is accurately described by the corresponding code when delivered via 
telehealth. The commenter asserted that that aspect of the criteria is 
self-fulfilling and might prevent the addition of otherwise appropriate 
services to the list of Medicare telehealth services since the codes 
were written to describe in-person services. Similarly, one commenter 
was concerned that accurate description of the code when delivered via 
telehealth might prevent CMS from adding critical care services to the 
list of Medicare telehealth services because there are category III CPT 
codes that describe remote real-time interactive videoconferenced 
critical care services.
    Response: In general, we do not believe it would be appropriate to 
add services to the Medicare telehealth list if those services cannot 
be accurately described by CPT or HCPCS codes that could otherwise 
describe in-person services. Medicare payment for the services is based 
upon the services that the CPT or HCPCS code describes. As we explained 
in the CY 2012 PFS proposed rule with comment period (76 FR 42826), 
Section 1834(m)(2)(A) of the Act requires that the distant site 
physician or practitioner furnishing the telehealth service must be 
paid an amount equal to the amount the physician or practitioner would 
have been paid under the PFS had such service been furnished without 
the use of a telecommunications system. Therefore, we believe that 
candidate telehealth services must also be covered when furnished in-
person; that the CPT and HCPCS code that is the basis for payment must 
accurately describe the service; and that any service that would only 
be furnished through a telecommunications system would be a distinct 
service from an in-person service, and therefore, not a candidate for 
addition to the Medicare telehealth list even when covered by Medicare. 
For example, remote services that utilize telecommunications technology 
are considered physicians' services in the same way as services that 
are furnished in-person without the use of telecommunications 
technology; they are paid under the same conditions as in-person 
physicians' services (with no requirements regarding permissible 
originating sites), and should be reported in the same way (that is, 
without the -GT or -GQ modifier appended). Medicare coverage for these 
types of services is distinct from the Medicare telehealth benefit.
    With regard to the request to add critical care services to the 
list of Medicare telehealth services, the application of the proposed 
category 2 criteria to that request is contingent on both the 
finalization of the proposed criteria and our receipt of a new request 
to add the services. However, as we noted in the CY 2012 PFS proposed 
rule with comment period (76 FR 42824), the fact that the CPT Editorial 
Panel created the Category III CPT codes suggests to us that these 
video-conferenced critical care services are not the same as the in-
person critical care services requested for addition to the telehealth 
list.
    After consideration of the public comments we received, we are

[[Page 73102]]

finalizing our proposal to revise the criteria we use to review 
category 2 requests to add services to the list of Medicare telehealth 
services beginning in CY 2013. We are modifying the current requirement 
to demonstrate similar diagnostic findings or therapeutic interventions 
with respect to a candidate service delivered through telehealth 
compared to in person delivery of the service (the comparability 
standard). Instead, we will assess category 2 requests to add services 
to the telehealth list using a standard of demonstrated clinical 
benefit (the clinical benefit standard) when the service is furnished 
via telehealth. To support our review using this revised standard, we 
ask requestors to specify in their request how the candidate telehealth 
service is still accurately described by the corresponding HCPCS or CPT 
code when delivered via telehealth as opposed to in person.
    Our revised criteria for category 2 additions are as follows:
     Category 2: Services that are not similar to the current 
list of telehealth services. Our review of these requests will include 
an assessment of whether the service is accurately described by the 
corresponding code when delivered via telehealth and whether the use of 
a telecommunications system to deliver the service produces 
demonstrated clinical benefit to the patient. Requestors should submit 
evidence indicating that the use of a telecommunications system in 
delivering the candidate telehealth service produces clinical benefit 
to the patient.
    The evidence submitted should include both a description of 
relevant clinical studies that demonstrate the service furnished by 
telehealth to a Medicare beneficiary improves the diagnosis or 
treatment of an illness or injury or improves the functioning of a 
malformed body part, including dates and findings and a list and copies 
of published peer reviewed articles relevant to the service when 
furnished via telehealth. Our evidentiary standard of clinical benefit 
will not include minor or incidental benefits. Some examples of 
clinical benefit include the following:
     Ability to diagnose a medical condition in a patient 
population without access to clinically appropriate in person 
diagnostic services.
     Treatment option for a patient population without access 
to clinically appropriate in-person treatment options.
     Reduced rate of complications.
     Decreased rate of subsequent diagnostic or therapeutic 
interventions (for example, due to reduced rate of recurrence of the 
disease process).
     Decreased number of future hospitalizations or physician 
visits.
     More rapid beneficial resolution of the disease process 
treatment.
     Decreased pain, bleeding, or other quantifiable symptom.
     Reduced recovery time.
5. Telehealth Consultations in Emergency Departments
    We have recently been asked to clarify instructions regarding 
appropriate reporting of telehealth services that, prior to our policy 
change regarding consultation codes, would have been reported as 
consultations furnished to patients in an emergency department. When we 
eliminated the use of consultation codes under the PFS beginning in CY 
2010, we instructed practitioners, when furnishing a service that would 
have been reported as a consultation service, to report the E/M code 
that is most appropriate to the particular service for all office/
outpatient or inpatient visits. Since section 1834(m) of the Act 
includes ``professional consultations'' (including the initial 
inpatient consultation codes ``as subsequently modified by the 
Secretary'') in the definition of telehealth services, we established 
several HCPCS codes to describe the telehealth delivery of initial 
inpatient consultations. For inpatient hospital and skilled nursing 
facility care telehealth services, we instructed practitioners to use 
the inpatient telehealth consultation G-codes listed in Table 12 to 
report those telehealth services (74 FR 61763, 61774). However, we 
neglected to account for the fact that E/M emergency department visit 
codes (99281-99285) are not on the telehealth list. As a result, there 
has not been a clear means for practitioners to bill a telehealth 
consultation furnished in an emergency department. In order to address 
this issue, we proposed to change the code descriptors for the 
inpatient telehealth consultation G-codes to include emergency 
department telehealth consultations effective January 1, 2012. However, 
we requested public comment regarding other options, including creating 
G-codes specific to these services when furnished to patients in the 
emergency department.
[GRAPHIC] [TIFF OMITTED] TR28NO11.016


[[Page 73103]]


    Comment: Many commenters supported the proposal to change the code 
descriptors for the inpatient telehealth consultation G-codes to 
include emergency department telehealth consultations effective January 
1, 2012. These commenters asserted that changing the code descriptors 
is an appropriate way for CMS to provide a clear means for 
practitioners to bill telehealth consultations furnished to emergency 
department patients.
    Response: We appreciate the support for the proposal. We agree that 
changing the code descriptors will ensure that telehealth consultations 
can be reported appropriately when furnished to emergency department 
patients.
    Comment: A few commenters expressed concerns that the proposal 
would blur the line between inpatient and outpatient services. One 
commenter disagreed with the proposal and suggested that CMS should 
create new G-codes since it is important to maintain the distinction 
between outpatient and inpatient services.
    Response: We thank the commenters for bringing these concerns to 
our attention. While we understand that emergency department services 
are considered outpatient services, at this time we believe that 
allowing practitioners to report the G-codes we created for initial 
inpatient telehealth consultations when furnishing telehealth 
consultations to emergency department patients is the most appropriate 
way to resolve the immediate issue. We note that the G-codes we created 
for telehealth consultations are used exclusively under the telehealth 
benefit. In this unique circumstance, we believe that the use of single 
codes to describe what can be an inpatient or an outpatient emergency 
department service is an appropriate mechanism to allow practitioners 
to report these telehealth services.
    However, the comments regarding site of service coding distinctions 
have prompted us to reconsider the need to provide a mechanism for 
follow-up consultations in the emergency department. While follow-up 
consultative services are furnished to hospital and SNF inpatients, we 
do not believe these services are furnished to patients in emergency 
departments since patients do not spend enough time in the emergency 
department to warrant a second consultative service by the same 
practitioner. Therefore, we are amending our proposal to pertain only 
to the G-codes that describe initial telehealth consultations.
    Comment: One commenter disagreed with the code descriptor change 
based on the assertion that the existing G-codes do not sufficiently 
cover the intensity, risk and medical judgment involved in providing 
teleICU services to critically ill patients.
    Response: We agree that the telehealth consultation codes do not 
fully describe critical care services. For additional information 
regarding the request to add critical care services to the list of 
Medicare telehealth services, we refer the commenter to our discussion 
in section II.E.1.b. of this final rule with comment period.
    Comment: One commenter requested additional information regarding 
why Medicare only pays for consultations furnished through telehealth.
    Response: While Medicare no longer recognizes CPT consultation 
codes for payment purposes, practitioners furnishing services that 
could be described by CPT consultation codes are still paid for those 
services when they are reported using the the most appropriate office 
or inpatient evaluation and management code. The telehealth 
consultation G-codes are intended to provide a mechanism for reporting 
telehealth consultation services to patients in the inpatient and SNF 
settings. We created these codes because inpatient and SNF evaluation 
and management codes were not included in the telehealth benefit and a 
practitioner could not bill an evaluation and management code when 
providing consultation services via telehealth furnished to patients in 
those settings. We refer the reader to our most recent thorough 
discussion of this issue in the CY 2010 PFS final rule with comment 
period (74 FR 61763 and 61767 through 61775).
    After consideration of the public comments we received, we are 
finalizing our proposal to change the code descriptors for initial 
inpatient telehealth consultation G-codes to reflect telehealth 
consultations furnished to emergency department patients in addition to 
inpatient telehealth consultations effective January 1, 2012. The 
descriptors for these codes for CY 2012 appear in table 13. After 
consideration of the public comments we received, we are not finalizing 
our proposal to change the code descriptors for follow-up inpatient 
telehealth consultations, since we do not believe follow-up 
consultations are furnished to emergency department patients.
[GRAPHIC] [TIFF OMITTED] TR28NO11.017


[[Page 73104]]


6. Telehealth Originating Site Facility Fee Payment Amount Update
    Section 1834(m)(2)(B) of the Act establishes the payment amount for 
the Medicare telehealth originating site facility fee for telehealth 
services provided from October 1, 2001, through December 31, 2002, at 
$20. For telehealth services provided on or after January 1 of each 
subsequent calendar year, the telehealth originating site facility fee 
is increased by the percentage increase in the MEI as defined in 
section 1842(i)(3) of the Act. The MEI increase for 2012 is 0.6 
percent. Therefore, for CY 2012, the payment amount for HCPCS code 
Q3014 (Telehealth originating site facility fee) is 80 percent of the 
lesser of the actual charge or $24.24. The Medicare telehealth 
originating site facility fee and MEI increase by the applicable time 
period is shown in Table 14.
[GRAPHIC] [TIFF OMITTED] TR28NO11.018

III. Addressing Interim Final Relative Value Units (RVUs) From CY 2011, 
Proposed RVUs From CY 2012, and Establishing Interim RVUs for CY 2012

    Under section 1848(c)(2)(B) of the Act, we review and make 
adjustments to RVUs for physicians' services at least once every 5 
years. Under section 1848(c)(2)(K) of the Act (as added by section 3134 
of the Affordable Care Act), we are required to identify and revise 
RVUs for services identified as potentially misvalued. Section 
1848(c)(2)(K)(iii) specifies that the Secretary may use existing 
processes to receive recommendations on the review and appropriate 
adjustment of potentially misvalued services. In accordance with 
section 1848(c)(2)(K)(iii) of the Act, we develop and propose 
appropriate adjustments to the RVUs, taking into account the 
recommendations provided by the AMA RUC, the Medicare Payment Advisory 
Commission (MedPAC), and others. To respond to concerns expressed by 
MedPAC, the Congress, and other stakeholders regarding the accuracy of 
values for services under the PFS, the AMA RUC has used an annual 
process to systematically identify, review, and provide CMS with 
recommendations for revised work values for many existing potentially 
misvalued services.
    For many years, the AMA RUC has provided CMS with recommendations 
on the appropriate relative values for PFS services. In recent years 
CMS and the AMA RUC have taken increasingly significant steps to 
address potentially misvalued codes. In addition to the Five-Year 
Reviews of Work, over the past several years CMS and the AMA RUC have 
identified and reviewed a number of potentially misvalued codes on an 
annual basis based on various identification screens for codes at risk 
for being misvalued, such as codes with high growth rates, codes that 
are frequently billed together in one encounter, and codes that are 
valued as inpatient services but that are now predominantly performed 
as outpatient services. This annual review of work RVUs and direct PE 
inputs for potentially misvalued codes was further bolstered by the 
Affordable Care Act mandate to examine potentially misvalued codes, 
with an emphasis on the following categories specified in section 
1848(c)(2)(K)(ii) (as added by section 3134 of the Affordable Care 
Act):
     Codes and families of codes for which there has been the 
fastest growth.
     Codes or families of codes that have experienced 
substantial changes in practice expenses.
     Codes that are recently established for new technologies 
or services.
     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 which have not been subject to review since the 
implementation of the RBRVS (the ``Harvard-valued'' codes).
     Other codes determined to be appropriate by the Secretary. 
(For example, codes for which there have been shifts in the site-of-
service (site-of-service anomalies).)
    In addition to providing recommendations to CMS for work RVUs, the 
AMA RUC's Practice Expense Subcommittee reviews, and then the AMA RUC 
recommends, direct PE inputs (clinical labor, medical supplies, and 
medical equipment) for individual services. To guide the establishment 
of malpractice RVUs for new and revised codes before each Five-Year 
Review of Malpractice, the AMA RUC also provides crosswalk 
recommendations, that is, ``source'' codes with a similar specialty mix 
of practitioners furnishing the source code and the new/revised code.
    CMS reviews the AMA RUC recommendations on a code-by-code basis. 
For AMA RUC recommendations regarding physician work RVUs, we determine 
whether we agree with the recommended work RVUs for a service (that is, 
whether we agree the valuation is accurate). If we disagree, we 
determine an alternative value that

[[Page 73105]]

better reflects our estimate of the physician work for the service. 
Because of the timing of the CPT Editorial Panel decisions, the AMA RUC 
recommendations, and our rulemaking cycle, we publish these work RVUs 
in the PFS final rule with comment period as interim final values, 
subject to public comment. Similarly, we assess the AMA RUC's 
recommendations for direct PE inputs and malpractice crosswalks, and 
establish PE and malpractice interim final values, which are also 
subject to comment. We note that, with respect to interim final PE 
RVUs, the main aspect of our valuation that is open for public comment 
for a new, revised, or potentially misvalued code is the direct PE 
inputs and not the other elements of the PE valuation methodology, such 
as the indirect cost allocation methodology, that also contribute to 
establishing the PE RVUs for a code. The public comment period on the 
PFS final rule with comment period remains open for 60 days after the 
rule is issued.
    If we receive public comments on the interim final work RVUs for a 
specific code indicating that refinement of the interim final work 
value is warranted based on sufficient information from the commenters 
concerning the clinical aspects of the physician work associated with 
the service (57 FR 55917), we refer the service to a refinement panel, 
as discussed in further detail in section III.B.1.a. of this final rule 
with comment period.
    In the interval between closure of the comment period and the 
subsequent year's PFS final rule with comment period, we consider all 
of the public comments on the interim final work, PE, and malpractice 
RVUs for the new, revised, and potentially misvalued codes and the 
results of the refinement panel, if applicable. Finally, we address the 
interim final RVUs (including the interim final direct PE inputs) by 
providing a summary of the public comments and our responses to those 
comments, including a discussion of any changes to the interim final 
work or malpractice RVUs or direct PE inputs, in the following year's 
PFS final rule with comment period. We then typically finalize the 
direct PE inputs and the work, PE, and malpractice RVUs for the service 
in that year's PFS final rule with comment period, unless we determine 
it would be more appropriate to continue their interim final status for 
another year and solicit further public comment.

A. Methodology

    We conducted a clinical review of each code identified in this 
section and reviewed the AMA RUC recommendations for work RVUs, time to 
perform the ``pre-,'' ``intra-,'' and ``post-'' service activities, as 
well as other components of the service which contribute to the value. 
Our clinical review generally includes, but is not limited to, a review 
of information provided by the AMA RUC, medical literature, public 
comments, and comparative databases, as well as a comparison with other 
codes within the Medicare PFS, consultation with other physicians and 
healthcare care professionals within CMS and the Federal Government, 
and the views based on clinical experience of the physicians on the 
clinical team. We also assessed the AMA RUC's methodology and data used 
to develop the recommendations and the rationale for the 
recommendations. As we noted in the CY 2011 PFS final rule with comment 
period (75 FR 73328 through 73329), the AMA RUC uses a variety of 
methodologies and approaches to assign work RVUs, including building 
block, survey data, crosswalk to key reference or similar codes, and 
magnitude estimation. The building block methodology is used to 
construct, or deconstruct, the work RVU for a CPT code based on 
component pieces of the code. Components may include pre-, intra-, or 
post-service time and post-procedure visits, or, when referring to a 
bundled CPT code, the components could be considered to be the CPT 
codes that make up the bundled code. Magnitude estimation refers to a 
methodology for valuing physician work that determines the appropriate 
work RVU for a service by gauging the total amount of physician work 
for that service relative to the physician work for similar service 
across the physician fee schedule without explicitly valuing the 
components of that work. The resource-based relative value system 
(RBRVS) has incorporated into it cross-specialty and cross-organ system 
relativity. This RBRVS requires assessment of relative value and takes 
into account the clinical intensity and time required to perform a 
service. In selecting which methodological approach will best determine 
the appropriate value for a service we consider the current physician 
work and time values, AMA RUC-recommended physician work and time 
values, and specialty society physician work and time values, as well 
as the intensity of the service, all relative to other services. During 
our clinical review to assess the appropriate values for the codes we 
developed systematic approaches to address particular areas of concern. 
Specifically, the application of work budget neutrality within clinical 
categories of CPT codes, CPT codes with site-of-service anomalies, and 
CPT codes for services typically furnished on the same day as an 
evaluation and management visit. A description of those methodologies 
follows.
[cir] Work Budget Neutrality for Clinical Categories of CPT Codes
    We apply work budget neutrality to hold the aggregate work RVUs 
constant within a set of clinically related CPT codes, while 
maintaining the relativity of values for the individual codes within 
that set. In some cases, when the CPT coding framework for a clinically 
related set of CPT codes is revised by the creation of new CPT codes or 
existing CPT codes are revalued, the aggregate work RVUs recommended by 
the AMA RUC within that clinical category of CPT codes may change, 
although the actual physician work associated with the services has not 
changed. When this occurs, we may apply work budget neutrality to 
adjust the work RVUs of each clinically related code so that the sum of 
the new/revised code work RVUs (weighted by projected utilization) for 
a set of CPT codes would be the same as the sum of the current work 
RVUs (weighted by projected utilization) for that set of codes.
    When the AMA RUC recommends work RVUs for new or revised CPT codes, 
we review the work RVUs and adjust or accept the recommended values as 
appropriate, making note of whether any estimated changes in aggregate 
work RVUs would result from true change in physician work, or from 
structural coding changes. We then determine whether the application of 
budget neutrality within sets of codes is appropriate. If the aggregate 
work RVUs would increase without a corresponding true increase in 
physician work, we generally view this as an indication that an 
adjustment to ensure work budget neutrality within the set of CPT codes 
is warranted. Ensuring work budget neutrality is an important principle 
so that structural coding changes are not unjustifiably redistributive 
among PFS services.
    In the CY 2011 PFS final rule with comment period, there were four 
sets of clinically related CPT codes where we believed that the 
application of work budget neutrality was appropriate. These codes were 
in the areas of paraesophageal hernia procedures, esophageal motility 
and high resolution esophageal pressure topography, skin excision and 
debridement, and obstetrical care. The CY 2011 interim final values and 
CY 2012 final values for these services are discussed in section

[[Page 73106]]

III.B.1.b. of this final rule with comment period.
[cir] 23-Hour Stay Site-of-Service Anomaly CPT Codes
    Since CY 2009, CMS and the AMA RUC have reviewed a number of CPT 
codes that have experienced a change in the typical site-of-service 
since the original valuation of the codes. Specifically, these codes 
were originally furnished in the inpatient setting, but Medicare claims 
data show that the typical case has shifted to being furnished in the 
outpatient setting. As we discussed in the CY 2011 PFS final rule with 
comment period (75 FR 73221) and the CY 2012 PFS proposed rule (76 FR 
42797), when the typical case for a service has shifted from the 
inpatient setting to an outpatient or physician's office setting, we do 
not believe the inclusion of inpatient hospital visits in the post-
operative period is appropriate. Additionally, we believe that it is 
reasonable to expect that there have been changes in medical practice 
for these services, and that such changes would represent a decrease in 
physician time or intensity or both.
    For CY 2009 and CY 2010, the AMA RUC reviewed and recommended--RVUs 
for 40 CPT codes we identified as being potentially misvalued under the 
Secretary's discretion to identify other categories of potentially 
misvalued codes (see section II.B. of this final rule) because a site-
of-service anomaly exists. In the CYs 2009 and 2010 PFS final rule with 
comment period (73 FR 69883 and 74 FR 61776 through 61778, 
respectively), we indicated that although we would accept the AMA RUC 
valuations for these CPT codes on an interim basis, we had ongoing 
concerns about the methodology used by the AMA RUC to value these 
services, and in the CY 2010 PFS final rule with comment period (74 FR 
61777) we encouraged the AMA RUC to utilize the building block 
methodology when revaluing services with site-of-service anomalies. In 
the CY 2011 final rule with comment period (75 FR 73221), we requested 
that the AMA RUC re-examine the site-of-service anomaly codes and 
adjust the work RVU, times, and post-service visits to reflect those 
typical of a service furnished in an outpatient or physician's office 
setting.
    Following this request, the AMA RUC re-reviewed these site-of-
service anomaly codes and recommended work RVUs to us for these 
services. Of the 40 CPT codes on the CY 2009 and CY 2010 site-of-
service anomaly codes lists, 1 CPT code was not re-reviewed, as it was 
addressed in the CY 2011 PFS final rule with comment period. Ten of the 
remaining 39 site-of-service anomaly codes were addressed in the Fourth 
Five-Year Review of Work (76 FR 32410), and the remaining 29 CPT codes 
were addressed in the CY 2012 PFS proposed rule (76 FR 72798 through 
42809). In addition, several other CPT codes were identified as having 
site-of-service anomalies and were addressed in the Fourth Five-Year 
Review of Work (76 FR 32410). In the CY 2012 PFS proposed rule (76 FR 
42797), we stated that we would respond to public comments and adopt 
final work RVUs for these codes in the CY 2012 PFS final rule with 
comment period.
    When Medicare claims data show that the typical setting for a CPT 
code has shifted from the inpatient setting to the outpatient setting, 
we believe that the work RVU, time, and post-service visits of the code 
should reflect a service furnished in the outpatient setting. For 
nearly all of the codes with site-of-service anomalies, the 
accompanying survey data suggest they are ``23-hour stay'' outpatient 
services. As we discussed in detail in the CY 2011 PFS final rule with 
comment period (75 FR 73226), the Fourth Five-Year Review of Work (76 
FR 32410) and the CY 2012 PFS proposed rule (76 FR 42798), the ``23-
hour stay service'' is a term of art describing services that typically 
have lengthy hospital outpatient recovery periods. For these 23-hour 
stay services, the typical patient is at the hospital for less than 24-
hours, but often stays overnight at the hospital. Unless a treating 
physician has written an order to admit the patient as an inpatient, 
the patient is considered for Medicare purposes to be a hospital 
outpatient, not an inpatient, and our claims data support that the 
typical 23-hour stay service is billed as an outpatient service.
    As we discussed in the Five-Year Review of Work (76 FR 32410), and 
CY 2012 PFS proposed rule (76 FR 42798) we believe that the values of 
the codes that fall into the 23-hour stay category should not reflect 
work that is typically associated with an inpatient service. However, 
as we stated in the CY 2011 PFS final rule with comment period (75 FR 
73226 through 73227), while the patient receiving the outpatient 23-
hour stay service remains a hospital outpatient, the patient would 
typically be cared for by a physician during that lengthy recovery 
period at the hospital. While we do not believe that post-procedure 
hospital visits would be at the inpatient level since the typical case 
is an outpatient who would be ready to be discharged from the hospital 
in 23-hours or less, we believe it is generally appropriate to include 
the intra-service time of the inpatient hospital visit in the immediate 
post-service time of the 23-hour stay code under review. In addition, 
we indicated that we believe it is appropriate to include a half day, 
rather than a full day, of a discharge day management service.
    We finalized this policy in the CY 2011 PFS final rule with comment 
period (75 FR 73226 through 73227) and applied this methodology when 
valuing 23-hour stay codes in the Fourth Five-Year Review and CY 2012 
PFS proposed rule in order to ensure the consistent and appropriate 
valuation of the physician work for these services. A full description 
of our methodology for revaluing the site-of-service anomaly codes can 
be found in the Fourth Five-Year Review of Work (76 FR 32410), and the 
CY 2012 PFS proposed rule (76 FR 72798 through 42809). In brief, where 
Medicare claims data suggested a site-of-service anomaly (more than 50 
percent of the Medicare PFS utilization is outpatient) and the AMA 
RUC's recommended value continued to include inpatient visits in the 
post-operative period, we removed any post-procedure inpatient visits 
or subsequent observation care services included in the AMA RUC-
recommended values for these codes and adjusted the physician times 
accordingly. We also consistently included the value of a half day of 
discharge management service.
    Comment: We received a number of comments that disagreed with the 
premise of the 23-hour site-of-service anomaly methodology arguing that 
the acuity of the patient as captured in patient status (inpatient or 
outpatient) is not an indicator of physician work. The commenters 
believe that if the procedure or service is typically performed in the 
hospital and the patient is kept overnight and/or admitted, the RUC 
should evaluate it as an inpatient service or procedure using the 
hospital visits as a work proxy regardless of the patient's status. 
Commenters noted that while physicians generally write admitting 
orders, the hospital frequently makes the determination to categorize a 
patient's stay as inpatient or outpatient, and that hospital attention 
to patient status is being driven by a fear of Recover Audit Contractor 
(RAC) audits and not clinical judgment. Commenters asserted that the 
AMA RUC-recommended values for site-of-service anomaly codes are based 
on physician specialty survey responses which identified the actual 
work performed in caring for these patients and that the physician work 
to treat the patient does not vary with regard to how the patient is 
later categorized for facility billing purposes as an inpatient or 
outpatient.

[[Page 73107]]

    Response: As we noted in the CY 2011 PFS final rule with comment 
period (75 FR 73227), these services would be considered for hospital 
outpatient services, not inpatient services, for the typical patient, 
and our claims data support that the typical 23-hour stay service, 
usually a scheduled procedure, is billed as an outpatient service. 
Since the typical patient commonly remains in the hospital for less 
than 24 hours, even if the stay extends overnight, and the patient's 
encounter is relatively brief, the acuity of the typical patient and 
the risk of adverse outcomes is less than that of a typical inpatient 
who is admitted to the hospital, and we continue to believe that the 
intensity of the physician work involved in caring for the hospital 
outpatient immediately following a 23-hour stay procedure is less than 
for a hospital inpatient. The typical hospital outpatient for a 23-hour 
procedure has fewer comorbidities, less complications, lower risk and 
therefore less need for intensive nursing and physician care of the 
kind provided during an inpatient admission. Medicare pays for an 
inpatient admission when, among other criteria, the physician 
responsible for the care of the patient has an expectation of a minimum 
24-hour stay and the patient requires an inpatient level of care, based 
on assessment of several factors including the severity of the signs 
and symptoms and the probability of an adverse event (Medicare Benefit 
Policy Manual 100-02, chapter 1, section 10).
    There are many reasons that services move from the inpatient to 
outpatient setting that reduce the overall risk of adverse outcomes and 
intensity of physician work. Services frequently move to the outpatient 
setting when the technique matures; that is, the risk-benefit ratio of 
the service is better understood and the efficacy of the service is 
more clearly established. Services may move to the outpatient setting 
because technological advances decrease the need for intensive 
monitoring and allow the discharge of sicker patients. Patient-
controlled analgesia, for example, reduces the iterative assessment and 
response work necessary to manage post-operative pain and allows 
earlier discharge. Technological advances in the procedures themselves 
also reduce the risk of adverse outcomes. Electronic imaging and 
robotic surgery both allow procedures to be performed with increasingly 
smaller incisions, decreasing post-operative morbidity. Accordingly, we 
believe that, generally, the valuation of the codes that fall into the 
23-hour stay category should not reflect physician work that is 
typically associated with an inpatient service.
[cir] CPT Codes Typically Billed on the Same Day as an Evaluation and 
Management Service
    Since CY 2011, we have reviewed a number of CPT codes that are 
typically billed with an E/M service on the same day. In cases where a 
service is typically furnished with an E/M service on the same day, we 
believe that there may be overlap between the two services in some of 
the activities conducted during the pre- and post-service times of the 
procedure code. Accordingly, in cases where the most recently available 
Medicare PFS claims data show the code is typically billed with an E/M 
visit on the same day, and where we believe that the AMA RUC did not 
adequately account for overlapping activities in the recommended value 
for the code, we systematically adjusted the physician times for the 
code to account for the overlap. After clinical review of the pre- and 
post-service work, we believe that at least one-third of the physician 
time in both the pre-service evaluation and post-service period is 
duplicative of the E/M visit in this circumstance. Therefore, for a 
number of CPT codes discussed in the following paragraphs, we adjusted 
the pre-service evaluation portion of the pre-service time to two-
thirds of the AMA RUC-recommended time. Similarly, we also adjusted the 
post-service time to two-thirds of the AMA RUC-recommended time.

B. Finalizing CY 2011 Interim and CY 2012 Proposed Values for CY 2012

    In this section, we address the interim final values published in 
Appendix C of the CY 2011 PFS final rule with comment period (75 FR 
73810 through 73815), as subsequently corrected in the January 11, 2011 
(76 FR 1670) correction notice; the proposed values published in the 
Fourth Five-Year Review of Work (76 FR 32410 through 32813); and the 
proposed values published in the CY 2012 PFS proposed rule (76 FR 42772 
through 42947). We discuss the results of the CY 2011 multi-specialty 
refinement panel, respond to public comments received on specific 
interim final and proposed values (including direct PE inputs), and 
address the other new, revised, or potentially misvalued codes with 
interim final or proposed values. In section II.B.3. of this final rule 
with comment period, we emphasized the importance of reviewing the full 
value for services (the work, PE, and malpractice components of codes) 
that are identified as part of the potentially misvalued code 
initiative in order to maintain appropriate relativity and key 
relationships within the components of codes. The final CY 2012 direct 
PE database that lists the direct PE inputs is available on the CMS Web 
site under the downloads for the CY 2012 PFS final rule with comment 
period at: https://www.cms.gov/PhysicianFeeSched/. The final CY 2011 
work, PE, and malpractice RVUs are displayed in Addendum B to this 
final rule with comment period at: https://www.cms.gov/PhysicianFeeSched/.
1. Finalizing CY 2011 Interim and Proposed Work Values for CY 2012
a. Refinement Panel
(1) Refinement Panel Process
    As discussed in the 1993 PFS final rule with comment period (57 FR 
55938), we adopted a refinement panel process to assist us in reviewing 
the public comments on CPT codes with interim final work RVUs for a 
year and in developing final work values for the subsequent year. We 
decided that the panel would be comprised of a multispecialty group of 
physicians who would review and discuss the work involved in each 
procedure under review, and then each panel member would individually 
rate the work of the procedure. We believed that establishing the panel 
with a multispecialty group would balance the interests of the 
specialty societies who commented on the work RVUs with the budgetary 
and redistributive effects that could occur if we accepted extensive 
increases in work RVUs across a broad range of services.
    Historically, the refinement panel's recommendation to change a 
work value or to retain the interim value had hinged solely on the 
outcome of a statistical test on the ratings (an F-test of panel 
ratings among the groups of participants). Depending on the number and 
range of codes that specialty societies request be subject to 
refinement through their public comments, we establish refinement 
panels with representatives from 4 groups of physicians: Clinicians 
representing the specialty most identified with the procedures in 
question; physicians with practices in related specialties; primary 
care physicians; and contractor medical directors (CMDs). Typically, 
the refinement panels meet in the summer prior to the promulgation of 
the PFS final rule with comment period that finalizes the RVUs for the 
codes. Typical panels have included 8 to 10 physicians across the 4 
groups. Over time, we found that the statistical test

[[Page 73108]]

used to evaluate the RVU ratings of individual panel members became 
less reliable as the physicians in each group have tended to select a 
previously discussed value, rather than developing a unique value, 
thereby reducing the observed variability needed to conduct a robust 
statistical test. In addition, reliance on values developed using the 
F-test also occasionally resulted in rank order anomalies among 
services (that is, a more complex procedure is assigned lower RVUs than 
a less complex procedure).
    Recently, section 1848(c)(2)(K) of the Act (as added by section 
3134 of the Affordable Care Act) authorized the Secretary to review 
potentially misvalued codes and make appropriate adjustments to the 
relative values. In addition, MedPAC has encouraged CMS to critically 
review the values assigned to the services under the PFS. As detailed 
in the CY 2011 PFS final rule with comment period (75 FR 73306), we 
believed the refinement panel process may provide an opportunity to 
review and discuss the proposed and interim final work RVUs with a 
clinically diverse group of experts, which then provides informed 
recommendations. Therefore, we indicated that we would like to continue 
the refinement process, including the established composition that 
includes representatives from the 4 groups of physicians, but with 
administrative modification and clarification. We eliminated the use of 
the statistical F-test and instead indicated that we would base revised 
RVUs on the median work value of the individual panel members' ratings. 
We believed this approach would simplify the refinement process 
administratively, while resulting in a final panel recommendation that 
reflects the summary opinion of the panel members based on a commonly 
used measure of central tendency that is not significantly affected by 
outlier values. We clarified that we have the final authority to set 
the RVUs, including making adjustments to the work RVUs resulting from 
refinement process if policy concerns warrant modification (75 FR 
73307).
    Due to the major increase in the number of codes reviewed by the CY 
2011 multi-specialty refinement panels as compared to refinement panels 
in recent years, and public comments requesting more clarification 
about the refinement panels, we would like to remind readers that 
historically the refinement panels were not intended to review every 
code for which we did not propose to accept the AMA RUC-recommended 
RVUs. Furthermore, in the past, we have asked commenters requesting 
refinement panel review to submit sufficient information concerning the 
clinical aspects of the work assigned for a service to indicate that 
referral to the refinement panel is warranted (57 FR 55917). We note 
that the majority of the information that was presented during the CY 
2011 refinement panel discussions was duplicative of the information 
provided to the AMA RUC during its development of recommendations. As 
detailed in section III.B. of this final rule with comment period, we 
consider information and recommendations from the AMA RUC when 
assigning proposed and interim final RVUs to services. To facilitate 
the selection of services for the refinement panels, we would like to 
remind specialty societies seeking reconsideration of proposed or 
interim final work RVUs, including consideration by a refinement panel, 
to specifically request refinement panel review in their public comment 
letters. Also, we request that commenters seeking refinement panel 
review of work RVUs submit supporting information that has not already 
been considered by the AMA RUC in creating recommended work RVUs or by 
CMS in assigning proposed and interim final work RVUs. In order to make 
the best use of the agency's limited resources and avoid inefficient 
duplicative consideration of information by the AMA RUC, CMS, and then 
a refinement panel, CMS will more critically evaluate the need to refer 
codes to refinement panels in future years, specifically considering 
any new information provided by commenters.
(2) Proposed and Interim Final Work RVUs Referred to the Refinement 
Panels in CY 2011
    We referred to the CY 2011 refinement panel 143 CPT codes with 
proposed or interim final work values for which we received comments 
from least one major specialty society. For these 143 CPT codes, all 
commenters requested increased work RVUs. For ease of discussion, we 
will be referring to these services as ``refinement codes.'' Consistent 
with past practice (62 FR 59084), we convened a multi-specialty panel 
of physicians to assist us in the review of the comments. The panel was 
moderated by our physician advisors, and consisted of the following 
voting members:
     One to two clinicians representing the commenting 
organization;
     One to two primary care clinicians nominated by the 
American Academy of Family Physicians and the American College of 
Physicians;
     One to three contractor medical directors (CMDs); and
     One to two clinicians with practices in related 
specialties who were expected to have knowledge of the services under 
review.
    The panel process was designed to capture each participant's 
independent judgment and his or her clinical experience which informed 
and drove the discussion of the refinement code during the refinement 
panel proceedings. Following the discussion, each voting participant 
rated the physician work of the refinement code. Ratings were obtained 
individually and confidentially, with no attempt to achieve consensus 
among the panel members.
    As finalized in the CY 2011 PFS final rule with comment period (75 
FR 73307), we reviewed the ratings from each panel member and 
determined the median value for each service that was reviewed by the 
refinement panels. Our decision to convene multi-specialty panels of 
physicians has historically been based on our need to balance the 
interests of those who commented on the interim final work values with 
the redistributive effects that would occur in other specialties if the 
work values were changed. We refer readers to section III.I. of the CY 
2011 PFS final rule with comment period for a full discussion of the 
changes to the refinement process that we adopted for refinement panels 
beginning in CY 2011.
    We note that individual codes, including those that were reviewed 
by the refinement panels, and their final work RVUs are discussed in 
section III.B.1.b. of this final rule with comment period. Also, see 
Table 15 for the refinement panel ratings and the final work RVUs for 
the codes that were reviewed by the CY 2011 multi-specialty refinement 
panels.
b. Code-Specific Issues
    In this section we discuss all code families for which we received 
a comment on an interim final physician work value in CY 2011 PFS final 
rule with comment period, on a proposed value in the Fourth Five-Year 
Review of Work, or on a proposed value in the CY 2012 PFS proposed 
rule. Table 15 provides a comprehensive list of all final values.
    (1) Integumentary System: Skin, Subcutaneous, and Accessory 
Structures (CPT codes 10140, 10160, 11010-11012, 11042-11047) and 
Active Wound Care Management (CPT codes 97597 and 97598)
    For the Fourth Five-Year Review, we identified CPT codes 10140 and 
10160

[[Page 73109]]

as potentially misvalued though the Harvard-Valued--Utilization > 
30,000 screen. The related specialty societies surveyed their members, 
and the AMA RUC issued recommendations to us for the Fourth Five-Year 
Review.
    As detailed in the Fourth Five-Year Review, for CPT codes 10140 
(Incision and drainage of hematoma, seroma or fluid collection) and 
10160 (Puncture aspiration of abscess, hematoma, bulla, or cyst) we 
believed that the current (CY 2011) work RVUs continued to accurately 
reflect the work of these services. For CPT code 10140 we proposed a 
work RVU of 1.58, and for CPT code 10160 we proposed a work RVU of 
1.25. The AMA RUC recommended maintaining the current work RVUs for 
these services as well. For CPT code 10160, the AMA RUC recommended a 
pre-service evaluation time of 7 minutes. As CPT codes 10160 and 10140 
have the same description of pre-service work, we believed that they 
should have the same pre-service time. Therefore, we reduced the pre-
service evaluation time for CPT code 10140 from 17 minutes to 7 
minutes, to match the pre-service evaluation time of CPT code 10160 (76 
FR 32431 through 32432).
    Comment: In its public comment to CMS on the Fourth Five-Year 
Review, the AMA RUC wrote that there was a typographical error in its 
recommendation to CMS for CPT code 10160, and the correct pre-service 
evaluation time for that code should have been 17 minutes. The AMA RUC 
wrote that they agree that CPT codes 10140 and 10160 should have the 
same pre-service time, but that both should have 17 minutes of pre-
service evaluation time, and not 7 minutes. They requested that CMS 
change the pre-service time for both CPT codes 10140 and 10160.
    Response: In response to comments, we re-reviewed CPT codes 10140 
and 10160. After reviewing the descriptions of pre-service work and the 
recommended pre-service time packages, we agree that both CPT codes 
10140 and 10160 should have 17 minutes of pre-service evaluation work. 
We thank the AMA RUC for pointing out this time error. For CPT code 
10140 we are finalizing a work RVU of 1.50 and a pre-service evaluation 
time of 17 minutes. For CPT code 10160 we are finalizing a work RVU of 
1.25 and a pre-service evaluation time of 17 minutes. CMS time 
refinements can be found in Table 16.
    CPT codes 11043 (Debridement; skin, subcutaneous tissue, and 
muscle) and 11044 (Debridement; skin, subcutaneous tissue, muscle, and 
bone) were identified by the AMA RUC's Five-Year Review Identification 
Workgroup through the ``site-of-service anomalies'' potentially 
misvalued codes screen in September 2007. The AMA RUC recommended that 
the entire family of services described by CPT codes 11040 through 
11044, and 97597 and 97598 be referred to the CPT Editorial Panel 
because the current descriptors allowed reporting of the codes for a 
bimodal distribution of patients and also to better define the terms 
excision and debridement. The CPT Excision and Debridement Workgroup 
and the CPT Editorial Panel reviewed and revised the CPT code 
descriptors for CPT codes 11042 through 11047, along with the 
descriptors for other related CPT codes. Following the descriptor 
changes, the related specialty societies surveyed their members, 
gathering information for work RVU and time recommendations for these 
services, and the AMA RUC issued recommendations to us for CY 2011. We 
reviewed these CPT codes, and published the CY 2011 interim final work 
RVUs in the CY 2011 PFS final rule with comment period (75 FR 73329 
through 73330). Based on comments received during the public comment 
period, we referred CPT codes 11042 through 11047 to the CY 2011 multi-
specialty refinement panel for further review.
    As detailed in the CY 2011 PFS final rule with comment period, for 
CPT code 11042 (Debridement, subcutaneous tissue (includes epidermis 
and dermis, if performed); first 20 sq cm or less) we assigned a work 
RVU of 0.80 on an interim final basis for CY 2011. After clinical 
review, we believed that the then current (2010) work RVU of 0.80 
continued to accurately reflect the work of the service relative to 
similar services, including reference CPT code 16020 (Dressings and/or 
debridement of partial-thickness burns, initial or subsequent; small 
(less than 5 percent total body surface area)). We found no grounds to 
increase the work RVU for this service. The AMA RUC recommended a work 
RVU of 1.12 for CPT code 11042 for CY 2011 (75 FR 73329).
    Comment: Commenters disagreed with the interim final work RVU of 
0.80 assigned to CPT code 11042 by CMS and believe that the AMA RUC-
recommended work RVU of 1.12 is more appropriate for this service. 
Commenters reiterated the arguments that the specialty societies 
presented to the AMA RUC that--(1) the 2005 survey for this code did 
not include podiatry, which is now the dominant specialty for this 
service; and (2) the original Harvard valuation of this code was based 
on a 10-day global period, and that since the original valuation CMS 
has reduced the work RVU and changed global period for this service 
through the refinement process in previous years. Commenters also noted 
that, while CMS indicated that the AMA RUC-recommended work RVU of 1.12 
was based on an old surveyed value, the AMA RUC agreed that a work RVU 
of 1.12 continues to be an appropriate valuation for this service 
relative to other services.
    Response: Based on the comments received, we referred CPT code 
11042 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU for CPT code 11042 was 
1.01. As a result of the refinement panel ratings and our clinical 
review, we are assigning a work RVU of 1.01 to CPT code 11042 as the 
final value for CY 2012.
    As detailed in the CY 2011 PFS final rule with comment period, for 
CPT code 11045 (Debridement, subcutaneous tissue (includes epidermis 
and dermis, if performed); each additional 20 sq cm, or part thereof 
(List separately in addition to code for primary procedure)) we 
assigned a work RVU of 0.33 on an interim final basis for CY 2011. CPT 
code 11045 is the add-on code to CPT code 11042. To obtain the 
appropriate RVU for this add-on service, we started with the CMS-
assigned CY 2011 interim final RVU of 0.80 for the primary code (CPT 
code 11042), and removed the work RVUs corresponding to the pre- and 
post-service time (add-on codes generally do not have pre- and post-
service time because that work is captured by the primary service). The 
AMA RUC recommended a work RVU of 0.69 for CPT code 11045 for CY 2011 
(75 FR 73329 and 73330).
    Comment: Commenters disagreed with the interim final work RVU of 
0.33 assigned to CPT code 11045 by CMS and believe that the AMA RUC-
recommended work RVU of 0.69 is more appropriate for this service. 
Commenters noted that removing the RVUs related to the pre- and post-
service time results in a work RVU of 0.34, not a work RVU of 0.33. 
Commenters offered reference service CPT code 36575 (Repair of tunneled 
or non-tunneled central venous access catheter, without subcutaneous 
port or pump, central or peripheral insertion site) to support the AMA 
RUC-recommended work RVU of 0.69.
    Response: Based on the comments received, we referred CPT code 
11045 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU for CPT code 11045 was 
0.50. As a result of the refinement panel ratings and our

[[Page 73110]]

clinical review, we are assigning a work RVU of 0.50 to CPT code 11045 
as the final value for CY 2012.
    As detailed in the CY 2011 PFS final rule with comment period, for 
CPT code 11043 (Debridement, muscle and/or fascia (includes epidermis, 
dermis, and subcutaneous tissue, if performed); first 20 sq cm or less) 
we assigned a work RVU of 2.00 on an interim final basis for CY 2011. 
After clinical review, we believed that the work RVU of 2.00 (the 
survey low) appropriately reflected the AMA RUC-recommended decrease in 
clinical time and follow-up E/M visits attributed to the performance of 
this service (CY 2010 work RVU=3.14). The AMA RUC recommended a work 
RVU of 3.00 for CPT code 11043 for CY 2011. (75 FR 73330)
    Comment: Commenters disagreed with the interim final work RVU of 
2.00 assigned to CPT code 11043 by CMS and believe that the AMA RUC-
recommended work RVU of 3.00 is more appropriate for this service. 
Commenters noted that the AMA RUC-recommended value for this service 
corresponds to the specialty society survey 25th percentile value, and 
that the CMS-assigned value corresponds to the survey low. Commenters 
asserted that CMS ignored the survey results by selecting the survey 
low, noting that the low of any survey could be construed as an outlier 
and that they believe it is not appropriate to value services based on 
the survey low.
    Response: Based on the comments received, we referred CPT code 
11043 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU for CPT code 11043 was 
2.70. As a result of the refinement panel ratings and our clinical 
review, we are assigning a work RVU of 2.70 to CPT code 11043 as the 
final value for CY 2012.
    As detailed in the CY 2011 PFS final rule with comment period, for 
CPT code 11046 (Debridement, muscle and/or fascia (includes epidermis, 
dermis, and subcutaneous tissue, if performed); each additional 20 sq 
cm, or part thereof (List separately in addition to code for primary 
procedure)) we assigned a work RVU of 0.70 on an interim final basis 
for CY 2011. After clinical review, we believed that the work RVU of 
0.70 (the survey low) appropriately placed this add-on service relative 
to its primary service, CPT code 11043. The AMA RUC recommended a work 
RVU of 1.29 for CPT code 11046 for CY 2011 (75 FR 73330).
    Comment: Commenters disagreed with the interim final work RVU of 
0.70 assigned to CPT code 11046 by CMS and believe that the AMA RUC-
recommended work RVU of 1.29 is more appropriate for this service. 
Commenters noted that the AMA RUC-recommended value for this service 
corresponds to the specialty society survey 25th percentile value, and 
that the CMS-assigned value corresponds to the survey low. Commenters 
asserted that CMS ignored the survey results by selecting the survey 
low, noting that the low of any survey could be construed as an outlier 
and that they believe it is not appropriate to value services based on 
the survey low.
    Response: Based on the comments received, we referred CPT code 
11046 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU for CPT code 11046 was 
1.03. As a result of the refinement panel ratings and our clinical 
review, we are assigning a work RVU of 1.03 to CPT code 11046 as the 
final value for CY 2012.
    As detailed in the CY 2011 PFS final rule with comment period, for 
CPT code 11044 (Debridement, bone (includes epidermis, dermis, 
subcutaneous tissue, muscle and/or fascia, if performed); first 20 sq 
cm or less) we assigned a work RVU of 3.60 on an interim final basis 
for CY 2011. After clinical review, we believed that the work RVU of 
3.60 (the survey low) appropriately reflected the AMA RUC-recommended 
decrease in clinical time and follow-up E/M visits attributed to the 
performance of this service (CY 2010 work RVU = 4.26). The AMA RUC 
recommended a work RVU of 4.56 for CPT code 11044 for CY 2011 (75 FR 
73330).
    Comment: Commenters disagreed with the interim final work RVU of 
3.60 assigned to CPT code 11044 by CMS and believe that the AMA RUC-
recommended work RVU of 4.56 is more appropriate for this service. 
Commenters noted that the AMA RUC-recommended value for this service 
corresponds to the specialty society survey 25th percentile value, and 
that the CMS-assigned value corresponds to the survey low. Commenters 
asserted that CMS ignored the survey results by selecting the survey 
low, noting that the low of any survey could be construed as an outlier 
and that they believe it is not appropriate to value services based on 
the survey low.
    Response: Based on the comments received, we referred CPT code 
11044 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU for CPT code 11044 was 
4.10. As a result of the refinement panel ratings and our clinical 
review, we are assigning a work RVU of 4.10 to CPT code 11044 as the 
final value for CY 2012.
    As detailed in the CY 2011 PFS final rule with comment period, for 
CPT code 11047 (Debridement, bone (includes epidermis, dermis, 
subcutaneous tissue, muscle and/or fascia, if performed); each 
additional 20 sq cm, or part thereof (List separately in addition to 
code for primary procedure)) we assigned a work RVU of 1.20 on an 
interim final basis for CY 2011. After clinical review, we believed 
that the work RVU of 1.20 (the survey low) appropriately placed this 
add-on service relative to its primary service, CPT code 11044. The AMA 
RUC recommended a work RVU of 2.00 for CPT code 11047 for CY 2011 (FR 
75 73330).
    Comment: Commenters disagreed with the interim final work RVU of 
1.20 assigned to CPT code 11047 by CMS and believe that the AMA RUC-
recommended work RVU of 2.00 is more appropriate for this service. 
Commenters noted that the AMA RUC-recommended value for this service 
corresponds to the specialty society survey 25th percentile value, and 
that the CMS-assigned value corresponds to the survey low. Commenters 
asserted that CMS ignored the survey results by selecting the survey 
low, noting that the low of any survey could be construed as an outlier 
and that they believe it is not appropriate to value services based on 
the survey low.
    Response: Based on the comments received, we referred CPT code 
11047 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU for CPT code 11047 was 
1.80. As a result of the refinement panel ratings and our clinical 
review, we are assigning a work RVU of 1.80 to CPT code 11047 as the 
final value for CY 2012.
    As stated in the CY 2011 PFS final rule with comment period (75 FR 
73338 and 73339), in the excision and debridement set of services, for 
CY 2011 two CPT codes were deleted and the services that would 
previously have been reported under those CPT codes are now reported 
under two revised codes, CPT code 97597 (Debridement (e.g., high 
pressure waterjet with/without suction, sharp selective debridement 
with scissors, scalpel and forceps), open wound, (e.g., fibrin, 
devitalized epidermis and/or dermis, exudate, debris, biofilm), 
including topical application(s), wound assessment, use of a whirlpool, 
when performed and instruction(s) for ongoing care, per session, total 
wound(s) surface area; first 20 sq cm or less) and CPT code 97598 
(Debridement (e.g., high pressure waterjet with/without suction, sharp 
selective debridement with scissors, scalpel and

[[Page 73111]]

forceps), open wound, (e.g., fibrin, devitalized epidermis and/or 
dermis, exudate, debris, biofilm), including topical application(s), 
wound assessment, use of a whirlpool, when performed and instruction(s) 
for ongoing care, per session, total wound(s) surface area; each 
additional 20 sq cm, or part thereof (List separately in addition to 
code for primary procedure)). These two revised wound management CPT 
codes were restructured from describing two distinct procedures 
reported based on wound surface area to describing a primary procedure 
and an add-on procedure that would additionally be reported in the case 
of a larger wound. We believed that the increase in aggregate work RVUs 
that would results from adoption of the RVUs, even after the 
adjustments we later discuss, did not represent a true increase in 
physician work for these procedures. Therefore, we believed it would be 
appropriate to apply work budget neutrality to this set of CPT codes. 
After reviewing the HCPAC-recommended work RVUs, we adjusted the work 
RVU for CPT code 97598, and then applied work budget neutrality to 
these two CPT codes, which constitute the set of clinically related CPT 
codes. The work budget neutrality factor for these 2 codes was 0.9422. 
The HCPAC-recommended work RVU, CMS-adjusted work RVU prior to the 
budget neutrality adjustment, and the CY 2011 interim final work RVU 
for these skin excision and debridement codes (CPT code 97597 and 
97598) follow.
[GRAPHIC] [TIFF OMITTED] TR28NO11.019

    As mentioned previously, and detailed in the CY 2011 PFS final rule 
with comment period, for CPT code 97598, we disagreed with the HCPAC-
recommended work RVU of 0.40 and assigned alternate work RVU of 0.25 
prior to the application of work budget neutrality (75 FR 73330). We 
believed that a work RVU of 0.25, which corresponded to the specialty 
society survey low value, was consistent with new CY 2011 add-on CPT 
code 11045 (Debridement, subcutaneous tissue (includes epidermis and 
dermis, if performed); each additional 20 sq cm, or part thereof (List 
separately in addition to code for primary procedure)), which we 
assigned a CY 2011 interim final work RVU of 0.33.
    Comment: Commenters agreed with the application of work budget 
neutrality to CPT codes 97597 and 97598, and requested that the codes 
be re-reviewed after additional claims data are available to ensure 
that the frequency estimates were accurate. Commenters disagreed with 
the CMS pre-budget neutrality work RVU of 0.25 for CPT code 97598 and 
believed that the HCPAC-recommended work RVU of 0.40 is more 
appropriate for this service. Commenters asserted that CMS ignored the 
survey results by selecting the survey low, noting that the low of any 
survey could be construed as an outlier and that they believe it is not 
appropriate to value services based on the survey low.
    Response: Based on the comments received, we referred CPT codes 
97597 and 97598 to the CY 2011 multi-specialty refinement panel for 
further review. The refinement panel result supported the HCPAC-
recommended work RVU of 0.54 for CPT code 97597, and the CY 2011 
interim final work RVU of 0.24 for CPT code 97598. Thus, the refinement 
panel result was in line with the pre-work budget neutrality work RVU 
for CPT code 97597, and in line with the post-work budget neutrality 
interim final work RVU for CPT code 97598. The refinement panel does 
not consider whether the application of work budget neutrality is 
appropriate. We continue to believe that these codes, although 
revalued, do not constitute new physician work in aggregate and that 
the application of work budget neutrality is appropriate for this set 
of clinically related CPT codes. Additionally, we continue to believe 
that the post-budget neutrality work RVU of 0.24, which was supported 
by the refinement panel result, appropriately reflects the work 
associated with CPT code 97598. After consideration of the public 
comments, refinement panel results, and our clinical review, we are 
finalizing a work RVU of 0.51 for CPT code 97597, and a work RVU of 
0.24 for CPT code 97598 for CY 2012.
    For CY 2012, we received no comments on the CY 2011 interim final 
work RVUs of 4.19 for CPT code 11010 (Debridement including removal of 
foreign material at the site of an open fracture and/or an open 
dislocation (e.g., excisional debridement); skin and subcutaneous 
tissues), 4.94 for CPT code 11011(Debridement including removal of 
foreign material at the site of an open fracture and/or an open 
dislocation (e.g., excisional debridement); skin, subcutaneous tissue, 
muscle fascia, and muscle), and 6.87 for CPT code 11012 (Debridement 
including removal of foreign material at the site of an open fracture 
and/or an open dislocation (e.g., excisional debridement); skin, 
subcutaneous tissue, muscle fascia, muscle, and bone). We believe these 
values continue to be appropriate and are finalizing them without 
modification.
(2) Integumentary System: Nails (CPT Codes 11732 and 11765)
    For the Fourth Five-Year Review, we identified CPT codes 11732 and 
11765 as potentially misvalued through the Harvard-Valued--Utilization 
> 30,000 screen. The related specialty societies surveyed their members 
and the HCPAC issued recommendations to us for the Fourth Five-Year 
Review.
    As detailed in the Fourth Five-Year Review, for CPT code 11732 
(Avulsion of nail plate, partial or complete, simple; each additional 
nail plate (List separately in addition to code for primary procedure)) 
we proposed a work RVU of 0.44, with refinement to time. After clinical 
review, we believed that Multi-Specialty Points of Comparison (MPC) CPT 
code 92250 (Fundus photography with interpretation and report) (work 
RVU=0.44) provided an appropriate crosswalk work RVU for this service. 
We found the HCPAC-recommended decrease in work RVU (from 0.57 to 0.48) 
to be too small, given the recommended reduction in time (from 20 
minutes total time in CY 2011, to a recommended 15 minutes total time 
for CY 2012). Additionally, we refined the post-service time for CPT 
code 11732 to 1 minute, as we believed the HCPAC-recommended 3 minutes 
of post-service time was excessive for this service (76 FR 32459).

[[Page 73112]]

    Comment: Commenters disagreed with the proposed work RVU of 0.44 
assigned to CPT code 11732 by CMS and believe that the HCPAC-
recommended work RVU of 0.48 is more appropriate for this service. 
Commenters recommended that CMS utilize the survey data when valuing 
this service rather than a crosswalk methodology. Commenters noted that 
the HCPAC reviewed the survey results from 38 podiatrists and 
determined that the 25th percentile work RVU of 0.48 and total time of 
15 minutes appropriately accounted for the work and times required to 
perform this service. Commenters wrote that the CMS-proposed reduction 
in time is unsubstantiated. Commenters reiterated the HCPAC 
recommendation stating that a work RVU of 0.48 maintains the proper 
relativity between this service and the comparison services of CPT 
codes 99212 (Level 3 Office or other outpatient visit) (work RVU=0.48) 
and 11721 (Debridement of nail(s) by any method(s); 6 or more) (work 
RVU=0.54). Commenters requested that CMS accept the HCPAC-recommended 
work RVU of 0.48 and total time of 15 minutes for CPT code 11732.
    Response: Based on the comments received, we re-reviewed CPT code 
11732. We continue to believe that a work RVU of 0.44 accurately 
reflects the work associated with this service and that MPC CPT code 
92250 is a more appropriate comparison for this service than CPT codes 
99212 or 11721. After reviewing the pre-, intra-, and post- service 
work descriptions for this service, we continue to believe that the 
recommended pre-, and intra- service times are appropriate, and that 
the recommended post-service time is in excess of the time required to 
perform the post-service work. We continue to believe that one minute 
of post-service time is sufficient for this add-on service. We are 
maintaining the interim final value, assigning a work RVU of 0.44, with 
13 minutes of total time, as the final values for CPT code 11732 for CY 
2012. A complete listing of the times associated with this, and all CPT 
codes, is available on the CMS Web site at: https://www.cms.gov/PhysicianFeeSched/.
    As detailed in the Fourth Five-Year Review, for CPT code 11765 
(Wedge excision of skin of nail fold (e.g., for ingrown toenail)) we 
proposed a work RVU of 1.22, with refinement to time. We compared CPT 
code 11765 with reference CPT code 11422 (Excision, benign lesion 
including margins, except skin tag (unless listed elsewhere), scalp, 
neck, hands, feet, genitalia; excised diameter 1.1 to 2.0 cm) (work 
RVU=1.68), as well as with CPT code 10060 (Incision and drainage of 
abscess (e.g., carbuncle, suppurative hidradenitis, cutaneous or 
subcutaneous abscess, cyst, furuncle, or paronychia); simple or single) 
(work RVU=1.22), and determined that CPT code 10060 was more similar in 
intensity and complexity to CPT code 11765, and thus the better 
comparator code for this service. We also refined the time associated 
with this service. CPT code 11765 is typically performed on the same 
day as an E/M visit and we believed that some of the activities 
conducted during the pre- and post- service times of the procedure code 
and the E/M visit overlap. To account for this overlap, we reduced the 
pre-service evaluation and post-service time by one third (76 FR 32459 
through 32460).
    Comment: Commenters disagreed with the CMS-proposed work RVU of 
1.22 for CPT code 11765, and believe that the HCPAC-recommended work 
RVU of 1.48 is more appropriate for this service. Commenters noted that 
CMS crosswalked the work RVU for CPT code 11765 to CPT code 10060 
which, commenters pointed out, is a revised code for this final rule 
with comment period. Commenters urged CMS not to crosswalk CPT code 
11765 to CPT code 10060 as it is currently under review and asserted 
that a direct crosswalk is inappropriate when survey data are 
available. Commenters also noted that CY 2009 Medicare claims data 
indicated that CPT code 11765 was billed with an E/M less than 50 
percent of the time. Commenters reiterated the HCPAC recommendation 
stating that the HCPAC compared CPT code 11765 to CPT code 11422 (work 
RVU=1.68) and noted that the reference code requires more intra-service 
time, more mental effort and judgment, and higher psychological stress 
to perform as compared to CPT code 11765. Ultimately, commenters 
requested that CMS accept the HCPAC- recommended work RVU of 1.48 and 
total time of 59 minutes for CPT code 11765.
    Response: Based on comments received, we re-reviewed CPT code 
11765. We continue to believe that a work RVU of 1.22 accurately 
reflects the work associated with this service and that CPT code 10060 
is an appropriate comparison code for this service. CPT code 10060 
recently was surveyed by related specialty society members, and the AMA 
RUC issued a new recommendation to us for CPT code 10060 for this final 
rule with comment period. As discussed in section III.C.1.b. of this 
final rule with comment period after a review of the new survey results 
for 10060, the AMA RUC recommendations, and our clinical review, we are 
setting an interim final work RVU of 1.22 for CPT code 10060 for CY 
2012, which maintains the current (CY 2011) value. As such, we believe 
that the crosswalk work RVU of 1.22 for CPT code 11765 continues to be 
appropriate. For CY 2012 we are finalizing a work RVU of 1.22 for CPT 
code 11765.
    In response to commenters' note that CPT code 11765 was billed with 
an E/M visit less than 50 percent of the time and therefore, should not 
be subject to the same day E/M adjustment, we looked back at the data 
for this and all other Five-Year Review CPT codes for which we proposed 
a same day E/M adjustment. When calculating the number of times a 
service was performed on the same day as an E/M visit, we likely over-
counted multiple billings of a CPT code and depending on billing 
patterns may have identified an inappropriately higher percentage of 
same day E/M billing. We recalculated these figures using combined 
occurrence pairs, which we now believe is the more appropriate measure 
of same day E/M billings for this purpose. We note that for all codes 
reviewed for the CY 2012 PFS proposed and final rules we used figures 
calculated based on combined occurrence pairs. After recalculating the 
same day E/M percentages for the Five-Year Review CPT codes, CPT code 
11765 was the only code that had originally appeared to be billed over 
50 percent with an E/M visit, but under the revised calculation is 
billed less than 50 percent with an E/M visit. As such, we no longer 
believe it is appropriate to remove one-third of the pre-service 
evaluation time and one-third of the post service time to account for 
the E/M visit on the same date of service. For CY 2012 we are 
finalizing the HCPAC-recommended times of 17 minutes of pre-service 
evaluation time, 1 minute of pre-service positioning time, 5 minutes of 
pre-service dress, scrub and wait time, 5 minutes of intra-service 
time, 5 minutes of post-service time, and 1 CPT code 99212 office or 
outpatient visit for CPT code 11765.
(3) Integumentary System: Repair (Closure) (CPT Codes 11900-11901, 
12001-12018, 12031-12057, 13100-13101, 15120-15121, 15260, 15732, 
15823)
    In the Fourth Five-Year Review, we identified CPT codes 12031, 
12051, 13101, and 15260 as potentially misvalued through the Harvard-
Valued--Utilization > 30,000 screen. CPT codes 12032-12047, 12052-
12057, and 13100 were added as part of the

[[Page 73113]]

family of services for review. Also for the Fourth Five-Year Review, we 
identified CPT code 15732 as potentially misvalued through the site-of-
service anomaly screen. CPT code 15121 was added as part of the family 
of services for review. The related specialty societies surveyed their 
members and the AMA RUC issued recommendations to us for the Fourth 
Five-Year Review.
    As detailed in the Fourth Five-Year Review, in its review of this 
set of CPT codes, the AMA RUC determined that the original Harvard-
valued work RVUs led to compression within these code families, which 
the AMA RUC recommended correcting by reducing the relative values for 
the smallest wound size repair codes and increasing the relative values 
for the larger wound size repair codes. Our proposed range of work RVUs 
for these CPT codes, while not as large as the range that would have 
resulted from our adoption of the AMA RUC recommendations, nevertheless 
is greater than the current range of work RVUs for the variety of wound 
sizes described by the repair codes (76 FR 32431 through 32432).
    For CPT codes 12035 (Repair, intermediate, wounds of scalp, 
axillae, trunk and/or extremities (excluding hands and feet); 12.6 cm 
to 20.0 cm), 12036 (Repair, intermediate, wounds of scalp, axillae, 
trunk and/or extremities (excluding hands and feet); 20.1 cm to 30.0 
cm), 12037 (Repair, intermediate, wounds of scalp, axillae, trunk and/
or extremities (excluding hands and feet); over 30.0 cm), 12045 
(Repair, intermediate, wounds of neck, hands, feet and/or external 
genitalia; 12.6 cm to 20.0 cm), 12046 (Repair, intermediate, wounds of 
neck, hands, feet and/or external genitalia; 20.1 cm to 30.0 cm), 12047 
(Repair, intermediate, wounds of neck, hands, feet and/or external 
genitalia; over 30.0 cm), 12055 (Repair, intermediate, wounds of face, 
ears, eyelids, nose, lips and/or mucous membranes; 12.6 cm to 20.0 cm), 
12056 (Repair, intermediate, wounds of face, ears, eyelids, nose, lips 
and/or mucous membranes; 20.1 cm to 30.0 cm), and 12057 (Repair, 
intermediate, wounds of face, ears, eyelids, nose, lips and/or mucous 
membranes; over 30.0 cm), we proposed specialty society survey 25th 
percentile work RVU. The specialty society surveys of physicians 
furnishing these services indicated that the work of performing these 
services has not changed in the past 5 years and that the complexity of 
patients requiring the services has also remained constant. The survey 
25th percentile work RVUs were somewhat higher than the current work 
RVUs for CPT codes 12035-12037, 12045-12047, 12055 and 12056, and the 
survey 25th percentile work RVU for CPT code 12057 was the same as the 
current (CY 2011) work RVU. Given the survey responses indicating that 
the work and complexity of these services has remained constant, we 
believed that adopting the survey 25th percentile work RVUs both 
accurately valued the work associated with these services and addressed 
the compression-related relativity adjustments recommended by the AMA 
RUC. For CPT codes 12035-12037, 12045-12047, and 12055-12057 the AMA 
RUC recommended the survey median work RVU, which was higher than both 
the current (CY 2011) and survey 25th percentile work RVU. The CY 2011, 
CMS-proposed survey 25th percentile, and AMA RUC-recommended survey 
median work RVUs are listed in Table 15.
    In addition to proposed changes to the AMA RUC-recommended work 
RVUs for these services, we also refined the time associated with 
several of these services. For CPT codes 12036, and 12055-12057, we 
found the survey median intra-service times to be more appropriate for 
these services than the higher AMA RUC-recommended times. After 
clinical review, we believed that these survey median times accurately 
reflected the work associated with performing these services. We also 
refined the times for CPT codes 12046 and 12047. Both CPT codes are 
typically performed on the same day as an E/M visit and we believed 
that some of the activities conducted during the pre- and post- service 
times of the procedure code and the E/M visit overlap. To account for 
this overlap, we reduced the pre-service evaluation and post-service 
time by one third.
    Comment: Commenters disagreed with the CMS-proposed work RVUs for 
CPT codes 12035-12037, 12045-12047, and 12055-12057, and recommended 
that CMS accept the AMA RUC-recommended work RVUs. Commenters believe 
that the proposal by CMS to select the survey 25th percentile survey 
value for these codes is flawed because, since these codes are not 
provided by a homogeneous group of providers, selecting a consistent 
survey marker does not ensure relativity between services. Commenters 
noted that CMS stated that use of the 25th percentile survey value was 
appropriate because survey respondents indicated that there has not 
been a change in complexity in these services in the last 5 years. 
Commenters asserted that a change in work was irrelevant, and that the 
revaluation was intended to correct compression within the family of 
services. Furthermore, commenters noted that the proposed work RVUs 
create rank order anomalies between similar services.
    Commenters also disagreed with the CMS-proposed reductions in time 
for CPT codes 12036, 12046-12047, and 12055-12057, and recommended that 
CMS accept the AMA RUC-recommended times. For CPT codes 12036, 12055, 
and 12057 commenters noted that a significant number of providers who 
do not typically perform the procedure responded to the survey, 
resulting in an artificially reduced median intra-service time. 
Commenters asserted that in this case it is more valid to utilize the 
results from the providers with experience performing this service. For 
CPT codes 12046 and 12047 commenters asserted that it was not 
appropriate for CMS to reduce the pre-evaluation and post service time 
to account for a same day E/M visit. Commenters noted that these 
services have very low utilization, and that the CMS data showing that 
these services are typically billed with an E/M may be incorrect. 
Commenters also noted that the recommended pre-service time for these 
two codes was already reduced from 19 minutes to 13 minutes so they 
believed that a further reduction was not justified.
    Response: Based on comments received, we referred CPT codes 12035-
12037, 12045-12047, and 12055-12057 to the CY 2011 multi-specialty 
refinement panel for further review. The refinement panel results 
largely supported the AMA RUC-recommended work RVUs for these services. 
However, we are going to maintain the CMS-proposed work RVUs and times 
for these services as interim, pending the AMA RUC review of the 
complex wound repair codes which we anticipate will be complete for CY 
2013. Following the receipt of the AMA RUC recommendations for the 
complex wound repair codes, we will reevaluate the work RVU and times 
for these services, especially relative to the complex wound repair 
services. With regards to the accuracy of the same day E/M data, for 
this final rule with comment period, for all the five-year review CPT 
codes, we recalculated the percentage of time they are billed with an 
E/M visit using combined occurrence pairs, as discussed under 
III.B.1.b.(2). of this final rule with comment period. Using a 5 
percent sample of CY 2009 Medicare claims data, CPT code 12046 is 
billed with an E/M visit for 50 percent of the services, and CPT code 
12047 is billed with an E/M for 60 percent of the services. Therefore, 
we continue to believe that it is appropriate to reduce the pre-service 
evaluation and post

[[Page 73114]]

service times by one-third. We recognize that these services are low 
volume and we will take this into consideration when reevaluating the 
times and work RVUs for these codes for CY 2013.
    In sum, we are holding as interim for CY 2012 the Fourth Five-Year 
Review proposed work RVUs and times for CPT codes 12035-12037, 12045-
12047, and 12055-12057 (the larger of the intermediate wound repair 
services), so we can review these services alongside the complex wound 
repair codes before finalizing their values. For clarification, we do 
not expect that the AMA RUC would resurvey these codes. For CY 2012 the 
interim work RVUs are as follows: A work RVU of 3.50 for CPT code 
12035, a work RVU of 4.23 for CPT code 12036, a work RVU of 5.00 for 
CPT code 12037, a work RVU of 3.75 for CPT code 12045, a work RVU of 
4.30 for CPT code 12046, a work RVU of 4.95 for CPT code 12047, a work 
RVU of 4.50 for CPT code 12055, a work RVU of 5.30 for CPT code 12056, 
and a work RVU of 6.00 for CPT code 12057. A complete listing of the 
times associated with these, and all CPT codes, is available on the CMS 
web site at: https://www.cms.gov/PhysicianFeeSched/.
    As detailed in the Fourth Five-Year Review, for CPT code 13100 
(Repair, complex, trunk; 1.1 cm to 2.5 cm) and 13101 (Repair, complex, 
trunk; 2.6 cm to 7.5 cm) the AMA RUC reviewed the specialty society 
survey results and determined that the current (CY 2011) work RVUs 
maintain the appropriate relativity for these services. We noted that 
the AMA RUC reviewed only two CPT codes in the complex wound repair 
family. We agreed with the AMA RUC-recommended work RVUs for these two 
services, and requested that, in order to ensure consistency, the AMA 
RUC review the entire set of codes in the complex wound repair family 
and assess the appropriate gradation of the work RVUs in this family. 
We maintained the current (CY 2011) work RVUs and times for CPT codes 
13100 and 13101 pending the AMA RUC review of the other CPT codes in 
this family (76 FR 32434 through 32435).
    Comment: Commenters requested that CMS adopt the AMA RUC-
recommended times for CPT codes 13100 and 13101. Commenters believe it 
would be unfair to ask the specialty to re-survey these services and 
that the review of other complex repair codes is unlikely to change the 
AMA RUC-recommended times for CPT code 13100 and 13101. Commenters note 
that the current (CY 2011) Harvard times are very similar to the AMA 
RUC-recommended times.
    Response: In response to comments received, we re-reviewed CPT code 
13100 and 13101. While we appreciate commenters' assertion that the 
review of other complex repair codes is unlikely to change the AMA RUC-
recommended times for CPT code 13100 and 13101, we would like to 
refrain from revising the current (CY 2011) times and work RVUs for 
these codes until we can review them alongside the other complex wound 
repair codes. In the CY 2013 PFS final rule with comment period, we 
anticipate publishing interim final values for CPT codes 13100 and 
13101 along with the other complex wound repair codes.
    In the Fourth Five-Year Review (76 FR 32435), we identified CPT 
codes 15120 and 15732 as potentially misvalued through the site-of-
service anomaly screen. CPT code 15121 was added as part of the family 
of services for AMA RUC review. In addition, we identified CPT code 
15260 as potentially misvalued through the Harvard-Valued--Utilization 
> 30,000 screen. For CPT code 15120 (Split-thickness autograft, face, 
scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, and/
or multiple digits; first 100 sq cm or less, or 1 percent of body area 
of infants and children (except 15050)), we proposed a work RVU of 
10.15 for CY 2012, which was in agreement with the AMA RUC-recommended 
work RVU for this CPT code. Because the most recent Medicare PFS claims 
data showed that CPT code 15120 is a code with a site-of-service 
anomaly, we adjusted the times in accordance with the policy discussed 
in section III.A. of this final rule with comment period. Specifically, 
we removed the current (CY 2011) 0.5 subsequent hospital care day, 
added 5 minutes to the immediate post-operative period, and reduced the 
discharge day management service to one-half. These time changes were 
reflected in the Five-Year Review physician time file available on the 
CMS Web site at: http://www.cms.gov/PhysicianFeeSched/PFSFRN/. Though 
this time refinement was listed in the physician time file, we 
unintentionally did not note this time refinement in the Fourth Five-
Year Review proposed notice text. As such, we are holding CPT code 
15120 as interim final for CY 2012, with the previously discussed AMA 
RUC-recommended work RVU of 10.15 and the site-of-service time 
refinement discussed previously. A complete listing of the times 
assigned to CPT code 15120 follow in Table 16.
    For CPT code 15732 (Muscle, myocutaneous, or fasciocutaneous flap; 
head and neck (e.g., temporalis, masseter muscle, sternocleidomastoid, 
levator scapulae)), we proposed a work RVU of 16.38 for CY 2012, with 
refinements to the time. The most recent Medicare PFS claims data 
showed that CPT code 15732 is a code with a site-of-service anomaly. 
Upon review, it was clear that this code was being billed for services 
furnished to hospital outpatients, and we had no reason to believe that 
miscoding was the main reason that outpatient settings were the 
dominant place of service for this code in historical PFS claims data. 
Therefore, in accordance with the policy discussed in section III.A. of 
this final rule with comment period, we removed the inpatient hospital 
visit, reduced the discharge day management service to one-half, and 
adjusted times. These adjustments resulted in a work RVU of 16.38.
    The AMA RUC asserted that claims data indicating that this service 
was furnished in an outpatient setting was the result of miscoding but, 
until the claims data indicate that this service typically was 
furnished in the inpatient setting (greater than 50 percent), we 
believed it was inappropriate for the service to be valued including 
inpatient E/M building blocks. We also stated that we will continue to 
monitor site-of-service utilization for this code and may consider 
reviewing the work RVU for this code again in the future if utilization 
patterns change (76 FR 32435).
    Comment: Commenters disagreed with the proposed work RVU of 16.38 
for CPT code 15732, and supported the AMA RUC-recommended work RVU of 
19.83. Commenters noted that the proposed value was derived from the 
reverse building block methodology, which removed the subsequent 
hospital care codes and reduced the full hospital discharge day code to 
a half day. Commenters stated that the service described by CPT code 
15732 is furnished in the inpatient setting, and that data showing 
otherwise are the result of miscoding. Commenters noted that education 
is still needed for this family of codes. Commenters noted that the AMA 
RUC-recommended value is more similar to the key reference code 15734 
(Muscle, myocutaneous, or fasciocutaneous flap; trunk) (work 
RVU=19.86). Commenters expressed concerns that the proposed work RVU 
will create a rank order anomaly within the family, and requested that 
CMS accept the AMA RUC-recommended work RVU of 19.83 for CPT code 
15732.
    Response: Based on comments we received, we referred CPT code 15732 
to the CY 2011 multi-specialty refinement panel for further review. The 
refinement

[[Page 73115]]

panel voted for a work RVU of 17.38 for CPT code 15732. We appreciate 
commenters' interest in physician education to alleviate the potential 
for miscoding. However, the Medicare PFS data show that this service is 
typically furnished in the outpatient setting. We do not believe it is 
appropriate for this now outpatient service to continue to reflect work 
that is typically associated with an inpatient service. As stated 
previously, we will continue to monitor site-of-service utilization for 
this code and may consider reviewing the work RVU for this code again 
in the future if utilization patterns change. In order to ensure 
consistent and appropriate valuation of physician work, we are 
upholding the application of our methodology to address 23-hour stay 
site-of-service anomalies. After consideration of the public comments, 
refinement panel results, and our clinical review, we are finalizing a 
work RVU of 16.38 for CPT code 15732 and our proposed refinements to 
physician time. CMS time refinements can be found in Table 16.
    For CY 2012, we received no comments on the CY 2011 interim final 
work RVUs for CPT codes 11900, 11901, 12001-12018, and 15823. 
Additionally, for CY 2012, we received no comments on the Fourth Five-
Year Review proposed work RVUs for CPT codes 12041-12044, 12051-12054, 
15120, 15121, and 15260. We believe these values continue to be 
appropriate and are finalizing them without modification (Table 15).
(4) Integumentary System: Destruction (CPT Codes 17250-17286)
    In the Fourth Five-Year Review (76 FR 32436), we identified CPT 
codes 17271, 17272 and 17280 as potentially misvalued through the 
Harvard-Valued--Utilization > 30,000 screen. The dominant specialty for 
this family--dermatology--identified several other codes in the family 
to be reviewed concurrently with these services and submitted to the 
AMA RUC recommendations for CPT codes 17260 through 17286. The AMA RUC 
concluded that, with the exception of one CPT code, 17284, the survey 
data validated the current values of the destruction of skin lesion 
services. We agreed with this assessment, with a few refinements to 
physician time.
    As detailed in the Fourth Five-Year Review (76 FR 32436), we 
proposed work RVUs of 1.37 for CPT codes 17270 (Destruction, malignant 
lesion (e.g., laser surgery, electrosurgery, cryosurgery, chemosurgery, 
surgical curettement), scalp, neck, hands, feet, genitalia; lesion 
diameter 0.5 cm or less); 1.54 for CPT code 17271 (Destruction, 
malignant lesion (e.g., laser surgery, electrosurgery, cryosurgery, 
chemosurgery, surgical curettement), scalp, neck, hands, feet, 
genitalia; lesion diameter 0.6 to 1.0 cm); and 2.64 for CPT code 17274 
(Destruction, malignant lesion (e.g., laser surgery, electrosurgery, 
cryosurgery, chemosurgery, surgical curettement), scalp, neck, hands, 
feet, genitalia; lesion diameter 3.1 to 4.0 cm) with refinements to 
physician time. The AMA RUC recommended a work RVU of 1.37 for CPT code 
17270, a work RVU of 1.54 for CPT code 17271, and a work RVU of 2.64 
for CPT code 17274. For CPT codes 17270, 17271, and 17274, we believed 
that the survey median intra-service times accurately reflected the 
time required to conduct the intra-service work associated with these 
services, the survey median. Therefore, for CPT code 17270, we 
increased the intra-service time from 15 minutes to 16 minutes. For CPT 
code 17271, we maintained the intra-service time of 18 minutes, the 
survey median. For CPT code 17274, we increased the intra-service time 
from 32 minutes to 33 minutes.
    Comment: In their public comment on the Fourth Five-Year Review, 
the AMA RUC noted that there was a typographical error in specialty 
society's recommendation to CMS for CPT codes 17270, 17271, and 17274, 
which the specialty society later corrected. They requested that CMS 
change the intra-service times to the AMA RUC-recommended times of 15 
minutes for CPT code 17270, the corrected 19 minutes for CPT code 
17271, and 32 minutes for CPT code 17274.
    Response: In response to comments, we re-reviewed CPT codes 17270, 
17271, and 17274. We thank the AMA RUC for pointing out this time 
error. After reviewing the descriptions of intra-service work, we agree 
that CPT codes 17270, 17271, and 17274 should have 15 minutes, 19 
minutes, and 32 minutes of intra-service physician time, respectively. 
For CPT code 17270, we are finalizing a work RVU of 1.37 and an intra-
service time of 15 minutes. For CPT code 17271, we are finalizing a 
work RVU of 1.54 and an intra-service time of 19 minutes. For CPT code 
17274, we are finalizing a work RVU of 2.64 and an intra-service time 
of 32 minutes.
    For CY 2012, we received no comments on the Fourth Five-Year Review 
proposed work RVUs for CPT codes 17250, 17260-17264, 17266, 17272, 
17273, 17276, 17280-17284, and 17286. We believe these values continue 
to be appropriate and are finalizing them without modification (Table 
15).
(5) Integumentary System: Breast (CPT Codes 19302-19357)
    In the Fourth Five-Year Review (76 FR 32437), we identified CPT 
code 19302 as potentially misvalued through the site-of-service anomaly 
screen. For CPT code 19302 (Mastectomy, partial (e.g., lumpectomy, 
tylectomy, quadrantectomy, segmentectomy); with axillary 
lymphadenectomy), we proposed a work RVU of 13.87. We agreed with the 
AMA RUC that CPT code 19302 is similar in work intensity and time to 
CPT code 38745 (Axillary lymphadenectomy; complete) (work RVU = 13.87), 
which overlaps significantly with CPT code 19302. As such, we believed 
these two procedures should have the same work RVU of 13.87. The AMA 
RUC recommended a work RVU of 13.99 for CPT code 19302 (76 FR 32437).
    Comment: Commenters disagreed with the CMS-proposed work RVU of 
13.87 for CPT code 19302, and asserted that the AMA RUC-recommended 
work RVU of 13.99 is more appropriate for this service. Commenters 
noted that we compared CPT code 19302 with CPT code 38745, which has an 
intra-service time of 90 minutes. Commenters stated that the slightly 
greater intra-service time of CPT code 19302 supports the current work 
RVU of 13.99, and request that we accept the AMA RUC-recommended work 
RVU of 13.99.
    Response: Based on the comments we received, we referred CPT code 
19302 to the CY 2011 multi-specialty refinement panel for further 
review. Refinement panel results supported the AMA RUC recommendation 
and validated the current work RVU of 13.99. As a result of the 
refinement panel ratings and our clinical review, for CY 2012 we are 
finalizing a work RVU of 13.99 for CPT code 19302.
    For CY 2012, we received no comments on the Fourth Five-Year Review 
proposed work RVU for CPT code 19357. We believe this value continue to 
be appropriate and are finalizing it without modification (Table 15).
(6) Musculoskeletal: Spine (Vertebral Column) (CPT Codes 22315, 22520-
22525, 22551, 22552, 22554, 22585, and 22851)
    In the Fourth Five-Year Review, we identified CPT code 22521 as 
potentially misvalued through the site-of-service anomaly screen. CMS 
also requested that the AMA RUC review other CPT codes in the family 
including

[[Page 73116]]

CPT codes 22520, 22522, 22523, 22524 and 22525.
    In the Fourth Five-Year Review, we proposed a work RVU of 8.01 for 
CPT code 22521 (Percutaneous vertebroplasty, 1 vertebral body, 
unilateral or bilateral injection; lumbar); a work RVU of 8.62 for CPT 
code 22523 (Percutaneous vertebral augmentation, including cavity 
creation (fracture reduction and bone biopsy included when performed) 
using mechanical device, 1 vertebral body, unilateral or bilateral 
cannulation (e.g., kyphoplasty); thoracic); and a work RVU of 8.22 for 
CPT code 22524 (Percutaneous vertebral augmentation, including cavity 
creation (fracture reduction and bone biopsy included when performed) 
using mechanical device, 1 vertebral body, unilateral or bilateral 
cannulation (e.g., kyphoplasty); lumbar). The current valuation of 
these codes includes one full discharge management day consistent with 
performance in an inpatient setting for these services. As these CPT 
codes are typically performed in the outpatient setting, the AMA RUC 
recommended, and we agreed, that the discharge management day should be 
reduced by half as this is consistent with our adjustment methodology 
for site-of-service anomaly codes. Although the AMA RUC reduced the 
discharge day management by half, it discovered that an inadvertent 
clerical error had led these codes to appear as if they had been valued 
with one full discharge management day. The AMA RUC stated that these 
codes were valued as outpatient services using only half a discharge 
management day during the 2006 Third Five-Year Review of Work (71 FR 
37271). The AMA RUC concluded that the current (CY 2011) work RVU for 
these codes should not be reduced to reflect the removal of the half 
discharge day. The AMA RUC recommended maintaining the current work RVU 
of 8.65 for CPT code 22521, 9.26 for CPT code 22523, and 8.86 for CPT 
code 22524 (76 FR 32437).
    Comment: Commenters disagreed with our proposed work RVUs of 8.01 
for CPT code 22521, 8.62 for CPT code 22523, and 8.22 for CPT code 
22524. Additionally, commenters stated that our action to reduce the 
work RVUs of codes 22521, 22523 and 22524 disregarded that the AMA RUC 
previously had accounted for the outpatient location in its 
recommendation. Moreover, commenters disagreed with CMS removing the 
value of the half discharge management day which is 0.64 of a work RVU 
from each code, and recommended that we accept the AMA RUC-recommended 
values for these three CPT codes.
    Response: Based on the public comments received, we referred CPT 
codes 22521, 22523, and 22524 to the CY 2011 multi-specialty refinement 
panel for further review. The refinement panel median work RVUs were 
8.65 for CPT code 22521, 9.04 for CPT code 22523, and 8.54 for CPT code 
22524. In response to the AMA RUC's comments on the Fourth Five-Year 
Review, we re-reviewed the Medicare PFS claims data for CPT codes 
22521, 22523, and 22524. The PFS claims data showed that these services 
were utilized in outpatient settings more than 50 percent of the time 
at the time these codes were last reviewed. These codes are not 
considered to be site-of-service anomaly codes since they were 
previously valued as outpatient services. We do not believe it would be 
appropriate to apply our site-of-service methodology of removing a half 
discharge day management (work RVU = 0.64) from the current (CY 2011) 
values in this final rule with comment period. Instead, we are 
finalizing the refinement panel median work RVUs of 8.65 for CPT code 
22521, 9.04 for CPT code 22523, and 8.54 for CPT code 22524 for CY 
2012. We received no comments on the CY 2012 proposed work RVUs for CPT 
codes 22315, 22520, 22522, and 22525. We believe these values continue 
to be appropriate and are finalizing them without modification (Table 
15).
    The AMA RUC identified CPT code 22554 (Arthrodesis, anterior 
interbody technique, including minimal discectomy to prepare interspace 
(other than for decompression); cervical below C2) through the ``Codes 
Reported Together'' potentially misvalued code screen. After review, 
the AMA RUC referred CPT code 22554 to the CPT Editorial Panel to 
create a new coding structure for this family of services. For CY 2011, 
the CPT Editorial Panel created 2 new CPT codes--22551 (Arthrodesis, 
anterior interbody, including disc space preparation, discectomy, 
osteophytectomy and decompression of spinal cord and/or nerve roots; 
cervical below C2) and 22552 (Arthrodesis, anterior interbody, 
including disc space preparation, discectomy, osteophytectomy and 
decompression of spinal cord and/or nerve roots; cervical below C2, 
each additional interspace (List separately in addition to code for 
separate procedure)--to describe fusion and discectomy of the anterior 
cervical spine.
    In the CY 2011 PFS final rule with comment period (75 FR 73331), we 
assigned a work RVU of 25.00 to CPT code 22551 on an interim final 
basis for CY 2011. The AMA RUC recommended a work RVU of 24.50. The 
specialty society requested a work RVU of 25.00. Upon review of the AMA 
RUC-recommended value and the reference codes used, it was unclear why 
the AMA RUC decided not to accept the specialty society's recommended 
work RVU of 25.00. We agreed with the specialty society and believed a 
work RVU of 25.00 was appropriate for this service. We also requested 
that the specialty society, with the AMA RUC, re-review the pre-service 
times for codes in this family since concerns were noted in the AMA RUC 
recommendation about the pre-service time for this service.
    We did not receive any public comments that disagreed with the 
interim final work values. Therefore, we are finalizing a work RVU of 
25.00 for CPT code 22551. For CY 2012, we received no comments on the 
CY 2011 interim final work RVUs for CPT codes 22552, 22554, 22585, and 
22851. We believe these values continue to be appropriate and are 
finalizing them without modification (Table 15).
(7) Musculoskeletal: Forearm and Wrist (CPT Codes 25116--25605)
    In the Fourth Five-Year Review, we identified CPT codes 25600 
(Closed treatment of distal radial fracture (e.g., Colles or Smith 
type) or epiphyseal separation, includes closed treatment of fracture 
of ulnar styloid, when performed; without manipulation) and 25605 
(Closed treatment of distal radial fracture (e.g., Colles or Smith 
type) or epiphyseal separation, includes closed treatment of fracture 
of ulnar styloid, when performed; with manipulation) as potentially 
misvalued through the Harvard-Valued--Utilization > 30,000 screen.
    As detailed in the Fourth Five-Year Review of Work, for CPT code 
25600, we proposed a work RVU of 2.64 for CY 2012. After clinical 
review, we believed that CPT code 25600 required more work than key 
reference CPT code 26600 (Closed treatment of metacarpal fracture, 
single; without manipulation, each bone), and found that CPT code 27767 
(Closed treatment of posterior malleolus fracture; without 
manipulation) (work RVU = 2.64) is similar in complexity and intensity 
to CPT code 25600. In addition to the work RVU adjustment for CPT code 
25600, we refined the time associated with this CPT code. We believed 
some of the activities conducted during the pre- and post-service times 
of the procedure code and the E/M visit overlap. Therefore, to account 
for this overlap, we refined the

[[Page 73117]]

time for CPT code 25600 by reducing the pre-service evaluation and post 
service time by one-third. Specifically, we believed that 5 minutes 
pre-service evaluation time and 7 minutes post-service time accurately 
reflect the time required to conduct the work associated with this 
service. The AMA RUC recommended that CMS continue the current work RVU 
of 2.78 for CPT code 25600 (76 FR 32438) based on the results of a 
recent survey.
    Comment: Commenters disagreed with the CMS-proposed work RVU of 
2.64 for CPT 25600 and believe that the AMA RUC-recommended work RVU of 
2.78 is more appropriate for this service. Furthermore, the commenters 
noted that the AMA RUC and the surveying specialty societies had 
already taken account of pre-operative work by reducing the specialty 
society recommended pre-service time from 9 minutes to 7 minutes. 
Commenters noted that AMA RUC submission to CMS mistakenly failed to 
allocate the 7 minutes of pre-service time between pre-service 
evaluation and pre-service positioning, and noted that they had 
intended to recommend 5 minutes of pre-service evaluation time and 2 
minutes of pre-service positioning time. They also argued that there is 
no overlapping post-operative work because the patient E/M visit would 
have been completed prior to the surgical service and thus, by 
definition, prior to the post-service period. As such, commenters 
requested that CMS accept the clarified pre-service times of 5 minutes 
for pre-service evaluation and 2 minutes for pre-service positioning, 
as well as the recommended 10 minutes of post-service time. 
Additionally, commenters noted that the AMA RUC originally valued this 
service using magnitude estimation based on comparison reference codes, 
which considers the total work of the service rather than the work of 
the component parts of the service, and requested CMS accept the AMA 
RUC-recommended work RVU of 2.78.
    Response: Based on comments received, we referred CPT code 25600 to 
the CY 2011 multi-specialty refinement panel for further review. The 
median refinement panel work RVU was 2.78. As a result of the 
refinement panel rating and our clinical review, we are assigning a 
work RVU of 2.78 to CPT code 25600 as the final value for CY 2012. In 
response to comments received regarding the times associated with CPT 
code 25600, we re-reviewed our proposed pre- and post-service minutes. 
We agree with the AMA RUC that 5 minutes of pre-service evaluation work 
adequately accounts for the time required to furnish this service and 
appropriately accounts for the E/M visit performed on the same day. 
However, for the pre-service positioning time, we believe that 1 minute 
of pre-service positioning time, rather than the revised recommendation 
of 2 minutes, is appropriate. CPT code 25605 (Closed treatment of 
distal radial fracture (e.g., Colles or Smith type) or epiphyseal 
separation, includes closed treatment of fracture of ulnar styloid, 
when performed; with manipulation) is assigned 1 minute of pre-service 
positioning time and includes manipulation, while CPT code 25600 is 
used for the same service, but without manipulation. As such, we do not 
believe that CPT code 25600 should have more pre-service positioning 
time than CPT code 25605. Therefore, for CPT code 25600, we are 
finalizing a pre-service evaluation time of 5 minutes and a pre-service 
positioning time of 1 minute.
    With regard to the post-service time, though the procedure 
described by CPT code 25600 would occur after the E/M service, after a 
review of the post-service work associated with the E/M visit and the 
procedure, we continue to believe that there is overlap, and that this 
overlap was appropriately accounted for by removing one-third of the 
post-service minutes from CPT code 25600, thereby reducing the post-
service time from 10 minutes to 7 minutes. In sum, for CY 2012 we are 
finalizing the refinement panel result median work RVUs of 2.78 and the 
following pre- and post-service times: 5 minutes pre-service evaluation 
time, 1 minute pre-service positioning time, and 7 minutes post-service 
time for CPT code 25600. CMS time refinements are listed in Table 16.
    As detailed in the Fourth Five-Year Review of Work, for CPT code 
25605, we proposed a work RVU of 6.00 for CY 2012. After clinical 
review, including comparison to CPT code 28113 (Ostectomy, complete 
excision; fifth metatarsal head), we believed that an RVU of 6.00 (the 
survey low) correctly reflected relativity across these services. The 
AMA RUC recommended a work RVU of 6.50 for CPT code 25605 for CY 2011 
(76 FR 32438). In addition to the work RVU adjustment for CPT code 
25605, we refined the time associated with this code. Recent Medicare 
PFS claims data show that this service is typically performed on the 
same day as an E/M visit. We believed that, in its time recommendation 
to us, the AMA RUC accounted for duplicate E/M work associated with the 
pre-service period, but not the post service period. To account for 
this post-service overlap, we proposed to reduced the post service time 
by one-third.
    Comment: Commenters disagreed with the proposed work RVU of 6.00 
for CPT code 25605 and believe that the AMA RUC-recommended work RVU of 
6.50 is more appropriate. In addition, commenters noted that the AMA 
RUC-recommended value for this service corresponds to the specialty 
society survey 25th percentile, whereas the CMS-assigned value 
corresponds to the survey low. Commenters noted that making a 
recommendation based on the survey low value which is potentially an 
outlier data point is not statistically sound methodology and assert 
that it is inappropriate to value services based on the survey low. 
Furthermore, the commenters noted that the AMA RUC and the surveying 
societies had already taken account of pre-operative overlap in work 
and reduced estimated times accordingly, and that there is no 
overlapping post-operative work because the patient E/M would have been 
completed prior to the surgical service and thus, by definition, prior 
to the post-service period. Commenters noted that the AMA RUC 
originally valued this service using magnitude estimation based on 
comparison reference codes, and requested CMS accept the AMA RUC-
recommended work RVU and physician time.
    Response: Based on comments received, we referred CPT code 25605 to 
the CY 2011 multi-specialty refinement panel for further review. The 
median refinement panel work RVU was 6.25. In response to comments 
received regarding the times associated with CPT code 25605, we re-
reviewed out proposed pre- and post-service minutes. We note that we 
did not propose a reduction in pre-service minutes from the AMA RUC-
recommended time, and that we did propose a one-third reduction in 
post-service minutes to account for the same day E/M visit. After a 
review of the post-service work associated with the E/M visit and the 
procedure, we continue to believe that there is overlap, and that this 
overlap was appropriately accounted for by removing one-third of the 
post-service minutes from CPT code 25605, thereby reducing the post-
service time from 20 minutes to 13 minutes. In sum, for CY 2012 we are 
finalizing the refinement panel result median work RVUs of 6.25 and the 
following pre- and post-service times: 14 minutes of pre-service 
evaluation time, 1 minute of pre-service positioning time, 5 minutes of 
pre-service dress, scrub and wait time, and 13 minutes of post-service 
time for CPT code 25605. CMS time refinements can be found in Table 50.

[[Page 73118]]

(8) Musculoskeletal: Femur (Thigh Region) and Knee Joint (CPT Codes 
27385-27530)
    In the Fourth Five-Year Review, we identified CPT codes 27385 and 
27530 as potentially misvalued through the site-of-service anomaly 
screen.
    As detailed in the Fourth Five-Year Review of Work, for CPT code 
27385 (Suture of quadriceps or hamstring muscle rupture; primary), we 
proposed a work RVU of 6.93 for CY 2012. Medicare PFS claims data 
indicated that CPT code 27385 is typically performed as an outpatient 
rather than inpatient service. In accordance with our methodology to 
address 23-hour stay and site-of-service anomalies described in section 
III.A. of this final rule with comment period, for CPT code 27385, we 
removed the hospital visit, reduced the discharge day management 
service by one-half, and increased the post-service time to 30 minutes. 
The AMA RUC recommended a work RVU of 8.11 for CPT code 27385 (76 FR 
32438). The AMA RUC reviewed the survey results from physicians who 
frequently perform this service and decided that the work required to 
perform this service had not changed. The AMA RUC recommended that this 
service be valued as a service performed predominately in the inpatient 
setting, as the survey data indicated that half of patients have an 
overnight stay.
    Comment: Commenters disagreed with the CMS-proposed work RVU of 
6.93 for CPT code 27385 and believe that that AMA RUC-recommended work 
RVU of 8.11 is more appropriate for this service. Commenters asserted 
that CPT code 27385 is not a site-of-service anomaly code because it is 
utilized more than 50 percent of the time in the inpatient setting. 
Commenters noted that the CMS value was derived from the reverse 
building block methodology, which removed the subsequent hospital care 
code and reduced the full hospital discharge day management code to a 
half day, along with the associated work RVUs and times. Commenters 
noted that the AMA RUC originally valued this service using magnitude 
estimation based on comparison reference codes, which considers the 
total work of the service rather than the work of the component parts 
of the service, and requested CMS accept the AMA RUC-recommended work 
RVU and physician time.
    Response: Based on the public comments received, we referred CPT 
code 27385 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU was 7.77 for CPT code 
27385. The current (CY 2011) work RVU for this service was developed 
when this service was typically furnished in the inpatient setting. The 
most recent Medicare PFS claims data indicates that this service is now 
typically furnished in the outpatient setting. As such, we believe that 
it is reasonable to expect that there have been changes in medical 
practice for these services, and that such changes would represent a 
decrease in physician time and intensity. However, the AMA RUC-
recommendation and refinement panel results do not reflect a decrease 
in physician work. We do not believe it is appropriate for this 
outpatient service to continue to reflect work that is typically 
associated with an inpatient service. In order to ensure consistent and 
appropriate valuation of physician work, we believe it is necessary in 
the case of CPT code 27385 to apply the methodology, described 
previously, to address 23-hour stay site-of-service anomalies. 
Therefore, we are finalizing the proposed work RVU of 6.93 for CPT code 
27385. Additionally, we are finalizing a pre-service evaluation time of 
33 minutes, a pre-service positioning time of 9 minutes, pre-service 
dress, scrub, and wait time of 15 minutes, an intra-service time of 60 
minutes, and a post-service time of 30 minutes. We are also reducing 
the hospital discharge day by 0.5 for CPT code 27385. CMS time 
refinements can be found in Table 16.
    As detailed in the Fourth Five-Year Review of Work, for CPT code 
27530 (Closed treatment of tibial fracture, proximal (plateau); without 
manipulation), we proposed a work RVU of 2.65 for CY 2012. Recent 
Medicare PFS claims data has shown that this service is typically 
performed on the same day as an E/M visit. We believed there was some 
overlap in the activities conducted during the pre- and post-service 
times between the procedure code and the E/M visit and, therefore, the 
time should not be counted twice in developing the procedure's work 
value. As described earlier in section III.A. of this final rule with 
comment period, to account for this overlap, we reduced the pre-service 
evaluation and post-service time by one-third. We believed that 5 
minutes pre-service evaluation time and 7 minutes post-service time 
accurately reflected the time required to conduct the work associated 
with this service. We also removed the 2 minutes of pre-service 
positioning time, as it does not appear from the vignette that 
positioning is required for a non-manipulated extremity.
    In order to determine the appropriate work RVU for this service 
given the time changes, we calculated the value of the extracted time 
and subtracted it from the AMA RUC-recommended work RVU. The AMA RUC 
recommended a work RVU of 2.81 for CPT code 27530 (76 FR 32438).
    Comment: Commenters disagreed with the CMS-proposed work RVU of 
2.65 for CPT code 27530 and believe that the AMA RUC-recommended work 
RVU of 2.81 is more appropriate for this service. Commenters disagree 
with CMS' use of the reverse building block methodology, which reduced 
pre- and post-service times because of overlap with same day E/M 
services. Commenters noted that the AMA RUC originally valued this 
service using magnitude estimation based on comparison reference codes, 
which considers the total work of the service rather than the work of 
the component parts of the service, and requested that CMS accept the 
AMA RUC-recommended work RVU and physician time.
    Response: Based on the public comments received, we referred CPT 
code 27530 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU was 2.76 for CPT code 
27530. In response to comments received, we reviewed the pre- and post- 
service time and work for this procedure. We continue to believe some 
of the activities conducted during the pre- and post-service times of 
the procedure code and the E/M visit overlap and should not be counted 
in developing this procedure's work value. In order to ensure 
consistent and appropriate valuation of physician work, we believe it 
is appropriate to apply the methodology, described previously for 
services typically billed in conjunction with an E/M service, and 
remove a total of 7 minutes from the AMA RUC-recommended pre- and post-
service time, which amounts to the removal of 0.16 of a work RVU as 
described previously. Therefore, we are finalizing a work RVU of 2.65 
for CPT code 27530. In addition, after reviewing the descriptions pre- 
and post-service work, we are finalizing a pre-service time of 4 
minutes, an intra-service time of 15 minutes, and a post-service time 
of 7 minutes. CMS time refinements can be found in Table 16.
(9) Musculoskeletal: Leg (Tibia and Fibula) and Ankle Joint (CPT Code 
27792)
    In the Fourth Five-Year Review, we identified CPT code 27792 (Open 
treatment of distal fibular fracture (lateral malleolus), includes 
internal fixation, when performed) as potentially

[[Page 73119]]

misvalued through the site-of-service anomaly screen. In addition, we 
proposed a work RVU of 8.75 for CPT code 27792. Medicare PFS claims 
data indicated that CPT code 27792 is typically performed in an 
outpatient setting. However, the current AMA RUC-recommended values for 
this code reflect work that is typically associated with an inpatient 
service. Therefore, in accordance with our methodology to address 23-
hour stay and site-of-service anomalies described in section III.A. of 
this final rule with comment period, for CPT code 27792, we removed the 
subsequent observation care service, reduced the discharge day 
management service by one-half, and adjusted the physician times 
accordingly. For CPT code 27792, the AMA RUC used magnitude estimation 
and recommended that the current value of this service, 9.71 RVUs, be 
maintained; and the AMA RUC replaced the current inpatient hospital E/M 
visit included in the value with a subsequent observation care service 
while maintaining a full discharge day management service (76 FR 
32439).
    Comment: Commenters disagreed with the CMS-proposed work RVU of 
8.75 for CPT code 27792 and believe that that AMA RUC-recommended work 
RVU of 9.71 is more appropriate for this service. Commenters disagreed 
with CMS' use of the reverse building block methodology, which removed 
the subsequent observation care code and reduced the full hospital 
discharge day management code to a half day, along with the associated 
work RVUs and times. Commenters noted that the AMA RUC originally 
valued this service using magnitude estimation based on comparison 
reference codes, which considers the total work of the service rather 
than the work of the component parts of the service, and requested CMS 
accept the AMA RUC-recommended work RVU and physician time.
    Response: Based on the public comments received, we referred CPT 
27792 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU was 9.71, which was 
consistent with the AMA RUC recommendation to maintain the current (CY 
2011) work RVU for CPT code 27792. The current (CY 2011) work RVU for 
this service was developed when this service was typically furnished in 
the inpatient setting. As this service is now typically furnished in 
the outpatient setting, we believe that it is reasonable to expect that 
there have been changes in medical practice for these services, and 
that such changes would represent a decrease in physician time or 
intensity or both. However, the AMA RUC-recommendation and refinement 
panel results do not reflect a decrease in physician work. We do not 
believe it is appropriate for this now outpatient service to continue 
to reflect work that is typically associated with an inpatient service. 
In order to ensure consistent and appropriate valuation of physician 
work, we believe it is appropriate to apply the methodology described 
previously to address 23-hour stay site-of-service anomalies. 
Therefore, we are finalizing a work RVU of 8.75 for CPT code 27792. In 
addition, after reviewing the descriptions of the pre- and post-service 
work, we are finalizing a pre-service evaluation time of 33 minutes, a 
pre-service positioning time of 10 minutes, a pre-service dress, scrub, 
and wait time of 15 minutes, an intra-service time of 60 minutes, and a 
post-service time of 30 minutes. We are also reducing the hospital 
discharge day by 0.5 for CPT code 27792. CMS time refinements can be 
found in Table 16.
(10) Musculoskeletal: Foot and Toes (CPT Codes 28002-28825)
    For the Fourth Five-Year Review, we identified CPT codes 28002, 
28715, 28820 as potentially misvalued though the site-of-service 
anomaly screen. CPT code 28003 was added as a part of the family of 
services for review. We also identified CPT code 28285 as potentially 
misvalued through the Harvard-Valued--Utilization > 30,000 screen. The 
related specialty societies surveyed these codes and the AMA RUC issued 
recommendations to us for the Fourth Five-Year Review of Work.
    CPT codes 28120 and 28122 were identified in 2007 by the AMA RUC 
Relativity Assessment Workgroup as potentially misvalued through the 
site-of-service anomaly screen. The related specialty societies 
surveyed these codes and the AMA RUC issued recommendations to us for 
CY 2010. As described in section III.A. of this final rule with comment 
period, we accepted these CY 2010 site-of-service anomaly code values 
on an interim basis but requested that the AMA RUC re-examine the site-
of-service anomaly codes and adjust the work RVUs, times, and post-
operative visits to reflect those typical of a service furnished in an 
outpatient or physician's office setting. The AMA RUC re-reviewed the 
survey data for these codes and issued recommendations to us for the 
Fourth Five-Year Review of Work.
    We reviewed CPT codes 28002-28003, 28120-21822, 28285, 28715, 
28820, and 28825, and published proposed work RVUs in the Fourth Five-
Year Review of Work (76 FR 32440). Based on comments received during 
the public comment period, we referred CPT codes 28002, 28120-21822, 
28285, 28715, 28820, and 28825 to the CY 2011 multi-specialty 
refinement panel for further review.
    As detailed in the Fourth Five-Year Review of Work, for CPT code 
28002 (Incision and drainage below fascia, with or without tendon 
sheath involvement, foot; single bursal space), we proposed a work RVU 
of 4.00 for CY 2012. After clinical review, including comparison to CPT 
code 58353 (Endometrial ablation, thermal, without hysteroscopic 
guidance) (work RVU=3.60), we believed that the survey low value work 
RVU of 4.00 accurately reflected the work associated with this service. 
The AMA RUC recommended a work RVU of 5.34 for CPT code 28002 for CY 
2011 (76 FR 32440).
    Comment: Commenters disagreed with the CMS-proposed work RVU of 
4.00 for CPT code 28002 and believe that the AMA RUC-recommended work 
RVU of 5.34 is more appropriate for this service. Commenters disagreed 
with the reference service put forward by CMS, and asserted that the 
AMA RUC-chosen reference service is a strong comparison code. 
Commenters noted that the AMA RUC-recommended value for this service 
corresponds to the specialty society survey 25th percentile value, and 
that the CMS-assigned value corresponds to the survey low. Commenters 
asserted that establishing a value based on the survey low, which 
potentially is an outlier data point, is not a statistically sound 
methodology, and believe that it is inappropriate to value services 
based on the survey low.
    Response: Based on the comments received, we referred CPT code 
28002 to the CY 2011 multi-specialty refinement panel for further 
review. The median refinement panel work RVU was 5.34. As a result of 
the refinement panel ratings and clinical review by CMS, we are 
assigning the AMA RUC-recommended work RVU of 5.34 to CPT code 28002 as 
the final value for CY 2012. For CY 2012, we received no comments on 
the proposed CY 2012 work RVU for CPT code 28003. We believe this value 
continues to be appropriate and are finalizing it without modification 
(Table 15).
    As detailed in the Fourth Five-Year Review of Work, for CPT code 
28120 (Partial excision (craterization, saucerization, sequestrectomy, 
or diaphysectomy) bone (e.g., osteomyelitis or bossing); talus or 
calcaneus), we proposed a work RVU of 7.31 for CY 2012. Medicare PFS 
claims data indicated that CPT code 28120 is typically performed in an 
outpatient

[[Page 73120]]

setting. However, the current and AMA RUC-recommended values for this 
code reflected work that is typically associated with an inpatient 
service. Therefore, in accordance with our methodology to address 23-
hour stay and site-of-service anomalies described previously, for CPT 
code 28120, we removed the subsequent observation care service, reduced 
the discharge day management service by one-half, and adjusted the 
physician times accordingly. The AMA RUC recommended maintaining the 
current work RVU of 8.27 for CPT code 28120 for CY 2012 (76 FR 32440).
    Comment: Commenters disagreed with the CMS-proposed work RVU of 
7.31 for CPT code 28120 and believe that the AMA RUC-recommended work 
RVU of 8.27 is more appropriate for this service. Commenters disagreed 
with CMS' use of the reverse building block methodology, which removed 
the subsequent observation care code and reduced the full hospital 
discharge management code to a half day, and the associated work RVUs 
and times. Commenters noted that the AMA RUC originally valued this 
service using magnitude estimation based on comparison reference codes, 
which considers the total work of the service rather than the work of 
the component parts of the service, and requested that CMS accept the 
AMA RUC-recommended work RVU and physician time.
    Response: Based on comments received, we referred CPT code 28120 to 
the CY 2011 multi-specialty refinement panel for further review. The 
refinement panel median work RVU was 8.27, which is consistent with the 
AMA-RUC recommendation to maintain the current work RVU for this 
service. The current (CY 2011) work RVU for this service was developed 
when this service was typically furnished in the inpatient setting. As 
this service is now typically furnished in the outpatient setting, we 
believe that it is reasonable to expect that there have been changes in 
medical practice for these services, and that such changes would 
represent a decrease in physician time or intensity or both. However, 
the AMA RUC-recommendation and refinement panel results do not reflect 
a decrease in physician work. We do not believe it is appropriate for 
this now outpatient service to continue to reflect work that is 
typically associated with an inpatient service. In order to ensure 
consistent and appropriate valuation of physician work, we believe it 
is appropriate to apply our methodology described previously to address 
23-hour stay site-of-service. After consideration of the public 
comments, refinement panel results, and our clinical review, we are 
assigning a work RVU of 7.31 to CPT code 28120 as the final value for 
CY 2012. In addition, after reviewing the descriptions pre- and post-
service work, we are finalizing a pre-service evaluation time of 33 
minutes, a pre-service positioning time of 10 minutes, a pre-service 
dress, scrub, and wait time of 15 minutes, an intra-service time of 50 
minutes, and a post-service time of 30 minutes. We are also reducing 
the hospital discharge day by 0.5 for CPT code 28120. CMS time 
refinements can be found in Table 16.
    As detailed in the Fourth Five-Year Review of Work, for CPT code 
28122 (Partial excision (craterization, saucerization, sequestrectomy, 
or diaphysectomy) bone (e.g., osteomyelitis or bossing); tarsal or 
metatarsal bone, except talus or calcaneus), we proposed a work RVU of 
6.76 for CY 2012. Medicare PFS claims data indicated that CPT code 
28122 is typically performed in an outpatient setting. However, the 
current and AMA RUC-recommended values for this code reflected work 
that is typically associated with an inpatient service. Therefore, in 
accordance with our methodology to address 23-hour stay and site-of-
service anomalies described previously, for CPT code 28122, we removed 
the subsequent observation care service, reduced the discharge day 
management service by one-half, and adjusted the physician times 
accordingly. The AMA RUC recommended maintaining the current work RVU 
of 7.72 for CPT code 28122 for CY 2012 (76 FR 32440).
    Comment: Commenters disagreed with the CMS-proposed work RVU of 
6.76 for CPT code 28122 and believe that the AMA RUC-recommended work 
RVU of 7.72 is more appropriate for this service. Commenters noted that 
the CMS value was derived from the reverse building block methodology, 
which removed the subsequent observation care code and reduced the full 
hospital discharge management code to a half day, along with the 
associated work RVUs and times. Commenters noted that the AMA RUC 
originally valued this service using magnitude estimation based on 
comparison reference codes, which considers the total work of the 
service rather than the work of the component parts of the service, and 
requested that CMS accept the AMA RUC-recommended work RVU and 
physician time.
    Response: Based on comments received, we referred CPT code 28122 to 
the CY 2011 multi-specialty refinement panel for further review. The 
refinement panel median work RVU was 7.72, which was consistent with 
the AMA RUC recommendation to maintain the current work RVU for this 
service. The current (CY 2011) work RVU for this service was developed 
when this service was typically furnished in the inpatient setting. As 
this service is now typically furnished in the outpatient setting, we 
believe that it is reasonable to expect that there have been changes in 
medical practice for these services, and that such changes would 
represent a decrease in physician time or intensity or both. However, 
the AMA RUC-recommendation and refinement panel results do not reflect 
a decrease in physician work. We do not believe it is appropriate for 
this now outpatient service to continue to reflect work that is 
typically associated with an inpatient service. In order to ensure 
consistent and appropriate valuation of physician work, we believe it 
is appropriate to apply our methodology described previously to address 
23-hour stay site-of-service. After consideration of the public 
comments, refinement panel results, and our clinical review, we are 
assigning a work RVU of 6.76 to CPT code 28122 as the final value for 
CY 2012. In addition, after reviewing the descriptions of pre- and 
post-service work, we are finalizing a pre-service evaluation time of 
33 minutes, a pre-service positioning time of 10 minutes, a pre-service 
dress, scrub, and wait time of 15 minutes, an intra-service time of 45 
minutes, and a post-service time of 30 minutes. We are also reducing 
the hospital discharge day by 0.5 for CPT code 28122. CMS time 
refinements can be found in Table 16.
    As detailed in the Fourth Five-Year Review of Work, for CPT code 
28285 (correction, hammertoe (e.g., interphalangeal fusion, partial or 
total phalangectomy), we proposed a work RVU of 4.76 for CY 2012. The 
AMA RUC recommended a work RVU of 5.62 for CPT code 28285. We disagreed 
with the AMA RUC-recommended work RVU for CPT code 28285 and believed 
that a work RVU of 4.76, the current work RVU, was more appropriate for 
this service. The majority of survey respondents indicated that the 
work of performing this service has not changed in the past 5 years (67 
percent), and that there has been no change in complexity among the 
patients requiring this service (81 percent) (76 FR 32440).
    Comment: Commenters disagreed with the CMS-proposed work RVU of 
4.76 for CPT code 28285 and believe that the AMA RUC-recommended work 
RVU of 5.62 is more appropriate for this service. Commenters contend 
that compelling evidence for changes in work, technology, and/or 
patient

[[Page 73121]]

complexity should not be restricted to the previous 5 years, and 
generally that CPT code 28285 is misvalued because there has been a 
change in the way this procedure is performed today resulting in more 
complex and more intense work as compared to 15 to 20 years ago. 
Commenters also noted that the Harvard study did not involve 
podiatrists, which were then and are now the dominant provider of this 
service.
    Response: Based on the comments received, we referred CPT code 
28285 to the CY 2011 multi-specialty refinement panel for further 
review. The median refinement panel work RVU was 5.62. As a result of 
the refinement panel ratings and clinical review by CMS, we are 
assigning a work RVU of 5.62 to CPT code 28285 as the final value for 
CY 2012.
    As detailed in the Fourth Five-Year Review of Work, for CPT code 
28715 (Arthrodesis; triple), we proposed a work RVU of 13.42 for CY 
2012. Medicare PFS claims data indicated that CPT code 28715 is 
typically performed in an outpatient setting. However, the current and 
AMA RUC-recommended values for this code reflected work that is 
typically associated with an inpatient service. Therefore, in 
accordance with our methodology to address 23-hour stay and site-of-
service anomalies described previously, for CPT code 28715, we removed 
the subsequent hospital care service, reduced the discharge day 
management service by one-half, and adjusted the physician times 
accordingly. The AMA RUC recommended maintaining the current work RVU 
of 14.60 for CPT code 28715 for CY 2012 (76 FR 32441).
    Comment: Commenters disagreed with the CMS-proposed work RVU of 
13.42 for CPT code 28715 and believe that the AMA RUC-recommended work 
RVU of 14.60 is more appropriate for this service. Commenters noted 
that the CMS value was derived from the reverse building block 
methodology, which removed the subsequent hospital care code and 
reduced the full hospital discharge management code to a half day, 
along with the associated work RVUs and time. Commenters noted that the 
AMA RUC originally valued this service using magnitude estimation based 
on comparison reference codes, which considers the total work of the 
service rather than the work of the component parts of the service, and 
requested that CMS accept the AMA RUC-recommended work RVU and 
physician time.
    Response: Based on comments received, we referred CPT code 28715 to 
the CY 2011 multi-specialty refinement panel for further review. The 
median refinement panel work RVU was 14.60, which was consistent with 
the AMA RUC-recommendation to maintain the current work RVU for this 
service. The current (CY 2011) work RVU for this service was developed 
when this service was typically furnished in the inpatient setting. As 
this service is now typically furnished in the outpatient setting, we 
believe that it is reasonable to expect that there have been changes in 
medical practice for these services, and that such changes would 
represent a decrease in physician time or intensity or both. However, 
the AMA RUC-recommendation and refinement panel results do not reflect 
a decrease in physician work. We do not believe it is appropriate for 
this now outpatient service to continue to reflect work that is 
typically associated with an inpatient service. In order to ensure 
consistent and appropriate valuation of physician work, we are believe 
it is appropriate to apply our methodology described previously to 
address 23-hour stay site-of-service. After consideration of the public 
comments, refinement panel results, and our clinical review, we are 
assigning a work RVU of 13.42 to CPT code 28715 as the final value for 
CY 2012. In addition, after reviewing the descriptions pre- and post-
service work, we are finalizing a pre-service evaluation time of 40 
minutes, a pre-service positioning time of 3 minutes, a pre-service 
dress, scrub, and wait time of 15 minutes, an intra-service time of 125 
minutes, and a post-service time of 40 minutes. We are also reducing 
the hospital discharge day by 0.5 for CPT code 28715. CMS time 
refinements can be found in Table 16.
    As discussed in the CY 2012 MPFS proposed rule, for CPT code 28725 
(Arthrodesis; subtalar) and 28730 (Arthrodesis, midtarsal or 
tarsometatarsal, multiple or transverse), we proposed work RVUs of 
11.22 for CPT code 28725, and work RVUs of 10.70 for CPT code 28730 
respectively. The most recently available Medicare claims data 
suggested that these site-of-service anomaly codes could be ``23-hour 
stay'' outpatient services. As detailed in the CY 2012 MPFS proposed 
rule, for CY 2010, CPT codes 28725 and 28730 were identified as 
potentially misvalued through the site-of-service anomaly screen and 
were reviewed by the AMA RUC. For both of these services, based on 
reference services and specialty survey data, the AMA RUC recommended 
maintaining the current (CY 2009) work RVU, which saw a slight increase 
based on the redistribution of RVUs that resulted from the CY 2010 
policy to no longer recognize the CPT consultation codes (74 FR 61775). 
The AMA RUC re-reviewed CPT codes 28725 and 28730 for CY 2012 and, 
contrary to the 23-hour stay valuation policy we finalized in the CY 
2011 PFS final rule with comment period (75 FR 73226 through 73227), 
recommended replacing the hospital inpatient post-operative visit in 
the current work values with a subsequent observation care service, 
specifically CPT code 99224 (Level 1 subsequent observation care, per 
day) and recommended maintaining the current interim value for the two 
CPT codes. Specifically, for CY 2012 the AMA RUC recommended a work RVU 
of 12.18 for CPT code 28725 and a work RVU of 12.42 for CPT code 28730 
(76 FR 42798).
    We disagreed with the AMA RUC-recommended values for CPT codes 
28725 and 28730. We believed the appropriate methodology for valuing 
these codes entails accounting for the removal of the inpatient visits 
in the work value for the site-of-service anomaly codes since these 
services are no longer typically furnished in the inpatient setting. We 
did not believe it is appropriate to simply exchange the inpatient 
post-operative visits in the original value with subsequent observation 
care visits and maintain the current work RVUs.
    Comment: Commenters stated that just because the patient may be 
discharged prior to 24-hours post-operatively does not mean that the 
post-operative visit would not include the standard pre-service and 
post-service work and instead would only include intra-service work. 
Furthermore, the commenters noted that physicians do not conduct 
shorter or less intense inpatient post-operative visits based on when 
the patient may be discharged. Commenters also stated that CMS is not 
consistent in the application of its methodology of applying intra-
service time and value only. Commenters encouraged CMS to accept the 
RUC-recommended values for 28725 and 28730.
    Response: Based on the public comments received, we referred CPT 
codes 28725 and 28730 to the CY 2011 multi-specialty refinement panel 
for further review. The refinement panel median work RVU was 12.18 for 
CPT code 28725 and 12.42 for CPT code 28730. The current (CY 2011) work 
RVUs for these services were developed based on these services being 
typically furnished in the inpatient setting. As these services are now 
typically furnished in the outpatient setting, we believe that it is 
reasonable to expect that there have been changes in medical

[[Page 73122]]

practice for these services, and that such changes would represent a 
decrease in physician time or intensity or both. However, the AMA RUC-
recommendation and refinement panel results do not reflect a decrease 
in physician work. We do not believe it is appropriate for these 
services, which are typically performed on an outpatient basis, to 
continue to reflect work that is typically associated with an inpatient 
service. In order to ensure consistent and appropriate valuation of 
physician work, we believe it is appropriate to apply our methodology 
described previously to address 23-hour stay site-of-service anomalies. 
Therefore, we are finalizing a work RVU of 11.22 for CPT code 28725 and 
a work RVU of 10.70 for CPT code 28730 with refinements to physician 
time. CMS time refinements can be found in Table 16.
    As detailed in the Fourth Five-Year Review of Work, for CPT code 
28820 (Amputation, toe; metatarsophalangeal joint), we proposed a work 
RVU of 5.82 for CY 2012. Medicare PFS claims data indicated that CPT 
code 28820 is typically performed in an outpatient setting. However, 
the current and AMA RUC-recommended values for this code reflected work 
that is typically associated with an inpatient service. Therefore, in 
accordance with our methodology described previously to address 23-hour 
stay and site-of-service anomalies, for CPT code 28820, we removed the 
subsequent hospital care service, reduced the discharge day management 
service to one-half, and adjusted the physician times accordingly. The 
AMA RUC recommended the survey median work RVU of 7.00 for CPT code 
28820 for CY 2012 (76 FR 32441).
    Comment: Commenters disagreed with the CMS-proposed work RVU of 
5.82 for CPT code 28820 and believe that the AMA RUC-recommended work 
RVU of 7.00 is more appropriate for this service. Commenters disagreed 
with CMS' use of the reverse building block methodology, which removed 
the subsequent hospital care code and reduced the full hospital 
discharge management code to a half day, as well as the associated work 
RVUs and time. Commenters noted that the AMA RUC originally valued this 
service using magnitude estimation based on comparison reference codes, 
which considers the total work of the service rather than the work of 
the component parts of the service, and requested that CMS accept the 
AMA RUC-recommended work RVU and physician time.
    Response: Based on comments received, we referred CPT code 28820 to 
the CY 2011 multi-specialty refinement panel for further review. The 
refinement panel median work RVU was 7.00, which was consistent with 
the AMA-RUC recommendation for this service. The current (CY 2011) work 
RVU for this service was developed when this service was typically 
furnished in the inpatient setting, and the CY 2012 AMA RUC 
recommendation continued to include building blocks typical of an 
inpatient service. Because we removed those building blocks, we believe 
that it is appropriate to reduce the work RVU to reflect the reduction 
in physician work, as measured by time and intensity. We do not believe 
it is appropriate for this now outpatient service to continue to 
reflect work that is typically associated with an inpatient service. In 
order to ensure consistent and appropriate valuation of physician work, 
we believe it is appropriate to apply our methodology described 
previously to address 23-hour stay site-of-service anomalies. After 
consideration of the public comments, refinement panel results, and our 
clinical review, we are assigning a work RVU of 5.82 to CPT code 28820 
as the final value for CY 2012. In addition, after reviewing the 
descriptions pre- and post- service work, we are finalizing a pre-
service evaluation time of 33 minutes, a pre-service positioning time 
of 10 minutes, a pre-service dress, scrub, and wait time of 15 minutes, 
an intra-service time of 30 minutes, and a post-service time of 30 
minutes. We are also reducing the hospital discharge day by 0.5 for CPT 
code 28820. CMS time refinements can be found in Table 16.
    As detailed in the Fourth Five-Year Review of Work, for CPT code 
28825 (Amputation, toe; interphalangeal joint), we proposed a work RVU 
of 5.37 for CY 2012. Medicare PFS claims data indicated that CPT code 
28825 is typically performed in an outpatient setting. However, the 
current and AMA RUC recommended values for this code reflected work 
that is typically associated with an inpatient service. Therefore, in 
accordance with our methodology to address 23-hour stay and site-of-
service anomalies described previously, for CPT code 28825, we reduced 
the discharge day management service to one-half, and adjusted the 
physician times accordingly. The AMA RUC recommended maintaining the 
current work RVU of 6.01 for CPT code 28825 for CY 2012 (76 FR 32441).
    Comment: Commenters disagreed with the CMS proposed work RVU of 
5.37 for CPT code 28825 and believe that the AMA RUC-recommended work 
RVU of 6.01 is more appropriate for this service. Commenters disagreed 
with CMS' use of the reverse building block methodology, which reduced 
the full hospital discharge management code to a half day, along with 
the associated work RVUs and time. Commenters noted that the AMA RUC 
originally valued this service using magnitude estimation based on 
comparison reference codes, which considers the total work of the 
service rather than the work of the component parts of the service, and 
requested that CMS accept the AMA RUC-recommended work RVU and 
physician time.
    Response: Based on comments received, we referred CPT code 28825 to 
the CY 2011 multi-specialty refinement panel for further review. The 
refinement panel median work RVU was 6.01, which was consistent with 
the AMA-RUC recommendation to maintain the current work RVU of 6.01 for 
this service. The current (CY 2011) work RVU for this service was 
developed when this service was typically furnished in the inpatient 
setting. As this service is now typically furnished in the outpatient 
setting, we believe that it is reasonable to expect that there have 
been changes in medical practice for these services, and that such 
changes would represent a decrease in physician time or intensity or 
both. However, the AMA RUC-recommendation and refinement panel results 
do not reflect a decrease in physician work. We do not believe it is 
appropriate for this now outpatient service to continue to reflect work 
that is typically associated with an inpatient service. In order to 
ensure consistent and appropriate valuation of physician work, we 
believe it is appropriate to apply our methodology described previously 
to address 23-hour stay site-of-service anomalies. After consideration 
of the public comments, refinement panel results, and our clinical 
review, we are assigning a work RVU of 5.37 to CPT code 28825 as the 
final value for CY 2012. In addition, we are finalizing a pre-service 
evaluation time of 33 minutes, a pre-service positioning time of 10 
minutes, a pre-service dress, scrub, and wait time of 15 minutes, an 
intra-service time of 30 minutes, and a post-service time of 20 
minutes. We are also reducing the hospital discharge day by 0.5 for CPT 
code 28825. CMS time refinements can be found in Table 16.
(11) Musculoskeletal: Application of Casts and Strapping (CPT codes 
29125-29916)
    In the Fourth Five-Year Review, we identified CPT code 29125 
(Application of short arm splint (forearm to hand); static), as 
potentially misvalued through the Harvard-Valued-Utilization > 30,000

[[Page 73123]]

screen. CPT codes 29126 (Application of short arm splint (forearm to 
hand); dynamic) and 29425 were added as part of the family of services 
for AMA RUC review.
    As detailed in the Fourth Five-Year Review of Work, for CPT code 
29125 (Application of short arm splint (forearm to hand); static), we 
proposed a work RVU of 0.50 for CY 2012. Medicare PFS claims data 
affirmed that this service is typically performed on the same day as an 
E/M visit. We believed some of the activities conducted during the pre- 
and post-service times of the procedure code and the E/M visit overlap 
and, therefore, should not be counted twice in developing the 
procedure's work value. As described earlier in section III.A. to 
account for this overlap, we reduced the pre-service evaluation and 
post-service time by one third. We believed that 5 minutes pre-service 
evaluation time and 3 minutes post-service time accurately reflect the 
time required to conduct the work associated with this service as 
described by the CPT code-associated specialties to the AMA RUC. The 
AMA RUC recommended maintaining the current work RVU of 0.59 for CPT 
code 29125 (76 FR 32441).
    Comment: Commenters disagreed with the CMS-proposed work RVU of 
0.50 for CPT code 29125 and believe that the AMA RUC-recommended work 
RVU of 0.59 is more appropriate. Commenters noted that the CMS value 
was derived from the reverse building block methodology, which removed 
the pre- and post-service time by one-third. Furthermore, commenters 
recommended CMS change our proposed values for this code and accept the 
RUC-recommended value as the pre-service time and values are already 
reduced to account for E/M work on the same day. Commenters noted that 
the AMA RUC originally valued this service using magnitude estimation 
based on comparison reference codes, which considers the total work of 
the service rather than the work of the component parts of the service, 
and requested that CMS accept the AMA RUC-recommended work RVU and 
physician time.
    Response: Based on the public comments received, we referred CPT 
29125 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel results agreed with the CMS-assigned work 
RVU of 0.50 for CPT code 29125. Our clinical review confirmed that this 
value reflects our methodology described previously to reduce the pre-
service evaluation and post-service time by one-third for codes for 
which there is typically a same-day E/M service. Based on the comments 
received, we re-reviewed the pre- and post-service time and work 
assigned to this service. We continue to believe that there is overlap 
in the pre- and post-service work between the E/M visit and service 
described by CPT code 29125. We believe that this overlap was 
appropriately accounted for by removing one-third of the pre-service 
evaluation minutes, and one-third of the post service minutes, thereby 
reducing the pre-service evaluation time from 7 minutes to 5 minutes, 
and the post-service time from 5 minutes to 3 minutes. Therefore, for 
CY 2012 we are finalizing a work RVU for CPT code 29125 of 0.50, with a 
pre-service evaluation time of 5 minutes, and a post-service time of 3 
minutes. CMS time refinements can be found in Table 16.
    As detailed in the Fourth Five-Year Review of Work, for CPT code 
29126 (Application of short arm splint (forearm to hand); dynamic), we 
proposed a work RVU of 0.68 for CY 2012. Medicare PFS claims data 
affirmed that this service is typically performed on the same day as an 
E/M visit. We believed some of the activities conducted during the pre- 
and post-service times of the procedure code and the E/M visit overlap 
and, therefore, should not be counted twice in developing the 
procedure's work value. As described earlier in section III.A. of this 
final rule with comment period, to account for this overlap, we reduced 
the pre-service evaluation and post-service time by one-third. The AMA 
RUC recommended maintaining the current work RVU of 0.77 for CPT code 
29126 (76 FR 32442).
    Comment: Commenters disagreed with the CMS-proposed work RVU of 
0.68 for CPT code 29126 and believe that the AMA RUC-recommended work 
RVU of 0.77 is more appropriate. Commenters noted that the CMS value 
was derived from the reverse building block methodology, which reduced 
the pre- and post service time by one-third. Furthermore, commenters 
recommended CMS change the proposed values for this code and accept the 
RUC-recommended values because, commenters asserted, the AMA RUC-
recommended pre-service time as values were already reduced to account 
for E/M work on the same day. Commenters noted that the AMA RUC 
originally valued this service using magnitude estimation based on 
comparison reference codes, which considers the total work of the 
service rather than the work of the component parts of the service, and 
requested that CMS accept the AMA RUC-recommended work RVU and 
physician time.
    Response: Based on the comments received, we referred CPT code 
29126 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU was 0.77, which supported 
the AMA RUC recommendation to maintain the current work RVU for this 
service. Based on the comments received, we re-reviewed the pre- and 
post-service time and work assigned to this service. We continue to 
believe that there is overlap in the pre- and post-service work between 
the E/M visit and service described by CPT code 29126. We believe that 
this overlap was appropriately accounted for by removing one-third of 
the pre-service evaluation minutes, and one-third of the post service 
minutes, thereby reducing the pre-service evaluation time from 7 
minutes to 5 minutes, and the post-service time from 5 minutes to 3 
minutes. We do not believe it is appropriate for the work RVU of this 
service to reflect the aforementioned overlap in pre- and post-service 
work between the E/M visit and the service described by CPT code 29126. 
Therefore, for CY 2012 we are finalizing the proposed work RVU of 0.68, 
with a pre-service evaluation time of 5 minutes, and a post-service 
time of 3 minutes. CMS time refinements can be found in Table 16.
    As detailed in the Fourth Five-Year Review, for CPT code 29515 
(Application of short leg splint (calf to foot)) we believed that the 
current (CY 2011) work RVU continued to accurately reflect the work of 
this service. For CPT code 29515 we proposed the current (CY 2011) work 
RVU of 0.73. The AMA RUC recommended maintaining the current work RVUs 
for this service as well. For CPT code 29515, the AMA RUC recommended 7 
minutes of pre-service evaluation time and 5 minutes of post-service 
time. We proposed to reduce the AMA RUC-recommended times to 5 minutes 
of pre-service evaluation time and 3 minutes of post-service time for 
CPT code 29515 (76 FR 32442).
    Comment: In its public comments to CMS on the Fourth Five-Year 
Review, the AMA RUC wrote that CMS agreed with the AMA RUC-recommended 
work RVU, but noted that CMS disagreed with the AMA RUC-recommended 
pre-service and post-service time components due to an E/M service 
typically being provided on the same day of service. Commenters 
recommended that CMS accept the AMA RUC-recommended pre-service 
evaluation time of 7 minutes and

[[Page 73124]]

immediate post-service time of 5 minutes for CPT code 29515.
    Response: Based on the comments received, we re-reviewed the pre- 
and post-service time and work assigned to this service. We continue to 
believe that there is overlap in the pre- and post-service work between 
the E/M visit and service described by CPT code 29126. We believe that 
this overlap was appropriately accounted for by removing one-third of 
the pre-service evaluation minutes, and one-third of the post service 
minutes, thereby reducing the pre-service evaluation time from 7 
minutes to 5 minutes, and the post-service time from 5 minutes to 3 
minutes. In sum, for CPT code 29515 for CY 2012, we are finalizing the 
Five-Year Review proposed and AMA RUC-recommended work RVU of 0.73, 
with a pre-service evaluation time of 5 minutes, and a post-service 
time of 3 minutes. CMS time refinements can be found in Table 16. In 
CPT code 29540 (Strapping; ankle and/or foot) was identified by the 
Five-Year Review Identification Workgroup through the HarvardValued--
Utilization > 100,000 screen. Upon review, the AMA RUC recommended this 
family of services be surveyed.
    As detailed in the CY 2011 final rule with comment period (75 FR 
73331), for CPT code 29540, we assigned an interim final work RVU of 
0.32. The HCPAC-recommended a work RVU of 0.39. The HCPAC compared the 
total time required for CPT code 29540 to CPT code 29580 (Strapping; 
Unna boot), 18 and 27 minutes, respectively, and noted that CPT code 
29540 requires less time, mental effort/judgment, technical skill and 
psychological stress than CPT code 29580. The HCPAC determined that CPT 
code 29540 was approximately 30 percent less intense and complex than 
CPT code 29580, resulting in work RVUs of 0.39 for CPT code 29540 (75 
FR 73331). We disagreed with the HCPAC-recommended work RVU for this 
service and believed work RVUs of 0.32 were appropriate. We believed 
CPT code 11720 (Debridement of nail(s) by any method(s); 1 to 5) (work 
RVUs = 0.32) was a more appropriate crosswalk (75 FR 73331).
    Comment: Commenters disagreed with the CMS-proposed work RVU of 
0.32 for CPT code 29540 and believe that the HCPAC work RVU of 0.39 is 
more appropriate for this service. Additionally, commenters supported 
HCPAC's original recommendation of 0.39 for code 29540 because they 
believe this code is more closely related to reference code 29580 (work 
RVU = 0.55). Commenters disagreed with the reference service put 
forward by CMS, and asserted that the HCPAC-chosen reference service is 
a stronger comparison code.
    Response: Based on the comments received, we referred CPT code 
29540 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU was 0.39. As a result of 
the refinement panel ratings and clinical review by CMS, we are 
assigning a work RVU of 0.39 to CPT code 29540 as the final value for 
CY 2012.
    As detailed in the CY 2011 final rule with comment period (75 FR 
73331), for CPT code 29550 (Strapping; toes), we assigned an interim 
final work RVU of 0.15. The HCPAC recommended a work RVU of 0.25. The 
HCPAC compared this service to CPT code 97762 (Checkout for orthotic/
prosthetic use, established patient, each 15 minutes) (work RVU = 
0.25), which it believed requires the same intensity and complexity to 
perform as CPT code 29550. The HCPAC recommended crosswalking the work 
RVUs for 29550 to reference CPT code 97762. The HCPAC reviewed the 
survey time and determined that 7 minutes pre-service, 5 minutes intra-
service, and 1 minute immediate post-service time were appropriate to 
perform this service. We disagreed with the HCPAC-recommended value for 
this service and believed a work RVU of 0.15, the survey low value, was 
appropriate, with 5 minutes of pre- and intra-service time and 1 minute 
of post-service time, as we believed the HCPAC-recommended pre-service 
time of 7 minutes was excessive (75 FR 73331).
    Comment: Commenters expressed concerns noting that CMS has 
recommended the interim value be set equal to the survey low, which 
they believe goes against the spirit of the surveys and in fact may be 
based on the response of an outlier, and without a reference service to 
further support the interim recommendation. Commenters agreed with the 
HCPAC request, and requested that CMS accept the HCPAC-recommended work 
RVU of 0.25 and 7 minutes pre-service time, 5 minutes intra-service 
time and 1 minute post-service time for CPT code 29550.
    Response: Based on the comments received, we referred CPT code 
29550 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU was 0.25. As a result of 
the refinement panel ratings and clinical review by CMS, we are 
assigning a work RVU of 0.25, with 5 minutes of pre- and intra-service 
time and 1 minute of post-service time, to CPT code 29550 as the final 
values for CY 2012. For CY 2012, we received no comments on the CY 2011 
interim final work RVUs for CPT codes 29914, 29915, and 29916. We 
believe these values continue to be appropriate and are finalizing them 
without modification (Table 15).
(12) Respiratory: Lungs and Pleura (CPT Codes 32405, 32851-32854, 
33255)
    We discussed CPT code 32851 (Lung transplant, single; without 
cardiopulmonary bypass) in the Fourth Five-Year Review of Work (76 FR 
32444). As noted in the proposed notice, the AMA RUC reviewed the 
survey responses and concluded that the survey 25th percentile work RVU 
of 63.00 appropriately accounted for the physician work required to 
perform this service. We disagreed with the AMA RUC-recommended work 
RVU for CPT code 32851 and upon a clinical review where we compared 
this service to other services, we concluded that a work RVU of 59.64 
was more appropriate for this service. Comparing CPT code 33255 
(Operative tissue ablation and reconstruction of atria, extensive 
(e.g., maze procedure); without cardiopulmonary bypass) (work RVU = 
29.04) with CPT code 33256 (Operative tissue ablation and 
reconstruction of atria, extensive (e.g., maze procedure); with 
cardiopulmonary bypass) (work RVU = 34.90), there is a difference in 
work RVU of 5.86. We stated that we believed this difference in work 
RVUs reflects the additional time and physician work performed while 
the patient is on cardiopulmonary bypass.
    In addition, we stated that we believed this was the appropriate 
interval in physician work distinguishing CPT code 32852 (Lung 
transplant, single; with cardiopulmonary bypass), from CPT code 32851 
(Lung transplant, single; without cardiopulmonary bypass). Since we 
proposed a work RVU of 65.05 for CPT code 32852 (see below), we 
believed a work RVU of 59.64 accurately reflects the work associated 
with CPT code 32851 and maintains appropriate relativity among similar 
services. Therefore, we proposed an alternative work RVU of 59.64 for 
CPT code 32851 for CY 2012.
    For CPT code 32852 (Lung transplant, single; with cardiopulmonary 
bypass), the AMA RUC reviewed the survey responses and concluded that 
the survey 25th percentile work RVU was too low and the median work RVU 
was too high. Therefore, the AMA RUC recommended a work RVU of 74.37 
for CPT code 32582. We disagreed with the AMA RUC-recommended work RVU 
for CPT code 32582 and believed that the survey 25th percentile value 
of a work RVU of 65.50 was more appropriate for

[[Page 73125]]

this service. Therefore, we proposed an alternative work RVU of 65.50 
for CPT code 32582 for CY 2012.
    Comment: The commenters disagreed with CMS' rationale to use the 
survey 25th percentile work RVU for CPT code 32852 and then use a 
reverse building block methodology to determine the proposed work RVUs 
for CPT code 32851. The commenters asserted that the AMA RUC considered 
and rejected the 25th percentile survey result for CPT code 32852, 
noting that the AMA RUC believed that the survey 25th percentile work 
RVU is insufficient to reflect the physician work involved in 
furnishing this service.
    Response: Based on the comments received, we referred CPT codes 
32851 and 32852 to the CY 2011 multi-specialty refinement panel for 
further review. CPT code 32851 has a current (CY 2011) work RVU of 
41.61, in the Five-Year Review we proposed a work RVU of 59.64, and the 
AMA RUC recommended a work RVU of 63.00. The median refinement panel 
work RVU was 63.00. CPT code 32852 has a current (CY 2011) work RVU of 
45.48, in the Five-Year Review we proposed a work RVU of 65.50, and the 
AMA RUC recommended a work RVU of 74.37. The median refinement panel 
work RVU was 74.37. For CPT codes 32851 and 32852, as well as the other 
CPT codes in this family, the Five-Year Review proposed work RVUs 
represent a significant increase over the current (CY 2011) work RVUs. 
We believe that the even higher AMA RUC-recommended work RVUs and 
refinement panel results would create a new higher standard of 
relativity for codes within this family that would not be appropriate 
when compared to other codes with similar physician time and intensity 
in different code families. We continue to believe the work RVUs of 
59.64 for CPT code 32851 and 65.50 for CPT code 32852, are more 
appropriate in order to preserve appropriate relativity across code 
families. Accordingly, we are assigning a work RVU of 59.64 to CPT code 
32851 and 65.50 to CPT code 32852 as final values for CY 2012.
    We discussed CPT code 32853 (Lung transplant, double (bilateral 
sequential or en bloc); without cardiopulmonary bypass) in the Fourth 
Five-Year Review of Work (76 FR 32444). As noted in the proposed notice 
the AMA RUC reviewed the survey responses and concluded that the survey 
median work RVU of 90.00 appropriately accounted for the physician work 
required to perform this service. We disagreed with the AMA RUC-
recommended work RVU for CPT code 32853 and believed that the survey 
25th percentile value of 84.48 was more appropriate for this service as 
a reflection of the time and intensity of the service in relation to 
other major surgical procedures. Therefore, we proposed an alternative 
work RVU of 84.48 for CPT code 32853 for CY 2012.
    For CPT code 32854 (Lung transplant, double (bilateral sequential 
or en bloc); with cardiopulmonary bypass), the AMA RUC reviewed the 
survey responses and concluded that the survey median work RVU of 95.00 
appropriately accounted for the physician work required to perform this 
service. We disagreed with the AMA RUC-recommended work RVU for CPT 
code 32854 and believed that the survey 25th percentile value of 90.00 
was more appropriate for this service. We stated that a work RVU of 
90.00 maintains the relativity between CPT code 32851 (Lung transplant, 
single; without cardiopulmonary bypass) and CPT code 32854, which 
describes a double lung transplant. We believed this work RVU reflects 
the increased intensity in total service for CPT code 32584 when 
compared to CPT code 32851. Therefore, we proposed an alternative work 
RVU of 90.00 for CPT code 32854 for CY 2012.
    Comment: The commenters disagreed with CMS' rationale to use the 
survey 25th percentile values for CPT codes 32853 and 32584. The 
commenters asserted that the AMA RUC recommendations were based on a 
careful and deliberate evaluation of the work involved in the provision 
of double lung transplantation, as compared with the work involved in 
other services.
    Response: Based on the comments received, we referred CPT codes 
32853 and 32854 to the CY 2011 multi-specialty refinement panel for 
further review. CPT code 32853 has a current (CY 2011) work RVU of 
50.78, in the Five-Year Review we proposed a work RVU of 84.48, and the 
AMA RUC recommended a work RVU of 90.00. The median refinement panel 
work RVU was 85.00, slightly higher than the proposed work RVU. CPT 
code 32854 has a current (CY 2011) work RVU of 54.74, in the Five-Year 
Review we proposed a work RVU of 90.00, and the AMA RUC recommended a 
work RVU of 95.00. The median refinement panel work RVU was 95.00. For 
CPT codes 32853 and 32854, as well as the other CPT codes in this 
family, the Five-Year Review proposed work RVUs represent a significant 
increase over the current (CY 2011) work RVUs. We believe that the even 
higher AMA RUC-recommended work RVUs and refinement panel results would 
create a new higher standard of relativity for codes within this family 
that would not be appropriate when compared to other codes with similar 
physician time and intensity in different code families. We continue to 
believe the work RVUs of 84.48 to CPT code 32853 and 90.00 to CPT code 
32854, are more appropriate. Accordingly, we are assigning a work RVU 
of 84.48 to CPT code 32853 and 90.00 to CPT code 32854 as final values 
for CY 2012.
    We note that CPT code 32405 (Biopsy, Lung or mediastinum) was also 
reviewed in this family for the Fourth Five-Year Review. We agreed with 
the AMA RUC's methodology and recommended value for this code. 
Accordingly, we are finalizing a work RVU of 1.93 for CPT code 32405. 
We note the CY 2012 final values for the codes in this family are 
summarized in Table 15.
(13) Cardiovascular: Heart and Pericardium (CPT Codes 33030-37766)
    We discussed CPT code 33030 (Pericardiectomy, subtotal or complete; 
without cardiopulmonary bypass) in the Fourth Five-Year Review of Work 
(76 FR 32444) where we noted the AMA RUC reviewed the survey responses 
and concluded that the survey median work RVUs of 39.50 for CPT code 
33030 appropriately accounted for the work required to perform this 
service.
    We disagreed with the AMA RUC-recommended work RVUs for CPT code 
33030. Following comparison with similar codes, we believed that the 
survey 25th percentile value of 36.00 was more appropriate for this 
service. Therefore, we proposed an alternative work RVUs of 36.00 for 
CPT code 33030 for CY 2012.
    Comment: The commenters disagreed with this proposed value and 
stated that they preferred that CMS accept the AMA RUC-recommended work 
RVUs of 39.50 based on the AMA RUC rationale. The commenters believed 
this would place the value of CPT code 33030 appropriately as far as 
time and intensity of physician work in relation to 33031.
    Response: Based on the comments received, we referred CPT code 
33030 to the CY 2011 multi-specialty refinement panel for further 
review. CPT code 33030 has current (CY 2011) work RVUs of 22.29, in the 
Five-Year Review we proposed work RVUs of 36.00, and the AMA RUC 
recommended work RVUs of 39.50. The median refinement panel work RVUs 
were 37.10, between the proposed work RVUs and the AMA RUC 
recommendation. For CPT code 33030, as well as the other CPT codes in 
this family, the Five-Year Review proposed work RVUs represent a 
significant

[[Page 73126]]

increase over the current (CY 2011) work RVUs. We believe that the even 
higher AMA RUC-recommended work RVUs and refinement panel results would 
create a new higher standard of relativity for codes within this family 
that would not be appropriate when compared to other codes with similar 
physician time and intensity in different code families. We continue to 
believe the work RVUs of 36.00, which are the survey 25th percentile 
work RVUs, are more appropriate. Accordingly, we are assigning work 
RVUs of 36.00 to CPT code 33030 as the final value for CY 2012.
    We discussed CPT code 33120 (Excision of intracardiac tumor, 
resection with cardiopulmonary bypass) in the Fourth Five-Year Review 
of Work (76 FR 32444), where we noted the AMA RUC reviewed the survey 
responses and concluded that the 25th percentile work RVUs for CPT code 
33120 appropriately accounted for the work required to furnish this 
service. The AMA RUC recommended work RVUs of 42.88 for CPT code 33120.
    We disagreed with the AMA RUC-recommended work RVUs for CPT code 
33120 and believed that work RVUs of 38.45 were more appropriate for 
this service. We compared CPT code 33120 with CPT code 33677 (Closure 
of multiple ventricular septal defects; with removal of pulmonary 
artery band, with or without gusset) (work RVUs = 38.45) and found the 
codes to be similar in complexity and intensity. We believed that work 
RVUs of 38.45 accurately reflect the work associated with CPT code 
33677 and properly maintains the relativity of similar services. 
Therefore, we proposed an alternative work RVUs of 38.45 for CPT code 
33120 for CY 2012.
    Comment: The commenters noted that CMS' proposed value, based on a 
direct crosswalk to 33677, (Closure of multiple ventricular septal 
defects; with removal of pulmonary artery band, with or without 
gusset), was less than the 25th percentile RUC-recommended value of 
42.88. Commenters strongly disagreed with the direct crosswalk and 
requested that CMS review CPT code 33120 in relation to the key 
reference code selected by physicians who furnish the procedure, CPT 
code 33426 (Valvuloplasty, mitral valve, with cardiopulmonary bypass; 
with prosthetic ring). The commenters stated that this procedure is 
very similar to operating to remove the typical left atrial tumor, 
utilizing the same cardiac incision and the same cannulation strategy 
for cardiopulmonary bypass. The commenters also noted that CPT code 
33426 is also an MPC list code and is furnished frequently by adult 
cardiac surgeons who also perform CPT code 33120.
    Response: Based on the comments received, we referred CPT code 
33120 to the CY 2011 multi-specialty refinement panel for further 
review. CPT code 33120 has current (CY 2011) work RVUs of 27.45, in the 
Five-Year Review we proposed work RVUs of 38.45, and the AMA RUC 
recommended work RVUs of 42.88. The median refinement panel work RVUs 
were also 42.88. For CPT code 33120, as well as the other CPT codes in 
this family, the Five-Year Review proposed work RVUs represent a 
significant increase over the current (CY 2011) work RVUs. We believe 
that the even higher AMA RUC-recommended work RVUs and refinement panel 
results would create a new higher standard of relativity for codes 
within this family that would not be appropriate when compared to other 
codes with similar physician time and intensity in different code 
families. We continue to believe that a comparison of CPT code 33120 
with CPT code 33677 (Closure of multiple ventricular septal defects; 
with removal of pulmonary artery band, with or without gusset) (work 
RVUs = 38.45) shows the codes to be similar in complexity and 
intensity. Therefore, we believe that work RVUs of 38.45 accurately 
reflect the work associated with CPT code 33677 and properly maintains 
the relativity of similar services. Accordingly, we are assigning work 
RVUs of 38.45 to CPT code 33120 as the final value for CY 2012.
    We discussed CPT code 33412 (Replacement, aortic valve; with 
transventricular aortic annulus enlargement (Konno procedure)) in the 
Fourth Five-Year Review of Work (76 FR 32444) where we noted the AMA 
RUC reviewed the survey responses and concluded that the survey median 
work RVUs for CPT code 33412 appropriately accounted for the work 
required to furnish this service. The AMA RUC recommended work RVUs of 
60.00 for CPT code 33412. We disagreed with the AMA RUC-recommended 
work RVUs for CPT code 33412 and believed that the survey 25th 
percentile value of 59.00 was more appropriate for this service. 
Therefore, we proposed alternative work RVUs of 59.00 for CPT code 
33412 for CY 2012.
    Comment: Commenters disagreed with CMS' proposed value and asserted 
that the AMA RUC workgroup closely reviewed this service and compared 
it to key reference service CPT code 33782 (Aortic root translocation 
with ventricular septal defect and pulmonary stenosis repair (i.e., 
Nikaidoh procedure); without coronary ostium reimplantation) (work RVUs 
= 60.08 and intra-time = 300 minutes). The commenters believed that 
these two services require the same intensity and complexity, physician 
work and time to furnish.
    Response: Based on the comments received, we referred CPT code 
33412 to the CY 2011 multi-specialty refinement panel for further 
review. CPT code 33412 has current (CY 2011) work RVUs of 43.94, in the 
Five-Year Review we proposed work RVUs of 59.00, and the AMA RUC 
recommended work RVUs of 60.00. The median refinement panel work RVUs 
were 59.00, which were also the proposed work RVUs. For CPT code 33412, 
as well as the other CPT codes in this family, the Five-Year Review 
proposed work RVUs represent a significant increase over the current 
(CY 2011) work RVUs. We believe that the even higher AMA RUC-
recommended work RVUs would create a new higher standard of relativity 
for codes within this family that would not be appropriate when 
compared to other codes with similar physician time and intensity in 
different code families. We continue to believe the work RVUs of 59.00, 
which are consistent with the refinement panel median RVUs, are more 
appropriate. Accordingly, we are assigning work RVUs of 59.00 to CPT 
code 33412 as the final value for CY 2012.
    We discussed CPT code 33468 (Tricuspid valve repositioning and 
plication for Ebstein anomaly) in the Fourth Five-Year Review of Work 
(76 FR 32444) where we noted the AMA RUC reviewed the survey responses 
and concluded that the survey median work RVUs for CPT code 33468 
appropriately accounted for the work required to furnish this service. 
The AMA RUC recommended work RVUs of 50.00 for CPT code 33468. We 
disagreed with the AMA RUC-recommended work RVUs for CPT code 33468 and 
believed that the survey 25th percentile value of 45.13 was more 
appropriate for this service. Therefore, we proposed alternative work 
RVUs of 45.13 for CPT code 33468 for CY 2012.
    Comment: Commenters disagreed with CMS' proposed value and stated 
that the AMA RUC workgroup closely reviewed this service and compared 
CPT code 33468 to key reference service CPT code 33427, (Valvuloplasty, 
mitral valve, with cardiopulmonary bypass; radical reconstruction, with 
or without ring) (work RVUs = 44.83 and intra-time = 221 minutes). The 
commenters asserted that CPT code 33468 is more intense and complex, 
and requires more physician work and time to perform

[[Page 73127]]

than the key reference service CPT code 33427.
    Response: Based on the comments received, we referred CPT code 
33468 to the CY 2011 multi-specialty refinement panel for further 
review. CPT code 33468 has current (CY 2011) work RVUs of 32.94, in the 
Five-Year Review we proposed work RVUs of 45.13, and the AMA RUC 
recommended work RVUs of 50.00. The median refinement panel work RVUs 
were 46.00. For CPT code 33468, as well as the other CPT codes in this 
family, the Five-Year Review proposed work RVUs represent a significant 
increase over the current (CY 2011) work RVUs. We believe that the even 
higher AMA RUC-recommended work RVUs and refinement panel results would 
create a new higher standard of relativity for codes within this family 
that would not be appropriate when compared to other codes with similar 
physician time and intensity in different code families. We continue to 
believe the work RVUs of 45.13, which are the survey 25th percentile 
work RVUs, are more appropriate. Accordingly, we are assigning work 
RVUs of 45.13 to CPT code 33468 as the final value for CY 2012.
    We discussed CPT code 33645 (Direct or patch closure, sinus 
venosus, with or without anomalous pulmonary venous drainage) in the 
Fourth Five-Year Review of Work (76 FR 32445) where we noted the AMA 
RUC reviewed survey responses and concluded that the survey median work 
RVUs for CPT code 33645 appropriately accounts for the work required to 
perform this service. The AMA RUC recommended work RVUs of 33.00 for 
CPT code 33645. We disagreed with the AMA RUC-recommended work RVUs for 
CPT code 33645 and believed that the survey 25th percentile value of 
31.30 appropriately captures the total work for the service. Therefore, 
we proposed alternative work RVUs of 31.30 for CPT code 33645 for CY 
2012.
    Comment: Commenters disagreed with CMS' proposed value and stated 
that the AMA RUC workgroup closely reviewed this service and compared 
33645 to key reference service CPT codes 33641, (Repair atrial septal 
defect, secundum, with cardiopulmonary bypass, with or without patch) 
(work RVUs = 29.58 and intra-time = 164 minutes) and 33681, (Closure of 
single ventricular septal defect, with or without patch) (work RVUs = 
32.34 and intra-time = 150 minutes). The commenters asserted that 
33645, (Surveyed intra-service time = 175 minutes) requires more 
intensity and complexity to furnish compared to these reference 
services.
    Response: Based on the comments received, we referred CPT code 
33645 to the CY 2011 multi-specialty refinement panel for further 
review. CPT code 33645 has current (CY 2011) work RVUs of 28.10, in the 
Five-Year Review we proposed work RVUs of 31.30, and the AMA RUC 
recommended work RVUs of 33.00. The median refinement panel work RVUs 
were 31.50, slightly higher than the proposed work RVUs. For CPT code 
33645, as well as the other CPT codes in this family, the Five-Year 
Review proposed work RVUs represent a significant increase over the 
current (CY 2011) work RVUs. We believe that the even higher AMA RUC-
recommended work RVUs and refinement panel results would create a new 
higher standard of relativity for codes within this family that would 
not be appropriate when compared to other codes with similar physician 
time and intensity in different code families. We continue to believe 
the work RVUs of 31.30, which are the survey 25th percentile work RVUs, 
are more appropriate. Accordingly, we are assigning work RVUs of 31.30 
to CPT code 33645 as the final value for CY 2012.
    We discussed CPT code 33647 (Repair of atrial septal defect and 
ventricular septal defect, with direct or patch closure) in the Fourth 
Five-Year Review of Work (76 FR 32445) where we noted the AMA RUC 
reviewed survey responses and concluded that the survey median work 
RVUs for CPT code 33467 appropriately account for the work required to 
furnish this service. The AMA RUC recommended work RVUs of 35.00 for 
CPT code 33647. We disagreed with the AMA RUC-recommended work RVUs for 
CPT code 33647 and believed that the survey 25th percentile value of 
33.00 was more appropriate for this service. Therefore, we proposed 
alternative work RVUs of 33.00 for CPT code 33647 for CY 2012.
    Comment: Commenters disagreed with CMS' proposed value and stated 
that the AMA RUC workgroup closely reviewed this service and compared 
CPT code 33647 to key reference service CPT code 33681, (Closure of 
single ventricular septal defect, with or without patch) (work RVUs = 
32.34 and intra-time = 150 minutes). The commenters asserted that CPT 
code 33647 are similarly intense and complex, and requires more 
physician work and time to furnish compared to the key reference 
service.
    Response: Based on the comments received, we referred CPT code 
33647 to the CY 2011 multi-specialty refinement panel for further 
review. CPT code 33647 has current (CY 2011) work RVUs of 29.53, in the 
Five-Year Review we proposed work RVUs of 33.00, and the AMA RUC 
recommended work RVUs of 35.00. The median refinement panel work RVUs 
were 33.00, the same as the proposed work RVUs. For CPT code 33647, as 
well as the other CPT codes in this family, the Five-Year Review 
proposed work RVUs represent a significant increase over the current 
(CY 2011) work RVUs. We believe that the even higher AMA RUC-
recommended work RVUs create a new higher standard of relativity for 
codes within this family that would not be appropriate when compared to 
other codes with similar physician time and intensity in different code 
families. We continue to believe the work RVUs of 33.00, which are 
consistent with the refinement panel median work RVUs, are more 
appropriate. Accordingly, we are assigning work RVUs of 33.00 to CPT 
code 33647 as the final value for CY 2012.
    Fourth Five-Year Review of Work (76 FR 32445) where we noted the 
AMA RUC reviewed survey responses, and recommended the survey median 
work RVUs of 38.75 for CPT code 33692. We disagreed with the AMA RUC-
recommended work RVUs for CPT code 33692 and believed that the survey 
25th percentile value of 36.15 was more appropriate for this service. 
Therefore, we proposed alternative work RVUs of 36.15 for CPT code 
33692 for CY 2012.
    Comment: Commenters disagreed with CMS' proposed value and stated 
that the AMA RUC workgroup closely reviewed this service and compared 
the service to key reference service CPT code 33684, (Closure of single 
ventricular septal defect, with or without patch; with pulmonary 
valvotomy or infundibular resection (acyanotic)) (work RVUs = 34.37 and 
intra-time = 200 minutes). Commenters asserted that CPT code 33692 is 
similarly intense and complex, and requires more physician work and 
time to furnish than the key reference service.
    Response: Based on the comments received, we referred CPT code 
33692 to the CY 2011 multi-specialty refinement panel for further 
review. CPT code 33692 has current (CY 2011) work RVUs of 31.54, in the 
Five-Year Review we proposed work RVUs of 36.15, and the AMA RUC 
recommended work RVUs of 38.75. The median refinement panel work RVUs 
were 38.75. For CPT code 33692, as well as the other CPT codes in this 
family, the Five-Year Review proposed work RVUs represent a significant 
increase over the current (CY 2011) work RVUs. We believe that the even 
higher AMA RUC-recommended

[[Page 73128]]

work RVUs and refinement panel results would create a new higher 
standard of relativity for codes within this family that would not be 
appropriate when compared to other codes with similar physician time 
and intensity in different code families. We continue to believe the 
work RVUs of 36.15, which are the survey 25th percentile work RVUs, are 
more appropriate. Accordingly, we are assigning work RVUs of 36.15 to 
CPT code 33692 as the final value for CY 2012.
    We recommended work RVUs of 43.00 for CPT code 33710, the survey 
median work RVUs. We disagreed with the AMA RUC-recommended work RVUs 
for CPT code 33710 and believed that the survey 25th percentile value 
of 37.50 was more appropriate for this service. We believed the 
physician time and intensity for CPT code 33710 reflected the 
appropriate incremental adjustment when compared to the key reference 
service, CPT code 33405 (Replacement, aortic valve, with 
cardiopulmonary bypass; with prosthetic valve other than homograft or 
stentless valve) (work RVUs = 41.32 and intra-service time = 198 
minutes). Therefore, we proposed alternative work RVUs of 37.50 for CPT 
code 33710 for CY 2012.
    Commenters disagreed with CMS' proposed value and stated that the 
AMA RUC workgroup closely reviewed this service and compared 33710 to 
key reference service CPT code 33405. The commenters asserted that 
33710 is similarly intense and complex, and requires more physician 
work and time to furnish than the key reference service.
    Response: Based on the comments received, we referred CPT code 
33710 to the CY 2011 multi-specialty refinement panel for further 
review. CPT code 33710 has current (CY 2011) work RVUs of 30.41, in the 
Five-Year Review we proposed work RVUs of 37.50, and the AMA RUC 
recommended work RVUs of 43.00. The median refinement panel work RVUs 
were also 43.00. For CPT code 33710, as well as the other CPT codes in 
this family, the Five-Year Review proposed work RVUs represent a 
significant increase over the current (CY 2011) work RVUs. We believe 
that the even higher AMA RUC-recommended work RVUs and refinement panel 
results would create a new higher standard of relativity for codes 
within this family that would not be appropriate when compared to other 
codes with similar physician time and intensity in different code 
families. We continue to believe the work RVUs of 37.50, which are the 
survey 25th percentile work RVUs, and more comparable to the reference 
service, are more appropriate. Accordingly, we are assigning work RVUs 
of 37.50 to CPT code 33710 as the final value for CY 2012.
    We discussed CPT code 33875 (Descending thoracic aorta graft, with 
or without bypass) in the Fourth Five-Year Review of Work (76 FR 32445) 
and noted that the AMA RUC reviewed survey responses and concluded that 
the 25th percentile work RVUs for code 33875 appropriately account for 
the work required to furnish this service. The AMA RUC recommended work 
RVUs of 56.83 for CPT code 33875. We disagreed with the AMA RUC-
recommended work RVUs for CPT code 33875 and believed that work RVUs of 
50.72 were more appropriate for this service. We compared CPT code 
33875 with CPT code 33465 (Replacement, tricuspid valve, with 
cardiopulmonary bypass) (work RVUs = 50.72) and believed that CPT code 
33875 was similar to CPT code 33465, with similar inpatient and 
outpatient work. We believed these work RVUs corresponded better to the 
value of the service than the survey 25th percentile work RVUs. 
Therefore, we proposed alternative work RVUs of 50.72 for CPT code 
33875 for CY 2012.
    Comment: Commenters disagreed with CMS' proposed direct crosswalk 
to CPT code 33465, and stated that patients and procedures are 
substantially different for CPT 33875. The commenters requested that 
CMS reconsider its proposed work value of 50.72 and, instead, accept 
the AMA RUC-recommended values of 56.83, which are the 25th percentile 
of the physician survey.
    Response: Based on the comments received, we referred CPT code 
33875 to the CY 2011 multi-specialty refinement panel for further 
review. CPT code 33875 has current (CY 2011) work RVUs of 35.78, in the 
Five-Year Review we proposed work RVUs of 50.72, and the AMA RUC 
recommended work RVUs of 56.83. The median refinement panel work RVUs 
were also 56.83. For CPT code 33875, as well as the other CPT codes in 
this family, the Five-Year Review proposed work RVUs represent a 
significant increase over the current (CY 2011) work RVUs. We believe 
that the even higher AMA RUC-recommended work RVUs and refinement panel 
results would create a new higher standard of relativity for codes 
within this family that would not be appropriate when compared to other 
codes with similar physician time and intensity in different code 
families. We compared CPT code 33875 with CPT code 33465 and believed 
that CPT code 33875 is similar to CPT code 33465, with similar 
inpatient and outpatient work. We continue to believe these work RVUs 
corresponds better to the value of the service than the survey 25th 
percentile work RVUs. Accordingly, we are assigning work RVUs of 50.72 
to CPT code 33875 as the final value for CY 2012.
    We discussed CPT code 33910 (Pulmonary artery embolectomy; with 
cardiopulmonary bypass) in the Fourth Five-Year Review of Work (76 FR 
32445) and noted that after reviewing the service, the AMA RUC 
recommended work RVUs of 52.33 for CPT code 33910. We disagreed with 
the AMA RUC-recommended work RVUs for CPT code 33910 and believed that 
work RVUs of 48.21 were more appropriate for this service. We compared 
CPT code 33910 with CPT code 33542 (Myocardial resection (e.g., 
ventricular aneurysmectomy)) (work RVUs = 48.21). We recognized that 
CPT code 33542 is not an emergency service. Nevertheless, this 
procedure requires cardiopulmonary bypass and has physician time and 
visits that are consistently necessary for the care required for the 
patient that are similar to CPT code 33910. We believed that work RVUs 
of 48.21 accurately reflected the work associated with CPT code 33910 
and properly maintained the relativity for a similar service. 
Therefore, we proposed alternative work RVUs of 48.21 for CPT code 
33910 for CY 2012.
    Comment: Commenters requested that CMS reconsider the proposed work 
value of 48.21, and accept the AMA RUC-recommended work value of 52.33, 
the survey median value. Commenters disagreed with the CMS-proposed 
direct crosswalk to the value of CPT code 33542. Commenters asserted 
that, although some of the technical composition of the two codes (time 
and visits) is similar, the intensity and complexity measures are 
different and easily account for the additional RVUs of 4.12 that would 
result from utilizing the survey median work value.
    Response: Based on the comments received, we referred CPT code 
33910 to the CY 2011 multi-specialty refinement panel for further 
review. CPT code 33910 has current (CY 2011) work RVUs of 29.71, in the 
Five-Year Review we proposed work RVUs of 48.21, and the AMA RUC 
recommended work RVUs of 52.33. The median refinement panel work RVUs 
were 52.33. For CPT code 33910, as well as the other CPT codes in this 
family, the Five-Year Review proposed work RVUs represent a significant 
increase over the current (CY 2011) work RVUs. We believe that the

[[Page 73129]]

even higher AMA RUC-recommended work RVUs and refinement panel results 
would create a new higher standard of relativity for codes within this 
family that would not be appropriate when compared to other codes with 
similar physician time and intensity in different code families. We 
continue to believe the work RVUs of 48.21, which are the survey 25th 
percentile work RVUs and properly maintain the relativity with CPT code 
33542 are more appropriate. Accordingly, we are assigning work RVUs of 
48.21 to CPT code 33910 as the final value for CY 2012.
    Fourth Five-Year Review of Work (76 FR 32445) and noted that the 
AMA RUC reviewed survey responses and recommended work RVUs of 100.00, 
the survey median work RVUs, for CPT code 33935. We disagreed with the 
AMA RUC-recommended work RVUs for CPT code 33935 and believed that the 
survey 25th percentile value of 91.78 was more appropriate for this 
service. We believed this service is more intense and complex than the 
reference CPT code 33945 (Heart transplant, with or without recipient 
cardiectomy) (work RVU = 89.50) and that the survey 25th percentile 
work RVUs accurately reflected the increased intensity and complexity 
when compared to the reference CPT code 33945. Therefore, we proposed 
alternative work RVUs of 91.78 for CPT code 33935 for CY 2012.
    Comment: Commenters requested that CMS reconsider its proposed work 
RVUs of 91.78 and accept the RUC-recommended survey median work RVUs of 
100.00 for CPT code 33935. Commenters noted that CMS acknowledged the 
increased intensity, complexity, and physician work compared to the key 
reference service CPT code 33945 Heart Transplant. However, commenters 
asserted that CPT code 33935 has substantially higher intensity and 
complexity than CPT code 33945, and CMS did not adequately account for 
the additional physician work.
    Response: Based on the comments received, we referred CPT code 
33935 to the CY 2011 multi-specialty refinement panel for further 
review. CPT code 33935 has current (CY 2011) work RVUs of 62.01, in the 
Five-Year Review we proposed work RVUs of 91.78, and the AMA RUC 
recommended work RVUs of 100.00. The median refinement panel work RVUs 
were also 100.00. For CPT code 33935, as well as the other CPT codes in 
this family, the Five-Year Review proposed work RVUs represent a 
significant increase over the current (CY 2011) work RVUs. We believe 
that the even higher AMA RUC-recommended work RVUs and refinement panel 
results would create a new higher standard of relativity for codes 
within this family that would not be appropriate when compared to other 
codes with similar physician time and intensity in different code 
families. We continue to believe work RVUs of 91.78, which are the 
survey 25th percentile work RVUs, are more appropriate. Accordingly, we 
are assigning work RVUs of 91.78 to CPT code 33935 as the final value 
for CY 2012.
    We discussed CPT code 33980 (Removal of ventricular assist device, 
implantable intracorporeal, single ventricle) in the Fourth Five-Year 
Review of Work (76 FR 32445). We noted the AMA RUC reviewed the survey 
results and recommended the survey median work RVUs of 40.00. 
Additionally, the AMA RUC recommended a global period change from 090 
(Major surgery with a 1-day pre-operative period and a 90-day 
postoperative period included in the fee schedule amount) to XXX (the 
global concept does not apply to the code). We agreed with the AMA RUC-
recommended global period change from 090 to XXX. However, we disagreed 
with the AMA RUC-recommended work RVUs for CPT code 33980. We believed 
the work RVUs of 33.50 were more appropriate, given the significant 
reduction in physician times and decrease in the number and level of 
post-operative visits that the AMA RUC included in the value of CPT 
code 33980. For CY 2012, we proposed alternative work RVUs of 33.50, 
the survey 25th percentile work RVUs.
    Comment: Commenters disagreed with the proposed work RVUs, and 
asserted that CPT code 33980 was surveyed as an XXX code with no post-
operative visits. Commenters stated that CPT code 33980 is one of the 
most intense, complex, and demanding procedures that their specialty 
furnishes. The commenters noted that this is an obligatory reoperation, 
which is almost always furnished during a one-six month time frame when 
the adhesions are new, tenacious, and very vascular. The commenters 
asserted that the reoperation CPT code 33530 (Reoperation, coronary 
artery bypass procedure or valve procedure, more than 1 month after 
original operation (List separately in addition to code for primary 
procedure)) its value (work RVUs = 10.13) should be considered. 
Commenters noted, however, that because CPT code 33530 is a ZZZ code 
(code is related to another service and is included in the global 
period of the other service) its value would not apply here. Secondly, 
the commenters noted this procedure requires reconstruction of the 
large bore defect in the apex of the left ventricle, which is 
technically demanding, particularly in patients destined for survival 
with a fragile and compromised left ventricle that must now support the 
circulation without VAD support. The commenters believed these features 
justify the higher AMA RUC-recommended RVUs of 40.00.
    Response: Based on the comments received, we referred CPT code 
33980 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVUs of 40.00, which were 
consistent with the AMA RUC recommendation. We believe work RVUs of 
33.50, which are the survey 25th percentile work RVU are more 
appropriate, given the significant reduction in physician times and 
decrease in the number and level of post-operative visits that the AMA 
RUC included in the value of CPT code 33980. Accordingly, we are 
assigning work RVUs of 33.50 to CPT code 33980 as the final value for 
CY 2012.
    We discussed CPT code 35188 (Repair, acquired or traumatic 
arteriovenous fistula; head and neck) in the Fourth Five-Year Review of 
Work (76 FR 32446) and noted the AMA RUC reviewed the survey results 
and recommended the survey median work RVUs of 18.50 for CPT code 
35188. We disagreed with the AMA RUC-recommended work RVUs for CPT code 
35188 and proposed alternative work RVUs of 18.00, which are the survey 
25th percentile work RVUs. We believed the work RVUs of 18.00 are more 
appropriate, given the decrease in the number and level of post-
operative visits that the AMA RUC included in the value of CPT code 
35188.
    Comment: Commenters noted the AMA RUC compared the service to key 
reference CPT code 35011 (Direct repair of aneurysm, pseudoaneurysm, or 
excision (partial or total) and graft insertion, with or without patch 
graft; for aneurysm and associated occlusive disease, axillary-brachial 
artery, by arm incision) (work RVUs = 18.58) and agreed they were 
similar services in the sense that they are both vascular operations on 
similar sized vessels in the upper body. The AMA RUC also compared 
35188 to MPC codes 19318 Reduction mammoplasty (work RVUs = 16.03) and 
44140 Colectomy, partial; with anastomosis (work RVUs = 22.59), which 
are similarly intensive surgical procedures requiring technical skill 
to successfully complete the operation. Commenters asserted the 
differences between CPT codes 35188, 19318, and 44140 lie in the post-
operative work, which are quite different, yet in proper

[[Page 73130]]

rank order, and requested that CMS reconsider this issue.
    Response: Based on the comments received, we referred CPT code 
35188 to the CY 2011 multi-specialty refinement panel for further 
review. CPT code 35188 has current (CY 2011) work RVUs of 15.16, in the 
Five-Year Review we proposed work RVUs of 18.00, and the AMA RUC 
recommended work RVUs of 18.50. The median refinement panel work RVUs 
were also 18.50. For CPT code 35188, as well as the other CPT codes in 
this family, the Five-Year Review proposed work RVUs represent a 
significant increase over the current (CY 2011) work RVUs. We believe 
that the even higher AMA RUC-recommended work RVUs and refinement panel 
results would create a new higher standard of relativity for codes 
within this family that would not be appropriate when compared to other 
codes with similar physician time and intensity in different code 
families. We continue to believe the work RVUs of 18.00, which are the 
survey 25th percentile work RVUs, are more appropriate, given the 
decrease in the number and level of post-operative visits that the AMA 
RUC included in the value of CPT code 35188. Accordingly, we are 
assigning work RVUs of 18.00 to CPT code 35188 as the final value for 
CY 2012.
    We discussed CPT code 35612 (Bypass graft, with other than vein; 
subclavian) in the Fourth Five-Year Review of Work (76 FR 32446) and 
noted the AMA RUC reviewed the survey results and recommended work RVUs 
of 22.00 for CPT code 35612. We disagreed with the AMA RUC-recommended 
work RVUs for CPT code 35612 and proposed alternative work RVUs of 
20.35, which were the survey 25th percentile work RVUs. We believed the 
work RVUs of 20.35 were more appropriate, given the decrease in the 
number and level of post-operative visits that the AMA RUC included in 
the value of CPT code 35612.
    Comment: Commenters disagreed with the proposed RVUs for CPT code 
35612. Commenters noted that the AMA RUC compared the service to key 
reference CPT code 35661 (Bypass graft, with other than vein; femoral-
femoral) (work RVUs = 20.35) and agreed the work value for CPT code 
35612 should be higher than for the work value for CPT code 35661. The 
AMA RUC also compared the surveyed code to MPC codes 22595 
(Arthrodesis, posterior technique, atlas-axis (C1-C2)) (work RVUs = 
20.46) and 62165 (Neuroendoscopy, intracranial; with excision of 
pituitary tumor, transnasal or trans-sphenoidal approach) (work RVUs = 
23.23), which have similar work intensities. Commenters requested that 
CMS accept the AMA RUC-recommended work RVUs of 22.00 for CPT code 
35612.
    Response: Based on the comments received, we referred CPT code 
35612 to the CY 2011 multi-specialty refinement panel for further 
review. CPT code 35612 has current (CY 2011) work RVUs of 16.82, in the 
Five-Year Review we proposed work RVUs of 20.35, and the AMA RUC 
recommended work RVUs of 22.00. The median refinement panel work RVUs 
were also 22.00. For CPT code 35612, as well as the other CPT codes in 
this family, the Five-Year Review proposed work RVUs represent a 
significant increase over the current (CY 2011) work RVUs. We believe 
that the even higher AMA RUC-recommended work RVUs and refinement panel 
results would create a new higher standard of relativity for codes 
within this family that would not be appropriate when compared to other 
codes with similar physician time and intensity in different code 
families. We continue to believe the work RVUs of 20.35, which are the 
survey 25th percentile work RVUs, are more appropriate, given the 
decrease in the number and level of post-operative visits that the AMA 
RUC included in the value of CPT code 35612. Accordingly, we are 
assigning work RVUs of 20.35 to CPT code 35612 as the final value for 
CY 2012.
    We discussed CPT code 35800 (Exploration for postoperative 
hemorrhage, thrombosis or infection; neck) in the Fourth Five-Year 
Review of Work (76 FR 32446) and noted the AMA RUC used magnitude 
estimation to recommend work RVUs for CPT code 35800 between the survey 
25th percentile (12.00 RVUs) and median (15.00 RVUs) work value. 
Accordingly, the AMA RUC recommended work RVUs of 13.89 for CPT code 
35800. We disagreed with the AMA RUC-recommended work RVUs for CPT code 
35800 and proposed alternative work RVUs of 12.00, which were the 
survey 25th percentile work RVUs. We believed the work RVU of 12.00 
were more appropriate, given that two of the key reference codes to 
which this service has been compared have identical intra-service time 
(60 minutes), but significantly lower work RVUs.
    Comment: Commenters noted that the AMA RUC compared the service to 
key reference codes. Commenters agreed with the intensity, physician 
work, and proper rank order amongst the comparison codes achieved when 
CPT code 35800 was valued between the survey 25th percentile (12.00 
RVUs) and median work value (15.00 RVUs) with work RVUs of 13.89. 
Commenters believed it was inappropriate for CMS to reduce the value of 
CPT code 35800 based on a comparison to two services with much less 
total time. Commenters requested that CMS accept the AMA RUC-
recommended work RVUs of 13.89.
    Response: Based on the comments received, we referred CPT code 
35800 to the CY 2011 multi-specialty refinement panel for further 
review. CPT code 35800 has current (CY 2011) work RVUs of 8.07, in the 
Five-Year Review we proposed work RVUs of 12.00, and the AMA RUC 
recommended work RVUs of 13.89. The median refinement panel work RVU 
were also 13.89. For CPT code 35800, as well as the other CPT codes in 
this family, the Five-Year Review proposed work RVUs represent a 
significant increase over the current (CY 2011) work RVUs. We believe 
that the even higher AMA RUC-recommended work RVUs and refinement panel 
results would create a new higher standard of relativity for codes 
within this family that would not be an appropriate when compared to 
other codes with similar physician time and intensity in different code 
families. That is, as when considering the values for the two reference 
services previously discussed, comparing CPT code 35800 to codes 
outside of the code family but with identical intra-service time (60 
minutes) demonstrates that in order to maintain inter-family relativity 
in the PFS, the 25th percentile survey work RVUs of 12.00 are more 
appropriate than the higher work RVUs recommended by the AMA RUC and 
the refinement panel. Accordingly, we are assigning work RVUs of 12.00 
to CPT code 35800 as the final value for CY 2012.
    We discussed CPT code 35840 (Exploration for postoperative 
hemorrhage, thrombosis or infection; abdomen) in the Fourth Five-Year 
Review of Work (76 FR 32446) and noted the AMA RUC used magnitude 
estimation to recommend work RVUs for CPT code 35840 between the survey 
25th percentile (19.25 RVU) and survey median (22.30 RVUs) work value. 
Accordingly, the AMA RUC recommended a work RVU of 21.19 for CPT code 
35840. We disagreed with the AMA RUC-recommended work RVU for CPT code 
35840 and proposed alternative work RVUs of 20.75, which were between 
the survey 25th percentile and survey median work RVUs. We believed the 
work RVUs of 20.75 were more appropriate given the comparison to the 
two reference codes.

[[Page 73131]]

    Comment: Commenters disagreed with the proposed work RVUs for CPT 
code 35840. Commenters noted that the AMA RUC compared CPT code 35840 
to the following two services: CPT code 49002 (Reopening of recent 
laparotomy) (work RVUs = 17.63, 75 minutes intra-service time), and CPT 
code 37617 (Ligation, major artery (e.g., post-traumatic, rupture); 
abdomen) (work RVUs = 23.70, 120 minutes intraservice time). Commenters 
agreed with the intensity, physician work, and proper rank order 
amongst the comparison codes when code 35840 was valued between the 
survey 25th percentile (19.25 RVUs) and median work value (22.30 RVUs). 
Commenters requested that CMS accept the AMA RUC-recommended work RVUs 
of 21.19.
    Response: Based on the comments received, we referred CPT code 
35840 to the CY 2011 multi-specialty refinement panel for further 
review. CPT code 35840 has current (CY 2011) work RVUs of 10.96, in the 
Five-Year Review we proposed work RVUs of 20.75, and the AMA RUC 
recommended work RVUs of 21.19. The median refinement panel work RVUs 
were also 21.19. For CPT code 33840, as well as the other CPT codes in 
this family, the Five-Year Review proposed work RVUs represent a 
significant increase over the current (CY 2011) work RVUs. We believe 
that the even higher AMA RUC-recommended work RVUs and refinement panel 
results would create a new higher standard of relativity for codes 
within this family that would not be an appropriate when compared to 
other codes with similar physician time and intensity in different code 
families. We continue to believe the work RVUs of 20.75 are more 
appropriate given the two reference codes to which this service has 
been compared. Accordingly, we are assigning work RVUs of 20.75 to CPT 
code 35840 as the final value for CY 2012.
    We discussed CPT code 35860 (Exploration for postoperative 
hemorrhage, thrombosis or infection; extremity) in the Fourth Five-Year 
Review of Work (76 FR 32446-32447) and noted the AMA RUC used magnitude 
estimation to recommend work RVUs between the survey 25th percentile 
(15.25 RVUs) and median work value (18.00 RVUs). The AMA RUC 
recommended work RVUs of 16.89 for CPT code 35860. We disagreed with 
the AMA RUC-recommended work RVUs for CPT code 35860 and proposed 
alternative work RVUs of 15.25, which were the survey 25th percentile 
work RVUs. We believed these work RVU maintained appropriate relativity 
within the family of related services for the exploration of 
postoperative hemorrhage.
    Comment: Commenters disagreed with CMS' proposed RVUs of 15.25 for 
CPT code 35860. Commenters stated the complexity and intensity of this 
service is higher because it is typically furnished to elderly patients 
for whom reoperation imposes more risks. Commenters asserted that the 
family of services was undervalued in the Harvard study. Commenters 
disagreed with CMS's assertion that the proposed work value is more 
relative to similar services in comparison to the RUC recommendation. 
During its review, the AMA RUC compared CPT code 35860 to two similar 
services: CPT code 34203 (Embolectomy or thrombectomy, popliteal-
tibioperoneal artery, by leg incision) (work RVU = 17.86, 108 minutes 
intra-service time) and CPT code 44602 (Suture of small intestine for 
perforation) (work RVU = 24.72, 90 minutes intra-service time). 
Commenters agreed with the intensity, physician work, and proper rank 
order amongst the comparison codes achieved when CPT code 35860 is 
valued between the survey 25th percentile (15.25 RVUs) and median work 
value (18.00 RVUs), at 16.89 work RVUs. Commenters requested that CMS 
accept the RUC recommended work RVUs of 16.89 for CPT code 35860.
    Response: Based on the comments received, we referred CPT code 
35860 to the CY 2011 multi-specialty refinement panel for further 
review. CPT code 35860 has current (CY 2011) work RVUs of 6.80, in the 
Five-Year Review we proposed work RVUs of 15.25, and the AMA RUC 
recommended work RVUs of 16.89. The median refinement panel work RVUs 
were also 16.89. For CPT code 35860, as well as the other CPT codes in 
this family, the Five-Year Review proposed work RVUs represent a 
significant increase over the current (CY 2011) work RVUs. We believe 
that the even higher AMA RUC-recommended work RVUs and refinement panel 
results would create a new higher standard of relativity for codes 
within this family that would not be appropriate when compared to other 
codes with similar physician time and intensity in different code 
families. We continue to believe the work RVUs of 15.25, which are the 
survey 25th percentile work RVUs, maintain appropriate relativity. 
Accordingly, we are assigning work RVUs of 15.25 to CPT code 35860 as 
the final value for CY 2012.
    As detailed in the Fourth Five-Year Review, for CPT code 36600 
(Arterial puncture, withdrawal of blood for diagnosis) we believed that 
the current (CY 2011) work RVUs continued to accurately reflect the 
work of these services and, therefore, proposed work RVUs of 0.32 for 
CPT code 36600. The AMA RUC also recommended maintaining the current 
(CY 2011) work RVUs for these services. For CPT code 36600, the AMA RUC 
recommended a pre-service evaluation time of 5 minutes and immediate 
post service time of 5 minutes. We proposed a pre-service evaluation 
time for CPT code 36600 of 3 minutes and a post service time of 3 
minutes (76 FR 32447).
    Comment: In its public comments to CMS on the Fourth Five-Year 
Review, the AMA RUC wrote that CMS agreed with the AMA RUC-recommended 
work RVU, but noted that CMS disagreed with the AMA RUC-recommended 
pre-service and post-service time components due to an E/M service 
typically being provided on the same day of service. The AMA RUC 
recommends that CMS accept the AMA RUC-recommended pre-service 
evaluation time of 5 minutes and immediate post-service time of 5 
minutes for CPT code 36600.
    Response: In response to comments, we re-reviewed CPT code 36600. 
After reviewing the descriptions of pre-service work and the 
recommended pre-service time packages, we disagree with the times 
recommended by the AMA RUC. For CPT code 36600 we are finalizing a work 
RVU of 0.32 and a pre-service evaluation time of 3 minutes. In 
addition, we are finalizing an intra-service time of 10 minutes, and a 
post-service time of 3 minutes for CPT code 36600. CMS time refinements 
can be found in Table 16.
    We discussed CPT code 36247 (Selective catheter placement, arterial 
system; initial third order or more selective abdominal, pelvic, or 
lower extremity artery branch, within a vascular family) in the Fourth 
Five-Year Review of Work (76 FR 32445) and proposed a CY 2012 work RVU 
of 6.29 and a global period change from 90-days (Major surgery with a 
1-day pre-operative period and a 90-day postoperative period included 
in the fee schedule amount) to XXX (the global concept does not apply 
to the code). The AMA RUC recommended the survey median work RVU of 
7.00 for this service. We disagreed with the RUC-recommended value 
noting that a reduced global period would support a reduction in the 
RVUs.
    Comment: Commenters noted that the dominant specialty for CPT code 
36247 has changed since the original Harvard valuations that therefore 
physician practice also has changed. Commenters pointed out that CMS' 
discussion of the

[[Page 73132]]

global period was not correct, that the specialty societies had 
surveyed the code based on a change to the global period of 000 
(endoscopic or minor procedure with related preoperative and post-
operative relative values on the day of the procedure only included in 
the fee schedule payment amount; evaluation and management services on 
the day of the procedure generally not payable) from the current global 
period indicator of XXX. Commenters also asserted that there had been a 
change in the physician work for CPT code 36247 due to patient 
population changes and the inclusion of moderate sedation as inherent 
in the procedure. Finally, commenters argued that the creation of the 
lower extremity revascularization codes in CY 2011 PFS final rule with 
comment period (75 FR 73334) increased the complexity of procedures 
described by CPT code 36247. Commenters requested that CMS reconsider 
the proposed value and global period.
    Response: Based on the comments received, we referred CPT code 
36247 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median value was a work RVU of 7.0, the 
AMA RUC-recommended value. Upon clinical review, we believe that our 
proposed value of 6.29 in more appropriate. We observe a significant 
decrease in the physician times reported for this service that argue 
for a lower value, notwithstanding that the survey was conducted for a 
0-day global period, which includes an evaluation and management 
service on the same day. We agree with commenters that our discussion 
of the global period in the Fourth Five-Year review of work was 
inconsistent with the commenters' original request. Therefore, we are 
assigning the work RVU of 6.29 and a global period of 000 to CPT code 
37247on an interim basis for CY 2012 and invite additional public 
comment on this code.
    We discussed CPT code 36819 (Arteriovenous anastomosis, open; by 
upper arm basilic vein transposition) in the Fourth Five-Year Review of 
Work (76 FR 32447) where we noted this code was identified as a code 
with a site-of- service anomaly. Medicare PFS claims data indicated 
that this code is typically furnished in an outpatient setting. 
However, the current and AMA RUC-recommended values for this code 
reflected work that is typically associated with an inpatient service. 
As discussed in section III.A. of this final rule with comment period, 
our policy is to remove any post-procedure inpatient and subsequent 
observation care visits remaining in the values for these codes and 
adjust physician times accordingly. It is also our policy for codes 
with site-of-service anomalies to consistently include the value of 
half of a discharge day management service. While the AMA RUC 
recommended maintaining the current (CY 2011) work RVU of 14.47, 
utilizing our methodology, we proposed an alternative work RVU for CY 
2012 of 13.29 with refinements in time for CPT code 36819.
    Comment: Commenters disagreed with the CMS-proposed work RVU and 
requested that CMS accept the AMA RUC-recommended work RVU of 14.47 for 
36819. Furthermore, commenters asked that the AMA RUC-recommended 
physician time should also be restored. Commenters disagreed with CMS' 
use of the reverse building block methodology. Commenters noted that 
the AMA RUC originally valued this service using magnitude estimation 
based on comparison reference codes, which considers the total work of 
the service rather than the work of the component parts of the service, 
and requested CMS accept the AMA RUC-recommended work RVU and physician 
time. Commenters noted that the AMA RUC reviewed the survey data, 
compared this service to other services, and concluded that there was 
no was no compelling evidence to suggest a change in the current work 
RVUs was warranted.
    Response: Based on comments received, we referred CPT code 36819 to 
the CY 2011 multi-specialty refinement panel for further review. The 
refinement panel median work RVU was 14.47, which was consistent with 
the AMA RUC recommendation to maintain the current (CY 2011) work 
value. The current (CY 2011) work RVU for this service was developed 
when this service was typically furnished in the inpatient setting. As 
this service is now typically furnished in the outpatient setting, we 
believe that it is reasonable to expect that there have been changes in 
medical practice for these services, and that such changes would 
represent a decrease in physician time or intensity or both. However, 
the AMA RUC-recommendation and refinement panel results do not reflect 
a decrease in physician work. We do not believe it is appropriate for 
this now outpatient service to continue to reflect work that is 
typically associated with an inpatient service. In order to ensure 
consistent and appropriate valuation of physician work, we believe it 
is appropriate to apply our methodology described previously to address 
23-hour stay site-of-service anomalies. After consideration of the 
public comments, refinement panel results, and our clinical review, we 
are assigning a final work RVU of 13.29 with refinements in time for 
CPT code 36819 for CY 2012.
    We discussed CPT code 36825 (Creation of arteriovenous fistula by 
other than direct arteriovenous anastomosis (separate procedure); 
autogenous graft) in the Fourth Five-Year Review of Work (76 FR 32445 
and 32446) where we noted this code was identified as a code with a 
site-of-service anomaly. Medicare PFS claims data indicated that this 
code is typically furnished in an outpatient setting. However, the 
current and AMA RUC-recommended values for this code reflected work 
that is typically associated with an inpatient service. As discussed in 
section III.A. of this final rule with comment period, consistent with 
that methodology, we removed the subsequent observation care service, 
reduced the discharge day management service by one-half, and adjusted 
times for CPT code 36825. While the AMA RUC recommended maintaining the 
current (CY 2011) work RVU of 15.13, utilizing our methodology for 
codes with site-of-service anomalies, we proposed an alternative work 
RVU of 14.17 with refinements to the time for CPT code 36825 for CY 
2012.
    Comment: Commenters disagreed with the CMS proposed work RVU of 
14.17. Commenters disagreed with CMS' use of the reverse building block 
methodology, which removed the subsequent observation care code and 
reduced the full hospital discharge day management code to a half day, 
along with the associated work RVUs and times. Commenters noted that 
the AMA RUC originally valued this service using magnitude estimation 
based on comparison reference codes, which considers the total work of 
the service rather than the work of the component parts of the service, 
and requested CMS accept the AMA RUC-recommended work RVU and physician 
time. Commenters contend that if the patient is stable and can safely 
be discharged on a day subsequent to the day of the procedure, then 
there should be no reduction in discharge management work. Commenters 
requested that CMS reconsider this issue and accept the AMA RUC-
recommended work RVU of 15.13 as a valid relative measure using 
magnitude estimation and comparison to codes with similar work and 
intensity.
    Response: Based on comments received, we referred CPT code 36825 to 
the CY 2011 multi-specialty refinement panel for further review. The 
refinement panel median work RVU was 15.13, which is consistent with 
AMA RUC recommendation to maintain the current (CY 2011) work RVU for 
this service.

[[Page 73133]]

The current (CY 2011) work RVU for this service was developed when this 
service was typically furnished in the inpatient setting. As this 
service is now typically furnished in the outpatient setting, we 
believe that it is reasonable to expect that there have been changes in 
medical practice for these services, and that such changes would 
represent a decrease in physician time or intensity or both. However, 
the AMA RUC-recommendation and refinement panel results do not reflect 
a decrease in physician work. We do not believe it is appropriate for 
this now outpatient service to continue to reflect work that is 
typically associated with an inpatient service. In order to ensure 
consistent and appropriate valuation of physician work, we believe it 
is appropriate to apply our methodology described previously to address 
23-hour stay site-of-service anomalies. After consideration of the 
public comments, refinement panel results, and our clinical review, we 
are assigning a work RVU for CY 2012 of 14.17 with refinements to the 
time for CPT code 36825 for CY 2012. CMS time refinements can be found 
in Table 16.
    For CY 2012, we received no comments on the Fourth Five-Year Review 
of Work proposed work RVUs for CPT codes 33916, 33975, 33976, 33977, 
33978, 33979, 33981, 33982, 33983, 36200, 36246, 36470, 36471, 36600, 
36821, 37140, 37145, 37160, 37180, and 37181. Additionally, we received 
no comments on the CY 2011 final rule with comment period work RVUs for 
CPT codes 33620, 33621, 33622, 33860, 33863, 33864, 34900, 35471, 
36410, 37205, 37206, 37207, 37208, 37220, 37221, 37222, 37223, 37224, 
37225, 37226, 37228, 37229, 27230, 37231, 37232, 37233, 37234, 37235, 
37765, 37766. We believe these values continue to be appropriate and 
are finalizing them without modification (Table 15).
(14) Digestive: Salivary Glands and Ducts (CPT Codes 42415-42440)
    In the Fourth Five-Year Review, we identified CPT codes 42415 and 
42420 as potentially misvalued through the site-of-service anomaly 
screen. The related specialty societies surveyed these codes and the 
AMA RUC issued recommendations to us for the Fourth Five-Year Review of 
Work.
    As detailed in the Fourth Five-Year Review of Work (76 FR 32447), 
for CPT code 42415 (Excision of parotid tumor or parotid gland; lateral 
lobe, with dissection and preservation of facial nerve), we proposed a 
work RVU of 17.16 for CY 2012. Medicare PFS claims data indicated that 
CPT code 42415 is typically furnished in an outpatient setting. 
However, the current AMA RUC-recommended values for this code reflected 
work that is typically associated with an inpatient service. Therefore, 
in accordance with our methodology to address 23-hour stay and site-of-
service anomalies described in section III.A. of this final rule with 
comment period, for CPT code 42415, we removed the observation care 
service, reduced the discharge day management service by one-half, and 
adjusted the physician times accordingly. The AMA RUC recommended 
maintaining the current work RVU of 18.12 for CPT code 42415.
    Furthermore, as detailed in the Fourth Five-Year Review of Work (76 
FR 32447), for CPT code 42420 (Excision of parotid tumor or parotid 
gland; total, with dissection and preservation of facial nerve) we 
proposed a work RVU of 19.53 for CY 2012. Medicare PFS claims data 
indicated that CPT code 42420 is typically furnished in an outpatient 
setting. However, the current AMA RUC-recommended values for this code 
reflected work that is typically associated with an inpatient service. 
Therefore, in accordance with our methodology to address 23-hour stay 
and site-of-service anomalies described in section III.A. of this final 
rule with comment period, for CPT code 42420, we removed the subsequent 
observation care service, reduced the discharge day management service 
by one-half, and adjusted the physician times accordingly. The AMA RUC 
recommended maintaining the current work RVU of 21.00 for CPT code 
42420.
    Comment: Commenters disagreed with the proposed work RVUs for CPT 
codes 42415 and 42420 and requested that CMS accept the AMA RUC-
recommended RVUs of 18.12 and 21.00, respectively, for these services. 
Commenters stated that patients typically stay overnight, receiving 
these specific services require close monitoring for airway patency, 
formation of hematoma, and facial nerve function, and for 42420, 
intervention for any noted deficits, drain function, and control of 
nausea. Moreover, commenters stated that survey data show that the 
typical patient receives this procedure in the hospital (91 percent for 
42415 and 97 percent for 42420) and receives an E/M service on the same 
date (53 percent for 42415 and 64 percent for 42420). Commenters also 
noted that whether or not the service is designated outpatient or 
inpatient, the physician work is the same. Commenters requested that 
CMS not apply the site-of-service anomaly reductions to work RVUs and 
physician times, and accept the AMA RUC recommended RVUs of 18.12 for 
42415 and 21.00 for 42420.
    Response: Based on the public comments received, we referred both 
CPT codes 42415 and 42420 to the CY 2011 multi-specialty refinement 
panel for further review. The refinement panel median work RVUs were 
18.12 for 42415 and 21.00 for 42420, which was consistent with the AMA 
RUC recommendation to maintain the current (CY 2011) work RVUs. The 
current (CY 2011) work RVU for this service was developed when this 
service was typically furnished in the inpatient setting. As this 
service is now typically furnished in the outpatient setting, we 
believe that it is reasonable to expect that there have been changes in 
medical practice for these services, and that such changes would 
represent a decrease in physician time or intensity or both. However, 
the AMA RUC-recommendation and refinement panel results do not reflect 
a decrease in physician work. We do not believe it is appropriate for 
this now outpatient service to continue to reflect work that is 
typically associated with an inpatient service. In order to ensure 
consistent and appropriate valuation of physician work, we believe it 
is appropriate to apply our methodology described previously to address 
23-hour stay site-of-service anomalies. Therefore, we removed the 
subsequent observation care services, reduced the discharge day 
management service to one-half, and increased the post-service times. 
We are finalizing work RVUs of 17.16 for CPT code 42415 and 19.53 for 
CPT code 42420 with refinements to physician time. CMS time refinements 
can be found in Table 16.
    As detailed in the CY 2012 PFS proposed rule (76 FR 42799), for CPT 
code 42440 (Excision of submandibular (submaxillary) gland), we 
proposed a work RVU of 6.14 for CY 2012. As stated in section III.A. of 
this final rule with comment period, we believe the appropriate 
methodology for valuing site-of-service anomaly codes entails not just 
removing the inpatient visits, but also accounting for the removal of 
the inpatient visits in the work value of the CPT code. To 
appropriately revalue this CPT code to reflect an outpatient service we 
started with the original CY 2008 work RVU of 7.05 then, in accordance 
with the policy discussed in section III.A. of this final rule with 
comment period, we removed the value of the subsequent hospital care 
service and one-half discharge day management service, and added back 
the subsequent hospital care intra-service time to the immediate post-
operative care service.

[[Page 73134]]

The AMA RUC recommended maintaining the current work RVU of 7.13 for 
CPT code 42440 (76 FR 42799).
    Comment: Commenters disagreed with the CMS-proposed work RVU of 
6.14 for CPT code 42440 and believe that the AMA RUC-recommended work 
RVU of 7.13 was more appropriate for this service. Commenters disagreed 
with CMS' use of the reverse building block methodology, which removed 
the work RVUs associated with the subsequent hospital care code and 
half a hospital discharge day management service. Commenters noted that 
the AMA RUC originally valued this service using magnitude estimation 
based on comparison reference codes, which considers the total work of 
the service rather than the work of the component parts of the service, 
and requested CMS accept the AMA RUC-recommended work RVU and physician 
time. Commenters also noted that there was an increase in intensity of 
office visits, because rather than an overnight stay in the hospital, 
the typical patient is discharged the same day with tubes in their 
neck, and a more intense office visit is needed to remove the tube and 
manage other dressings.
    Response: Based on the public comments received, we referred CPT 
code 42440 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work was 7.13, which was consistent 
with AMA RUC recommendation to maintain the current (CY 2011) work RVU 
for this service. The current (CY 2011) work RVU for this service was 
developed when this service was typically furnished in the inpatient 
setting. As this service is now typically furnished in the outpatient 
setting, we believe that it is reasonable to expect that there have 
been changes in medical practice for these services, and that such 
changes would represent a decrease in physician time or intensity or 
both. However, the AMA RUC-recommendation does not reflect a decrease 
in physician work. We believe the appropriate methodology for valuing 
site-of-service anomaly codes entails not just removing the inpatient 
visits, but also accounting for the removal of the inpatient visits in 
the work value of the CPT code. Furthermore, we believe it is 
appropriate to remove the value of the subsequent hospital care service 
and one-half discharge day management service, and add back the 
subsequent hospital care intra-service time to the immediate post-
operative care service. Therefore, we are finalizing a work RVU for CPT 
code 42440 of 6.14 with refinements to time. CMS time refinements can 
be found in Table 16.
(15) Digestive: Esophagus (CPT codes 43262, 43327-43328, and 43332-
43338)
    As detailed in the Fourth Five-Year Review (76 FR 32448), for CPT 
code 43262 (Endoscopic retrograde cholangiopancreatography (ERCP); with 
sphincterotomy/papillotomy), we believed that the current (CY 2011) 
work RVU of 7.38 continued to accurately reflect the work of this 
service. We proposed to maintain the current work RVU and physician 
times for CPT code 43262. The AMA RUC recommended maintaining the 
current work RVUs for these services as well. However, the AMA RUC 
recommended a pre-service evaluation time of 15 minutes and immediate 
post service time of 20 minutes. Additionally, the AMA RUC recommended 
a pre-service positioning time of 5 minutes; a pre-service dress/scrub 
time of 5 minutes; and an intra-service time of 45 minutes. We noted 
that based on a preliminary review of the intra-service times for these 
codes, we were concerned the codes in this family are potentially 
misvalued. We requested that the AMA RUC undertake a comprehensive 
review of the entire family of ERCP codes, including the base CPT code 
43260, and provide us with work RVU recommendations.
    Comment: In its public comments to CMS on the Fourth Five-Year 
Review, the AMA RUC stated that it intends to review this family of 
codes in 2012. The AMA RUC also noted that CMS disagreed with the AMA 
RUC-recommended physician times for CPT code 43262. The AMA RUC 
requested that CMS accept the AMA RUC-recommended times be utilized for 
CY 2012.
    Response: We appreciate the AMA RUC accepting family of ERCP codes 
for review in 2012. We continue to have concerns about the recommended 
intra-service times for this code, and believe it is appropriate to 
maintain the current physician times. CMS time refinements can be found 
in Table 16.
    For CY 2012, we did not receive any public comments on the Fourth 
Five-Year Review proposed work RVUs for CPT code 43262. We believe this 
value continues to be appropriate and are finalizing it without 
modification (Table 15).
    For CY 2011 the CPT Editorial Panel deleted six existing CPT codes 
and created ten new CPT codes (CPT codes 43283, 43327-43328, 43332-
43338) to better report current surgical techniques for paraesophageal 
hernia procedures. The specialty societies surveyed their members, and 
the AMA RUC issued recommendations to us for the CY 2011 PFS final rule 
with comment period.
    As stated in the CY 2011 PFS final rule with comment period, after 
reviewing these new CPT codes, we believed that this coding change 
resulted in more codes that describe the same physician work with a 
greater degree of precision, and that the aggregate increase in work 
RVUs that would result from the adoption of the CMS-adjusted pre-budget 
neutrality RVUs would not represent a true increase in physician work. 
Therefore, we believed it was appropriate to apply work budget 
neutrality to this set of CPT codes. After reviewing the AMA RUC-
recommended work RVUs, we adjusted the work RVUs for two CPT codes (CPT 
code 43333 and 43335), and then applied work budget neutrality to the 
set of clinically related CPT codes. The work budget neutrality factor 
for the 10 paraesophageal hernia procedure CPT codes was 0.7374. The 
AMA RUC-recommended work RVU, CMS-adjusted work RVU prior to the budget 
neutrality adjustment, and the CY 2011 interim final work RVU for these 
paraesophageal hernia procedure codes follow (CPT codes 43283, 43327-
43328, 43332-43338) (75 FR 73338).

[[Page 73135]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.020

    As mentioned previously, and detailed in the CY 2011 PFS final rule 
with comment period, for CPT codes 43333 (Repair, paraesophageal hiatal 
hernia (including fundoplication), via laparotomy, except neonatal; 
with implantation of mesh or other prosthesis) and 43335 (Repair, 
paraesophageal hiatal hernia (including fundoplication), via 
thoracotomy, except neonatal; with implantation of mesh or other 
prosthesis), we disagreed with the AMA RUC-recommended work RVUs and 
assigned alternate RVUs prior to the application of work budget 
neutrality (75 FR 73331). For CPT code 43333 we assigned a pre-budget 
neutrality work RVU of 29.10 and for CPT code 43335 we assigned a pre-
budget neutrality work RVU of 32.50. We arrived at these values by 
starting with the AMA RUC-recommended values for the repair of 
papaesophageal hernia without mesh, CPT codes 43332 (Repair, 
paraesophageal hiatal hernia (including fundoplication), via 
laparotomy, except neonatal; without implantation of mesh or other 
prosthesis) and 43334 (Repair, paraesophageal hiatal hernia (including 
fundoplication), via thoracotomy, except neonatal; without implantation 
of mesh or other prosthesis) then adjusted them upward by a work RVU of 
2.50 to account for the incremental difference associated with the 
implantation of mesh or other prosthesis. The AMA RUC recommended a 
work RVU of 30.00 for CPT code 43333 and a work RVU of 33.00 for CPT 
43335 for CY 2011.
    Comment: Commenters disagreed with the application of work budget 
neutrality to this set of services and noted that the specialty 
societies and AMA RUC agreed that there was compelling evidence that 
technology has changed the physician work to repair esophageal hernias. 
Commenters stated that the work described by the deleted CPT codes was 
intended for patients with acid reflux or blockage and that, with the 
advent of medical management and less invasive treatments, the 
patients' currently undergoing surgery are symptomatic, typically with 
blockage. They stated that the typical patient has more advanced 
disease and requires more complex repair. Commenters also stated that 
the CY 2011 interim final values would create rank order anomalies 
between these CPT codes and other major inpatient surgical procedures.
    With regard to CPT codes 43333 and 43335, commenters disagreed with 
the CMS-assigned pre-budget neutrality work RVU of 29.10 for CPT code 
43333 and 32.50 for CPT code 43335, and believe that the AMA RUC-
recommended work RVUs of 30.00 for CPT code 43333 and 33.00 for CPT 
code 43335 are more appropriate for these services. Commenters noted 
that CMS adjusted the AMA RUC-recommended values for CPT codes 43333 
and 43335 by 2.50 work RVUs, an increment established in the AMA RUC's 
valuation of CPT codes 43336 and 43337. In other words CMS added 2.50 
work RVUs to the AMA RUC-recommended work RVUs of 26.60 for CPT code 
43332, which resulted in a value of 29.10 for CPT code 43333. Also, CMS 
added 2.50 work RVUs to the AMA RUC-recommended work RVUs of 30.00 for 
CPT code 43334, which resulted in a value of 32.50 for CPT code 43335. 
Commenters disagreed with this method because CMS' interim values were 
not supported by the survey results or AMA RUC recommendations. 
Commenters note that the AMA RUC recommendations were based on 
magnitude estimation rather than the building block methodology, which 
considers the total work of the service rather than the work of the 
component parts of the service. Commenters did not agree with adding 
component parts on to values that were based through magnitude 
estimation. Commenters asserted that these,services should be valued 
through magnitude estimation, rather than incremental addition of work 
RVUs of 2.50 in order to account for both the work related to inserting 
mesh, as well as other patient factors that in turn make the insertion 
of mesh necessary. Based on these arguments, commenters stated that 
work budget neutrality should not be applied to these codes, and urged 
CMS to accept the AMA RUC-recommended values for these services.
    Response: Based on comments received, we referred this set of 
paraesophageal hernia procedures (CPT codes 43283, 43327-43328, and 
43332-43338) to the CY 2011 multi-specialty refinement panel for 
further review. Though the refinement panel median work RVUs were work 
RVUs of 30.00 for CPT code 43333 and 33.00 for CPT 43335, which were 
consistent with the AMA RUC-recommended values for these services. We 
continue to believe that the application of work budget neutrality is 
appropriate for this set of clinically related CPT codes. While we 
understand that the practice of medicine has changed since these codes 
were originally valued, we do not believe these changes have resulted 
in more aggregate physician work. As such, we believe that allowing an 
increase in utilization-weighted RVUs within this set of clinically 
related CPT codes would be unjustifiably redistributive among PFS 
services. Additionally, we continue to believe that a work RVU of 2.50, 
which was based on a differential that was recommended by the AMA RUC 
between a pair of with/without implantation of mesh codes in this 
family, appropriately accounts for the incremental difference in work 
between CPT codes 43332 and 43333, and 43334 and 43335. After 
consideration of the public comments, refinement panel

[[Page 73136]]

results, and our clinical review, we are finalizing the CY 2011 interim 
final work RVU values for paraesophageal hernia procedures (CPT codes 
43283, 43327-43328, and 43332-43338) for CY 2012. The CY 2012 final 
work RVUs for these services are as follows:
[GRAPHIC] [TIFF OMITTED] TR28NO11.021

    Additionally, we received no public comments on the Fourth Five-
Year Review proposed work RVUs for CPT code 43415. We believe these 
values continue to be appropriate and are finalizing them without 
modification (Table 15).
(16) Digestive: Rectum (CPT code 45331)
    As detailed in the Fourth Five-Year Review, for CPT code 45331 
(Sigmoidoscopy, flexible; with biopsy, single or multiple) we believed 
that the current (CY 2011) work RVUs continued to accurately reflect 
the work of these services and, therefore, proposed a work RVU of 1.15 
for CPT code 45331. The AMA RUC recommended maintaining the current 
work RVUs for this service as well. For CPT code 45331, the AMA RUC 
recommended a pre-service time of 15 minutes, intra-service time of 15 
minutes, and post-service time of 10 minutes. While the AMA RUC 
recommended pre-service times based on the 75th percentile of the 
survey results, we believed it was more appropriate to accept the 
median survey physician times. Accordingly, we proposed to refine the 
times to the following: 5 minutes for pre-evaluation; 5 minutes for 
pre-service other, 5 minutes for pre- dress, scrub, and wait; 10 
minutes intra-service; and 10 minutes immediate post-service (76 FR 
32448).
    Comment: In its public comment to CMS on the Fourth Five-Year 
Review, the AMA RUC wrote that CMS agreed with the AMA RUC recommended 
work RVU, but noted that CMS disagreed with the AMA RUC recommended 
time components. The commenters further noted that CMS proposed to use 
the median survey time for CPT code 45331. The AMA RUC recommends that 
CMS accept the AMA RUC recommended intra-service time of 15 minutes for 
CPT code 45331.
    Response: In response to comments, we re-reviewed CPT code 45331. 
After reviewing the descriptions of pre-service work and the 
recommended pre-service time packages, we disagree with the times 
recommended by the AMA RUC. For CPT code 45331 we are finalizing a work 
RVU of 1.15. In addition, we are finalizing the following times for CPT 
code 45331: 5 minutes for pre-evaluation; 5 minutes for pre-service 
other, 5 minutes for pre- dress, scrub, and wait; 10 minutes intra-
service; and 10 minutes immediate post-service. CMS time refinements 
can be found in Table 16.
(17) Digestive: Biliary Tract (CPT Codes 47480, 47490, 47563, and 
47564)
    In the Fourth Five-Year Review, CMS identified CPT code 47563 as 
potentially misvalued through the Harvard Valued--Utilization > 30,000 
screen and site-of-service anomaly screen. The AMA RUC reviewed CPT 
codes 47564 and 47563.
    As detailed in the Fourth Five-Year Review (76 FR 32448), for CPT 
code 47563 (Laparoscopy, surgical; cholecystectomy with 
cholangiography), we proposed a work RVU of 11.47 with refinements in 
time for CPT code 47563 for CY 2012. The survey data show 95 percent 
(57 out of 60) of survey respondents stated they furnish the procedure 
``in the hospital.'' However, of those respondents who stated that they 
typically furnish the procedure in the hospital, 30 percent (17 out of 
57) stated that the patient is ``discharged the same day''; 46 percent 
(26 out of 57) stated the patient is ``kept overnight (less than 24 
hours)''; and 25 percent (14 out of 57) stated the patient is 
``admitted (more than 24 hours).'' These responses make no distinction 
between the patient's status as an inpatient or outpatient of the 
hospital for stays of longer than 24 hours. Based on the survey data, 
we valued this service based on our methodology to address 23-hour stay 
site-of-service anomaly services.
    As we discussed in section III.A. of this final rule with comment 
period, for codes with site-of-service anomalies, our policy is to 
remove any post-procedure inpatient visits remaining in the values for 
these codes and adjust physician times accordingly. It is also our 
policy for codes with site-of-service anomalies to consistently include 
the value of half of a discharge day management service, adjusting 
physician times accordingly. The AMA RUC recommended that this service 
be valued as a service furnished predominately in the facility setting 
with a work RVU of 12.11 for CPT code 47563 (76 FR 32448).
    Comment: Commenters disagreed with the proposed work RVU of 11.47, 
and supported the AMA RUC-recommended work RVU of 12.11 for CPT code 
47563. Commenters disagreed with CMS' methodology to address 23-hour 
stay site-of-service anomaly services of removing half of a discharge 
day management service. Commenters noted the change in physician work 
in the past five years; specifically, a more complex patient 
population. Commenters also stated that the physician's discharge work 
remains the same, independent of facility status. Commenters stated 
that CPT code 47563 is more intense and has a higher intra-service time 
than the key reference code 47562 (Laparoscopy, surgical; 
cholecystectomy), and cautioned against a rank order anomaly within the 
family

[[Page 73137]]

with CPT code 47562 (work RVU = 11.76). Commenters requested that CMS 
accept the AMA RUC-recommended work RVU of 12.11 and include a full day 
discharge service for CPT code 47563.
    Response: Based on the comments we received, we referred CPT code 
47563 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU was 12.11, which was 
consistent with the AMA RUC recommendation and the current (CY 2011) 
work RVU. The current (CY 2011) work RVU for this service was developed 
when this service was typically furnished in the inpatient setting. As 
this service is now typically furnished in the outpatient setting, we 
believe that it is reasonable to expect that there have been changes in 
medical practice for these services, and that such changes would 
represent a decrease in physician time or intensity or both. However, 
the AMA RUC-recommendation and refinement panel results do not reflect 
a decrease in physician work. We do not believe it is appropriate for 
this 23-hour stay service to continue to reflect work that is typically 
associated with an inpatient service. In order to ensure consistent and 
appropriate valuation of physician work, we believe it is appropriate 
to apply our methodology described previously to address 23-hour stay 
site-of-service anomalies. After consideration of the public comments, 
refinement panel results, and our clinical review, we are finalizing a 
work RVU of 11.47 to CPT code 47563. CMS time refinements can be found 
in Table 16.
    As detailed in the Fourth Five-Year Review (76 FR 32449), for CPT 
code 47564 (Laparoscopy, surgical; cholecystectomy with exploration of 
common duct), we proposed a work RVU of 18.00, the survey low work RVU, 
for CY 2012. We accepted the AMA RUC-recommended median survey times 
and believed the work RVU of 18.00 for CPT code 35860 was more 
appropriate given the significant reduction in recommended physician 
times in comparison to the current times. The AMA RUC recommended a 
work RVU of 20.00, the 25th survey percentile, for CPT code 47564.
    Comment: Commenters disagreed with the proposed work RVU of 18.00, 
and supported the AMA RUC-recommended work RVU of 20.00 for CPT code 
47564. Commenters disagreed with CMS' acceptance of the survey low, 
while the AMA RUC recommended the 25th survey percentile. Commenters 
noted that the physician times for CPT code 47564 were crosswalked in 
1994 and were not accurate. Therefore, they state that reducing the 
work value based on the reduction in physician time is not appropriate.
    Response: Based on comments we received, we referred CPT code 47564 
to the CY 2011 multi-specialty refinement panel for further review. The 
refinement panel median work RVU was 20.00, which was consistent with 
the AMA RUC recommendation for this service. We find that the median 
survey times, recommended by the AMA RUC, do not support the AMA RUC-
recommended increase in work RVUs. We believe that the proposed work 
RVU is more appropriate with the AMA RUC-recommended physician times 
that we accepted. After consideration of the public comments, 
refinement panel results, and our clinical review, we are finalizing a 
work RVU of 18.00 for CPT code 47564. CMS time refinements can be found 
in Table 16.
    For CY 2012, we received no comments on the Fourth Five-Year Review 
proposed work RVUs for CPT codes 47480 and 47490. We believe these 
values continue to be appropriate and are finalizing them without 
modification (Table 15).
(18) Digestive: Abdomen, Peritoneum, and Omentum (CPT codes 49324-
49655)
    We discussed CPT codes 49507 (Repair initial inguinal hernia, age 5 
years or over; incarcerated or strangulated), 49521 (Repair recurrent 
inguinal hernia, any age; incarcerated or strangulated), and 49587 
(Repair umbilical hernia, age 5 years or over; incarcerated or 
strangulated) in the Fourth Five-Year Review (76 FR 32449) where we 
noted these codes were identified as codes with a site-of- service 
anomaly. Medicare PFS claims data indicated that these codes are 
typically furnished in an outpatient setting. However, the current and 
AMA RUC-recommended values for these codes reflected work that is 
typically associated with an inpatient service. As discussed in section 
III.A. of this final rule with comment period, our policy is to remove 
any post-procedure inpatient and subsequent observation care visits 
remaining in the values for these codes and adjust physician times 
accordingly. It is also our policy for codes with site-of- service 
anomalies to consistently include the value of half of a discharge day 
management service. While the AMA RUC recommended maintaining the 
current work RVUs, utilizing our methodology, we proposed an 
alternative work RVU of 9.09 for CPT code 49507, 11.48 for CPT code 
49521, and 7.08 for CPT code 49587, with appropriate refinements to the 
time.
    Comment: Commenters disagreed with the CMS-proposed work RVU for 
CPT codes 49507 49521, and 49587. The commenters noted that for these 
three hernia repair codes, the AMA RUC survey data show 98-100 percent 
of survey respondents stated they furnish the procedure ``in the 
hospital.'' Commenters disagreed with CMS' use of the reverse building 
block methodology, which removed the subsequent observation care code 
and reduced the full hospital discharge day management code to a half 
day, along with the associated work RVUs and times. Commenters noted 
that the AMA RUC originally valued this service using magnitude 
estimation based on comparison reference codes, which considers the 
total work of the service rather than the work of the component parts 
of the service, and requested CMS accept the AMA RUC-recommended work 
RVU and physician time. Commenters requested that CMS reconsider this 
issue and accept the AMA RUC recommended work RVU as a valid relative 
measure using magnitude estimation and comparison to codes with similar 
work and intensity.
    Response: Based on comments received, we referred CPT codes 49507, 
49521, and 49587 to the CY 2011 multi-specialty refinement panel for 
further review. The refinement panel median work RVUs were 10.05 for 
CPT code 49507, 12.44 for CPT code 49521, and 8.04 for CPT code 49587, 
which was consistent with the AMA RUC recommendation to maintain the 
current (CY 2011) work RVU for this service. The current (CY 2011) work 
RVU for this service was developed when this service was typically 
furnished in the inpatient setting. As this service is now typically 
furnished in the outpatient setting, we believe that it is reasonable 
to expect that there have been changes in medical practice for these 
services, and that such changes would represent a decrease in physician 
time or intensity or both. However, the AMA RUC-recommendation and 
refinement panel results do not reflect a decrease in physician work. 
We do not believe it is appropriate for this now outpatient service to 
continue to reflect work that is typically associated with an inpatient 
service. While the commenter noted that the survey respondents 
overwhelmingly indicated that they furnish this procedure ``in the 
hospital,'' the Medicare claims data show these patients are typically 
in the hospital as outpatients, not inpatients and we do not believe 
that maintaining the current

[[Page 73138]]

value, which reflects work that is typically associated with an 
inpatient service, is appropriate. In order to ensure consistent and 
appropriate valuation of physician work, we believe it is appropriate 
to apply our methodology described previously to address 23-hour stay 
site-of-service anomalies. After consideration of the public comments, 
refinement panel results, and our clinical review, we are assigning a 
work RVU for CY 2012 of 9.09 for CPT code 49507, 11.48 for CPT code 
49521, and 7.08 for CPT code 49587, with appropriate refinements to the 
time. CMS time refinements can be found in Table 16.
    We discussed CPT code 49652 (Laparoscopy, surgical, repair, 
ventral, umbilical, spigelian or epigastric hernia (includes mesh 
insertion, when performed); reducible), CPT code 49653 (Laparoscopy, 
surgical, repair, ventral, umbilical, spigelian or epigastric hernia 
(includes mesh insertion, when performed); incarcerated or 
strangulated), CPT code 49654 (Laparoscopy, surgical, repair, 
incisional hernia (includes mesh insertion, when performed); 
reducible), and CPT code 49655 (Laparoscopy, surgical, repair, 
incisional hernia (includes mesh insertion, when performed)) in the 
Fourth Five-Year Review of Work (76 FR 32450-32452) where we noted 
these codes were identified as codes with a sites-of-services anomaly. 
Medicare PFS claims data indicated that these codes are typically 
furnished in an outpatient setting. However, the current and AMA RUC-
recommended values for these codes reflected work that is typically 
associated with an inpatient service. As discussed in section III.A. of 
this final rule with comment period, our policy is to remove any post-
procedure inpatient and subsequent observation care visits remaining in 
the values for these codes and adjust physician times accordingly. It 
is also our policy for codes with site-of-service anomalies to 
consistently include the value of half of a discharge day management 
service. While the AMA RUC recommended maintaining the current work 
RVUs, utilizing our methodology, we proposed an alternative work RVU of 
11.92 with refinements to the time for CPT code 49652, 14.92 with 
refinements to the time for CPT code 49653, 13.76 with refinements to 
the time for CPT code 49654, and 16.84 with refinements to the time for 
CPT code 49655.
    Comment: Commenters disagreed with the CMS-proposed work RVU for 
CPT codes 49652, 49653, 49654, and 49655. Commenters noted that similar 
to the three hernia repair codes previously discussed, the AMA RUC 
survey data show 98-100 percent of survey respondents stated they 
furnish these laparoscopic hernia repair procedures ``in the 
hospital.'' Commenters disagreed with CMS' use of the reverse building 
block methodology, which removed the subsequent observation care codes 
and reduced the full hospital discharge day management code to a half 
day, along with the associated work RVUs and times. Commenters noted 
that the AMA RUC originally valued this service using magnitude 
estimation based on comparison reference codes, which considers the 
total work of the service rather than the work of the component parts 
of the service, and requested CMS accept the AMA RUC-recommended work 
RVU and physician time. Commenters also contended the surgeon's post-
operative work has not changed and has not become easier because of a 
change in facility designation. Commenters requested that CMS 
reconsider this issue and accept the AMA RUC recommended work RVU as a 
valid relative measure using magnitude estimation and comparison to 
codes with similar work and intensity.
    Response: Based on comments received, we referred CPT codes 49652, 
49653, 49654, and 49655 to the CY 2011 multi-specialty refinement panel 
for further review. The refinement panel median work RVUs were 12.88, 
16.21, 15.03, and 18.11 for CPT codes 49652, 49653, 49654, and 49655, 
respectively, which were consistent with the AMA RUC recommendation to 
maintain the current work RVUs for this services. The current (CY 2011) 
work RVU for this service was developed when this service was typically 
furnished in the inpatient setting. As this service is now typically 
furnished in the outpatient setting, we believe that it is reasonable 
to expect that there have been changes in medical practice for these 
services, and that such changes would represent a decrease in physician 
time or intensity or both. However, the AMA RUC-recommendation and 
refinement panel results do not reflect a decrease in physician work. 
We do not believe it is appropriate for this now outpatient service to 
continue to reflect work that is typically associated with an inpatient 
service. We note again that while survey respondents overwhelmingly 
indicated that they furnish these procedures ``in the hospital,'' the 
Medicare claims data show these patients are typically in the hospital 
as outpatients, not inpatients and we do not believe that maintaining 
the current value, which reflects work that is typically associated 
with an inpatient service, is appropriate. In order to ensure 
consistent and appropriate valuation of physician work, we believe it 
is appropriate to apply our methodology described previously to address 
23-hour stay site-of-service anomalies. After consideration of the 
public comments, refinement panel results, and our clinical review, we 
are assigning a work RVU for CY 2012 of 11.92 with refinements to the 
time for CPT code 49652, 14.92 with refinements to the time for CPT 
code 49653, 13.76 with refinements to the time for CPT code 49654, and 
16.84 with refinements to the time for CPT code 49655.
    For CY 2012, we received no public comments on the CY 2011 interim 
final work RVUs for CPT codes 49324, 49327, 49412, 49418, 49419, 49421, 
and 49422. We believe these values continue to be appropriate and are 
finalizing them without modification (Table 15).
(19) Urinary System: Bladder (CPT Codes 51705-53860)
    As detailed in the Fourth Five-Year Review, for CPT code 51710 
(Change of cystostomy tube; complicated), we agreed with the AMA RUC-
recommended work RVU, and proposed a work RVU of 1.35 for CY 2012. The 
AMA RUC noted that a request was sent to CMS to have the global service 
period changed from a 10-day global period (010) to a 0-day global 
period (000), which only includes RVUs for the same day pre- and post-
operative period. The AMA RUC indicated that in the standards of care 
for this procedure, there is no hospital time and there are no follow 
up visits. The AMA RUC also noted that while the service was surveyed 
as a 10-day global, the respondents inadvertently included a hospital 
visit, CPT code 99231 (Subsequent hospital care), and removed the RVUs 
for that visit.
    Consequently, the AMA RUC did not use the survey results to value 
the code. Rather, comparing the physician work within the family of 
services, the AMA RUC compared CPT code 51710 to CPT code 51705 (Change 
of cystostomy tube; simple) and recommended a work RVU of 1.35 for CPT 
code 51710.
    We agreed to change the global period from a 10-day global to 0-day 
global. However, we noted that while we believed that changing a 
cystostomy tube in a complicated patient may be more time consuming 
than in a patient that requires a simple cystostomy tube change, we 
believed that the prepositioning time is unnecessarily high given the 
recommended pre-positioning time of 5 minutes for CPT

[[Page 73139]]

code 51705, which has an identical pre-positioning work description. 
Hence, we proposed refinements in time for CPT code 51710 for CY 2012 
(76 FR 32452).
    Comment: In their public comment to CMS on the Fourth Five-Year 
Review, the AMA RUC wrote that CMS agreed with the AMA RUC recommended 
work RVU and the request to change the global period from a 10-day 
global to 0-day global period. Commenters disagreed with CMS that the 
pre-service positioning time is identical between codes 51710 and 
51705. Commenters also state that the service does require more time 
for positioning since many times patients must be transferred from a 
wheelchair to an examination table. Lastly, commenters recommend that 
CMS accept the AMA RUC-recommended pre-service positioning time of 10 
minutes for CPT code 51710.
    Response: In response to comments, we re-reviewed CPT code 51710. 
After reviewing the descriptions of pre-service work and the 
recommended pre-service time packages, we continue to disagree with the 
times recommended by the AMA RUC. We believe that the prepositioning 
time is unnecessarily high given the recommended pre-positioning time 
of 5 minutes for CPT code 51705, which has an identical pre-positioning 
work description. For CPT code 51710, we are finalizing a work RVU of 
1.35. In addition, we are finalizing the following times for CPT code 
51710: 7 minutes for pre-evaluation; 5 minutes for pre-service 
positioning, 15 minutes for intra-service; and 15 minutes post-service. 
CMS time refinements can be found in Table 16.
    CPT codes 52281 (Cystourethroscopy, with calibration and/or 
dilation of urethral stricture or stenosis, with or without meatotomy, 
with or without injection procedure for cystography, male or female) 
and 52332 (Cystourethroscopy, with insertion of indwelling ureteral 
stent (e.g., Gibbons or double-J type)) were identified as a 
potentially misvalued code through the Five-Year Review Identification 
Workgroup under the Harvard-Valued potentially misvalued codes screen 
for services with utilization over 100,000.
    As detailed in the CY 2011 final rule with comment period (75 FR 
73339), for CPT code 52281, we assigned an interim final work RVU of 
2.60. The AMA RUC reviewed the survey results and determined that the 
physician time of 16 minutes pre-, 20 minutes intra-, and 10 minutes 
immediate post-service time and maintaining the current work RVUs of 
2.80 appropriately accounted for the time and work required to furnish 
this procedure. We disagreed with the AMA RUC recommendation to 
maintain the current RVUs for this code because the physician time to 
furnish this service (a building block of the code) has changed since 
the original ``Harvard values'' were established, as indicated by the 
AMA RUC-recommended reduction in pre-service time. Accounting for the 
reduction in pre-service time, we calculated work RVUs that were close 
to the survey 25th percentile.
    Comment: Commenters disagreed with the interim final work RVU of 
2.60. Commenters acknowledged that CPT code 52281 had significant 
reductions to the pre-service times. However, commenters stated that 
the work for this service had not changed. Commenters asserted that 
because this service was valued using magnitude estimation based on 
comparison reference codes, which considers the total work of the 
service rather than the work of the component parts of the service, it 
is not appropriate to remove RVUs based on time (a building block of 
the code). For CPT code, commenters requested that CMS accept the AMA 
RUC-recommended work RVU of 2.80.
    Response: Based on the comments received, we referred CPT code 
52281 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU was 2.75. As a result of 
the refinement panel ratings and clinical review by CMS, we are 
assigning a work RVU of 2.75 to CPT code 52281 as the final value for 
CY 2012.
    As detailed in the CY 2011 final rule with comment period (75 FR 
73339), for CPT code 52332, we assigned an interim final work RVU of 
2.60. We disagreed with the AMA RUC's CY 2011 work RVU recommendation 
to maintain the current value due significant reduction in pre-service 
time. Based on the same building block rationale we applied to CPT code 
52281, the other code within this family, we believed 2.60, which is 
the survey 25th percentile and maintains rank order, was a more 
appropriate valuation for 52332.
    Comment: Commenters believed that CMS made a mistake on the 
valuation for code 52332 in the CY 2011 PFS final rule with comment 
period. The information in the final rule with comment period prior to 
correction stated that the 25th percentile work RVU was 1.47. The 
commenters noted that the RUC states that the 25th percentile is 3.20 
not 1.47 as stated in the final rule. Additionally, the commenters 
stated that if CMS maintains the 1.47 work RVU, then 52332 will have 
less value than cystoscopy (52000) at 2.23 work RVUs. Moreover, 
commenters stated that the procedure identified as 52332 is a more 
intense procedure than 52000.
    Commenters also acknowledged that CPT code 52332 had significant 
reductions to the pre-service times. However, commenters stated that 
the work for this service had not changed. Commenters asserted that 
because this service was valued using magnitude estimation based on 
comparison reference codes, which considers the total work of the 
service rather than the work of the component parts of the service, it 
is not appropriate to remove RVUs based on time (a building block of 
the code). For CPT code, commenters requested that CMS accept the AMA 
RUC-recommended work RVU of 2.83.
    Response: We corrected a typographical error in the CY 2011 PFS 
final rule with comment period that improperly valued the work RVU for 
CPT code 52332 at 1.47, instead of the interim final work RVU of 2.60 
for CY 2011 (76 FR 1673). Based on the comments received, we referred 
CPT code 52332 to the CY 2011 multi-specialty refinement panel for 
further review. The refinement panel median work RVU was 2.82. As a 
result of the refinement panel ratings and clinical review by CMS, we 
are assigning a work RVU of 2.82 for CPT code 52332 as the final value 
for CY 2012.
    In the Fourth Five-Year Review, we identified CPT codes 51705, 
52005 and 52310 as potentially misvalued through the Harvard-Valued--
Utilization > 30,000 screen. CPT codes 51710, 52007 and 52315 were 
added as part of the family of services for AMA RUC review. In 
addition, we identified CPT codes 52630, 52649, 53440 and 57288 as 
potentially misvalued through the site-of-service anomaly screen. The 
specialty agreed to add CPT codes 52640 and 57287 as part of the family 
of services for AMA RUC review.
    As detailed in the Fourth Five-Year Review of Work (76 FR 32452), 
for 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 internalurethrotomy are included)), we 
proposed a work RVU of 6.55 for CY 2012. Medicare PFS claims data 
indicated that CPT code 52630 is typically furnished in an outpatient 
setting. However, the current AMA RUC-recommended values for this code 
reflected work that is typically associated with an inpatient service. 
Therefore, in accordance with our methodology to address 23-hour stay 
and site-of-service anomalies described

[[Page 73140]]

in section III.A. of this final rule with comment period, for CPT code 
52630, we removed the post procedure inpatient visit remaining in the 
AMA RUC-recommended value and adjusted the physician times accordingly. 
We also reduced the discharge day management service by one-half. The 
AMA RUC recommended maintaining the current work RVU of 7.73 for CPT 
code 52630.
    Comment: Commenters disagreed with the CMS-proposed work RVU of 
6.55 for CPT code 52630 and believe that the AMA RUC-recommended work 
RVU of 7.73 is more appropriate for this service. The commenters 
disagreed with CMS' reduction to half of a discharge day management 
service. Furthermore, commenters stated that one full discharge day 
management code (either 99238 or 99217 1.28 RVU) should be included in 
the valuation of 52630. The commenters asserted that there was not 
appropriate justification for CMS to remove 0.64 work RVUs from the 
RUC's recommendation to reduce the full day of discharge management 
services to one-half day. Commenters also stated that the AMA RUC-
recommended physician time should be restored.
    Response: Based on comments received, we referred CPT code 52630 to 
the CY 2011 multi-specialty refinement panel for further review. The 
refinement panel median work RVU was 7.14. The AMA RUC recommended 
maintaining the current (CY 2011) work RVU of 7.73. The current (CY 
2011) work RVU for this service was developed when this service was 
typically furnished in the inpatient setting. As this service is now 
typically furnished in the outpatient setting, we believe that it is 
reasonable to expect that there have been changes in medical practice 
for these services, and that such changes would represent a decrease in 
physician time or intensity or both. However, the AMA RUC-
recommendation and refinement panel results do not adequately reflect a 
decrease in physician work. We do not believe it is appropriate for 
this now outpatient service to continue to reflect work that is 
typically associated with an inpatient service. In order to ensure 
consistent and appropriate valuation of physician work, we believe it 
is appropriate to apply our methodology described previously to address 
23-hour stay site-of-service anomalies. After consideration of the 
public comments, refinement panel results, and our clinical review, we 
are assigning a work RVU of 6.55 to CPT code 52630 as the final value 
for CY 2012. Therefore, we are finalizing a pre-service time of 33 
minutes, a pre-service positioning time of 5 minutes, a pre-service 
(dress, scrub, wait) time of 15 minutes, an intra-service time of 60 
minutes, and a post-service time of 35 minutes. We are also reducing 
the hospital discharge day by 0.5 for CPT code 52630. CMS time 
refinements can be found in Table 16.
    As detailed in the Fourth Five-Year Review of Work (76 FR 32453), 
for 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)), we proposed a work RVU of 14.56 for CY 
2012. Medicare PFS claims data indicated that CPT code 52649 is 
typically furnished in an outpatient setting. However, the current AMA 
RUC-recommended values for this code reflected work that is typically 
associated with an inpatient service. Therefore, in accordance with our 
methodology to address 23-hour stay and site-of-service anomalies 
described in section III.A. of this final rule with comment period, CPT 
code 52649, we reduced the discharge day management service to one-half 
and adjusted the physician times accordingly. The AMA RUC recommended a 
work RVU of 15.20 for CPT code 52649.
    Comment: Commenters disagreed with the CMS proposed work RVU of 
14.56 for CPT code 52649 and believe that the AMA RUC-recommended work 
RVU of 15.20 is more appropriate for this service. In addition, the 
commenters disagreed that a half-day of discharge management services 
is appropriate for this code. The commenters support the utilization of 
a full discharge day that takes into account the time the physician 
spends returning to the hospital later that night or the next morning 
to review charts, furnish an examination of the patient, check on post-
operative status, speak with the patient's family, and provide any 
subsequent discharge services that usually require more than 30 
minutes. Commenters also stated that the AMA RUC physician time should 
be restored.
    Response: Based on comments received, we referred CPT code 52649 to 
the CY 2011 multi-specialty refinement panel for further review. The 
refinement panel median work RVU was 14.88. The AMA RUC recommendation 
for this service was a work RVU of 15.20. The AMA RUC-recommended work 
value for this service included a full discharge day management 
service, which we do not believe is appropriate for an outpatient 
service. As this service is now typically furnished in the outpatient 
setting, we believe that it is reasonable to expect that there have 
been changes in medical practice for these services, and that such 
changes would represent a decrease in physician time or intensity or 
both. The AMA RUC-recommendation and refinement panel results do not 
adequately reflect the appropriate decrease in physician work. We do 
not believe it is appropriate for this now outpatient service to 
continue to reflect work that is typically associated with an inpatient 
service. In order to ensure consistent and appropriate valuation of 
physician work, we believe it is appropriate to apply our methodology 
described previously to address 23-hour stay site-of-service anomalies. 
After consideration of the public comments, refinement panel results, 
and our clinical review, we are assigning a work RVU of 14.56 to CPT 
code 52649 as the final value for CY 2012. In addition, we are 
finalizing a pre-service time of 33 minutes, a pre-service positioning 
time of 5 minutes, a pre-service (dress, scrub, wait) time of 15 
minutes, an intra-service time of 120 minutes, and a post-service time 
of 25 minutes. We are also reducing the hospital discharge day by 0.5 
for CPT code 52649. CMS time refinements can be found in Table 16.
    As detailed in the Fourth Five-Year Review of Work (76 FR 32453), 
for CPT code 53440 (Sling operation for correction of male urinary 
incontinence (e.g., fascia or synthetic)), we proposed a work RVU of 
13.36 for CY 2012. Medicare PFS claims data indicated that CPT code 
53440 is typically furnished in a hospital setting as an outpatient 
service. However, the current AMA RUC-recommended values for this code 
reflected work that is typically associated with an inpatient service. 
Therefore, in accordance with our methodology to address 23-hour stay 
and site-of-service anomalies described in section III.A. of this final 
rule with comment period, for CPT code 53440, we reduced the discharge 
day management service to one-half. The AMA RUC recommended a work RVU 
of 14.00 for CPT code 53440.
    Comment: Commenters disagreed with the CMS proposed work RVU of 
13.36 for CPT code 53440 and believe that the AMA RUC-recommended work 
RVU of 14.00 is more appropriate for this service. In addition, the 
commenters disagreed that a half-day of discharge management services 
is appropriate for this code. The commenters support the utilization of 
a full discharge day that takes into account the time the physician 
spends returning to the hospital later that night or the next morning 
to review charts, furnish an examination of the patient,

[[Page 73141]]

check on post-op status, speak with the patient's family, and provide 
any subsequent discharge services that usually require more than 30 
minutes. Commenters also stated that the AMA RUC-recommended physician 
time should be restored.
    Response: Based on comments received, we referred CPT code 53440 to 
the CY 2011 multi-specialty refinement panel for further review. The 
refinement panel median work RVU was 13.68. The current (CY 2011) work 
RVU for this service was developed when this service was typically 
furnished in the inpatient setting. As this service is now typically 
furnished in the outpatient setting, we believe that it is reasonable 
to expect that there have been changes in medical practice for these 
services, and that such changes would represent a decrease in physician 
time or intensity or both. However, the AMA RUC-recommendation and 
refinement panel results do not adequately reflect a decrease in 
physician work. We do not believe it is appropriate for this now 
outpatient service to continue to reflect work that is typically 
associated with an inpatient service. In order to ensure consistent and 
appropriate valuation of physician work, we believe it is appropriate 
to apply our methodology described previously to address 23-hour stay 
site-of-service anomalies. After consideration of the public comments, 
refinement panel results, and our clinical review, we are assigning a 
work RVU of 13.36 to CPT code 53440 as the final value for CY 2012. In 
addition, we are finalizing a pre-service time of 33 minutes, a pre-
service positioning time of 7 minutes, a pre-service (dress, scrub, 
wait) time of 15 minutes, an intra-service time of 90 minutes, and a 
post-service time of 22 minutes. We are also reducing the hospital 
discharge day by 0.5 for CPT code 53440. CMS time refinements can be 
found in Table 16.
    For CY 2009, CPT code 53445 (Insertion of inflatable urethral/
bladder neck sphincter, including placement of pump, reservoir, and 
cuff) was identified as potentially misvalued through the site-of-
service anomaly screen. As detailed in the CY 2012 PFS proposed rule 
(76 FR 42799), we proposed a work RVU of 13.00 for CY 2012. Medicare 
PFS claims data indicated that CPT code 53445 is typically furnished in 
a hospital setting as an outpatient service. Upon clinical review of 
this service and the time and visits associated with it, we believe 
that the survey 25th percentile work RVU of 13.00 appropriately 
accounts for the work required to furnish this service (76 F42800).
    Comment: Commenters disagreed with the CMS-proposed work RVU of 
13.00 for CPT code 53445 and stated that a work RVU of 15.39 is more 
appropriate for this service. Some commenters opposed the reduction in 
RVUs for this service and our utilization of a reverse building block 
methodology. Additionally, some commenters expressed concerns regarding 
the use of the 25th percentile in the CMS and whether this methodology 
accounts for the resources required to furnish this service. However, 
the AMA RUC clarified that the AMA RUC recommendation was misstated in 
the proposed rule due to an error, and that the AMA RUC-recommended 
work RVU is 13.00 for CPT 53445.
    Response: We agree with the AMA RUC that the 25th percentile value 
of 13.00 work RVUs is appropriate for this service. Therefore, we are 
finalizing a work RVU of 13.00 for CPT code 53445 for CY 2012.
    For CY 2012, we received no public comments on the CY 2011 interim 
final work RVUs for CPT codes 50250, 50542, 51736, 51741, 53860, 55866, 
and 55876. Also, for CY 2012, we received no public comments on the CY 
2012 proposed work RVUs for CPT codes 52341, 52342, 52343, 52344, 
52345, 52346, 52400, 52500, 54410, and 54530. Finally, for CY 2012, we 
received no public comments on the Fourth Five-Year Review proposed 
work RVUs for CPT codes 51705, 52005, 52007, 52310, 52315, and 52640. 
We believe these values continue to be appropriate and are finalizing 
them without modification (Table 15).
(20) Female Genital System: Vagina (CPT Codes 57155-57288)
    We discussed CPT code 57155 (Insertion of uterine tandems and/or 
vaginal ovoids for clinical brachytherapy) in the CY 2011 PFS final 
rule with comment period (75 FR 73330). For CY 2011, the AMA RUC 
reviewed survey responses, concluded that the survey median work RVU 
appropriately accounts for the physician work required to furnish this 
service, and recommended a work RVU of 5.40 for CPT code 57155. We 
disagreed with the AMA RUC-recommended value for this service because 
the description of the AMA RUC's methodology was unclear to us. We 
believed the work RVU of 3.37 was more appropriate for this service, 
which is the same as the value assigned to CPT code 58823 (Drainage of 
pelvic abscess, transvaginal or transrectal approach, percutaneous 
(e.g., ovarian, pericolic)), which we believed was an appropriate 
crosswalk. Therefore, we assigned an alternative work RVU of 3.37 to 
CPT code 57155 on an interim final basis for CY 2011.
    Comment: Commenters disagreed with this proposed value. Commenters 
did not believe comparison of CPT code 57155 to CPT code 58823 was 
acceptable, asserting CPT code 57155 is a much higher intensity 
procedure that is not clinically parallel in work or intensity to CPT 
code 58823. Commenters stated that they preferred CMS accept the AMA 
RUC recommendation.
    Response: Based on the comments received, we referred CPT code 
57155 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU was 5.40. As a result of 
the refinement panel ratings and clinical review by CMS, we are 
assigning a work RVU of 5.40 to CPT code 57155 as the final value for 
CY 2012.
    We discussed CPT code 57156 (Insertion of a vaginal radiation 
afterloading apparatus for clinical brachytherapy) in the CY 2011 PFS 
final rule with comment period (75 FR 73330). For CY 2011, the AMA RUC 
reviewed survey responses, concluded that the survey 25th work RVU 
appropriately accounts for the physician work required to furnish this 
service, and recommended a work RVU of 2.69. We disagreed with the AMA 
RUC's valuation of the work associated with this service and determined 
it was more appropriate to crosswalk CPT code 57156 to CPT code 62319 
(Injection, including catheter placement, continuous infusion or 
intermittent bolus, not including neurolytic substances, with or 
without contrast (for either localization or epidurography), of 
diagnostic or therapeutic substance(s) (including anesthetic, 
antispasmodic, opioid, steroid, other solution), epidural or 
subarachnoid; lumbar, sacral (caudal)) (work RVUs = 1.87), which has 
the same intra-service time (30 minutes) and overall lower total time 
than the comparison services referenced by the AMA RUC. We assigned an 
alternative value of 1.87 work RVUs to CPT code 57156 on an interim 
final basis for CY 2011.
    Comment: The commenters disagreed with interim final value, noting 
the AMA RUC recommended the survey 25th percentile value which the 
commenters preferred over CMS' crosswalk. The commenters requested that 
CMS accept the AMA RUC recommendation.
    Response: Based on the comments received, we referred CPT code 
57156 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement

[[Page 73142]]

panel median work RVU was 2.69. As a result of the refinement panel 
ratings and clinical review by CMS, we are assigning a work RVU of 2.69 
to CPT code 57156 as the final value for CY 2012.
    Additionally, we note there were two other codes in the Female 
Genital System: Vagina family for which we agreed with the AMA RUC 
recommendations. We received no public comments on CPT codes 57287 
(Revise/remove sling repair) and 57288 (Repair bladder defect). For CY 
2012, we received no public comments on the Fourth Five-Year Review of 
Work proposed work RVUs for CPT codes 57287 and 57288. We believe these 
values continue to be appropriate and are finalizing them without 
modification (Table 15).
(21) Maternity Care and Delivery (CPT Codes 59400-59410, 59510-59515, 
and 59610-59622)
    CPT codes 54900-59622 were identified as potentially misvalued 
codes ``High IWPUT'' screen. The specialty societies surveyed their 
members, and the AMA RUC issued recommendations to us for the CY 2011 
PFS final rule with comment period.
    As stated in the CY 2011 PFS final rule with comment period (75 FR 
73338), for CY 2011 the AMA RUC reviewed 17 existing obstetrical care 
codes as part of the potentially misvalued code initiative. The AMA RUC 
recommended significant increases in the work RVUs for some of the 
comprehensive obstetrical care codes, largely to address the management 
of labor. While we generally agreed with the resulting AMA RUC-
recommended rank order of services in this family, we believed that the 
aggregate increase in work RVUs for the obstetrical services that would 
result from the adoption of the CMS-adjusted pre-budget neutrality work 
RVUs was not indicative of a true increase in physician work for the 
services. Therefore, we believed that it would be appropriate to apply 
work budget neutrality to this set of CPT codes. After reviewing the 
AMA RUC-recommended work RVUs, we adjusted the work RVUs for several 
codes, then applied work budget neutrality to the set of clinically 
related CPT codes. The work budget neutrality factor for the 17 
obstetrical care CPT codes was 0.8922. The AMA RUC-recommended work 
RVU, CMS-adjusted work RVU prior to the budget neutrality adjustment, 
and the CY 2011 interim final work RVU for obstetrical care codes (CPT 
codes 59400-59410, 59510-59515, and 59610-59622) follow.
[GRAPHIC] [TIFF OMITTED] TR28NO11.022

    As mentioned previously, and detailed in the CY 2011 PFS final rule 
with comment period, we disagreed with the AMA RUC-recommended work 
RVUs for a subset of the obstetrical care CPT codes, and assigned 
alternate RVUs prior to the application of work budget neutrality (75 
FR 73340). For obstetrical care services that include postpartum care 
with delivery, the AMA RUC included one CPT code 99214 visit (Level 4 
established patient office or other outpatient visit). We believed that 
one CPT code 99213 visit (Level 3 established patient office or other 
outpatient visit) more accurately reflected the services furnished at 
this postpartum care visit. Therefore, for the obstetrical care 
services that include postpartum care following delivery, we converted 
the CPT code 99214 visit to a 99213 visit and revised the work RVUs 
accordingly. This includes the following CPT codes: 59400 (Routine 
obstetric care including antepartum care, vaginal delivery (with or 
without episiotomy, and/or forceps) and postpartum care), 59410 
(Vaginal delivery only (with or without episiotomy and/or forceps); 
including postpartum care), 59510 (Routine obstetric care including 
antepartum care, cesarean delivery, and postpartum care), 59515 
(Cesarean delivery only; including postpartum care), 59610 (Routine 
obstetric care including antepartum care, vaginal delivery (with or 
without episiotomy, and/or forceps) and postpartum care, after previous 
cesarean delivery), 59614 (Vaginal delivery only, after previous 
cesarean delivery (with or without episiotomy and/or forceps); 
including postpartum care), 59618 (Routine obstetric care including 
antepartum care, cesarean delivery, and postpartum care, following 
attempted vaginal delivery after previous cesarean delivery), and 59622 
(Cesarean delivery only, following attempted vaginal delivery after 
previous cesarean delivery; including postpartum care).

[[Page 73143]]

    Comment: Commenters disagreed with the application of work budget 
neutrality to this set of services and noted that the specialty 
societies and AMA RUC agreed that there was compelling evidence that 
the work RVUs for these services should be increased. Commenters stated 
that the original work RVUs for the obstetrical care codes were 
established using a flawed building block methodology, and that 
discharge day management was not accounted for. Commenters also stated 
that the original building blocks that were used to develop RVUs for 
the obstetrical care codes included evaluation and management codes, 
and that the RVUs for these obstetrical care codes had not been 
increased though the evaluation and management codes have had 
significant RVU increases in the past 17 years. Based on these 
arguments, commenters stated that work budget neutrality should not be 
applied to these codes, and urged CMS to accept the AMA RUC-recommended 
values for these services.
    Additionally, commenters disagreed with the CMS decision to change 
the post-partum visit building block from a CPT code 99214 office visit 
to a CPT code 99213 office visit. Commenters noted that the post-partum 
visit includes not only a post-procedure physical exam, but also 
counseling and screening. They reiterated that they believe the CPT 
code 99214 office visit best reflects the amount of services provided 
by the physician at this visit. Therefore, commenters requested that 
CMS accept the AMA RUC-recommended values for all of the obstetrical 
care services.
    Response: We appreciate the specialty society's comprehensive 
application of the building block methodology to value the obstetrical 
care services and the detailed rationale they provided. After clinical 
review, we continue to believe that CPT code 99213, rather than CPT 
code 99214, accurately reflects the work associated with the provision 
of the post-partum office visit, and are maintaining the CMS-adjusted 
pre-budget neutrality RVUs for these services. After reviewing public 
comments and the history of the valuation of the obstetrical care CPT 
codes, we agree with commenters that the increase in work RVUs reflects 
a true increase in aggregate work for this set of service, and not just 
a structural coding change. As such, we are not applying the budget 
neutrality scaling factor of 0.8922 discussed in the CY 2011 PFS final 
rule with comment period for these obstetrical care services. After 
consideration of the public comments, refinement panel results, and our 
clinical review, we are finalizing the following values for obstetrical 
care services (CPT codes 59400-59410, 59510-59515, and 59610-59622) for 
CY 2012:
[GRAPHIC] [TIFF OMITTED] TR28NO11.023

(22) Endocrine System: Thyroid Gland (CPT Codes 60220-60240)
    In the Fourth Five-Year Review, we identified CPT codes 60220, 
60240, and 60500 as potentially misvalued through the sites-of-service 
anomaly screen. The related specialty societies surveyed these codes 
and the AMA RUC issued recommendations to CMS for the Fourth Five-Year 
Review of Work.
    As detailed in the Fourth Five-Year Review of Work (76 FR 32453), 
for CPT code 60220 (Total thyroid lobectomy, unilateral; with or 
without isthmusectomy), we proposed a work RVU of 11.19 for CY 2012. 
Medicare PFS claims data indicated that CPT code 60220 is typically 
furnished as an outpatient rather than inpatient service. However, the 
AMA RUC recommended that this service be valued as a service furnished 
predominately in the facility setting. The AMA RUC indicated that since 
the typical patient is kept overnight, the AMA RUC believes that one 
inpatient hospital visit as well as one discharge day management 
service should be maintained in the post operative visits for this 
service. Using magnitude estimation, the AMA RUC recommended the 
current work RVU of 12.37 for CPT code 60220. In accordance with our 
methodology to address 23-hour stay and site-of-service anomalies 
described in III.A. of this final rule with comment period, for CPT 
code 60220, we removed the hospital visit, reduced the discharge day 
management service by one-half, and adjusted times.
    Comment: Commenters disagreed with the CMS-proposed work RVU of 
11.19 for CPT code 60220 and believe that that AMA RUC recommended work 
RVU is more appropriate for this service. Commenters noted that the CMS 
value was derived from the reverse building block methodology, which 
removed the subsequent hospital care code and reduced the full hospital

[[Page 73144]]

discharge day management code to a half day. Commenters also stated 
that our reverse building block methodology is incorrect because 
Harvard did not use RVU's for E/M codes to build the values-minutes 
were used. Commenters recommended maintaining the current work RVU of 
12.37 for CPT code 60220. Commenters also stated that the AMA RUC-
recommended physician time should be restored.
    Response: Based on the public comments received, we referred CPT 
60220 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU was 12.37, which is 
consistent with the AMA RUC recommendation to maintain the current (CY 
2011) work RVU for CPT code 60220. The current (CY 2011) work RVU for 
this service was developed when this service was typically furnished in 
the inpatient setting. As this service is now typically furnished in 
the outpatient setting, we believe that it is reasonable to expect that 
there have been changes in medical practice for these services, and 
that such changes would represent a decrease in physician time or 
intensity or both. However, the AMA RUC-recommendation and refinement 
panel results do not reflect a decrease in physician work. We do not 
believe it is appropriate for this now outpatient service to continue 
to reflect work that is typically associated with an inpatient service. 
In order to ensure consistent and appropriate valuation of physician 
work, we believe it is appropriate to apply our methodology described 
previously to address 23-hour stay site-of-service anomalies. 
Therefore, we are finalizing a work RVU for CPT code 60220 of 11.19. In 
addition, after reviewing the descriptions of the AMA RUC-recommended 
time packages, we disagree with the post-service time recommended by 
the AMA RUC. Therefore, we are finalizing a pre-service time of 40 
minutes, a pre-service positioning time of 12 minutes, a pre-service 
(dress, scrub, wait) time of 20 minutes, an intra-service time of 90 
minutes, and a post-service time of 40 minutes. We are also reducing 
the hospital discharge day by 0.5 for CPT code 60220. CMS time 
refinements can be found in Table 16.
    As detailed in the Fourth Five-Year Review of Work (76 FR 32454), 
for CPT code 60240 (Thyroidectomy, total or complete), we proposed a 
work RVU of 15.04 for CY 2012. Medicare PFS claims data indicated that 
CPT code 60240 is typically furnished as an outpatient rather than 
inpatient service. Using magnitude estimation, the AMA RUC believed the 
current work RVU of 16.22 for CPT code 60240 was appropriate. However, 
in accordance with our methodology to address 23-hour stay and site-of-
service anomalies described in section III.A. of this final rule with 
comment period, for CPT code 60240, we removed the post-procedure 
inpatient visit and reduced the discharge day management service to 
one-half. The AMA RUC recommended maintaining the current work RVU of 
16.22 for CPT code 60240.
    Comment: Commenters disagreed with the CMS-proposed work RVU of 
15.04 of CPT code 60240 and believe that the AMA RUC-recommended work 
RVU of 16.22 is more appropriate. Additionally, commenters noted that 
the CMS value was derived from the reverse building block methodology, 
which removed the post-procedure inpatient visit and reduced the 
discharge day management service to one-half. Commenters also stated 
that the AMA RUC originally valued this service using magnitude 
estimation based on comparison reference codes, and requested that CMS 
accept the AMA RUC-recommended work RVU of 16.22 for CPT code 60420. 
Commenters also stated that the AMA RUC-recommended physician time 
should be restored.
    Response: Based on the public comments received, we referred CPT 
60240 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU was 16.22, which was 
consistent with the AMA RUC recommendation to maintain the current (CY 
2011) work RVU for CPT code 60240. The current (CY 2011) work RVU for 
this service was developed when this service was typically furnished in 
the inpatient setting. As this service is now typically furnished in 
the outpatient setting, we believe that it is reasonable to expect that 
there have been changes in medical practice for these services, and 
that such changes would represent a decrease in physician time or 
intensity or both. However, the AMA RUC-recommendation and refinement 
panel results do not reflect a decrease in physician work. We do not 
believe it is appropriate for this service, which is typically 
furnished on an outpatient basis, to continue to reflect work that is 
typically associated with an inpatient service. In order to ensure 
consistent and appropriate valuation of physician work, we believe it 
is appropriate to apply our methodology described previously to address 
23-hour stay site-of-service anomalies finalized in the CY 2011 PFS 
final rule with comment period (75 FR 73220). Therefore, we are 
finalizing a work RVU for CPT code 60240 of 15.04. In addition, after 
reviewing the descriptions of the AMA RUC-recommended time packages, we 
disagree with the post-service time recommended by the AMA RUC. 
Therefore, we are finalizing a pre-service time of 40 minutes, a pre-
service positioning time of 12 minutes, a pre-service (dress, scrub, 
wait) time of 20 minutes, an intra-service time of 150 minutes, and a 
post-service time of 40 minutes. We are also reducing the hospital 
discharge day by 0.5 for CPT code 60240. CMS time refinements can be 
found in Table 16.
(23) Endocrine System: Parathyroid, Thymus, Adrenal Glands, Pancreas, 
and Cartoid Body (CPT Code 60500)
    As detailed in the Fourth Five-Year Review of Work (76 FR 32454), 
for CPT code 60500 (Parathyroidectomy or exploration of 
parathyroid(s)), we proposed a work RVU of 15.60 for CY 2012. Medicare 
PFS claims data indicated that CPT code 60500 is typically furnished as 
an outpatient rather than inpatient service. Using magnitude 
estimation, the AMA RUC believed the current work RVU of 16.78 for CPT 
code 60500 was appropriate. Therefore, in accordance with our 
methodology to address 23-hour stay and site-of-service anomalies 
described in section III.A. of this final rule with comment period, for 
CPT code 60500, we removed the hospital visit, reduced the discharge 
day management service by one-half, and adjusted times. The AMA RUC 
recommended maintaining the current work RVU of 16.78 for CPT code 
60500.
    Comment: Commenters disagreed with the CMS-proposed work RVU of 
15.60 for CPT code 60500 and believe that the AMA RUC-recommended work 
RVU of 16.78 is more appropriate. Additionally, commenters noted that 
the CMS value was derived from the reverse building block methodology, 
which removed the hospital visit and reduced the discharge day 
management service to one-half. Commenters also stated that the AMA RUC 
originally valued this service using magnitude estimation based on 
comparison reference codes, and requested that CMS accept the AMA RUC 
recommended work RVU of 16.78 for CPT code 60500. Commenters also 
stated that the AMA RUC recommended physician time should be restored.
    Response: Based on the public comments received, we referred CPT 
60500 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU was 16.78, which was 
consistent with the AMA RUC recommendation to maintain

[[Page 73145]]

the current (CY 2011) work RVU for CPT code 60500. The current (CY 
2011) work RVU for this service was developed when this service was 
typically furnished in the inpatient setting. As this service is now 
typically furnished in the outpatient setting, we believe that it is 
reasonable to expect that there have been changes in medical practice 
for these services, and that such changes would represent a decrease in 
physician time or intensity or both. However, the AMA RUC-
recommendation and refinement panel results do not reflect a decrease 
in physician work. We do not believe it is appropriate for this 
service, which is typically furnished on an outpatient basis, to 
continue to reflect work that is typically associated with an inpatient 
service. In order to ensure consistent and appropriate valuation of 
physician work, we believe it is appropriate to apply our methodology 
described previously to address 23-hour stay site-of-service anomalies. 
Therefore, we are finalizing a work RVU for CPT code 60500 of 15.60. In 
addition, after reviewing the descriptions of the AMA RUC-recommended 
time packages, we disagree with the post-service time recommended by 
the AMA RUC. Therefore, we are finalizing a pre-service time of 40 
minutes, a pre-service positioning time of 12 minutes, a pre-service 
(dress, scrub, wait) time of 20 minutes, an intra-service time of 120 
minutes, and a post-service time of 40 minutes. We are also reducing 
the hospital discharge day by 0.5 for CPT code 60500. CMS time 
refinements can be found in Table 16.
(24) Nervous System: Skull, Meninges, Brain and Extracranial Peripheral 
Nerves, and Autonomic Nervous System (CPT Codes 61781-61885, 64405-
64831)
    We discussed CPT code 61885 (Insertion or replacement of cranial 
neurostimulator pulse generator or receiver, direct or inductive 
coupling; with connection to a single electrode array) in the CY 2011 
final rule with comment period (75 FR 73332) where we noted that this 
code was identified as a site-of-service anomaly code in September 
2007. After reviewing the vagal nerve stimulator family of services, 
the specialty societies agreed that the family lacked clarity and the 
CPT Editorial Panel created three new codes to accurately describe 
revision of a vagal nerve stimulator lead, the placement of the pulse 
generator and replacement or revision of the vagus nerve electrode. For 
CY 2011, the AMA RUC recommended a work RVU of 6.44 for CPT code 61885. 
Although the AMA RUC compared this service to the key reference 
service, CPT code 63685 (Insertion or replacement of spinal 
neurostimulator pulse generator or receiver, direct or inductive 
coupling) (work RVUs = 6.05) and other relative services and noted the 
similarities in times, the AMA RUC elected not to recommend this value 
of 6.05 for CPT code 61885. We believed the AMA RUC-recommended work 
RVUs did not adequately account for the elimination of two inpatient 
visits and the reduction in outpatient visits for this service. We 
disagreed with the AMA RUC recommended value and believed 6.05 work 
RVUs, the survey 25th percentile, was appropriate for this service. 
Therefore, we assigned an alternative value of 6.05 work RVUs to CPT 
code 61885 on an interim final basis for CY 2011.
    Comment: Commenters stated that assumptions by CMS that the RUC 
recommendations did not adequately account for the elimination of two 
inpatient visits and the reduction in outpatient visits for this 
service is flawed. Furthermore, the commenters asserted that the 
rationale in the RUC database indicates that the initial RUC 
recommended value for this code included a reduction in value due to an 
adjustment of the post-operative E/M visits. Commenters recommended we 
accept the AMA RUC-recommended work RVU of 6.44 for CPT code 61885.
    Response: Based on the comments received, we referred CPT code 
61885 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU was 6.44, which was 
consistent with the AMA RUC-recommendation to maintain the current work 
RVU for this service. We believe that the AMA RUC-recommended work RVUs 
did not adequately account for the elimination of two inpatient visits 
and the reduction in outpatient visits for this service. We believe 
that 6.05 work RVUs, the survey 25th percentile, is appropriate for 
this service. Therefore, we are finalizing a work RVU of 6.05 for CPT 
code 61885 in CY 2012.
    In the Fourth Five-Year Review (76 FR 32455), CMS identified CPT 
code 64405 as potentially misvalued through the Harvard-Valued--
Utilization > 30,000 screen. As detailed in the Fourth Five-Year Review 
of Work, for CPT code 64405 ((Injection, anesthetic agent; greater 
occipital nerve), we proposed a work RVU of 0.94 for CY 2012. The AMA 
RUC reviewed the survey results and recommended the median survey work 
RVU of 1.00 for CPT code 64405. We disagreed with the AMA RUC-
recommended work RVU for CPT code 64405. Upon clinical review and a 
consideration of physician time and intensity, we believed this code is 
comparable to the key reference CPT code 20526 (Injection, therapeutic 
(e.g., local anesthetic, corticosteroid), carpal tunnel) (work RVU = 
0.94).
    Comment: Commenters disagreed with the CMS-proposed work RVU of 
0.94 of CPT code 64405 and believe that the AMA RUC-recommended work 
RVU of 1.00 is more appropriate. The commenters noted survey findings 
stating that 97 percent of the respondents agreed that the vignette 
described the typical patient for this service. Furthermore, the 
commenters stated that CMS does not provide any rationale explaining 
use of CPT code 20526 as a comparison over the AMA RUC vignette and 
survey results. Commenters believed that CMS should give more 
consideration to the survey results when valuing an occipital nerve 
block.
    Response: Based on the public comments received, we referred CPT 
64405 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU supported the AMA RUC-
recommended work RVU of 1.00 for CPT code 64405. We believe that the 
comparison to CPT code 20526 is appropriate for this service and 
related work RVUs. Therefore, we are finalizing a work RVU of 0.94 for 
CPT code 64405.
    For CPT code 64568 (Incision for implantation of cranial nerve 
(e.g., vagus nerve) neurostimulator electrode array and pulse 
generator), the AMA RUC recommended 11.19 work RVUs; however, the 
methodology was unclear. As with CPT code 61885 discussed previously, 
to which this code is related, we conducted a clinical review and 
compared the physician intensity and time associated with providing 
this service and determined that the survey 25th percentile, 9.00 work 
RVUs, was appropriate. Therefore, we assigned an alternative value of 
9.00 work RVUs to CPT code 64568 on an interim final basis for CY 2011 
(75 FR 73332).
    In the CY 2011 PFS final rule with comment period (75 FR 73332), 
for CPT codes 64569 (Revision or replacement of cranial nerve (e.g., 
vagus nerve) neurostimulator electrode array, including connection to 
existing pulse generator) and 64570 (Removal of cranial nerve (e.g., 
vagus nerve) neurostimulator electrode array and pulse generator), we 
assigned interim final work RVUs of 11.00 and 9.10, respectively, for 
CY 2011. In section II.B.3. of this final rule with comment period, we 
described maintaining relativity for the codes in families as a

[[Page 73146]]

priority in the review of misvalued codes. Based on the reduction in 
work RVUs for CPT codes 61885 and 64568 that we adopted on an interim 
final basis for CY 2011, we believed work RVUs of 11.00, the survey 
25th percentile, were appropriate for CPT code 64569 and work RVUs of 
9.10, the survey 25th percentile, were appropriate for CPT code 64570. 
Therefore, we assigned alternative work RVUs of 11.00 to CPT code 64569 
and 9.10 to CPT code 64570 on an interim final basis for CY 2011.
    Comment: Commenters noted that CMS makes its interim 
recommendations based on the selection of a reference code which has 
similar time and intensity. Additionally, commenters asserted that CMS 
does not offer any reference codes to support the proposed interim 
values for any of these services. Moreover, the commenters disagreed 
with CMS's interim final values for 64568, 64569, and 64570, which were 
based on CMS' rationale to support the valuation of 61885, a site-of-
service anomaly code. The commenters requested that CMS accept the AMA 
RUC-recommended values of 11.19 for CPT code 64568.
    Response: Based on the comments received, we referred CPT code 
64568, 64569, and 64570 to the CY 2011 multi-specialty refinement panel 
for further review. Although the refinement panel median work RVUs were 
11.47 for CPT code 64568, 15.00 for CPT code 64569, and 13.00 for 
64570, we believe it is imperative to maintain appropriate relativity 
within the code family as well as across code families in order to 
ensure accuracy in the entire PFS system. Accordingly, to maintain 
appropriate relativity with CPT code 61885, we are finalizing the 
following work RVUs for CY 2012: 9.00 for CPT code 64568, 11.00 for CPT 
code 64569 and 9.10 for CPT code 64570.
    For CY 2012, we received no public comments on the CY 2011 interim 
final work RVUs for CPT codes 61781, 61782, 61783, 64415, 64445, 64447, 
64479, 64480, 64484, 64566, 64581, 64611, 64708, 64712, 64713, and 
64714. We believe these values continue to be appropriate and are 
finalizing them without modification (Table 15).
    Finally, we received no public comments on the CY 2012 proposed 
work RVUs for CPT codes 64831 and 64708. We believe these values 
continue to be appropriate and are finalizing them without modification 
(Table 15).
(25) Nervous System: Spine and Spinal Cord (CPT Codes 62263-63685)
    As we discussed in the CY 2012 PFS proposed rule (76 FR 42800), CPT 
code 62263 (Percutaneous lysis of epidural adhesions using solution 
injection (e.g., hypertonic saline, enzyme) or mechanical means (e.g., 
catheter) including radiologic localization (includes contrast when 
administered), multiple adhesiolysis sessions; 2 or more days), was 
identified for CY 2009 as potentially misvalued through the site-of-
service anomaly screen. We referred this code back to the AMA RUC for 
review because of our ongoing concern that the AMA RUC did not believe 
the AMA RUC appropriately accounted for the change in site-of-service 
when providing the recommendation for work RVUs. That is, for CY 2009, 
the AMA reviewed survey data, compared this code to other services, and 
concluded that while it was appropriate to remove the inpatient 
subsequent hospital care visits to reflect the current outpatient place 
of service, the AMA RUC recommended maintaining the CY 2008 work RVU 
for this service. We disagreed with the AMA RUC's methodology because 
we believe the appropriate methodology for valuing site-of-service 
anomaly codes entails not just removing the inpatient visits, but also 
accounting for the removal of the inpatient visits in the work value of 
the CPT code. Accordingly, while we accepted the AMA RUC-recommended 
work RVU for this code on an interim basis for CYs 2009 and 2010 (with 
a slight adjustment in CY 2010 due to the consultation code policy (74 
FR 61775)), we referred the code back to the AMA RUC to be reexamined.
    Upon re-review for CY 2012, the AMA RUC reaffirmed its previous 
recommendation and recommended that the current work RVU of 6.54 for 
CPT code 62263 be maintained. In the CY 2012 PFS proposed rule (76 FR 
42800), we indicated that we continue to disagreed with the AMA RUC 
recommended work RVU for this service because we believe the 
appropriate methodology for valuing site-of-service anomaly codes 
entails not just removing the inpatient visits, but also accounting for 
the removal of the inpatient visits in the work value of the CPT code. 
We noted also that the AMA RUC disregarded survey results that 
indicated the respondents believed this service should be valued lower. 
In fact, the median survey work RVU was 5.00. After CMS clinical review 
of this service where we considered this code in comparison to other 
codes in the PFS and accounted for the change in the site-of-service, 
we believed that the survey median work RVU of 5.00 appropriately 
accounted for the removal of the inpatient visits. Therefore, we 
proposed a work RVU of 5.00 for CPT code 62263 for CY 2012.
    Comment: Commenters disagreed with CMS' proposed work RVU, stating 
that they remained concerned that CMS still assumes that the starting 
values for these services were correct. Commenters noted that the AMA 
RUC originally valued this service using magnitude estimation based on 
comparison reference codes, which considers the total work of the 
service rather than the work of the component parts of the service, and 
requested CMS accept the AMA RUC-recommended work RVU and physician 
time.
    Response: Based on comments received, we referred CPT code 62263 to 
the CY 2011 multi-specialty refinement panel for further review. The 
refinement panel median work RVU was 6.02. We do not believe that 
either the AMA RUC recommended work RVU or the refinement panel result 
adequately accounts for the removal of all the inpatient visits for 
this service which was originally identified as having a site-of-
service anomaly. As we specified previously, we believe the appropriate 
methodology for valuing site-of-service anomaly codes entails both 
removing the inpatient visits and modifying the work RVU to adequately 
account for the removal of all the inpatient visits originally 
included. In order to ensure consistent and appropriate valuation of 
physician work, we believe it is appropriate to apply our methodology 
to address codes with site-of-service anomalies as discussed in detail 
in section III.A. of this final rule with comment period. After 
consideration of the public comments, refinement panel results, and our 
clinical review, we are assigning a work RVU for CY 2012 of 5.00 for 
CPT code 62263 with refinements to time. CMS time refinements can be 
found in Table 16.
    As we discussed in the CY 2012 PFS proposed rule (76 FR 42800), CPT 
code 62355 (Removal of previously implanted intrathecal or epidural 
catheter) was identified as potentially misvalued through the site-of-
service anomaly screen for CY 2009. The AMA RUC reviewed this service 
and recommended a work RVU of 4.30, approximately midway between the 
survey median and 75th percentile. The AMA RUC also recommended 
removing the inpatient building blocks to reflect the outpatient site-
of-service, removing all but 1 of the post-procedure office visits to 
reflect the shift in global period from 90 days to 10 days, and 
reducing the physician time associated with this service. While we 
accepted the AMA RUC-recommended work RVU for this

[[Page 73147]]

code on an interim basis for CYs 2009 and 2010 (with a slight 
adjustment in CY 2010 due to the consultation code policy (74 FR 
61775)), we referred the code back to the AMA RUC to be reexamined 
because we did not believe the AMA RUC-recommended work RVU fully 
accounted for the reduction in inpatient building blocks to reflect the 
shift to the outpatient setting.
    Upon re-review for CY 2012, the AMA RUC reaffirmed its previous 
recommendation and ultimately recommended that the current work RVU of 
4.35 for CPT code 62355 be maintained. We disagreed with the AMA RUC-
recommended work RVU for CPT code 62355. As stated previously, we 
believed the appropriate methodology for valuing site-of-service 
anomaly codes entails not just removing the inpatient visits, but also 
accounting for the removal of the inpatient visits in the work value of 
the CPT code. We did not believe that the reduction from the CY 2008 
work RVU of 6.60 to the CY 2009 work RVU of 4.30 adequately accounted 
for the removal of 3 subsequent hospital care visits and half a 
discharge management day, which together represent a work RVU of 5.40. 
Also, the time required to furnish this service dropped significantly, 
even after considering the global period change. Upon clinical review, 
we believed that the survey median work RVU of 3.55 appropriately 
accounted for the removal of the inpatient visits and decreased time 
for this service. Therefore, proposed a work RVU of 3.55 for CPT code 
62355 for CY 2012.
    Comment: Commenters disagreed with CMS' proposed work RVU, stating 
that they remained concerned that CMS still assumes that the starting 
values for these services were correct. Commenters noted that the AMA 
RUC originally valued this service using magnitude estimation based on 
comparison reference codes, which considers the total work of the 
service rather than the work of the component parts of the service, and 
requested CMS accept the AMA RUC-recommended work RVU and physician 
time.
    Response: Based on comments received, we referred CPT code 62355 to 
the CY 2011 multi-specialty refinement panel for further review. The 
refinement panel median work RVU was 4.18. The AMA RUC recommended 
maintain the current (CY 2011) work RVU of 4.35 for CPT code 62355. 
While the AMA RUC reduced the RVUs for CY 2009, we do not believe the 
AMA RUC-recommended value adequately accounted for the shift from 
inpatient to outpatient and the reduction in office/outpatient visits. 
That is, we do not believe that either the AMA RUC recommended work RVU 
or the refinement panel result adequately accounts for the removal of 
all the inpatient visits for this service which was originally 
identified as having a site-of-service anomaly. As we specified 
previously, we believe the appropriate methodology for valuing site-of-
service anomaly codes entails both removing the inpatient visits and 
modifying the work RVU to adequately account for the removal of all the 
inpatient visits originally included. In order to ensure consistent and 
appropriate valuation of physician work, we believe it is appropriate 
to apply our methodology to address codes with site-of-service 
anomalies as discussed in detail in section III.A. of this final rule 
with comment period. After consideration of the public comments, 
refinement panel results, and our clinical review, we are assigning a 
work RVU for CY 2012 of 3.55 for CPT code 62355.
    As we discussed in the CY 2012 PFS proposed rule (76 FR 42800), CPT 
code 62361 (Implantation or replacement of device for intrathecal or 
epidural drug infusion; nonprogrammable pump) was identified for CY 
2009 as potentially misvalued through the site-of-service anomaly 
screen. The AMA RUC reviewed this code and recommended a work RVU of 
5.60, approximately midway between the survey median and 75th 
percentile. The AMA RUC also recommended removing the inpatient visits 
to reflect the outpatient site-of-service, removing all but 1 of the 
post procedure office visits to reflect the shift in global period from 
90 days to 10 days, and reducing the physician time associated with 
this service. While we accepted the AMA RUC's recommended work RVU for 
this code on an interim basis for CYs 2009 and 2010 (with a slight 
adjustment to 5.65 work RVUs in CY 2010 due to the consultation code 
policy (74 FR 61775)), we referred the code back to the AMA RUC to be 
reexamined because we did not believe the AMA RUC recommended work RVU 
fully accounted for the reduction in inpatient building blocks to 
reflect the shift to the outpatient setting.
    Upon re-review for CY 2012, the AMA RUC reaffirmed its previous 
recommendation and ultimately recommended that the work RVU of 5.65 for 
CPT code 62361 be maintained. We disagreed with the AMA RUC-recommended 
work RVU for CPT code 62361. As stated previously, we believe the 
appropriate methodology for valuing site-of-service anomaly codes 
entails not just removing the inpatient visits, but also accounting for 
the removal of the inpatient visits in the work value of the CPT code. 
We did not believe that the reduction from the CY 2008 work RVU of 6.59 
to the CY 2009 work RVU of 5.60 adequately accounted for the removal of 
3 subsequent hospital care visits and half a discharge management day, 
which together represent a work RVU of 5.40. Also, the time required to 
furnish this service dropped significantly, even after considering the 
global period change. Upon clinical review, we believed that the survey 
25th percentile work RVU of 5.00 appropriately accounted for the 
removal of the inpatient visits and decreased time for this service. 
Therefore, we proposed a work RVU of 5.00 for CPT code 62361 for CY 
2012.
    Comment: Commenters disagreed with CMS' proposed work RVU, stating 
that they remained concerned that CMS still assumes that the starting 
values for these services were correct. Commenters noted that the AMA 
RUC originally valued this service using magnitude estimation based on 
comparison reference codes, which considers the total work of the 
service rather than the work of the component parts of the service, and 
requested CMS accept the AMA RUC-recommended work RVU and physician 
time.
    Response: Based on comments received, we referred CPT code 62361 to 
the CY 2011 multi-specialty refinement panel for further review. The 
refinement panel median work RVU was 5.48. The AMA RUC recommended 
maintaining the current work RVU of 5.65 for CPT code 62361. We do not 
believe that either the AMA RUC recommended work RVU or the refinement 
panel result adequately accounts for the removal of all the inpatient 
visits for this service which was originally identified as having a 
site-of-service anomaly. As we specified previously, we believe the 
appropriate methodology for valuing site-of-service anomaly codes 
entails both removing the inpatient visits and modifying the work RVU 
to adequately account for the removal of all the inpatient visits 
originally included. In order to ensure consistent and appropriate 
valuation of physician work, we believe it is appropriate to apply our 
methodology to address codes with site-of-service anomalies as 
discussed in detail in section III.A. of this final rule with comment 
period. After consideration of the public comments, refinement panel 
results, and our clinical review, we are assigning a work RVU for CY 
2012 of 5.00 for CPT code 62361.
    As we discussed in the CY 2012 PFS proposed rule (76 FR 42800), CPT 
code 62362 (Implantation or replacement of device for intrathecal or 
epidural drug

[[Page 73148]]

infusion; programmable pump, including preparation of pump, with or 
without programming) was identified for CY 2009 as potentially 
misvalued through the site-of-service anomaly screen. The AMA RUC 
reviewed the code and recommended a work RVU of 6.05, approximately 
midway between the survey median and 75th percentile. The AMA RUC also 
recommended removing the inpatient visits to reflect the outpatient 
site-of-service, removing all but 1 of the post procedure office visits 
to reflect the shift in global period from 90 days to 10 days, and 
reducing the physician time associated with this service. While we 
accepted the AMA RUC's recommended work RVU for this code on an interim 
basis for CYs 2009 and 2010 (with a slight adjustment to 6.10 work RVUs 
in CY 2010 due to the consultation code policy (74 FR 61775)), we 
referred the code back to the AMA RUC to be reexamined because we did 
not believe the AMA RUC-recommended work RVU fully accounted for the 
reduction in inpatient building blocks to reflect the shift to the 
outpatient setting. Upon re-review for CY 2012, the AMA RUC reaffirmed 
its previous recommendation and ultimately recommended that the current 
work RVU of 6.10 for CPT code 62362 be maintained. We disagree with the 
AMA RUC-recommended work RVU for CPT code 62362. As stated previously, 
we believed the appropriate methodology for valuing site-of-service 
anomaly codes entails not just removing the inpatient visits, but also 
accounting for the removal of the inpatient visits in the work value of 
the CPT code. We do not believe that the reduction from the CY 2008 
work RVU of 8.58 to the CY 2009 work RVU of 6.05 adequately accounts 
for the removal of 3 subsequent hospital care visits and half a 
discharge management day, which together represent a work RVU of 5.40. 
Also, the time required to furnish this service dropped significantly, 
even after considering the global period change. Upon clinical review, 
we believed that the survey median work RVU of 5.60 appropriately 
accounted for the removal of the inpatient visits and decreased time 
for this service. Therefore, we proposed a work RVU of 5.60 for CPT 
code 62362 for CY 2012.
    Comment: Commenters disagreed with CMS' proposed work RVU, stating 
that they remained concerned that CMS still assumes that the starting 
values for these services were correct. Commenters noted that the AMA 
RUC originally valued this service using magnitude estimation based on 
comparison reference codes, which considers the total work of the 
service rather than the work of the component parts of the service, and 
requested CMS accept the AMA RUC-recommended work RVU and physician 
time.
    Response: Based on comments received, we referred CPT code 62362 to 
the CY 2011 multi-specialty refinement panel for further review. The 
refinement panel median work RVU was 5.95. The AMA RUC recommended 
maintaining the current work RVU of 6.10 for CPT code 62362. The 
current (CY 2011) work RVU for this service was developed when this 
service was typically furnished in the inpatient setting. As this 
service is now typically furnished in the outpatient setting, we 
believe that it is reasonable to expect that there have been changes in 
medical practice for these services, and that such changes would 
represent a decrease in physician time or intensity or both. However, 
the AMA RUC-recommendation and refinement panel results do not 
adequately reflect a decrease in physician work. We do not believe that 
either the AMA RUC recommended work RVU or the refinement panel result 
adequately accounts for the removal of all the inpatient visits for 
this service which was originally identified as having a site-of-
service anomaly. As we specified previously, we believe the appropriate 
methodology for valuing site-of-service anomaly codes entails both 
removing the inpatient visits and modifying the work RVU to adequately 
account for the removal of all the inpatient visits originally 
included. In order to ensure consistent and appropriate valuation of 
physician work, we believe it is appropriate to apply our methodology 
to address codes with site-of-service anomalies as discussed in detail 
in section III.A. of this final rule with comment period. After 
consideration of the public comments, refinement panel results, and our 
clinical review, we are assigning a work RVU for CY 2012 of 5.60 for 
CPT code 62362.
    As we discussed in the CY 2012 PFS proposed rule (76 FR 42801), CPT 
code 62365 (Removal of subcutaneous reservoir or pump, previously 
implanted for intrathecal or epidural infusion) was identified for CY 
2009 as potentially misvalued through the site-of-service anomaly 
screen. The AMA RUC reviewed this service and recommended a work RVU of 
4.60, the survey median. Additionally, the AMA RUC recommended removing 
the inpatient visits to reflect the outpatient site-of-service, 
removing all but 1 of the post-procedure office visits to reflect the 
shift in global period from 90 days to 10 days, and reducing the 
physician time associated with this service. While we accepted the AMA 
RUC's recommended work RVU for this code on an interim basis for CYs 
2009 and 2010 (with a slight adjustment to 4.65 work RVUs in CY 2010 
due to the consultation code policy (74 FR 61775)), we referred the 
code back to the AMA RUC to be reexamined because we did not believe 
the AMA RUC-recommended work RVU fully accounted for the reduction in 
inpatient building blocks to reflect the shift to the outpatient 
setting.
    Upon re-review for CY 2012, the AMA RUC reaffirmed its previous 
recommendation and ultimately recommended that the current work RVU of 
4.65 for CPT code 62365 be maintained. We disagreed with the AMA RUC 
recommended work RVU for CPT code 62365. As stated previously, we 
believed the appropriate methodology for valuing site-of-service 
anomaly codes entails not just removing the inpatient visits, but also 
accounting for the removal of the inpatient visits in the work value of 
the CPT code. We did not believe that the reduction from the CY 2008 
work RVU of 6.57 to the CY 2009 work RVU of 4.60 adequately accounted 
for the removal of 3 subsequent hospital care visits and half a 
discharge management day, which together represent a work RVU of 5.40. 
Also, the time required to furnish this service dropped significantly, 
even after considering the global period change. We believed that this 
service is similar in terms of time intensity to that of CPT code 33241 
(Subcutaneous removal of single or dual chamber pacing cardioverter-
defibrillator pulse generator) which has a work RVU of 3.29 but does 
not include a half day of discharge management service. Upon clinical 
review, we believed that a work RVU of 3.93, that is a work RVU of 3.29 
plus a work RVU of 0.64 to account for the half day of discharge 
management service, appropriately accounted for the removal of the 
inpatient visits and decreased time for this service. Therefore, we 
proposed a work RVU of 3.93 for CPT code 62365 for CY 2012.
    Comment: Commenters disagreed with CMS' proposed work RVU, stating 
that they remained concerned that CMS still assumes that the starting 
values for these services were correct. Commenters noted that the AMA 
RUC originally valued this service using magnitude estimation based on 
comparison reference codes, which considers the total work of the 
service rather than the work of the component parts of the service, and 
requested CMS accept the AMA RUC-recommended work RVU and physician 
time.

[[Page 73149]]

    Response: Based on comments received, we referred CPT code 62365 to 
the CY 2011 multi-specialty refinement panel for further review. The 
refinement panel median work RVU was 4.40. The AMA RUC recommended 
maintaining the current work RVU of 4.65 for CPT code 62365. The 
current (CY 2011) work RVU for this service was developed when this 
service was typically furnished in the inpatient setting. As this 
service is now typically furnished in the outpatient setting, we 
believe that it is reasonable to expect that there have been changes in 
medical practice for these services, and that such changes would 
represent a decrease in physician time or intensity or both. However, 
the AMA RUC-recommendation and refinement panel results do not 
adequately reflect a decrease in physician work. We do not believe that 
either the AMA RUC recommended work RVU or the refinement panel result 
adequately accounts for the removal of all the inpatient visits for 
this service which was originally identified as having a site-of-
service anomaly. As we specified previously, we believe the appropriate 
methodology for valuing site-of-service anomaly codes entails both 
removing the inpatient visits and modifying the work RVU to adequately 
account for the removal of all the inpatient visits originally 
included. In order to ensure consistent and appropriate valuation of 
physician work, we believe it is appropriate to apply our methodology 
to address codes with site-of-service anomalies as discussed in detail 
in section III.A. of this final rule with comment period. After 
consideration of the public comments, refinement panel results, and our 
clinical review, we are assigning a work RVU for CY 2012 of 3.93 for 
CPT code 62365.
    As we discussed in the CY 2012 PFS proposed rule (76 FR 42802), CPT 
code 63650 (Percutaneous implantation of neurostimulator electrode 
array, epidural) or mechanical means (such as, catheter) including 
radiologic localization (includes contrast when administered), multiple 
adhesiolysis sessions; 2 or more days, was identified for CY 2009 as 
potentially misvalued through the site-of-service anomaly screen. The 
AMA RUC reviewed this service and recommended the survey median work 
RVU of 7.15 as well as removing the inpatient subsequent hospital care 
visits to reflect the current outpatient place of service. While we 
accepted the AMA RUC's recommended work RVU for this code on an interim 
basis for CYs 2009 and 2010 (with a slight adjustment to 7.20 work RVUs 
in CY 2010 due to the consultation code policy (74 FR 61775)), we 
referred the code back to the AMA RUC to be reexamined because we did 
not believe the AMA RUC-recommended work RVU fully accounted for the 
reduction in inpatient building blocks to reflect the shift to the 
outpatient setting.
    Upon re-review for CY 2012, the AMA RUC reaffirmed its previous 
recommendation and ultimately recommended that the current work RVU of 
7.20 for CPT code 63650 be maintained. We disagreed with the AMA RUC-
recommended work RVU of 7.20 for CPT code 63650. As stated previously, 
we believed the appropriate methodology for valuing site-of-service 
anomaly codes entails not just removing the inpatient visits, but also 
accounting for the removal of the inpatient visits in the work value of 
the CPT code. Upon clinical review, we believed that the survey median 
work RVU of 7.15 appropriately accounted for the removal of the 
inpatient visits, as well as the physician time and post-operative 
office visit changes. Therefore, we proposed a work RVU of 7.15 for CPT 
code 63650 for CY 2012.
    Comment: Commenters disagreed with CMS' proposed work RVU, stating 
that they remained concerned that CMS still assumes that the starting 
values for these services were correct. Commenters noted that the AMA 
RUC originally valued this service using magnitude estimation based on 
comparison reference codes, which considers the total work of the 
service rather than the work of the component parts of the service, and 
requested CMS accept the AMA RUC-recommended work RVU and physician 
time.
    Response: Based on comments received, we referred CPT code 63650 to 
the CY 2011 multi-specialty refinement panel for further review. The 
refinement panel median work RVU was 7.18. The AMA RUC recommended 
maintaining the current work RVU of 7.20 for CPT code 63650. The 
current (CY 2011) work RVU for this service was developed when this 
service was typically furnished in the inpatient setting. As this 
service is now typically furnished in the outpatient setting, we 
believe that it is reasonable to expect that there have been changes in 
medical practice for these services, and that such changes would 
represent a decrease in physician time or intensity or both. However, 
the AMA RUC-recommendation and refinement panel results do not 
adequately reflect a decrease in physician work. That is, we do not 
believe that either the AMA RUC recommended work RVU or the refinement 
panel result adequately accounts for the removal of all the inpatient 
visits for this service which was originally identified as having a 
site-of-service anomaly. As we specified previously, we believe the 
appropriate methodology for valuing site-of-service anomaly codes 
entails both removing the inpatient visits and modifying the work RVU 
to adequately account for the removal of all the inpatient visits 
originally included. In order to ensure consistent and appropriate 
valuation of physician work, we believe it is appropriate to apply our 
methodology to address codes with site-of-service anomalies as 
discussed in detail in section III.A. of this final rule with comment 
period. After consideration of the public comments, refinement panel 
results, and our clinical review, we are assigning a work RVU for CY 
2012 of 7.15 for CPT code 63650.
    As discussed in the Fourth Five-Year Review of Work (76 FR 32454), 
CMS identified CPT code 63655 (Laminectomy for implantation of 
neurostimulator electrodes, plate/paddle, epidural) as potentially 
misvalued through the Site-of-Service Anomaly screen. The AMA RUC 
recommended maintaining the current work RVU of 11.56, as well as the 
current physician time components. We disagreed with the AMA RUC-
recommended work RVU for CPT code 63655. We noted that according to the 
survey data provided by the AMA RUC, of the 90 percent of respondents 
that stated they furnish the procedure ``in the hospital,'' 18 percent 
stated that the patient is ``discharged the same day'' and 55 percent 
stated that the patient was ``kept overnight (less than 24 hours).'' 
Given that the most recently available Medicare PFS claims data 
continue to show the typical case is not an inpatient, and that the 
survey data for this code suggested the typical case is a 23-hour stay 
service, we believed it was appropriate to apply our established policy 
and reduce the discharge day management service to one-half. 
Accordingly, we proposed an alternative work RVU of 10.92 with 
refinements in time for CPT code 63655 for CY 2012.
    Comment: Commenters disagreed with the CMS proposed work RVU of 
10.92 for CPT code 63655 and believed that the AMA RUC recommended work 
RVU of 11.56 was more appropriate. Commenters believed that there was 
no evidence that the work of this procedure, which includes a full 
laminectomy, has changed since April 2009. In addition, commenters 
noted that complete 2008 Medicare utilization data shows that 63655 was 
billed 51.2 percent in the inpatient hospital setting,

[[Page 73150]]

questioning whether it was appropriate for this service to be on the 
``site of service'' change list at all since it was so close to 50 
percent, the threshold which defines ``typical.''
    Response: Based on the public comments received, we referred CPT 
63655 to the CY 2011 Multi-Specialty Refinement Panel for further 
review. The refinement panel median work RVU was 11.56, which was 
consistent with the the AMA RUC recommendation to maintain the current 
work RVU for CPT code 63655. The current (CY 2011) work RVU for this 
service was developed when this service was typically furnished in the 
inpatient setting. As this service is now typically furnished in the 
outpatient setting, we believe that it is reasonable to expect that 
there have been changes in medical practice for these services, and 
that such changes would represent a decrease in physician time or 
intensity or both. However, the AMA RUC-recommendation and refinement 
panel results do not adequately reflect a decrease in physician work. 
We do not believe it is appropriate for this service, which is 
typically furnished on an outpatient basis, to continue to reflect work 
that is typically associated with an inpatient service. We note that 50 
percent defines ``typical'' for purposes of valuing services under the 
PFS. In order to ensure consistent and appropriate valuation of 
physician work, we believe it is appropriate to apply our methodology 
described previously to address 23-hour stay site-of-service anomalies. 
Therefore, we are finalizing a work RVU for CPT code 63655 of 10.92 for 
CY 2012. We are also finalizing the proposed refinements to time. CMS 
time refinements can be found in Table 16.
    As we discussed in the CY 2012 PFS proposed rule (76 FR 42802), CPT 
code 63685 (Insertion or replacement of spinal neurostimulator pulse 
generator or receiver, direct or inductive coupling) was identified for 
CY 2009 as potentially misvalued through the site-of-service anomaly 
screen. The AMA RUC reviewed this service and recommended the survey 
median work RVU of 6.00. The AMA RUC also recommended removing the 
inpatient subsequent hospital care visits to reflect the current 
outpatient place of service. While we accepted the AMA RUC's 
recommended work RVU for this code on an interim basis for CYs 2009 and 
2010 (with a slight adjustment to the work RVUs in CY 2010 due to the 
consultation code policy (74 FR 61775)), we referred the code back to 
the AMA RUC to be reexamined because we did not believe the AMA RUC-
recommended work RVU fully accounted for the reduction in inpatient 
building blocks to reflect the shift to the outpatient setting.
    Upon re-review for CY 2012, the AMA RUC affirmed its previous 
recommendation and ultimately recommended that the current work RVU for 
CPT code 63685 be maintained. We disagreed with the AMA RUC-recommended 
work RVU of 6.05 for CPT code 63685. As stated previously, we believed 
the appropriate methodology for valuing site-of-service anomaly codes 
entails not just removing the inpatient visits, but also accounting for 
the removal of the inpatient visits in the work value of the CPT code. 
Upon clinical review, we believed that the survey 25th percentile work 
RVU of 5.19 appropriately accounted for the removal of the inpatient 
visits, as well as the physician time and post-operative office visit 
changes. Therefore, we proposed a work RVU of 5.19 for CPT code 63685 
for CY 2012.
    Comment: Commenters disagreed with CMS' proposed work RVU, stating 
that they remained concerned that CMS still assumes that the starting 
values for these services were correct. Commenters noted that the AMA 
RUC originally valued this service using magnitude estimation based on 
comparison reference codes, which considers the total work of the 
service rather than the work of the component parts of the service, and 
requested CMS accept the AMA RUC-recommended work RVU and physician 
time.
    Response: Based on comments received, we referred CPT code 63685 to 
the CY 2011 multi-specialty refinement panel for further review. The 
refinement panel median work RVU was 5.78. The AMA RUC recommended 
maintaining the current work RVU of 6.05 for CPT code 63685. The 
current (CY 2011) work RVU for this service was developed when this 
service was typically furnished in the inpatient setting. As this 
service is now typically furnished in the outpatient setting, we 
believe that it is reasonable to expect that there have been changes in 
medical practice for these services, and that such changes would 
represent a decrease in physician time or intensity or both. However, 
the AMA RUC-recommendation and refinement panel results do not 
adequately reflect a decrease in physician work. That is, we do not 
believe that either the AMA RUC recommended work RVU or the refinement 
panel result adequately accounts for the removal of all the inpatient 
visits for this service which was originally identified as having a 
site-of-service anomaly. As we specified previously, we believe the 
appropriate methodology for valuing site-of-service anomaly codes 
entails both removing the inpatient visits and modifying the work RVU 
to adequately account for the removal of all the inpatient visits 
originally included. In order to ensure consistent and appropriate 
valuation of physician work, we believe it is appropriate to apply our 
methodology to address codes with site-of-service anomalies as 
discussed in detail in section III.A. of this final rule with comment 
period. After consideration of the public comments, refinement panel 
results, and our clinical review, we are assigning a work RVU for CY 
2012 of 5.19 for CPT code 63685.
    We received no public comments on the CY 2011 final rule with 
comment period interim work RVUs for CPT codes 63075 and 63076. We 
received no public comments on the Fourth Five-Year Review of Work 
proposed work RVUs for CPT code 62284. Finally, we also received no 
public comments on the CY 2012 PFS proposed rule proposed work RVUs for 
CPT codes 62360 and 62350. We believe these values continue to be 
appropriate and are finalizing them without modification (Table 15).
(26) Eye and Ocular Adnexa: Eyeball (CPT Codes 65285)
    As detailed in the CY 2012 PFS proposed rule (76 FR 42802), we 
identified CPT code 65285 (Repair of laceration; cornea and/orsclera, 
perforating, with reposition or resection of uveal tissue) as a 
potentially misvalued code through the site-of-service anomaly screen 
in 2009. The AMA RUC recommended removing the CPT code from the site-
of-service anomaly list and maintaining the CY 2008 work RVUs (14.43), 
physician times, and visits. In the CY 2010 PFS final rule with comment 
period, while we adopted the AMA RUC-recommended work value on an 
interim final basis and referred the service back to the AMA RUC to be 
reexamined, the work RVU for CPT code 65285 used under the PFS was 
increased to 14.71 based on the redistribution of RVUs that resulted 
from the our policy to no longer recognize the CPT consultation codes 
(74 FR 61775).
    In the CY 2012 PFS proposed rule (76 FR 42802), we proposed to 
apply the 23-hour stay methodology described in section III.A. of this 
final rule with comment period. That is, we reduced the one day of 
discharge management service to one-half day, and adjusted physician 
work RVUs and times accordingly. As a result, we proposed a work RVU of 
15.36 with refinements to

[[Page 73151]]

the time for CPT code 65285 for CY 2012. CMS time refinements can be 
found in Table 16. The AMA RUC recommended a work RVU of 16.00 for CPT 
code 65285 for CY 2012.
    Comment: Commenters disagreed with the CMS proposed work RVU of 
15.36, and requested that CMS accept the AMA RUC-recommended work RVU 
of 16.00 for CPT code 65285. Commenters stated that the AMA RUC-
recommended RVU was more appropriate because the intensity of and 
complexity of the procedure has increased due to enhanced microsurgical 
technology, improvements in suture and graft materials and new 
pharmaceuticals that control post operative complications. Commenters 
also disagreed with applying the site-of-service methodology of 
reducing the discharge management service to one-half day when the AMA 
RUC's valuation was not based on a building block methodology.
    Response: Based on the comments we received, we referred CPT code 
65285 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU was 16.00, which was 
consistent with the AMA RUC recommendation. The AMA RUC-recommended 
work value for this service included a full discharge day management 
service, which we do not believe is appropriate for an outpatient 
service. As this service is now typically furnished in the outpatient 
setting, we believe that it is reasonable to expect that there have 
been changes in medical practice for these services, and that such 
changes would represent a decrease in physician time or intensity or 
both. However, we do not believe the AMA RUC-recommendation and 
refinement panel results adequately reflect a decrease in physician 
work. We do not believe it is appropriate for this service to continue 
to reflect work that is typically associated with an inpatient service. 
In order to ensure consistent and appropriate valuation of physician 
work, we believe it is appropriate to apply our methodology to address 
site-of-service anomalies as discussed in section III.A. of this final 
rule with comment period. After consideration of the public comments, 
refinement panel results, and our clinical review, we are finalizing a 
work RVU of 15.36, with time refinements, for CPT code 65285.
    For CY 2012, we receive no public comments on the CY 2011 interim 
final work RVUs for CPT codes 65778 through 65780, 66174, 66175, and 
66761. We believe these values continue to be appropriate and are 
finalizing them without modification (Table 15).
(27) Eye and Ocular Adnexa: Posterior Segment (CPT Code 67028)
    CPT code 67028 (Intravitreal injection of a pharmacologic agent 
(separate procedure) was identified for review by the Five-Year 
Identification Workgroup through the High Volume CMS Fastest Growing 
Screen. For CY 2011, the AMA RUC reviewed the survey results, compared 
the code to other services, and concluded that CPT code 67028 was 
similar in both physician time and intensity to another eye injection 
code, CPT code 67500 (retrobulbar injection: Medication). Accordingly, 
the AMA RUC recommended accepting the specialty society recommended 
time and directly crosswalking the work RVUs of CPT code 67500 of 1.44 
to CPT code 67028. Upon clinical review, we agreed that these two 
services are similar and therefore assigned a CY 2011 interim final 
work RVU of 1.44 to CPT code 67028 (75 FR 73732).
    Comment: Commenters strongly disputed the AMA RUC-recommended work 
RVU for CPT code 67028 that CMS accepted as the interim final value for 
CY 2011. Commenters asserted that a comparison of CPT code 67028 to CPT 
code 67500 shows that the AMA RUC significantly underestimated the 
physician work of CPT code 67028. Commenters believed that injecting 
medication directly into the vitreous of the eye is more intense, 
carries more risk, requires more training and is inherently more 
stressful than injecting medication around the external areas of the 
eye and that this difference should be recognized in a relative value 
system with a higher physician work value. The commenters requested 
this code be discussed at the CY 2011 refinement panel and recommended 
a value of 2.12 work RVUs be finalized for CPT code 67028, instead of 
the interim final value of 1.44.
    Response: Based on comments received, we referred CPT code 67028 to 
the CY 2011 multi-specialty refinement panel for further review. The 
refinement panel median work RVU was 1.96. Upon clinical review, we 
believe that the physician work of CPT code 67028 is similar to that of 
CPT code 67500. We find it compelling that the specialty-recommended 
time for this code is similar to the reference code and that the AMA 
RUC has also concluded that the services are similar in both time and 
intensity. Accordingly, we are assigning final work RVU of 1.44 to CPT 
code 67028 for CPT code 67028.
(28) Diagnostic Radiology: Chest, Spine, and Pelvis (CPT Codes 71250, 
72100, 72110, 72120, 72125, 72128, 72131, 72144, and 72170)
    As we discussed in the CY 2011 final rule with comment period (75 
FR 73340), CPT Code 71250 (Computed tomography, thorax; without 
contrast material) was identified as a potentially misvalued code by 
the Five-Year Review Identification Workgroup under the ``CMS Fastest 
Growing'' potentially misvalued codes screen. While the AMA RUC 
recommended the survey results for physician times, the AMA RUC 
believed maintaining the code's current value of 1.16 work RVUs was 
more appropriate, noting that this recommended value is slightly lower 
than the survey 25th percentile of 1.20. We disagreed with the AMA 
RUC's CY 2011 work RVU recommendation to maintain the current value for 
CPT code 71250 and similar codes. As we noted in the CY 2011 final rule 
with comment period (75 FR 73340), we were increasingly concerned over 
the validity of accepting work valuations based upon surveys conducted 
on existing codes as we have noticed a pattern of predictable survey 
results. Increasingly, rather than recommending the median survey value 
that has historically been most commonly used, the AMA RUC has been 
choosing to recommend the 25th percentile value, potentially responding 
to the same concern we have identified. Therefore, based on our concern 
that CT codes would continue to be misvalued if we were to accept the 
AMA RUC recommendation to maintain the current value, we assigned an 
alternative value of 1.00 work RVUs (the survey low value) to CPT code 
71250 on an interim final basis for CY 2011.
    Also in the CY 2011 final rule with comment period (75 FR 73341), 
we noted CPT codes 72125 (Computed tomography, cervical spine; without 
contrast material), 72128 (Computed tomography, thoracic spine; without 
contrast material), and 72131 (Computed tomography, lumbar spine; 
without contrast material) were also identified as potentially 
misvalued codes by the Five-Year Review Workgroup under the ``CMS 
Fastest Growing'' screen for potentially misvalued codes. For CPT code 
72125, the AMA RUC concurred with the specialty-recommended times but 
concluded that it was appropriate to maintain the current work RVUs of 
1.16. Similarly, for CPT codes 72128 and 72131, the AMA RUC accepted 
the survey physician times, but also disregarded the median survey work 
RVU results in favor of recommending

[[Page 73152]]

maintaining the current values. Upon clinical review of these codes in 
this family, we were concerned over the validity of the survey results 
since the survey 25th percentile values are very close to the current 
value of 1.16 RVUs for the code. As we stated previously, we were 
concerned that this pattern may indicate a bias in the survey results. 
Therefore, based on our concern that the CT codes would continue to be 
misvalued if we were to accept the AMA RUC recommendation to maintain 
the current values, we assigned alternative work RVUs of 1.00 (the 
survey low value) to CPT codes 72125, 72128, and 72131 on an interim 
final basis for CY 2011.
    Comment: Commenters acknowledged that the existing RVUs are 
available within the public domain and are accessible on the CMS Web 
site, however, the commenters doubted this influenced the RVU choices 
among the respondents. The commenters noted that the survey respondents 
are provided with reference codes to which they may compare services in 
order to maintain relativity within the system. Furthermore, some 
commenters noted that ``other data used by the RUC to validate the RVUs 
chosen by most respondents, such as the existing service period times 
and those of the reference services, are not readily available to the 
respondents and the RUC methodology of evaluating survey results is 
even less accessible.'' Thus, commenters ``believe CMS' conclusion that 
bias was interjected into the survey process is unwarranted.'' The 
commenters requested CMS accept the AMA RUC recommended work RVU 
instead.
    Response: Based on comments received, we referred CPT codes 71250, 
72125, 72128, and 72131 to the CY 2011 multi-specialty refinement panel 
for further review. The refinement panel median work RVUs were 1.02 for 
CPT code 71250, 1.07 for CPT code 72125, 1.00 for CPT code 72128, and 
1.00 for CPT code 72131. As a result of the refinement panel ratings 
and clinical review by CMS, we are assigning CY 2012 final work RVU of 
1.02 to CPT code 71250, 1.07 to CPT code 72125, 1.00 to CPT code 72128, 
and 1.00 to 72131.
(29) Diagnostic Radiology: Upper and Lower Extremities (CPT Codes 
73030-73700)
    As discussed in the CY 2011 final rule with comment period (75 FR 
73341), CPT codes 73200 (Computed tomography, upper extremity; without 
contrast material) and 73700 (Computed tomography, lower extremity; 
without contrast material) were identified as potentially misvalued 
codes by the Five-Year Review Workgroup under the ``CMS Fastest 
Growing'' screen for potentially misvalued codes. Our clinical review 
of CPT codes 73200 and 73700, as with the other CT codes previously 
discussed, concluded that maintaining the current values would result 
in an overvaluing of this type of service. Similar to the other CT 
codes previously discussed, the AMA RUC reviewed the survey results and 
accepted the survey physician times but recommended maintaining the 
current work RVUs of 1.09 for both of these services. We remain 
concerned over the validity of the survey results. Therefore, based on 
our concern that CT codes would continue to be misvalued if we were to 
accept the AMA RUC recommendation to maintain the current values, we 
assigned alternative work RVUs of 1.00 (the survey low RVU value) to 
CPT codes 73200 and 73700 on an interim final basis for CY 2011.
    Comment: Commenters believed the surveys were valid and noted the 
high response rate relative to other specialty societies' surveys 
conducted on codes with known current values. The commenters asserted 
the AMA RUC's review was rigorous and urged CMS to accept the AMA RUC 
recommended work RVUs for CT codes.
    Response: Based on comments received, we referred CPT codes 73200 
and 73700 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU was 1.00 for CPT code 
73200 and 1.00 for CPT code 73700. As a result of the refinement panel 
ratings and clinical review by CMS, we are assigning CY 2012 final work 
RVU of 1.00 to CPT code 73200 and 1.00 to CPT code 73700.
    Furthermore, for CY 2012, we received no public comments on the CY 
2011 interim final work RVUs for CPT codes 73080, 73510, 73610, and 
73630. We believe these values continue to be appropriate and are 
finalizing them without modification (Table 15).
(30) Diagnostic Ultrasound: Extremities (CPT Codes 76881-76882)
    As discussed in the CY 2011 final rule with comment period (75 FR 
73332), in October 2008, CPT code 76880 (Ultrasound, extremity, 
nonvascular, real time with image documentation) was identified by the 
Five-Year Review Identification Workgroup through its ``CMS Fastest 
Growing'' screen for potentially misvalued codes. In February 2009, the 
CPT Editorial Panel deleted CPT code 76880 and created two new codes, 
CPT codes 76881 (Ultrasound, extremity, nonvascular, real-time with 
image documentation; complete) and 76882 (Ultrasound, extremity, 
nonvascular, real-time with image documentation; limited anatomic 
specific) to distinguish between the comprehensive diagnostic 
ultrasound and the focused anatomic-specific ultrasound. For CPT code 
76881, the AMA RUC recommended work RVUs of 0.72. For CPT code 76882, 
the AMA RUC recommended 0.50 work RVUs. We noted the predecessor CPT 
code 76880 (Ultrasound, extremity, nonvascular, real time with image 
documentation) described a nonvascular ultrasound of the entire 
extremity and was assigned work RVUs of 0.59. In contrast, the new CPT 
codes describe a complete service, CPT code 76881, and a limited 
service, CPT code 76882 (defined as examination of a specific anatomic 
structure, such as a tendon or muscle). As such, for CPT code 76881, we 
did not believe an increase in work RVUs was justified given that this 
service will be reported for the evaluation of the extremity, as was 
CPT code 76800 which is being deleted for CY 2011. Therefore, we 
assigned a CY 2011 interim work RVU of 0.59 for this service, which is 
consistent with the value of the predecessor code. For CPT code 76882, 
we assigned a CY 2011 interim work RVU of 0.41 to maintain appropriate 
relativity with CPT code 76800.
    Comment: The commenters clarified that based on Medicare claims 
data, podiatry was the dominant provider of the predecessor code 76880 
and their specialty acknowledged that they more commonly furnish a 
limited ultrasound examination, which will now be reported as CPT code 
76882. CPT code 76881 will now be used for the more complete 
examination. The commenters maintained that the AMA RUC-recommended 
values for these two codes were more appropriate than CMS' CY 2011 
interim final values.
    Response: Based on comments received, we referred CPT codes 76881 
and 76882 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU was 0.63 for CPT code 
76881 and 0.49 for CPT code 76882. As a result of the refinement panel 
ratings and our clinical review, we are assigning CY 2012 final work 
RVU of 0.63 to CPT code 76881 and 0.49 to CPT code 76882.
    Furthermore, for CY 2012, we received no public comments on the CY 
2011 interim final work RVUs for CPT code 74962. We believe these 
values continue to be appropriate and are finalizing them without 
modification (Table 15).

[[Page 73153]]

(31) Radiation Oncology: Radiation Treatment Management (CPT Codes 
77427-77469)
    CPT code 77427 (Radiation treatment management, 5 treatments) was 
identified as a potentially misvalued code by the Five-Year 
Identification Workgroup's ``Site-of-Service Anomalies'' screen for 
potentially misvalued codes in 2007.
    As detailed in the CY 2011 PFS final rule with comment period (75 
FR73341), we assigned a work RVU of 3.37 for CPT code 77427 on an 
interim final basis for CY 2011. We agreed with the AMA RUC's use of 
the building block approach to value the treatment visits associated 
with CPT code 77427. The AMA RUC averaged the number of weekly E/M 
visits, that is, 4 of CPT code 99214 (Level 4 established patient 
office or other outpatient visit) and 2 of CPT code 99213 (Level 3 
established patient office or other outpatient visit) over 6 weeks to 
calculate an E/M building block of 1.32 RVUs. Similarly, to value the 
post-operative office visits associated with this code, the AMA RUC 
calculated a building block of 0.57 to account for the average over 6 
weeks of ``E/M visits after treatment planning.'' The AMA RUC then 
crosswalked the physician times for CPT code 77427 to CPT code 77315 
(Teletherapy, isodose plan (whether hand or computer calculated); 
complex (mantle or inverted Y, tangential ports, the use of wedges, 
compensators, complex blocking, rotational beam, or special beam 
considerations)) and used the value of CPT code 77315 as the remaining 
building block for CPT code 77427.
    Upon clinical review, we modified one of the building blocks that 
the AMA RUC used to calculate the work RVUs associated with the 
treatment E/M office visits. We believed instead of the average based 
upon 4 units of CPT code 99214 and 2 units of CPT code 99213, a more 
appropriate estimation was an average of 3 units of CPT code 99214 and 
3 units of CPT code 99213. Accordingly, we assigned a work RVU of 3.37 
on an interim final basis for CY 2011 for CPT code 77427 (75 FR73341, 
corrected in 76 FR 1670). The AMA RUC recommended a work RVU of 3.45 
for CPT code 77427 based on the use of 4 units of CPT code 99214 and 2 
units of CPT code 99213 (75 FR 73341).
    Comment: Commenters disagreed with the interim final work RVU of 
3.37, and supported the AMA RUC-recommended work RVU of 3.45 for CPT 
code 77427. Commenters agreed with the AMA RUC building block of 4 
units of 99214 and 2 units of 99213, and supported this conclusion with 
comparison to other services, CPT codes 95953 (work RVU = 3.30), 77263 
(work RVU = 3.14), and 90962 (work RVU = 3.15). Commenters requested 
that CMS accept the AMA-RUC building block of 4 units of 99214 and 2 
units of 99213 and a final work RVU of 3.45 for CPT code 77427.
    Response: We appreciate commenters' support for the building block 
method utilized for CPT code 77427. While commenters agree with the AMA 
RUC-recommended E/M building blocks, we continue to believe 3 units of 
CPT code 99214 and 3 units of CPT code 99213 is a more appropriate 
building block for CPT code 77427. Therefore, we are finalizing a work 
RVU of 3.37 for CPT code 77427 in CY 2012.
(32) Nuclear Medicine: Diagnostic (CPT Codes 78264)
    In the Fourth Five-Year Review (76 FR 32455), we identified CPT 
code 78264 as potentially misvalued through the Harvard-Valued--
Utilization > 30,000 screen.
    As detailed in the Fourth Five-Year Review, for CPT code 78264 
(Gastric emptying study), we proposed a work RVU of 0.80 for CPT code 
78264 for CY 2012. We believed the 25th percentile survey value was 
appropriate based on its similarity in physician work to other 
diagnostic tests. The AMA RUC reviewed the survey results and 
recommended the survey median work RVU of 0.95 for CPT code 78264 (76 
FR 32455).
    Comments: Commenters disagreed with the proposed work RVU of 0.80 
for CPT code 78264. Commenters noted that the work and time required to 
furnish the gastric emptying study has substantially changed since its 
last valuation 20 years ago when it was Harvard valued. Commenters 
supported the AMA RUC-recommended work RVU of 0.95 for CPT code 78264, 
the AMA survey median, which they state is supported by comparison to 
the key reference service, CPT code 78707 (work RVU = 0.96, total time 
= 22 minutes). Commenters also compared this service to CPT code 78453 
(work RVU=1.00, total time = 20 minutes), which they stated compared 
favorably to CPT code 78264 and had similar physician time. Commenters 
noted that a work RVU of 0.95 better maintains relativity among other 
services, and requested that CMS accept the AMA RUC-recommended work 
RVU of 0.95.
    Response: Based on comments we received, we referred CPT code 78264 
to the CY 2011 multi-specialty refinement panel for further review. 
Although commenters requested that we accept the AMA RUC-recommended 
work RVU of 0.95, the refinement panel ratings supported our proposed 
work RVU of 0.80. We also continue to believe that the 25th percentile 
survey value is more appropriate based on its similarity to other 
diagnostic test. Therefore, we are finalizing the proposed work RVU of 
0.80 for CPT code 78264 in CY 2012. We also finalized the proposed 
refinements to time, which can be found on the CMS Web site at: https://www.cms.gov/PhysicianFeeSched/.
(33) Pathology and Laboratory: Urinalysis (CPT Codes 88120, 88121, 
88172, 88173, and 88177)
    For CY 2011, the AMA's CPT Editorial Panel created two new 
cytopathology codes that describe in situ hybridization testing using 
urine samples: CPT code 88120 (Cytopathology, in situ hybridization 
(e.g., FISH), urinary tract specimen with morphometric analysis, 3-5 
molecular probes, each specimen; manual) and CPT code 88121 
(Cytopathology, in situ hybridization (e.g., FISH), urinary tract 
specimen with morphometric analysis, 3-5 molecular probes, each 
specimen; using computer-assisted technology). In the CY 2011 PFS final 
rule with comment period (75 FR 73170), we assigned a work RVU of 1.20 
for CPT code 88120 and a work RVU of 1.00 for CPT code 88121 on an 
interim basis for CY 2011. However, as detailed in the CY 2012 PFS 
proposed rule (76 FR 42796), we asked the AMA RUC to review the both 
the direct PE inputs and work values of the following codes in 
accordance with the consolidated approach to reviewing potentially 
misvlaued codes. Therefore, we are maintaining RVUs of 1.20 for CPT 
code 88120 and 1.00 for CPT code 88121 on an interim final basis for CY 
2012, pending the AMA RUC review of these services. For more 
information on CPT codes 88120 and 88121, see section II.B.5.b.1 of 
this final rule with comment period.
    In February 2010, the CPT Editorial Panel revised the descriptor 
for CPT code 88172 (Cytopathology, evaluation of fine needle aspirate; 
immediate cytohistologic study to determine adequacy of specimen(s)) 
and created a new code, CPT code 88177 (Cytopathology, evaluation of 
fine needle aspirate; immediate cytohistologic study to determine 
adequacy for diagnosis, each separate additional evaluation episode, 
same site), to report the first evaluation episode and each additional 
episode of cytopathology evaluation of fine needle aspirate. As 
detailed in the CY 2011 PFS final rule with comment period (75 FR 
73333), we maintained the CY 2010

[[Page 73154]]

work RVU of 0.60 on an interim final basis for CY 2011 because we did 
not believe that the work had changed. While CPT code 88172 was revised 
by the CPT Editorial Panel, the AMA RUC explanation did not adequately 
demonstrate increased work. The AMA RUC recommended work RVUs of 0.69 
based on comparing this code to several other services, which we did 
not find to be an appropriate methodology for valuing CPT code 88172 
(75 FR 73333).
    Comment: Commenters disagreed with the interim final work RVU of 
0.60 assigned to CPT code 88172. Commenters reiterated that CPT code 
88177 was added to differentiate reporting between the first episode 
and each additional episode of cytopathology evaluation of fine needle 
aspirate. Commenters stated that the first episode was more intense 
than the subsequent episodes, and requested that CMS accept the AMA 
RUC-recommended work RVU of 0.69.
    Response: Based on the comments we received, we referred CPT code 
88172 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU was 0.69. As a result of 
the refinement panel and our clinical review, we are assigning a work 
RVU of 0.69 to CPT code 88172 as a final value.
    For CY 2012, we received no public comments on the CY 2011 interim 
final work RVUs for CPT codes 88173 and 88177. We believe these values 
continue to be appropriate and are finalizing them without modification 
(Table 15).
(34) Immunization Administration for Vaccines/Toxoids (CPT Codes 90460-
90461)
    As detailed in the CY 2011 PFS final rule with comment period (75 
FR 73333), the CPT Editorial Panel revised the reporting of 
immunization administration in the pediatric population in order to 
better align the service with the evolving best practice model of 
delivering combination vaccines. In addition, effective January 1, 
2011, reporting and payment for these services is to be structured on a 
per toxoid basis rather than a per vaccine (combination of toxoids) 
basis as it was in prior years. We maintained the CY 2010 work RVUs for 
the related predecessor codes since these codes would be billed on a 
per toxoid basis in CY 2011. We assigned a work RVU of 0.17 for CPT 
code 90460 (Immunization administration through 18 years of age via any 
route of administration, with counseling by physician or other 
qualified health care profession; first vaccine/toxoid component) and a 
work RVU of 0.15 for CPT code 90461 (Immunization administration 
through 18 years of age via any route of administration, with 
counseling by physician or other qualified health profession; each 
additional vaccine/toxoid component (List separately in addition to 
code for primary procedure)) on an interim final basis for CY 2011. The 
AMA RUC recommended a work RVU of 0.20 for CPT code 90460 and 0.16 for 
CPT code 90461 (75 FR 73333).
    Comment: Commenters disagreed with the CMS-proposed work RVUs of 
0.17 for CPT code 90460 and 0.15 for CPT code 90461, and stated that 
the AMA RUC-recommended work RVUs of 0.20 for CPT code 90460 and 0.16 
for CPT code 90461 are more appropriate. Commenters noted that the 
immunization administration codes were revised to allow physicians to 
accurately report the work involved in counseling for vaccines with 
more than one component. Commenters stressed that it is inappropriate 
to crosswalk CPT codes 90460 and 90461 to their respective predecessor 
codes, 90471 and 90472, given the differences in work involved in 
patient counseling with CPT codes 90460 and 90461.
    Response: Based on comments we received, we referred CPT codes 
90460 and 90461 to the multi-specialty refinement panel for further 
review. The refinement panel median work RVUs were 0.23 for CPT code 
90460 and 0.17 for CPT code 90461, which were higher than the AMA RUC-
recommended values. However, we believe it is appropriate to value 
these services at the same rate as their predecessor codes. We do not 
agree with commenters that the addition of counseling in the code 
descriptor supports increasing the work RVUs because CPT codes 90460 
and 90461 were restructured to be reported on a per toxoid basis, 
rather than a per vaccine (combination of toxoids) basis as it was in 
prior years. After consideration of public comments, refinement panel 
results, and our clinical review, we are finalizing work RVUs of 0.17 
for CPT 90460 and 0.15 for CPT code 90461.
(35) Gastroenterology (CPT Codes 91010-91117)
    For CY 2011 the CPT Editorial Panel restructured a set of CPT codes 
used to describe esophageal motility and high resolution esophageal 
pressure topography services. The specialty societies surveyed their 
members, and the AMA RUC issued recommendations to us for the CY 2011 
PFS final rule with comment period.
    As stated in the CY 2011 PFS final rule with comment period (75 FR 
73338), in the esophageal motility and high resolution esophageal 
pressure topography set of services, for CY 2011 two CPT codes were 
deleted and the services are now reported under a revalued existing CPT 
code 91010 (Esophageal motility (manometric study of the esophagus and/
or gastroesophageal junction) study with interpretation and report; 2-
dimensional data) and a new add-on CPT code 91013 (Esophageal motility 
(manometric study of the esophagus and/or gastroesophageal junction) 
study with interpretation and report; with stimulation or perfusion 
during 2-dimensional data study (e.g., stimulant, acid or alkali 
perfusion) (List separately in addition to code for primary 
procedure)). We agreed with the AMA RUC that there was compelling 
evidence to change the work RVUs for the existing CPT code to account 
for the inclusion of procedures with higher work RVUs that would 
previously have been reported under the deleted code. We also agreed 
with the AMA RUC-recommended work RVUs for the add-on code. However, we 
did not believe that this structural coding change should result in an 
increase in aggregate physician work for the same services. Therefore, 
we believed it would be appropriate to apply work budget neutrality to 
this set of CPT codes. The work budget neutrality factor for these 2 
CPT codes was 0.8500. The AMA RUC-recommended work RVU, CMS-adjusted 
work RVU prior to the budget neutrality adjustment, and the CY 2011 
interim final work RVU for these esophageal motility and high 
resolution esophageal pressure topography procedure codes (CPT codes 
91010 and 91013) follow.

[[Page 73155]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.024

    Comment: Commenters disagreed with the application of work budget 
neutrality to this set of services and noted that the specialty 
societies and AMA RUC agreed that there was compelling evidence to 
change the work RVUs associated with these services. Specifically, 
commenters wrote that they believed that the current value for CPT code 
91010 was based on an incorrect assumption; and that advancements in 
technology have had an impact on physician work since the code was 
originally valued. They went on to state that esophageal manometry is a 
more comprehensive and complex study than it was years ago. Based on 
these arguments, commenters stated that work budget neutrality should 
not be applied to these codes, and urged CMS to accept the AMA RUC-
recommended values for these services.
    Response: Based on comments we received, we referred this set of 
esophageal motility and high resolution esophageal pressure topography 
procedures (CPT codes 91010 and 91013) to the CY 2011 multi-specialty 
refinement panel for further review. The refinement panel median work 
RVUs were 1.50 for CPT code 91010 and 0.21 for CPT code 91013, which 
were consistent with the AMA RUC-recommended values for these services. 
We continue to believe that the application of work budget neutrality 
is appropriate for this set of clinically related CPT codes. While we 
understand that technology has advanced since these codes were 
originally valued, we do not believe that these advancements have 
resulted in more aggregate physician work. As such, we believe that 
allowing an increase in utilization-weighted RVUs within this set of 
clinically related CPT codes would be unjustifiably redistributive 
among PFS services. After consideration of the public comments, 
refinement panel results, and our clinical review, we are finalizing a 
work RVU of 1.28 for CPT code 91010, and a work RVU of 0.18 for CPT 
code 91013 for CY 2012.
    We received no public comments on the CY 2011 final rule with 
comment period interim work RVUs for CPT codes 91038 and 91117. We 
believe these values continue to be appropriate and are finalizing them 
without modification (Table 15).
(36) Opthalmology: Special Opthalmological Services (CPT Codes 92081-
92285)
    In February, 2010 the CPT Editorial Panel established two codes for 
reporting remote imaging for screening retinal disease and management 
of active retinal disease. As detailed in the CY 2011 PFS proposed rule 
(75 FR 73333), for CPT code 92228 (Remote imaging for monitoring and 
management of active retinal disease (e.g., diabetic retinopathy) with 
physician review, interpretation and report, unilateral or bilateral), 
we assigned a work RVU of 0.30 to on an interim final basis for CY 
2011. We compared this code to another diagnostic service, CPT code 
92135 (Scanning computerized ophthalmic diagnostic imaging, posterior 
segment, (e.g., canning laser) with interpretation and report, 
unilateral) (Work RVUs = 0.35), which we believed was more equivalent 
than CPT code 92250 (Fundus photography with interpretation and report) 
(Work RVU = 0.44), the AMA RUC reference service, but had more pre- and 
intra-service time. Upon further review of CPT code 92228 and the time 
and intensity needed to furnish this service, we assigned a work RVU of 
0.30, the survey low value, on an interim final basis for CY 2011. The 
AMA RUC recommended a work RVU of 0.44 for CPT code 92228 for CY 2011 
(75 FR 73333).
    Comment: Commenters disagreed with the CMS interim final work RVU 
of 0.030, and requested that CMS accept the AMA RUC-recommended RVU of 
0.44. Commenters disagreed with CMS' use CPT code 92135 as a comparison 
service for the valuation of CPT code 92228. Commenters stated that CPT 
code 92250 more accurately reflects the service involved in CPT code 
92228. Furthermore, commenters raised concerns regarding a rank order 
anomaly with CPT code 92250, which they stated represents the same 
physician work as CPT code 92228, if CMS finalizes the interim final 
work RVU of 0.30 for CPT code 92228.
    Response: Based on the comments we received, we referred CPT code 
92228 to the CY 2011 multi-specialty refinement panel for further 
review. The refinement panel median work RVU was 0.37. As a result of 
the refinement panel ratings and our clinical review, we are finalizing 
a work RVU of 0.37 for CPT code 92228.
    For CY 2012, we received no public comment on the CY 2011 interim 
final work RVUs for CPT codes 92132 through 92134 and 9222. We believe 
these values continue to be appropriate and are finalizing them without 
modification (Table 15).
(37) Special Otorhinolaryngologic Services (CPT Codes 92504-92511)
    Section 143 of the MIPPA specifies that speech-language 
pathologists may independently report services they provide to Medicare 
patients. Starting in July 2009, speech-language pathologists were able 
to bill Medicare as independent practitioners. As a result, the 
American Speech-Language-Hearing Association (ASHA) requested that CMS 
ask the AMA RUC to review the speech-language pathology codes to newly 
value the professionals' services in the work and not the practice 
expense. ASHA indicated that it would survey the 12 speech-language 
pathology codes over the course of the CPT 2010 and CPT 2011 cycles. 
Four of these services were reviewed by the HCPAC or the AMA RUC and 
were included in the CY 2010 PFS final rule with comment period (74 FR 
61784 and 62146). For CY 2011, the HCPAC submitted work recommendations 
for the remaining eight codes.
    As detailed in the CY 2011 PFS final rule with comment period (75 
FR 7333), for CPT code 92508 (Treatment of speech, language, voice, 
communication, and/or auditory processing disorder; group, 2 or more 
individuals), we assigned a work RVU of 0.33 on an interim final basis 
for CY 2011. We derived the work RVU of 0.33 by dividing the value for 
CPT code 92507 (Treatment of speech, language, voice, communication, 
and/or auditory processing disorder; individual) (work RVU = 1.30) by 4 
participants based on our understanding from practitioners that 4 
accurately represented the typical number of participants in a group. 
Additionally, the work RVU of 0.33 was appropriate for this group 
treatment service relative to the work RVU of 0.27 for CPT code 97150 
(Therapeutic procedure(s), group (2 or more individuals)), which is 
furnished to a similar patient population, namely patients who have had 
a stroke. The

[[Page 73156]]

HCPAC recommended a work RVU of 0.43 for CPT code 92508 for CY 2011 (75 
FR 7333).
    Comment: Commenters disagreed with the interim final work RVU of 
0.33 for CPT code 92508, and asserted that the HCPAC recommendation of 
a work RVU of 0.43 was more appropriate. Commenters disagreed with 
using 4 participants to value CPT code 92508, requesting that CMS 
assume 3 as the typical number of participants in a group. Commenters 
also disagreed with CMS' comparison with CPT code 97150, asserting that 
this service is furnished to a dissimilar patient population by other 
professional groups. Commenters requested that we accept the HCPAC-
recommended work RVU of 0.43 for CPT code 92508.
    Response: Based on comments we received, we referred CPT code 92508 
to the CY 2011 multi-specialty refinement panel for further review. The 
refinement panel supported that HCPAC-recommended value of 0.43. As 
stated previously based on our understanding of this service, we 
believe that dividing the value for CPT code 92507 by 4 participants 
more appropriately values CPT code 92508. Furthermore, as stated in CY 
2012 PFS final rule with comment period (75 FR 7333), CPT code 97150 
(work RVU = 0.27) is furnished to a similar patient population. We 
believe a work RVU of 0.33 for CPT code 92508 creates appropriate 
relativity to CPT code 97150. After consideration of the public 
comments, refinement panel results, and our clinical review, we are 
finalizing a work RVU of 0.33 for CPT code 92508.
    As detailed in the Fourth Five-Year Review, for CPT code 92511 
(Nasopharyngoscopy with endoscope (separate procedure)) we proposed a 
work RVU of 0.61 for CY 2012. The AMA RUC recommended a work RVU of 
0.61 for this service as well. For CPT code 92511, the AMA RUC 
recommended the following times: pre-service evaluation time of 6 
minutes; pre-service (dress, scrub, wait) of 5 minutes; an intra-
service time of 5 minutes; and a post-service time of 5 minutes. We 
proposed a pre-service evaluation time for CPT code 92511 of 4 minutes, 
pre-service (dress, scrub, wait) of 5 minutes, an intra-service time of 
5 minutes, and a post-service time of 3 minutes to account for the E/M 
service begin provided on the same day (76 FR 32455).
    Comment: In its public comment to CMS on the Fourth Five-Year 
Review, the AMA RUC wrote that CMS agreed with the AMA RUC-recommended 
work RVU, but noted that CMS disagreed with the AMA RUC recommended 
pre-service and post-service time components due to an E/M service 
typically being provided on the same day of service. The AMA RUC 
recommends that CMS accept the AMA RUC-recommended pre-service 
evaluation time of 6 minutes and immediate post-service time of 5 
minutes for CPT code 92511.
    Response: In response to comments, we re-reviewed the descriptions 
of pre-service work and the recommended pre-service time packages for 
CPT code 92511. We disagree with the times recommended by the AMA RUC, 
and we do not believe the recommended times account for the overlap 
with an E/M service typically billed on the same day of service. We 
continue to believe our proposal to reduce the pre- and post-service 
time by 2 minutes is appropriate for this service. For CPT code 92511, 
we are finalizing a work RVU of 0.61. In addition, we are finalizing a 
pre-service evaluation time of 4 minutes, pre-service (dress, scrub, 
wait) time of 5 minutes, an intra-service time of 5 minutes, and a 
post-service time of 3 minutes for CPT code 92511. CMS time refinements 
can be found in Table 16.
    For CY 2012, we received no public comments on the CY 2011 interim 
final work RVUs for CPT Codes 92504, 92507, and 92508. We believe these 
values continue to be appropriate and are finalizing them without 
modification (Table 15).
    (38) Special Otorhinolaryngologic Services: Evaluative and 
Therapeutic Services (CPT Codes 92605-92618)
    As detailed in the CY 2011 PFS final rule with comment period (75 
FR 7333), for CPT code 92606 (Therapeutic service(s) for the use of 
non-speech generating device, including programming and modification), 
we published the AMA RUC-recommended work RVU of 1.40 in Addendum B to 
the final rule with comment period in accordance with our usual 
practice for bundled services. This service is currently bundled under 
the PFS and we maintained the bundled status for CY 2011.
    Comment: Commenters requested that CMS consider applying an active 
Medicare status to this service to be covered by Medicare.
    Response: As stated previously, CPT code 92606 is currently bundled 
and paid as a part of other services on the PFS. We do not pay 
separately for services that are included in other paid services, as 
this would amount to double payments for those services. We are 
maintaining the bundled status for CPT code 92606 for CY 2012.
    For CY 2012, we received no public comments on the CY 2011 interim 
final work RVUs for CPT codes 92607 through 92609. We believe these 
values continue to be appropriate and are finalizing them without 
modification (Table 15).
(39) Cardiovascular: Therapeutic Services and Procedures (CPT Codes 
92950)
    In the Fourth Five-Year Review, CMS identified CPT code 92950 
(Cardiopulmonary resuscitation (e.g., in cardiac arrest)) as 
potentially misvalued through the Harvard-Valued--Utilization >30,000 
screen. As detailed in the Fourth Five-Year Review of Work, for CPT 
code 92950 (Cardiopulmonary resuscitation (e.g., in cardiac arrest)), 
we proposed a work RVU of 4.00 for CY 2012. The AMA RUC reviewed the 
survey results and recommended the median survey work RVU of 4.50 for 
CPT code 92950. We recognized that patients that undergo this service 
are very ill; however, we did not believe that the typical patient met 
all the criteria for the critical care codes. Furthermore, the most 
currently available Medicare PFS claims data showed that CPT code 92950 
is typically furnished on the same day as an E/M visit. We believed 
some of the pre- and post- service time should not be counted in 
developing this procedure's work value. As described in section III.A., 
to account for this overlap, we reduced the pre-service evaluation and 
post service time by one-third. We believed that 1 minute pre-service 
evaluation time and 20 minutes post-service time accurately reflect the 
time required to conduct the work associated with this service.
    Comment: Commenters disagreed with the CMS-proposed work RVU of 
4.00 of CPT code 92950 and believe that the AMA RUC recommended work 
RVU of 4.50 is more appropriate. Additionally, commenters asserted that 
a patient requiring cardiopulmonary resuscitation is clearly as intense 
as critical care definition having a high probability of imminent life 
threatening deterioration. Furthermore, commenters note that 
utilization data show that CPR is not typically reported with an E/M 
code.
    Response: Based on the comments received, we referred CPT code 
92950 to the CY 2011 multi-specialty refinement panel for further 
review. Although the refinement panel median work RVU was 4.50, which 
was consistent with the AMA RUC-recommendation for this service. The 
Medicare PFS claims data show that there is an E/M visit billed on the 
same day as CPT code 92950 more

[[Page 73157]]

than 50 percent of the time. We do not believe it is appropriate for 
this service to reflect the aforementioned E/M visit overlap, which 
would result in duplicate recognition of activities associated with 
pre- and post- service times. In order to ensure consistent and 
appropriate valuation of physician work, we believe it is appropriate 
to apply our methodology to address services for which there is 
typically a same-day E/M service. Therefore, we are finalizing a work 
RVU for CPT code 92950 of 4.00 in CY 2012 with refinements to time. A 
complete list of CMS time refinements can be found in Table 16.
(40) Neurology and Neuromuscular Procedures: Sleep Testing (CPT Codes 
95800-95811)
    Sleep testing CPT codes were identified by the Five-Year Review 
Identification Workgroup as potentially misvalued codes through the 
``CMS Fastest Growing'' potentially misvalued codes screen. The CPT 
Editorial Panel created separate Category I CPT codes to report for 
unattended sleep studies. The AMA RUC recommended concurrent review of 
the family of sleep codes.
    As detailed in the CY 2011 PFS final rule with comment period (75 
FR 73334), we assigned a work RVU of 1.25 for CPT codes 95806 (Sleep 
study, unattended, simultaneous recording of, heart rate, oxygen 
saturation, respiratory airflow, and respiratory effort (e.g., 
thoracoabdominal movement)) and a work RVU of 1.28 for CPT code 95807 
(Sleep study, simultaneous recording of ventilation, respiratory 
effort, ECG or heart rate, and oxygen saturation, attended by a 
technologist) on an interim basis for CY 2011. The AMA RUC recommended 
work RVUs of 1.28 for CPT code 95806 and 1.25 for CPT code 95807. 
Although the AMA RUC-recommended values for these codes reflect the 
survey 25th percentile, we disagreed with the values and believed the 
values should be reversed because of the characteristics of the 
services. CPT code 95807 has 5 minutes more pre-service time but a 
lower AMA RUC-recommended value. We did not receive any public comments 
that disagreed with the interim final work values. Therefore, we are 
finalizing work RVUs of 1.25 for CPT code 95806 and 1.28 for CPT code 
95807.
    For CY 2012, we received no public comments on the CY 2011 interim 
final work RVUs for CPT codes 95800, 95801, 95803, 95805, 95808, 95810, 
and 95811. We believe these values continue to be appropriate and are 
finalizing them without modification (Table 15).
(41) Osteopathic Manipulative Treatment (CPT Codes 98925-98929)
    In the Fourth Five-Year Review (76 FR 32456 through 32458), we 
identified CPT codes 98925, 98928 and 98929 as potentially misvalued 
through the Harvard-Valued--Utilization > 30,000 screen. Additionally, 
the American Osteopathic Association identified CPT codes 98926 and 
98927 to be reviewed as part of this family since these were also 
identified to be reviewed by the AMA RUC Relativity Assessment 
Workgroup because these codes were identified through the Harvard-
Valued--Utilization > 100,000 screen.
    We reviewed CPT codes 98925 through 98929 and published proposed 
work RVUs in the Fourth Five-Year Review of Work (76 FR 32456 through 
32458). Based on comments we received during the public comment period, 
we referred CPT codes 98925 through 98929 to the CY 2011 multi-
specialty refinement panel for further review.
    For CPT code 98925 (Osteopathic manipulative treatment (OMT); 1-2 
body regions involved), we proposed a work RVU of 0.46 in the Fourth 
Five-Year Review (76 FR 32456). We also refined the time associated 
with CPT code 98925. Recent PFS claims data showed that this service is 
typically furnished on the same day as an E/M visit. While we 
understand that there are differences between these services, we 
believed some of the activities conducted during the pre- and post-
service times of the osteopathic manipulative treatment code and the E/
M visit overlapped and should not be counted in developing the work 
RVUs for this service. As described earlier in section III.A. of this 
final rule with comment period, we reduced the pre-service evaluation 
and post-service time by 1x3 to account for the overlap. We believed 
that 1 minute of pre-service evaluation time and 2 minutes post-service 
time accurately reflected the time required to conduct the work 
associated with this service.
    As detailed in the Fourth Five-Year Review (76 FR 32456), we 
calculated the value of the extracted time and subtracted it from the 
AMA RUC-recommended work RVU of 0.50. For CPT code 98925, we removed a 
total of 2 minutes from the AMA RUC-recommended pre- and post-service 
times, which amounts to the removal of .04 of a work RVU, resulting in 
a work RVU of 0.46. We noted that 70 percent of the survey respondents 
indicated that the work of furnishing this service has not changed in 
the past 5 years (current RVU = 0.45). We proposed a work RVU of 0.46, 
with refinement in time for CPT code 98925 for CY 2012. CMS time 
refinements can be found in Table 16. The AMA RUC recommended a work 
RVU of 0.50 for CPT code 98925.
    For CPT code 98926 (Osteopathic manipulative treatment (OMT); 3-4 
body regions involved), we proposed a work RVU of 0.71 in the Fourth 
Five-Year Review (76 FR 32456). We also refined the time associated 
with CPT code 98926. Recent PFS claims data showed that this service is 
typically furnished on the same day as an E/M visit. While we 
understand that there are differences between these services, we 
believed some of the activities conducted during the pre- and post-
service times of the osteopathic manipulative treatment code and the E/
M visit overlapped and should not be counted in developing the work 
RVUs for this service. As described earlier in section III.A. of this 
final rule with comment period, we reduced the pre-service evaluation 
and post-service time by one-third to account for the overlap. We 
believed that 1 minute of pre-service evaluation time and 2 minutes 
post-service time accurately reflected the time required to conduct the 
work associated with this service.
    As detailed in the Fourth Five-Year Review (76 FR 32456), we 
calculated the value of the extracted time and subtracted it from the 
AMA RUC-recommended work RVU of 0.75. For CPT code 98926, we removed a 
total of 2 minutes from the AMA RUC-recommended pre- and post-service 
times, which amounts to the removal of .04 of a work RVU, resulting in 
a work RVU of 0.71. We noted that 81 percent of the survey respondents 
indicated that the work of furnishing this service has not changed in 
the past 5 years (current RVU = 0.65). We proposed an alternative work 
RVU of 0.71, with refinement in time for CPT code 98926 for CY 2012. 
CMS time refinements can be found in Table 16. The AMA RUC recommended 
a work RVU of 0.75 for CPT code 98926.
    For CPT code 98927 (Osteopathic manipulative treatment (OMT); 5-6 
body regions involved), we proposed a work RVU of 0.96 in the Fourth 
Five-Year Review (76 FR 32457). We also refined the time associated 
with CPT code 98927. Recent PFS claims data showed that this service is 
typically furnished on the same day as an E/M visit. While we 
understand that there are differences between these services, we 
believed some of the activities conducted during the pre- and post-
service times of the osteopathic manipulative treatment code and the E/
M visit overlapped and should not be counted in developing the work 
RVUs

[[Page 73158]]

for this service. As described earlier in section III.A. of this final 
rule with comment period, we reduced the pre-service evaluation and 
post-service time by one-third to account for the overlap. We believed 
that 1 minute of pre-service evaluation time and 2 minutes post-service 
time accurately reflected the time required to conduct the work 
associated with this service.
    As detailed in the Fourth Five-Year Review (76 FR 32457), we 
calculated the value of the extracted time and subtracted it from the 
AMA RUC-recommended work RVU of 1.00. For CPT code 98927, we removed a 
total of 2 minutes from the AMA RUC-recommended pre- and post-service 
times, which amounts to the removal of 0.04 of a work RVU, resulting in 
a work RVU of 0.96. We noted that 77 percent of the survey respondents 
indicated that the work of furnishing this service has not changed in 
the past 5 years (current RVU = 0.87). We proposed a work RVU of 0.96, 
with refinement in time for CPT code 98927 for CY 2012. CMS time 
refinements can be found in Table 16. The AMA RUC recommended a work 
RVU of 1.00 for CPT code 98927.
    For CPT code 98928 (Osteopathic manipulative treatment (OMT); 7-8 
body regions involved), we proposed a work RVU of 1.21 in the Fourth 
Five-Year Review (76 FR 32457). We also refined the time associated 
with CPT code 98928. Recent PFS claims data showed that this service is 
typically furnished on the same day as an E/M visit. While we 
understand that there are differences between these services, we 
believed some of the activities conducted during the pre- and post-
service times of the osteopathic manipulative treatment code and the E/
M visit overlapped and should not be counted in developing the work 
RVUs for this service. As described earlier in section III.A. of this 
final rule with comment period, we reduced the pre-service evaluation 
and post-service time by one-third to account for the overlap. We 
believed that 1 minute of pre-service evaluation time and 2 minutes 
post-service time accurately reflected the time required to conduct the 
work associated with this service.
    As detailed in the Fourth Five-Year Review (76 FR 32457), we 
calculated the value of the extracted time and subtracted it from the 
AMA RUC-recommended work RVU of 1.25. For CPT code 98928, we removed a 
total of 2 minutes from the AMA RUC-recommended pre- and post-service 
times, which amounts to the removal of 0.04 of a work RVU, resulting in 
a work RVU of 1.21. We noted that 67 percent of the survey respondents 
indicated that the work of furnishing this service has not changed in 
the past 5 years (current RVU = 1.03). We proposed a work RVU of 1.21, 
with refinement in time for CPT code 98928 for CY 2012. CMS time 
refinements can be found in Table 16. The AMA RUC recommended a work 
RVU of 1.25 for CPT code 98928.
    For CPT code 98929 (Osteopathic manipulative treatment (OMT); 9-10 
body regions involved), we proposed a work RVU of 1.46 in the Fourth 
Five-Year Review (76 FR 32457). We also refined the time associated 
with CPT code 98929. Recent PFS claims data showed that this service is 
typically furnished on the same day as an E/M visit. While we 
understand that there are differences between these services, we 
believed some of the activities conducted during the pre- and post-
service times of the osteopathic manipulative treatment code and the E/
M visit overlapped and should not be counted in developing the work 
RVUs for this service. As described earlier in section III.A. of this 
final rule with comment period, we reduced the pre-service evaluation 
and post-service time by 1x3 to account for the overlap. We believed 
that 1 minute of pre-service evaluation time and 2 minutes post-service 
time accurately reflected the time required to conduct the work 
associated with this service.
    As detailed in the Fourth Five-Year Review (76 FR 32457), we 
calculated the value of the extracted time and subtracted it from the 
AMA RUC-recommended work RVU of 1.50. For CPT code 98929, we removed a 
total of 2 minutes from the AMA RUC-recommended pre- and post-service 
times, which amounts to the removal of .04 of a work RVU, resulting in 
a work RVU of 1.46. We noted that 63 percent of the survey respondents 
indicated that the work of furnishing this service has not changed in 
the past 5 years (current RVU = 1.19). We proposed a work RVU of 1.46, 
with refinement in time for CPT code 98928 for CY 2012. CMS time 
refinements can be found in Table 16. The AMA RUC recommended a work 
RVU of 1.50 for CPT code 98929.
    Comment: Commenters disagreed with the CMS-proposed work RVUs for 
these osteopathic manipulative treatment services, and state that the 
AMA RUC-recommended RVUs of 0.50 for CPT code 98925, 0.75 for CPT code 
98926, 1.00 for CPT code 98927, 1.25 for CPT code 98928, 1.50 for CPT 
code 98929 are more appropriate. Commenters reminded CMS that the AMA 
RUC incorporated reductions in the pre- and post-service times 
recommended in the specialty's survey of the codes. Commenters noted 
that the proposed work RVUs were derived from the reverse building 
block methodology, which removed 0.04 from the AMA RUC-recommended RVUs 
for CPT codes 98925 through 98929 to account for the overlap with the 
E/M services.
    Commenters also found that the survey responses indicating that the 
work of furnishing these services had not changed in the past 5 years 
were irrelevant to valuing these services because there was compelling 
evidence that the methodology was flawed in the original valuation of 
these codes. Commenters requested that CMS accept the AMA RUC-
recommended work RVUs and physician time.
    Response: Based on the comments we received, we referred CPT codes 
98925, 98926, 98927, 98928, and 98929 to the CY 2011 multi-specialty 
refinement panel for further review. The refinement panel median work 
RVUs were 0.49, 0.74, 0.99, 1.24, 1.49 for CPT codes 98925, 98926, 
98927, 98928, and 98929, respectively. While the AMA RUC asserts that 
it reduced physician times to account for the E/M service on the same 
day, we do not believe the recommended physician times adequately 
account for the overlap in services with an E/M visit on the same day. 
We continue to believe that some of the activities in the pre- and 
post-service times of the osteopathic manipulative treatment codes and 
the E/M visit overlap, and that our proposal to remove 1 minute of pre- 
and 1 minute of post-service time appropriately accounts for this 
overlap. As detailed earlier in section III.A. of this final rule with 
comment period, we do not believe the overlap in activities should be 
counted in developing these procedures' work values. In order to ensure 
consistent and appropriate valuation of physician work, we are 
continuing with the application of our methodology, explained in the 
Fourth Five-Year Review (76 FR 32422), to address the overlapping 
activities when a service is typically billed on the same day as an E/M 
service. After consideration of the public comments, refinement panel 
results, survey responses, and our clinical review, we are finalizing 
the proposed work RVUs and refined times associated with these codes. 
CMS time refinements can be found in Table 16. We are finalizing work 
RVUs of 0.46 for CPT code 98925, 0.71 for CPT code 98926, 0.96 for CPT 
code 98927, 1.21 for CPT code 98928, 1.46 for CPT code 98929.

[[Page 73159]]

(42) Evaluation and Management: Initial Observation Care (CPT Codes 
99218-99220)
    In the Fourth Five-Year Review (76 FR 32458), we identified CPT 
codes 99218 through 99220 as potentially misvalued through the Harvard-
Valued--Utilization > 30,000 screen. The American College of Emergency 
Physicians (ACEP) submitted a public comment identifying CPT codes 
99218 through 99220 to be reviewed in the Fourth Five-Year Review. ACEP 
also identified CPT codes 99234 through 99236 as part of the family of 
services for AMA RUC review. For CPT codes 99218 (Level 1 initial 
observation care, per day), 99219 (Level 2 initial observation care, 
per day), and 99220 (Level 3 initial observation care, per day), we 
stated that we believed there were differences in physician work in the 
outpatient and inpatient settings, and proposed work RVUs of 1.28 for 
CPT code 99218, 2.14 for CPT code 99219, and 2.99 for CPT code 99220.
    We agreed with the AMA RUC that appropriate relativity must be 
maintained within and between the families of similar codes. However, 
we believed that while the work RVUs of the initial observation care 
codes (99218, 99219, and 99220) should be greater than those of the 
subsequent observation care codes (99224, 99225, and 99226), we did not 
believe the work RVUs of the initial observation care codes (99218, 
99219, and 99220) should be equivalent (or close) to the initial 
hospital care codes (99221, 99222, and 99223). We noted that we 
believed the acuity level of the typical patient receiving outpatient 
observation services would generally be lower than that of the 
inpatient level. We believed the work RVUs of the initial observation 
care codes should reflect the modest differences in patient acuity 
between the outpatient and inpatient settings. We compared the CY 2011 
work RVUs of the initial observation care codes to the CY 2011 interim 
final work RVUs of the subsequent observation care codes and found that 
the relativity existing between these codes was acceptable. We also 
believed that the CY 2011 work RVUs of the initial observation care 
codes maintained the proper rank order with the initial hospital care 
services. Therefore, we proposed to maintain the CY 2011 work RVUs for 
CPT codes 99218, 99219, and 99220. We accepted the survey median 
physician times for these codes, as recommended by the AMA RUC. CMS 
time refinements can be found in Table 16. The AMA RUC asserted that a 
rank order anomaly existed within this family of codes as the 
observation care codes have an analogous relationship to the initial 
hospital care codes (99221 through 99223), and recommended work RVUs of 
1.92 for CPT code 99218, 2.60 for CPT code 99219, and 3.56 for CPT code 
99220.
    Comment: Commenters disagreed with the proposed RVUs for CPT codes 
99218, 99219, and 99220. Commenters stressed that the physician work is 
the same whether the patient is in observation status or admitted to 
the hospital. Commenters stated that these initial observation care 
codes should be valued consistently with initial hospital care codes 
(99221, 99222, and 99223). Commenters stated that a patient's 
classification by a hospital as inpatient or outpatient does not 
necessarily equate to patient acuity relevance for a physician. 
Furthermore, commenters noted that hospital classification of patients 
as inpatient or outpatient may be in response to hospital policies, 
facility resource utilization, or other factors, while physician work 
is described within CPT guidelines for the E/M codes. Commenters 
requested that CMS accept the AMA RUC-recommended work RVUs of 1.92 for 
CPT code 99218, 2.60 for CPT code 99219, and 3.56 for CPT code 99220 
with the AMA RUC-recommended physician times.
    Response: Based on comments we received, we referred CPT codes 
99218, 99219, and 99220 to the CY 2011 multi-specialty refinement panel 
for further review. The refinement panel median work RVUs were 1.92 for 
CPT code 99218, 2.60 for CPT code 99219, and 3.56 for CPT code 99220. 
As a result of the refinement panel ratings and our clinical review, we 
are finalizing work RVUs of 1.92 for CPT code 99218, 2.60 for CPT code 
99219, and 3.56 for CPT code 99220. We are also finalizing the AMA RUC-
recommended physician times. CMS time refinements can be found in Table 
16.
(43) Evaluation and Management: Subsequent Observation Care (CPT Codes 
99224-99226)
    At the June 2009 CPT Editorial Panel meeting, three new codes were 
approved to report subsequent observation services in a facility 
setting. These codes are CPT code 99224 (Level 1 subsequent observation 
care, per day); CPT code 99225 (Level 2 subsequent observation care, 
per day); and CPT code 99226 (Level 3 subsequent observation care, per 
day). Observation services are outpatient services ordered by a 
patient's treating practitioner. In the CY 2011 PFS final rule with 
comment period (75 FR 73334), we assigned interim final work RVUs of 
0.54 to CPT code 99224, 0.96 to CPT code 99225, and 1.44 to CPT code 
99226 for CY 2011. As detailed in the CY 2011 PFS final rule with 
comment period, we stated that there are generally differences in 
patient acuity between the inpatient and outpatient settings. To 
account for these differences, we removed the pre- and post-services 
times from the AMA RUC-recommended values for subsequent observation 
care, reducing the values to approximately 75 percent of the values for 
the subsequent hospital care codes. The AMA RUC recommended work RVUs 
of 0.76 for CPT code 99224, 1.39 for CPT code 99225, and 2.00 for CPT 
99226.
    Comment: Commenters disagreed with the interim final RVUs for the 
CPT codes 99224, 99225, and 99226. Commenters stressed that the 
physician work is the same whether the patient is admitted to the 
hospital or in observation status, and should be valued consistently 
with subsequent hospital care codes (99231, 99232, and 99233). 
Commenters also disagreed with CMS removing the pre- and post-service 
time for valuation of these codes. Commenters stated that subsequent 
observation care involves physician time and work before and after the 
patient encounter. Commenters requested that CMS accept the AMA RUC-
recommended RVUs of 0.76 for 99224, 1.39 for 99225, and 2.00 for 99226, 
which correlate to the subsequent hospital care codes (99231, 99232, 
and 99233).
    Response: Based on the comments we received, we referred CPT codes 
99224, 99225, and 99226 to the CY 2011 multi-specialty refinement panel 
for further review. The refinement panel median work RVUs were 0.76 for 
99224, 1.39 for 99225, and 2.00 for 99226. As a result of the 
refinement panel ratings and our clinical review, we are finalizing 
work RVUs of 0.76 for 99224, 1.39 for 99225, and 2.00 for 99226. We are 
also finalizing the AMA RUC-recommended pre- and post-service times. 
CMS time refinements can be found in Table 16.
(44) Evaluation and Management: Subsequent Hospital Care (CPT Codes 
99234-99236)
    In the Fourth Five-Year Review (76 FR 32458), for CPT codes 99234 
(Level 1, observation or inpatient hospital care, for the evaluation 
and management of a patient including admission and discharge on the 
same date); 99235 (Level 2, observation or inpatient hospital care, for 
the evaluation and management of a patient including admission and 
discharge on the same

[[Page 73160]]

date); and 99236 (Level 3 observation or inpatient hospital care, for 
the evaluation and management of a patient including admission and 
discharge on the same date), we proposed a work RVUs of 1.92 for CPT 
code 99234, 2.78 for CPT code 99235, and 3.63 for CPT code 99236. We 
followed the same approach to valuing these observation same day admit/
discharge services as the AMA RUC--taking the corresponding initial 
observation care code of the same level, plus half the value of a 
hospital discharge day management service. However, we incorporated the 
Fourth Five-Year Review proposed values for CPT codes 99218, 99219, and 
99220 discussed previously. We also made corresponding physician time 
changes. CMS time refinements can be found in Table 16. The AMA RUC 
recommended 2.56 for CPT code 99234, 3.24 for CPT code 99235, and 4.20 
for CPT code 99236 based on the same methodology, but incorporated the 
AMA RUC-recommended RVUs for 99218, 99219, and 99220, respectively.
    Comment: Commenters disagreed with the proposed RVUs for CPT codes 
99234, 99235, and 99236. Commenters supported the methodology CMS and 
the AMA RUC used to value these services of taking the corresponding 
initial observation care code of the same level, plus half the value of 
a hospital discharge day management service, but commenters disagreed 
with the underlying initial observation care code RVUs. Commenters 
requested that CMS continue to apply the same methodology from the 
Fourth Five-Year Review. However, commenters requested that CMS use the 
AMA RUC-recommended RVUs, rather than the CMS proposed values for the 
initial observation care codes in the calculation of RVUs for CPT codes 
99234, 99235, and 99236. Commenters requested that CMS accept the AMA 
RUC-recommended RVUs of 2.56 for CPT code 99234, 3.24 for CPT code 
99235, and 4.20 for CPT code 99236 with the AMA RUC-recommended 
physician times.
    Response: Based on the comments we received, we referred CPT codes 
99224, 99225, and 99226 to the CY 2011 multi-specialty refinement panel 
for further review. The refinement panel median work RVUs were 2.56 for 
CPT code 99234, 3.24 for CPT code 99235, and 4.20 for CPT code 99236. 
As a result of the refinement panel ratings and our clinical review, we 
are finalizing work RVUs of 2.56 for CPT code 99234, 3.24 for CPT code 
99235, and 4.20 for CPT code 99236. We are also finalizing the AMA RUC-
recommended physician times. CMS time refinements can be found in Table 
16.
    As noted previously, for all CY 2011 new, revised, or potentially 
misvalued codes with CY 2011 interim final work RVUs that are not 
specifically discussed in this final rule with comment period, we are 
finalizing, without modification, the interim final direct PE inputs 
that we initially adopted for CY 2011. Table 15 provides a 
comprehensive list of all final values.
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BILLING CODE 4120-01-C
2. Finalizing CY 2011 Interim Direct PE RVUs for CY 2012
a. Background and Methodology
    In this section, we address interim final direct PE inputs as 
presented in the CY 2011 PFS final rule with comment period and 
displayed in the final CY 2011 direct PE database (as subsequently 
corrected on December 30, 2010) available on the CMS Web site under the 
downloads for the ``Payment Policies under Physician Fee Schedule and 
other Revisions to Part B for CY 2011; Corrections'' at: http://www.cms.gov/PhysicianFeeSched/PFSFRN/list.asp.
    On an annual basis, the AMA RUC provides CMS with recommendations 
regarding direct PE inputs, including clinical labor, supplies, and 
equipment, for new, revised, and potentially misvalued codes. We review 
the AMA RUC-recommended direct PE inputs on a code-by-code basis, 
including the recommended facility PE inputs and/or nonfacility PE 
inputs, as clinically appropriate for the code. We determine whether we 
agree with the AMA RUC's recommended direct PE inputs for a service or, 
if we disagree, we refine the PE inputs to represent inputs that better 
reflect our estimate of the PE resources required for the service in 
the facility and/or nonfacility settings. We also confirm that CPT 
codes should have facility and/or nonfacility direct PE inputs and make 
changes based on our clinical judgment and any PFS payment policies 
that would apply to the code.
    In the CY 2011 PFS final rule with comment period (75 FR 73350), we 
addressed the general nature of some common refinements to the AMA RUC-
recommended direct PE inputs as well as the reasons for refinements to 
particular inputs. In the following subsections, we respond to comments 
we received regarding common refinements and the direct PE inputs 
specific to particular codes.
b. Common Refinements
(1) General Equipment Time
    As we stated in the CY 2011 PFS final rule with comment period (75 
FR 73350), many of the refinements to the AMA RUC direct PE 
recommendations were made in the interest of promoting a transparent 
and consistent approach to equipment time inputs. In the past, the AMA 
RUC had not always provided us with recommendations regarding equipment 
time inputs. In CY 2010, we requested that the AMA RUC provide 
equipment times along with the other direct PE recommendations, and we 
provided the AMA RUC with general guidelines regarding appropriate 
equipment time inputs. We appreciate the AMA RUC's willingness to 
provide us with these additional inputs as part of their direct PE 
recommendations.
    In general, the equipment time inputs correspond to the intra-
service portion of the clinical labor times. We have clarified that 
assumption to consider equipment time as the sum of the times within 
the intra-service period when a clinician is using the piece of 
equipment, plus any additional time the piece of equipment is not 
available for use for another patient due to its use during the 
designated procedure. In addition, when a piece of equipment is 
typically used during additional visits included in a service's global 
period, the equipment time should also reflect that use.
    Certain highly technical pieces of equipment and equipment rooms 
are less likely to be used by a clinician over the full course of a 
procedure and are typically available for other patients during time 
that may still be in the intra-service portion of the service. We 
adjust those equipment times accordingly. For example, CPT code 74178 
(Computed tomography, abdomen and pelvis; without contrast material in 
more than one body region) includes 3 minutes of intra-service clinical 
labor time associated with obtaining the patient's consent for the 
procedure. Since it would be atypical for this activity to occur within 
the CT room, we believe these 3 minutes should not be attributed to the 
CT room as equipment time. We refined the CY 2011 AMA RUC direct PE 
recommendations to conform to these equipment time policies.
    Comment: One commenter expressed concerns with CMS' overall 
methodology for computing equipment times. The commenter specifically 
addressed CMS' refinement of minutes allocated to an angiography room 
for a series of endovascular revascularization procedures. The 
commenter claimed that in the case of interventional radiology 
procedures, a nurse typically greets and gowns the patient, provides 
pre-service education, and obtains consent and vital signs in an 
angiography room or other procedure room. Additionally, the commenter 
asserted that since CMS provided general guidelines to the RUC 
regarding appropriate equipment time inputs, CMS should defer to the 
expertise of the AMA RUC and accept the recommendations for equipment 
times. Further, the commenter argued that by not allocating minutes for 
certain highly technical pieces of equipment and equipment rooms for 
greeting/gowning, obtaining vital signs or providing pre-service 
education, CMS is instituting a change in practice expense methodology 
without discussing it with stakeholders prior to implementation.
    Another commenter expressed similar concerns regarding CMS' 
refinements of equipment minutes allocated to a CT room for a series of 
new codes that describe combined CTs of the abdomen and pelvis. This 
commenter argued that equipment minutes should be allocated based on 
the full number of minutes in the clinical labor intraservice time 
since, for example, even when a CT technologist greets a patient in a 
different room, the CT room cannot be used for another patient. This 
commenter argued that current CMS allocation of room minutes is 
inconsistent with the historically accepted premise that if the 
technologists are involved with a patient, the room cannot be used for 
a different patient until after it has been cleaned and therefore 100 
percent of the clinical labor time should be attributed to ``Room 
Time.'' Both commenters argued that CMS should accept the direct PE 
input recommendations of the AMA RUC, without refining the equipment 
room minutes that were allocated for greeting/gowning, obtaining vital 
signs or providing pre-service education or obtaining consent.
    Response: We continue to believe that equipment minutes should be 
allocated as the sum of the intra-service minutes that a clinician 
typically uses a piece of equipment and the equipment is typically 
unavailable to other patients due to its use during the designated 
procedure. For many services, this means that the equipment is 
allocated the full number of minutes during the intra-service period. 
For example, for many services, the three clinical labor minutes 
attributed to a nurse for greeting and gowning the patient prior to the 
procedure are then also logically allocated to the exam table (EF023). 
We believe that this allocation reflects typical use of the equipment 
since it is logical to assume that the patient is usually greeted and 
gowned in the room that contains the exam table.
    In the case of services that require the use of certain highly 
technical pieces of equipment and equipment rooms, however, we believe 
it is inappropriate to assume that all of the same intra-service 
clinical labor activities typically make these equipment items 
unavailable for use in furnishing services to other patients. For 
example, we do not believe it is typical to occupy a CT room while 
gowning a patient, providing pre-service education, or

[[Page 73183]]

obtaining consent of a patient prior to performing a procedure since 
those activities are not dependent on access to the equipment. 
Therefore, we do not agree with the commenter's assertion that these 
highly technical pieces of equipment and equipment rooms are typically 
unavailable to other patients whenever any patient is greeted, gowned, 
provided pre-service education, or has vital signs taken. That is why 
we do not allocate equipment minutes in those cases. We reiterate that 
equipment minutes are allocated based on the time a clinician typically 
uses a piece of equipment and the equipment is typically unavailable to 
other patients due to its use during the designated procedure.
    While recent RUC recommendations have often reflected an agreement 
with that principle, some of the recommendations have required CMS 
refinements to make sure the equipment time minutes adhere to these 
principles. We note that we have only recently asked the RUC to provide 
CMS with recommendations regarding equipment time, and both CMS and the 
RUC considered the CY 2011 refinements to be technical modifications to 
the direct PE input recommendations instead of disagreements. 
Therefore, we do not agree with the commenters' premise that these 
refinements to equipment time are necessarily in conflict with the 
clinical judgment of the RUC.
    We understand commenters' concerns regarding the importance of 
accurate and consistent allocation of equipment minutes as direct PE 
inputs. We agree that equipment minutes have not always been allocated 
with optimal precision, and we believe that imprecise allocation of 
equipment minutes may be a factor in certain potentially misvalued 
codes. We point the reader to section II.B.5.b.1. of this final rule 
with comment period for an example of this issue.
    We believe that our CY 2011 refinements of equipment minutes for 
new and revised, and potentially misvalued codes most accurately 
reflect typical use of resources required to furnish PFS services to 
Medicare beneficiaries. We will continue to work to improve the 
accuracy of the equipment minutes and will address any further 
improvements in future rulemaking.
(2) Supply and Equipment Items Missing Invoices
    When clinically appropriate, the AMA RUC generally recommends the 
use of supply and equipment items that already exist in the direct PE 
database as inputs for new, revised, and potentially misvalued codes. 
Some recommendations include supply or equipment items that are not 
currently in the direct PE database. In these cases, the AMA RUC has 
historically recommended a new item be created and has facilitated CMS' 
pricing of that item by working with the specialty societies to provide 
sales invoices to us. We appreciate the contributions of the AMA RUC in 
that process.
    Despite the assistance of the AMA RUC for CY 2011, we did not 
receive adequate information for pricing the following new supply items 
included in the AMA RUC's CY 2011 direct PE recommendations: SC098 
(Catheter, angiographic, Berman); SD251 (Sheath Shuttle (Cook); SD255 
(Reentry Device (Frontier, Outback, Pioneer); SD257 (Tunneler); and 
SD258 (Vacuum Bottle). Therefore, for CY 2011, these supply items had 
no price inputs associated with them in the direct PE database. In the 
CY 2011 PFS final rule (75 FR 73351), we noted that we would consider 
any newly submitted information for these items as part of our annual 
supply and equipment price update process.
    Comment: One commenter pointed out that the ``vacuum bottle'' 
already has an established supply code, SD 144, and is referred to as 
``canister, vacuum, pleural (w-drainage line).'' The commenter also 
claimed that invoice pricing for the Sheath Shuttle (Cook) had already 
been submitted to CMS.
    Response: We agree with the commenter's assessment regarding the 
vacuum bottle being captured by the existing supply code SD144, and we 
have subsequently removed SD258 from the direct PE database. The only 
information we have received regarding the Sheath Shuttle was a page 
from the vendor's catalog that described the item. However, that 
information did not include a price, so we were unable to use that 
information in pricing the supply input.
    We remind stakeholders that we established a process that allows 
the public to submit requests for updates to supply price inputs or 
equipment price or useful life inputs in the CY 2011 PFS final rule 
with comment period (75 FR 73205 through 73207). As part of this 
established process, we ask that requests be submitted as comments to 
the PFS final rule with comment period each year, subject to the 
deadline for public comments applicable to that rule. Alternatively, 
stakeholders may submit requests to CMS on an ongoing basis throughout 
a given calendar year to PE_Price_Input_Update@cms.hhs.gov. Requests 
received by the end of a calendar year will be considered in rulemaking 
during the following year. We refer readers to the description 
available in the CY 2011 PFS final rule (75 FR 73206) that details the 
minimum information we request that stakeholders provide in order to 
facilitate our review and preparation of issues for the proposed rule.
c. Code-Specific Direct PE Inputs
(1) CT Abdomen and Pelvis
    For CY 2011, AMA CPT created a series of new codes that describe 
combined CTs of the abdomen and pelvis. Prior to 2011, these services 
would have been billed using multiple stand-alone codes for each body 
region. The new codes are: 74176 (Computed tomography, abdomen and 
pelvis; without contrast material); 74177 (Computed tomography, abdomen 
and pelvis; with contrast material); and 74178 (Computed tomography, 
abdomen and pelvis; without contrast material in one or both body 
regions, followed by with contrast material(s) and further sections in 
one or both body regions.)
    Comment: One commenter stated that there were discrepancies between 
the inputs for these codes and the AMA RUC recommendations that were 
not addressed as refinements in the CY 2011 PFS final rule with comment 
period. Specifically, the commenter suggested that CMS did not include 
a power injector recommended by the RUC. Another commenter stated that 
the clinical labor type in the codes should be a ``CT technologist'' 
(L046A) instead of a ``Radiologic Technologist'' (L041B).
    Response: We have reexamined the CY 2011 AMA RUC direct PE 
recommendations for these codes and confirmed that the RUC 
recommendation we received does not include power injector as an input 
for these codes. We also confirmed that the RUC recommendation included 
labor code ``Radiologic Technologist'' (L041B) for these codes. We also 
confirmed that the information the specialty society presented to the 
RUC also included the ``Radiologic Technologist'' as the clinical labor 
time for the service. However, we note that both the RUC and other 
commenters now believe the labor type was included in error, and all 
similar codes include the ``CT technologist'' (L046A) as the 
appropriate labor type, including the codes that describe a CT of the 
abdomen and a CT of the pelvis independently. Therefore, we consider 
the labor code included with the recommendation to be a technical 
oversight, and we have amended the labor category in each of the three 
codes to include a ``CT technologist'' (L046A).

[[Page 73184]]

    Comment: One commenter stated that each of these codes is missing 
the film jacket and CD supply inputs which are proxies for digital 
storage of images.
    Response: We did not accept the film jacket as a disposable supply 
item because film jackets are not disposable/consumable supplies. We 
did not incorporate the CD as a supply item since the codes also 
included x-ray film, which can also be a proxy for digital image 
storage. We mistakenly omitted these refinements from the list of 
refinements in the CY 2011 PFS final rule with comment period.
    After consideration of these comments, for CY 2012, we are 
finalizing the direct PE inputs, with the labor category refinement, 
for CPT codes 74176, 74177, and 74178.
(2) Endovascular Revascularization
    In the CY 2011 PFS final rule with comment period (75 FR 73351), we 
explained our refinements of the supply input recommendations from the 
AMA RUC for CPT codes describing certain endovascular revascularization 
services. The recommendations included two or three high-cost stents 
for each of the following six CPT codes: 37226 (Revascularization, 
femoral/popliteal artery(s), unilateral; with transluminal stent 
placement(s); 37227 (Revascularization, femoral/popliteal artery(s), 
unilateral; with transluminal stent placement(s) and atherectomy); 
37230 (Revascularization, tibial/peroneal artery, unilateral, initial 
vessel; with transluminal stent placement(s)); 37231 
(Revascularization, tibial/peroneal artery, unilateral, initial vessel; 
with transluminal stent placement(s) and atherectomy); 37234 
(Revascularization, tibial/peroneal artery, unilateral, each additional 
vessel; with transluminal stent placement(s) (List separately in 
addition to code for primary procedure)); and 37235 (Revascularization, 
tibial/peroneal artery, unilateral, each additional vessel; with 
transluminal stent placement(s) and atherectomy (List separately in 
addition to code for primary procedure)).
    Given the complex clinical nature of these services, their new 
pricing in the nonfacility setting under the PFS, and the high cost of 
each stent, we were concerned that inclusion of two or three stents 
could overestimate the number of stents used in the typical office 
procedure that would be reported under one of the CPT codes. Therefore, 
we examined CY 2009 hospital OPPS claims data for the combinations of 
predecessor codes that would have historically been reported for each 
case reported in under CY 2011 under a single comprehensive code. 
Because of the OPPS device-to-procedure claims processing edits, all 
prior cases would have included a HCPCS C-code for at least one stent 
on the claim for the case. Based on our analysis of these data, we 
determined that for each new CY 2011 comprehensive code, the 
predecessor code combinations would have used only one stent in 65 
percent or more of the cases. We had no reason to believe that when 
these new CPT codes were reported for procedures performed in the 
nonfacility setting, the typical patient would receive more than the 
one stent typically used in the hospital outpatient setting. Therefore, 
we refined the CY 2011 AMA RUC recommendations to include one stent in 
the direct PE inputs for each of the six endovascular revascularization 
stent insertion codes, including the add-on codes. These refinements 
were reflected in the final CY 2011 PFS direct PE database.
    Comment: One commenter asserted that the CMS analysis of the OPPS 
data was flawed because the predecessor codes included treatments of 
all vascular territories instead of only the lower extremities 
described by the new codes. Additionally, the commenter argued that 
hospital payment does not depend on correctly coding the number of 
stents, so the claims data are probably inaccurate. In order to account 
for the latter possibility, the commenter reported conducting a review 
of similar claims data that excluded all hospitals that reported only 
one unit for stents for all of their claims. After examining that data, 
the commenter reported that the percentage of one stent dropped 
``closer to 50 percent.'' The commenter argued that this analysis, 
combined with the former assertion regarding the limitations of 
anatomic non-specificity, invalidates the CMS' analysis that supported 
the refinement of the RUC-recommended direct PE inputs. Therefore, the 
commenter argued that CMS should accept the RUC recommendation without 
refinement and use the quantity of stents originally recommended in the 
direct PE database.
    Response: As we stated in the CY 2011 PFS final rule (75 FR 73351), 
we have no reason to believe that more than one stent is typically used 
in furnishing the services reported under one of the CPT code in the 
nonfacility setting. While the commenter did not submit detailed 
results from the data used in reaching conclusions, we believe it 
important to note that even after reviewing preferred data, the 
commenter reported results that continued to indicate that one stent 
was used in at least half of the cases. While we appreciate the 
commenter's arguments regarding the potential differences between the 
stents required in the lower extremities and the pooled data reported 
by hospitals in the predecessor codes, we believe the possibility of 
such disparity is likely more than offset by the difference in typical 
patient acuity in the hospital outpatient and nonfacility settings. 
Finally, we note that neither the AMA RUC nor the medical specialty 
society that reports the highest utilization of these codes submitted 
comments in opposition to refinement of these direct PE inputs.
    Comment: One commenter stated that there were discrepancies between 
the clinical labor inputs for these codes and the AMA RUC 
recommendations that were not addressed as refinements in the CY 2011 
PFS final rule with comment period.
    Response: We have reexamined the CY 2011 AMA RUC direct PE 
recommendations for these codes and confirmed that the labor minutes 
associated with the codes in the direct PE database match the AMA RUC 
recommendations regarding clinical labor inputs, which we accepted 
without refinement.
    Comment: One commenter alerted CMS that the minutes allocated for 
two particular equipment items (a printer and a stretcher) had been 
inverted in three of these codes.
    Response: We appreciate the commenter's informing us of the 
inverted minutes. We made a proposal to correct these inputs in the CY 
2012 PFS proposed rule, and we are finalizing that correction in 
section II.A.3.a. of this final rule with comment period.
    After consideration of all comments received, we are finalizing the 
direct PE inputs, as amended in section II.A.3.a. of this final rule 
with comment period, for these codes for CY 2012.
(3) Nasal/Sinus Endoscopy
    The CY 2011 AMA RUC recommendation for direct PE inputs for CPT 
code 31295 (Nasal/sinus endoscopy, surgical; with dilation of maxillary 
sinus ostium (e.g., balloon dilation), transnasal or via canine fossa), 
included irregular supply and equipment inputs. The AMA RUC recommended 
two similar, new supply items, specifically ``kit, sinus surgery, 
balloon (maxillary, frontal, or sphenoid)'' and ``kit, sinus surgery, 
balloon (maxillary)'' as supply inputs with a quantity of one-half for 
each item. In the CY 2011 PFS final rule with comment period (75 FR 
73351), we explained that we believed that this

[[Page 73185]]

recommendation was intended to reflect an assumption that each of these 
distinct supplies is used in approximately half of the cases when the 
service is furnished. We noted that, in general, the direct PE inputs 
should reflect the items used when the service is furnished in the 
typical case. Therefore, the quantity of supply items associated with a 
code should reflect the actual units of the item used in the typical 
case, and not be reflective of any estimate of the proportion of cases 
in which any supply item is used. We also noted, however, that 
fractional inputs are appropriate when fractional quantities of a 
supply item are typically used, as is commonly the case when the unit 
of a particular supply reflects the volume of a liquid supply item 
instead of quantity.
    Upon receipt of these recommendations, we requested that the AMA 
RUC clarify the initial recommendation by determining which of these 
supply items would be used in the typical case. The AMA RUC recommended 
that the supply item ``kit, sinus surgery, balloon (maxillary, frontal, 
or sphenoid)'' be included in the inputs for the code. We considered 
that recommendation, but we believed the item ``kit, sinus surgery, 
balloon (maxillary)'' to be more clinically appropriate based on the 
description of CPT code 32195.
    The AMA RUC recommendation for equipment inputs for the same code 
(CPT code 31295) included a parallel irregularity by distributing half 
of the equipment minutes to each of two similar pieces of equipment, 
one existing and one new: ``endoscope, rigid, sinoscopy'' (ES013) and 
``fiberscope, flexible, sinoscopy'' (ES035 and new for CY 2011). We 
believed that this recommendation was intended to reflect an assumption 
that each of these distinct pieces of equipment is used in 
approximately half of the cases in which the service is furnished. 
Again, we noted that, in general, the direct PE inputs should reflect 
the items used when the service is furnished in the typical case. 
Therefore, the equipment time inputs associated with a code should 
reflect the number of minutes an equipment item is used in the typical 
case, and not be distributed among a set of equipment items to reflect 
an estimate of the proportion of cases in which a particular equipment 
item might be used. Upon review of these items, we believed the new 
piece of equipment, ``fiberscope, flexible, sinoscopy'' to be more 
clinically appropriate based on the description of CPT code 32195. We 
refined the CY 2011 AMA RUC direct PE recommendations to conform to 
these determinations.
    Comment: Two commenters claimed that CMS had misunderstood the 
recommendation of the AMA RUC, that two kits are typically used each 
time that the maxillary sinus surgery is furnished, and that both the 
rigid and the flexible scope are used in furnishing the service. One of 
commenters also suggested that the service requires the use of a light 
pipe so the direct PE database should include a light pipe for the 
codes. Both commenters also suggested that CMS institute PE RVUs that 
directly reimburse the costs of furnishing the service as calculated by 
the commenters.
    As part of their CY 2012 recommendations, the AMA RUC provided a 
new recommendation regarding the disposable sinus surgery kits included 
as direct PE supply inputs for each of these three codes. When 
developing direct PE input recommendations for these new codes, the AMA 
RUC believed that the codes would be typically billed in one unit per 
patient encounter. Following implementation of these codes for Medicare 
purposes at the start of CY 2011, the RUC received reports that 
multiple units of services were being reported in the same patient 
encounter and that corresponding number of kits was not utilized. The 
RUC reported this information to CMS in conjunction with a request for 
preliminary claims data. The RUC then examined partial year sample 
claims data that overwhelmingly demonstrated each of the codes was 
typically billed with another code in the family and more often billed 
in multiples of three than singularly. Using this information to 
corroborate the reports the RUC had previously received, the RUC 
submitted a refined recommendation for CMS to consider for CY 2012. The 
new recommendation requests that CMS remove the disposable sinus 
surgery kits from each of the codes for CY 2012 and implement 
separately billable alpha-numeric HCPCS codes when possible to allow 
practitioners to be paid the cost of the disposable kits per patient 
encounter instead of per CPT code.
    Response: We agree with the RUC that only one kit is used when 
typically furnishing the maxillary sinus procedure. We also continue to 
believe that in the typical case only one of the scopes is used. 
Neither commenter submitted evidence to support their claims that more 
than one kit or scope is required to furnish these services. In 
response to the commenter's statement regarding the missing input for a 
light pipe, we confirmed that the RUC recommendations and the CY 2011 
direct PE database include minutes allocated to ``light, fiberoptic 
headlight w-source'' equipment (EQ170). We do not understand why the 
commenter requests that minutes should be allocated for an additional 
light source.
    We appreciate and agree with the RUC's concern that the CY 2011 
recommendations reflect an incorrect assumption about the number of 
services furnished per disposable sinus surgery kit used. We have 
considered the RUC's recommendation to remove the sinus surgery kits 
from the codes immediately and establish separately payable alpha-
numeric HCPCS codes to use to report using the kits in furnishing the 
services described by these codes, and we agree that it provides one 
potential long-term solution to the problem with the high-cost 
disposable supply inputs for these particular codes. However, the RUC's 
solution presents a series of potential problems that we have addressed 
previously in the context of the broader challenges regarding our 
ability to price high cost disposable supply items. For the most recent 
discussion of this issue, we direct the reader to our discussion in the 
CY 2011 PFS final rule with comment period (75 FR 73251). However, we 
will consider the recommendation of the RUC regarding these and similar 
supply items during preparation for future rulemaking.
    For CY 2012, we do not believe it would be appropriate to remove 
these items as supply inputs for these codes without providing an 
alternative means for paying practitioners for the resources associated 
with furnishing the related services. At the same time, however, we do 
not believe that it would be appropriate to maintain supply inputs that 
are based on an incorrect assumption about the relationship between how 
a service is furnished and how it is reported. Given the recent 
recommendation from the RUC, as well as our concurring interpretation 
of preliminary claims data for these codes, we believe that modifying 
the supply inputs for these codes is the most appropriate means for 
achieving accurate payment for CY 2012. Recognizing that these codes 
are typically billed in units of two, we believe that reducing the 
sinus surgery kit supply quantity to one-half for each of the codes 
will best reflect the number of kits used when the services are 
typically furnished. As part of our initial refinements, we only 
included the sinus surgery kit specific to the maxillary sinus in CPT 
code 32195. Since we now understand that the non-specific kits can be 
used when

[[Page 73186]]

furnishing more than one service to the same beneficiary on the same 
day, we believe that it would be appropriate to include one-half non-
specific sinus-surgery kit for each code, including CPT code 32195.
    After consideration of both the public comments and the 
recommendations of the AMA RUC, we are altering the direct PE inputs 
for these codes as follows. The ``kit, sinus surgery, balloon 
(maxillary, frontal, or sphenoid)'' (SA106) will be included in the 
direct PE database at the quantity of one-half for each of the three 
CPT codes: 31295, 31296, and 31297. The ``kit, sinus surgery, balloon 
(maxillary)'' (SA107) will be removed as an input for 31295 in the 
direct PE database. We are not allocating equipment for an additional 
scope or an additional light source for any of the codes. However, we 
are not finalizing the direct PE inputs for 31295, 31296, or 31297 for 
CY 2012. Instead, we will keep these direct PE inputs as interim final 
for CY 2012. We seek additional public comments regarding the 
appropriate direct PE inputs for these codes and we will continue to 
consider the AMA RUC's solution for future rulemaking.
(4) Insertion of Intraperitoneal Catheter
    For CY 2011, CPT created a new code to describe percutaneous 
procedures: 49418 (Insertion of tunneled intraperitoneal catheter 
(e.g., dialysis, intraperitoneal chemotherapy instillation, management 
of ascites), complete procedure, including imaging guidance, catheter 
placement, contrast injection when performed, and radiological 
supervision and interpretation; percutaneous).
    Comment: Two commenters stated that CMS had not addressed some of 
the direct PE input recommendations for CPT Code 49418 (Insertion of 
tunneled intraperitoneal catheter, complete procedure). In particular, 
the commenters suggested that a film jacket and a CD approved by the 
RUC as disposable supply inputs for the codes were not included in the 
direct PE database but were not were not addressed as refinements in 
the CY 2011 PFS final rule with comment period. Another commenter 
suggested that there were discrepancies between the clinical labor 
inputs for these codes and the AMA RUC recommendations that were not 
addressed as refinements in the CY 2011 PFS final rule with comment 
period.
    Response: We did not accept the film jacket as a disposable supply 
item because film jackets are not disposable/consumable supplies. This 
refinement was included in the CY 2011 PFS final rule (75 FR 73362). We 
did not incorporate the CD as a supply item for 49418 since the code 
also included x-ray film, which can also be a proxy for digital image 
storage. We mistakenly omitted this refinement from the list of 
refinement in the CY 2011 PFS final rule. We have reexamined the CY 
2011 AMA RUC direct PE recommendations for these codes and confirmed 
that the labor minutes associated with the codes in the direct PE 
database match the AMA RUC recommendations regarding clinical labor 
inputs, which we accepted without refinement.
    In addition to the public comments, we have reviewed the inputs for 
this code and are concerned with one of the disposable supplies 
included in the recommendation. We accepted an item called ``Y-set 
connection tubing'' (SD260). The invoice submitted with the 
recommendation describes an item that is used to replace a plastic 
catheter connecter included with a disposable flex-neck catheter. We 
are asking for public comment regarding the accuracy of this item.
    We are maintaining the direct PE inputs for CPT code 49418 for CY 
2012, but since we are seeking public comment regarding a particular 
supply item, we are keeping the direct PE inputs as interim for CY 
2012.
(5) In Situ Hybridization Testing
    We note that we also received comments on the interim final direct 
PE inputs for CPT codes 88120 (Cytopathology, in situ hybridization 
(e.g., FISH), urinary tract specimen with morphometric analysis, 3-5 
molecular probes, each specimen; manual) and 88121 (Cytopathology, in 
situ hybridization (e.g., FISH), urinary tract specimen with 
morphometric analysis, 3-5 molecular probes, each specimen; using 
computer-assisted technology). We addressed those comments in CY 2012 
PFS proposed rule and again in section II.B.5.b. of this final rule. We 
refer readers there for additional discussion of these codes. As we 
note in that section, for CY 2012 we are maintaining the current direct 
PE inputs for CPT codes 88120 and 88121, but they will remain interim 
and open for public comment.
(6) External Mobile Cardivascular Telemetry
    In the CY 2011 PFS final rule with comment period, after 
consideration of the public comments we received, we established a 
national price for CPT code 93229 (Wearable mobile cardiovascular 
telemetry with electrocardiographic recording, concurrent computerized 
real time data analysis and greater than 24 hours of accessible ECG 
data storage (retrievable with query) with ECG-triggered and patient 
selected events transmitted to a remote attended surveillance center 
for up to 30 days; technical support for connection and patient 
instructions for use, attended surveillance, analysis and physician 
prescribed transmission of daily and emergent data reports) instead of 
maintaining the code as contractor-priced as we had proposed for CY 
2011. We adopted the AMA RUC's recommendations for the clinical labor 
and supply inputs, and utilized price, utilization, and useful life 
information provided by commenters as equipment inputs for the cardiac 
telemetry monitoring device worn by the patient. In developing PE RVUS 
for this service, we classified the costs associated with the 
centralized monitoring equipment, including the hardware and software, 
workstation, webserver, and call recording system, as indirect costs.
    Comment: We received comments objecting to the manner in which CPT 
93229 was nationally priced. These objections included reiterations of 
earlier comments received on the CY 2011 PFS proposed rule that we 
should treat the centralized hardware and software as a direct cost 
similar to the treatment of the cardiac telemetry monitoring device 
worn by the patient and we should incorporate a new PE/HR value into 
the methodology for services such as remote cardiac monitoring.
    Response: As we noted in the CY 2011 PFS final rule, we believe it 
is more appropriate to classify the costs associated with the 
centralized monitoring equipment, including the hardware and software, 
workstation, webserver, and call recording system, as indirect costs 
since it is difficult to allocate those costs to services furnished to 
individual patients in a manner that adequately reflects the number of 
patients being tested. As we also indicated in the CY 2011 PFS final 
rule, it would be inappropriate to deviate from our standard PFS PE 
methodology to adopt a PE/HR that is specific to CPT code 93229 or any 
other set of cardiac monitoring codes based on data from two telemetry 
providers, from a subset of services provided by certain specialty 
cardiac monitoring providers, or from a certain group of specialty 
providers that overall furnish only a portion of cardiac monitoring 
services, nor to change our established indirect PE allocation 
methodology. We believe the current PE methodology appropriately 
captures the relative costs of these services in setting their PE RVUs, 
based on the conclusion we have drawn following our assessment of the 
centralized

[[Page 73187]]

monitoring system that is especially characteristic of services such as 
CPT code 93229. For these reasons, after careful consideration of the 
comments received on this issue, we continue to disagree with 
commenters who believe we should treat the centralized hardware and 
software as a direct cost and that we should incorporate a new PE/HR 
value into the methodology for services such as remote cardiac 
monitoring. We are finalizing, without modification, the development of 
PE RVUs for CPT 93229.
3. Finalizing CY 2011 Interim Final and CY 2012 Proposed Malpractice 
RVUs
    a. Finalizing CY 2011 Interim Final Malpractice RVUs
    Consistent with our malpractice methodology described in section 
II.C.1. of this final rule with comment period, for the CY 2011 PFS 
final rule, we developed malpractice RVUs for new codes and adjusted 
malpractice RVUs for revised codes by scaling the malpractice RVUs of 
the CY 2011 new/revised codes for differences in work RVUs between a 
source code and the new/revised codes. For CY 2011 we adopted the AMA 
RUC-recommended source code crosswalks for all new and revised codes on 
an interim final basis.
    Comment: Commenters supported the adoption of the AMA RUC-
recommended malpractice crosswalks for the CY 2011 new and revised 
codes and encouraged CMS to continue to adopt the AMA RUC 
recommendations in future rulemaking.
    Response: We thank commenters for their support of the CY 2011 
interim final malpractice crosswalks. We will continue to consider the 
AMA RUC-recommended malpractice crosswalks and public comments when 
determining the appropriate risk-of-service for new/revised codes. For 
CY 2012 we are finalizing, without modification, the CY 2011 interim 
final malpractice source code crosswalks. The CY 2011 interim final 
malpractice crosswalk, finalized for CY 2012, is available at the CMS 
Web site at: http://www.cms.gov/PhysicianFeeSched/PFSFRN/list.asp.
    We did not receive any comments to the CY 2011 PFS final rule with 
comment period disagreeing with the malpractice crosswalk for any of 
the CY 2011 new and revised codes. However, we note that we did receive 
a comment to the CY 2012 PFS proposed rule for CPT codes 88120 
(Cytopathology, in situ hybridization (e.g., FISH), urinary tract 
specimen with morphometric analysis, 3-5 molecular probes, each 
specimen; manual) and 88121 (Cytopathology, in situ hybridization 
(e.g., FISH), urinary tract specimen with morphometric analysis, 3-5 
molecular probes, each specimen; using computer-assisted technology); 
both CPT codes had CY 2011 interim final PE, work, and malpractice 
RVUs. The commenter requested that we increase the physician work and 
malpractice RVUs assigned to CPT code 88121 to match the physician work 
and malpractice RVUs assigned to CPT code 88120. As discussed in detail 
in section II.B.5. of this final rule with comment period, we are 
holding the PE, work, and malpractice RVUs for CPT code 88120 and 88121 
as interim for CY 2012, pending re-review by the AMA RUC.
    Additionally, we received a comment to the CY 2011 PFS final rule 
requesting that we reevaluate the malpractice risk factor for a number 
of largely pediatric cardiothoracic surgery CPT codes. These CPT codes 
were not open for comment for CY 2011, however we addressed this 
malpractice comment in the CY 2012 PFS proposed rule (76 FR 42814), and 
it is discussed in greater detail in section II.A.3.d. of this final 
rule with comment period.
b. Finalizing CY 2012 Proposed Malpractice RVUs, Including Malpractice 
RVUs for Certain Cardiothoracic Surgery Services
    As described in the Five Year Review (76 FR 32469) for CPT codes 
with work RVU changes included in the Fourth Five-Year Review, the 
malpractice source code for nearly all reviewed codes was the code 
itself (a 1 to 1 crosswalk). For these CPT codes, we calculated the 
revised malpractice RVUs by scaling the current (CY 2011) malpractice 
RVU by the percent difference in work RVU between the current (CY 2011) 
work RVU and the proposed work RVU. However, there were three CPT codes 
included in the Five Year Review that were previously contractor priced 
and did not have current (CY 2011) work RVUs--CPT codes 33981 
(Replacement of extracorporeal ventricular assist device, single or 
biventricular, pump(s), single or each pump), 33982 (Replacement of 
ventricular assist device pump(s); implantable intracorporeal, single 
ventricle, without cardiopulmonary bypass), and 33983 (Replacement of 
ventricular assist device pump(s); implantable intracorporeal, single 
ventricle, with cardiopulmonary bypass). For all three CPT codes, we 
applied the AMA RUC-recommended malpractice crosswalks to obtain the 
appropriate malpractice RVUs. The crosswalk source code for CPT code 
33981 was CPT code 33976 (Insertion of ventricular assist device; 
extracorporeal, biventricular), and the crosswalk source for CPT codes 
33982 and 33983 was CPT code 33979 (Insertion of ventricular assist 
device, implantable intracorporeal, single ventricle). Consistent with 
the malpractice methodology, the malpractice RVUs for these three 
newly-valued CPT codes were developed by adjusting the malpractice RVU 
of the source codes for the difference in work RVU between the source 
code and the newly-valued codes.
    We received no comments on the malpractice crosswalks included in 
the Five-Year Review. We are finalizing the Five-Year Review 
malpractice crosswalks without modification for CY 2012.
    In the CY 2012 PFS proposed rule there were a number of codes for 
which we reviewed the physician work and practice expense. Like the 
Five-Year Review, for these CPT codes the source code for each code was 
the code itself (a 1-to-1 crosswalk). Therefore, we calculated the 
revised malpractice RVUs for these codes by scaling the current (CY 
2011) malpractice RVU by the percent difference in work RVU between the 
current (CY 2011) work RVU and the proposed work RVU (76 FR 42813).
    In addition to the scaling of malpractice RVUs to account for the 
proportionate difference between current and proposed work RVUs, there 
were 19 cardiothoracic surgery codes for which we proposed to scale the 
malpractice RVUs to account for the proportionate difference between 
the current and proposed revised specialty risk factor (76 FR 42813). 
These codes and their short descriptors are listed in Table 17. We 
assign malpractice RVUs to each service based upon a weighted average 
of the malpractice risk factors of all specialties that furnish the 
service. For the CY 2010 review of malpractice RVUs, we used CY 2008 
Medicare claims data on allowed services to establish the frequency of 
a service by specialty. For a number of cardiothoracic surgery CPT 
codes representing major open heart procedures performed primarily on 
neonates and infants, CY 2008 Medicare claims data showed zero allowed 
services. Therefore, our contractor set the number of services to 1, 
and assigned a risk factor according to the average risk factor for all 
services that do not explicitly have a separate technical or 
professional component (average risk factor = 1.95). In the CY 2010 PFS 
final rule with comment period, we published interim final malpractice 
RVUs for these codes calculated using the average physician risk 
factor, and finalized them in the CY

[[Page 73188]]

2011 PFS final rule with comment period. However, since publication of 
the CY 2010 PFS final rule with comment period, stakeholders expressed 
concern that the average risk factor was not appropriate for these 
services, and that a cardiac surgery risk factor would be more 
appropriate (cardiac surgery risk factor = 6.93). While these CPT codes 
continued to have little to no Medicare claims data, upon clinical 
review we agreed that these CPT codes represent cardiac surgery 
services and that the malpractice RVUs should be calculated using the 
cardiac surgery risk factor. Accordingly, we proposed to scale the 
malpractice RVUs for these CPT codes to reflect the proportionate 
difference between the average risk factor and the cardiac surgery risk 
factor.
    We also proposed to scale the malpractice RVUs to reflect a change 
in risk factor for CPT code 32442 (Removal of lung, total 
pneumonectomy; with resection of segment of trachea followed by 
broncho-tracheal anastomosis (sleeve pneumonectomy)). In the CY 2010 
review of malpractice RVUs we assigned CPT code 32442 the pulmonary 
disease risk factor (2.09) and published the interim final malpractice 
RVU calculated from this risk factor in the CY 2010 PFS final rule with 
comment period. This value was finalized in the CY 2011 PFS final rule 
with comment period. Since finalizing this value, stakeholders have 
suggested that a blended risk factor of thoracic surgery (6.49) and 
general surgery (5.91) would be more appropriate for this service. As 
described in the CY 2010 PFS final rule with comment period (74 FR 
61760), we do not use a blended risk factor for services with Medicare 
utilization under 100; instead, we use the malpractice risk factor of 
the specialty that performs the given service the most (the dominant 
specialty). As CPT code 32442 has Medicare utilization well below the 
100 occurrences threshold, and current Medicare claims data show that 
the dominant specialty for CPT code 32442 is thoracic surgery, we 
believed that the thoracic surgery risk factor is the appropriate risk 
factor for this service. Adjusting the malpractice RVU to reflect the 
thoracic surgery risk factor rather than the pulmonary disease risk 
factor resulted in a malpractice RVU of 13.21 for CPT code 32442. 
Therefore, we proposed a malpractice RVU of 13.21 for CPT code 32442 
for CY 2012.
[GRAPHIC] [TIFF OMITTED] TR28NO11.046

    Comment: Commenters noted their appreciation of our review and 
revisions to these 19 cardiothoracic surgery services. Commenters 
stated that setting the risk factor to the all physician average 
penalized the providers of these procedures, and expressed concern that 
this will occur again unless CMS considers using an assigned specialty 
for CPT codes with fewer than 100 claims per year. Commenters believe 
that it would be prudent to re-examine the use of claims data to 
identify the appropriate specialty for services with less than 100 
claims.
    Response: We appreciate commenters support for our proposal to 
revise the malpractice RVUs for certain cardiothoracic surgery 
services. We note commenters' concern with the malpractice methodology 
as it relates to services with less than 100 claims and will consider 
this recommendation for future rulemaking. We received no comments on 
the 1-to-1 crosswalks described previously for CPT codes with work and 
practice expense revisions in the CY 2012 PFS proposed rule. For CY 
2012, we are finalizing without modification, the proposed crosswalks,

[[Page 73189]]

as well as the proposed revisions to the malpractice risk factors for 
the cardiothoracic surgery services described previously.
4. Payment for Bone Density Tests
    Section 1848(b)(6) of the Act (as amended by section 3111(a) of the 
Affordable Care Act) changed the payment calculation for dual-energy x-
ray absorptiometry (DXA) services described by two specified DXA CPT 
codes for CY s 2010 and 2011. This provision required payment for these 
services at 70 percent of the product of the CY 2006 RVUs for these DXA 
codes, the CY 2006 CF, and the geographic adjustment for the relevant 
payment year.
    Effective January 1, 2007, the CPT codes for DXA services were 
revised. The former DXA CPT codes 76075 (Dual energy X-ray 
absorptiometry (DXA), bone density study, one or more sites; axial 
skeleton (e.g., hips, pelvis, spine)); 76076 (Dual energy X-ray 
absorptiometry (DXA), bone density study, one or more sites; 
appendicular skeleton (peripheral) (for example, radius, wrist, heel)); 
and 76077 (Dual energy X-ray absorptiometry (DXA), bone density study, 
one or more sites; vertebral fracture assessment) were deleted and 
replaced with new CPT codes 77080, 77081, and 77082 that have the same 
respective code descriptors as the predecessor codes. Section 1848(b) 
of the Act, as amended, specifies that the revised payment applies to 
two of the predecessor codes (CPT codes 76075 and 76077) and ``any 
succeeding codes,'' which are, in this case, CPT codes 77080 and 77082.
    As mentioned previously, section 1848(b) of the Act revised the 
payment for CPT codes 77080 and 77082 during CY 2010 and CY 2011. We 
provided for payment in CY s 2010 and 2011 under the PFS for CPT codes 
77080 and 77082 at the specified rates (70 percent of the product of 
the CY 2006 RVUs for these DXA codes, the CY 2006 CF, and the 
geographic adjustment for the relevant payment year). Because the 
statute specifies a payment calculation for these services for CY s 
2010 and 2011 as described previously, for those years we implemented 
the payment provision by imputing RVUs for these services that would 
provide the specified payment amount for these services when multiplied 
by the current year's conversion factor.
    As discussed in the CY 2012 PFS proposed rule (76 FR 42809 and 
42810), for CY 2012, the payment rate for CPT codes 77080 and 77082 
will be based upon resource-based, rather than imputed, RVUs, and the 
current year's conversion factor. The CY 2012 work, PE, and malpractice 
RVUs for these codes are shown in Table 18, CY 2012 RVUs for DXA CPT 
Codes 77080 and 77082, as well as in Addendum B of this final rule with 
comment period.
[GRAPHIC] [TIFF OMITTED] TR28NO11.047

    In addition to temporarily changing the payment rate for the two 
DXA CPT codes, section 3111(b) of the Affordable Care Act also 
authorizes the Secretary to enter into agreement with the Institute of 
Medicine of the National Academies to conduct a study on the 
ramifications of Medicare payment reductions for dual-energy x-ray 
absorptiometry (as described in section 1848(b)(6) of the Act) during 
years 2007, 2008, and 2009 on beneficiary access to bone mass density 
tests. This study has not yet been conducted. In the absence of this 
study, we have requested that the AMA RUC review CPT codes 77080 and 
77082 during CY 2012.
5. Other New, Revised, or Potentially Misvalued Codes With CY 2011 
Interim Final RVUs or CY 2012 Proposed RVUs Not Specifically Discussed 
in the CY 2012 Final Rule With Comment Period
    For all other new, revised, or potentially misvalued codes with CY 
2011 interim final RVUs or CY 2012 proposed RVUs that are not 
specifically discussed in this final rule with comment period, we are 
finalizing for CY 2012, without modification, the interim final or 
proposed work and malpractice RVUs and direct PE inputs. Unless 
otherwise indicated, we agreed with the time values recommended by the 
AMA RUC or HCPAC for all codes addressed in this section. The time 
values for all codes appear on the CMS Web site at: https://www.cms.gov/PhysicianFeeSched/.

C. Establishing Interim Final RVUs for CY 2012

1. Establishing Interim Final Work RVUs for CY 2012
a. Code-Specific Issues
    As previously discussed in section III.A of this final rule with 
comment period, on an annual basis, the AMA RUC and HCPAC provide CMS 
with recommendations regarding physician work values for new and 
revised CPT codes. This section discusses the families of clinically 
related CPT codes where CMS disagreed with the AMA RUC or HCPAC 
recommended physician work RVU or time values for a service for a CY 
2012 new or revised CPT code. The interim or interim final physician 
work RVUs for all new and revised codes, including those where CMS 
agreed with the recommended work RVU appear in Table 19 at the end of 
this section. Unless otherwise indicated, we agreed with the time 
values recommended by the AMA RUC or HCPAC for all codes addressed in 
this section. The time values for all codes appear on the CMS Web site 
at: https://www.cms.gov/PhysicianFeeSched/. We reviewed the AMA RUC's 
recommendations on physician work and time for 156 CY 2012 new and 
revised CPT codes. Upon clinical review, we agreed with the

[[Page 73190]]

AMA RUC's work RVU recommendation for 106 CPT codes, or 68 percent. We 
reviewed the HCPAC's recommendations on physician work and time for 8 
CPT codes. Upon clinical review, we agreed with the HCPAC's work RVU 
recommendation for 6 CPT codes, or 75 percent.
    We note that the AMA RUC also reviewed over 100 CPT codes 
describing molecular pathology services. These CPT codes are new for CY 
2012, however they will not be valid for Medicare purposes for CY 
2012--For CY 2012 Medicare will continue to use the current 
``stacking'' codes for the reporting and payment for these services. 
These molecular pathology codes appear in Addendum B to this final rule 
with the procedure status indicator of I (Not valid for Medicare 
purposes. Medicare uses another code for the reporting and payment for 
these services).
(1) Integumentary System: Skin, Subcutaneous, and Accessory Structures 
(CPT Codes 10060-10061, and 11056)
[GRAPHIC] [TIFF OMITTED] TR28NO11.048

    CPT code 10061 was identified by the AMA RUC Relativity Assessment 
Workgroup through the Harvard-Valued--Utilization > 100,000 screen. CPT 
code 10060 was identified as part of this family to be reviewed. We 
identified CPT code 11056 as part of the MPC List screen.
    After clinical review of CPT codes 10060 (Incision and drainage of 
abscess (e.g., carbuncle, suppurative hidradenitis, cutaneous or 
subcutaneous abscess, cyst, furuncle, or paronychia); simple or single) 
and 10061 (Incision and drainage of abscess (e.g., carbuncle, 
suppurative hidradenitis, cutaneous or subcutaneous abscess, cyst, 
furuncle, or paronychia); complicated or multiple) we believe that the 
current work RVUs of 1.22 and 2.45 respectively, accurately reflect the 
work associated with these services. Upon review, we found no evidence 
that the work for these services has changed.
    For the Third Five-Year Review for CY 2007, the HCPAC recommended 
increasing the work RVU for CPT code 10060 from 1.17 to 1.50 because 
the HCPAC believed the survey methodology used for this code in the 
original Harvard valuation was flawed. In reviewing this code for the 
Third Five-Year Review we compared the specialty society survey times 
with the Harvard-based times and found them comparable (71 FR 37236). 
As such, we found no grounds for increase, and ultimately maintained 
the work RVU of 1.17 for this service (71 FR 69733). For the CY 2010 
PFS, the work RVU for CPT code 10060 was increased to 1.22 based on the 
redistribution of RVUs resulting from the CMS policy to no longer 
recognize the CPT consultation codes.
    For CY 2012, the AMA RUC reviewed the survey results from 
physicians who perform this service. Citing the HCPAC rationale and 
recommendation in the Third Five-Year Review, the AMA RUC recommended 
the survey median work RVU of 1.50 for CPT code 10060 for CY 2012. We 
continue to believe that the original valuation of the service was 
appropriate, and since the work associated with the procedure has not 
changed, we believe that the current work RVU of 1.22 should be 
maintained. Therefore, we are assigning a work RVU of 1.22 to CPT code 
10060 on an interim final basis for CY 2012.
    We reviewed CPT code 11056 (Paring or cutting of benign 
hyperkeratotic lesion (e.g., corn or callus); 2 to 4 lesions), and are 
accepting the HCPAC-recommended work RVU of 0.50, the survey 25th 
percentile value, on an interim basis for CY 2012. We request that the 
specialty society re-review CPT code 11056 along with CPT codes 11055 
(Paring or cutting of benign hyperkeratotic lesion (e.g., corn or 
callus); single lesion) and 11057 (Paring or cutting of benign 
hyperkeratotic lesion (e.g., corn or callus); more than 4 lesions) as 
part of the family. Therefore, we are assigning a work RVU of 0.50 to 
CPT code 11056 on an interim basis for CY 2012, pending re-review of 
the family of services.
    For the CY 2012 new, revised, and potentially misvalued CPT codes 
reviewed in this family of services and not specifically discussed 
here, we agree with the AMA RUC/HCPAC-recommended work RVUs and are 
setting as interim final the work RVUs listed in Table 19.
(2) Integumentary System: Nails (CPT codes 11719-11721)
[GRAPHIC] [TIFF OMITTED] TR28NO11.049


[[Page 73191]]


    We identified CPT code 11721 as part of the MPC List screen. The 
AMA RUC recommended that CPT codes 11721, along with CPT code 11719 and 
11720 be surveyed for CY 2012.
    After reviewing the survey data, the specialty society concluded 
that the survey data for CPT code 11719 (Trimming of nondystrophic 
nails, any number) was not reflective of the service, and is 
resurveying CPT code 11719 for CY 2013. We will review CPT code 11719 
at that time, along with G0127 (Trimming of dystrophic nails, any 
number) which is crosswalked to CPT code 11719.
    After clinical review of CPT code 11720 (Debridement of nail(s) by 
any method(s); 1 to 5.), and 11721 (Debridement of nail(s) by any 
method(s); 6 or more.), we believe that the current (CY 2011) work RVUs 
of 0.32 and 0.54 (respectively) continue to accurately account for the 
work of these services. The HCPAC also recommended maintaining the 
current (CY 2011) work RVUs for these services. Therefore, we are 
assigning a work RVU of 0.32 for CPT code 11720 and a work RVU of 0.54 
for CPT code 11721 on an interim final basis for CY 2012.
(3) Integumentary System: Repair (Closure) (CPT Codes 15271-15278, 
15777, 16020, 16025)
[GRAPHIC] [TIFF OMITTED] TR28NO11.050

    For CY 2012, the CPT Editorial Panel deleted 24 skin substitute 
codes and established a 2-tier structure with 8 new codes (CPT codes 
15271 through 15278) to report the application of skin substitute 
grafts, which are distinguished according to the anatomic location and 
surface area rather than by product description. Additionally, the CPT 
Editorial Panel created a new add-on code (CPT code 15777) to report 
implantation of a biological implant for soft ties reinforcement. For 
CY 2012, the AMA RUC Relativity Assessment Workgroup identified CPT 
codes 16020 and 16025 through its Different Performing Specialty from 
Survey screen.
    For CY 2011, we created 2 HCPCS codes, G0440 (Application of tissue 
cultured allogeneic skin substitute or dermal substitute; for use on 
lower limb, includes the site preparation and debridement if performed; 
first 25 sq cm or less) and G0441 (Application of tissue cultured 
allogeneic skin substitute or dermal substitute; for use on lower limb, 
includes the site preparation and debridement if performed; each 
additional 25 sq cm), that are recognized for payment under the PFS for 
the application of products described by the codes to the lower limb. 
These codes will be deleted for CY 2012. Providers reporting the 
application of tissue cultured allogeneic skin substitute or dermal 
substitutes to the lower limb for payment under the PFS in CY 2012 
should report under the appropriate new CPT code(s).
    After clinical review of CPT code 15272 (Application of skin 
substitute graft to trunk, arms, legs, total wound surface area up to 
100 sq cm; each additional 25 sq cm wound surface area, or part thereof 
(List separately in addition to code for primary procedure)), we 
believe that a work RVU of 0.33 accurately reflects the work for 
associated with this service. The AMA RUC reviewed the survey results 
for CPT code 15272 and recommended the survey 25th percentile work RVU 
of 0.59 for this service.
    However, we believe this value overstates the work of this 
procedure when compared to the base CPT code 15271 (Application of skin 
substitute graft to trunk, arms, legs, total wound surface area up to 
100 sq cm; first 25 sq cm or less wound surface area). We believe that 
CPT code 15272 is similar in intensity to CPT code 15341 (Tissue 
cultured allogeneic skin substitute; each additional 25 sq cm, or part 
thereof (List separately in addition to code for primary procedure)), 
and that the primary factor distinguishing the work of the two services 
is the intra-service physician time. CPT code 15341 has a work RVU of 
0.50, 15 minutes of intra-service time, and an IWPUT of 0.0333. CPT 
code 15272 has 10 minutes of intra-service time. Ten minutes of intra-
service work at the same intensity as CPT code 15341 is equal to a work 
RVU of 0.33 (10 minutes x 0.0333 IWPUT = 0.33 WRVU). Therefore, we are 
assigning a work RVU of 0.33 to CPT code 15272 on an interim final 
basis for CY 2012.
    After clinical review of CPT code 15276 (Application of skin 
substitute graft to face, scalp, eyelids, mouth, neck, ears, orbits, 
genitalia, hands, feet, and/or multiple digits, total wound surface 
area up to 100 sq cm; each additional 25 sq cm wound surface area, or 
part thereof (List separately in addition to code for primary 
procedure)), we believe that a work RVU of 0.50 accurately reflects the 
work associated with this service. The AMA RUC reviewed the survey 
results for CPT code 15276 and recommended a work RVU of 0.59 which 
corresponds to the the AMA RUC's recommended work RVU for CPT code 
15272. As discussed previously, we are assigning an interim final work 
RVU of 0.33 to CPT code 15272. We believe that the work associated with 
CPT code 15276, which describes work on the face, scalp, eyelids, 
mouth, neck, ears, orbits, genitalia, hands, feet, and/or multiple

[[Page 73192]]

digits, is more intense than the work associated with CPT code 15272, 
which describes work on the trunk, arms, legs. We believe that a work 
RVU of 0.50 for CPT code 15276 accurately captures the work associated 
with this service, and establishes the appropriate relativity between 
the services. Therefore, we are assigning a work RVU of 0.50 to CPT 
code 15276 on an interim final basis for CY 2012.
    CPT codes 16020 (Dressings and/or debridement of partial-thickness 
burns, initial or subsequent; small (less than 5 percent total body 
surface area)) and 16025 (Dressings and/or debridement of partial-
thickness burns, initial or subsequent; medium (e.g., whole face or 
whole extremity, or 5 percent to 10 percent total body surface area)) 
are typically billed on the same day as an E/M service. We believe some 
of the activities conducted during the pre- and post-service times of 
the procedure code and the E/M visit overlap and, therefore, should not 
be counted twice in developing the procedure's work value. As described 
earlier in section III.A. of this final rule with comment period, to 
account for this overlap, we reduced the pre-service evaluation and 
post-service time by one-third. For CPT code 16020 we reduced the pre-
service evaluation time from 7 minutes to 5 minutes and the post 
service time from 5 minutes to 3 minutes. For CPT code 16025 we reduced 
the pre-service evaluation time from 10 minutes to 7 minutes, and the 
post-service time from 5 minutes to 3 minutes. A complete listing of 
the times assigned to these CPT codes is available on the CMS Web site 
at: https://www.cms.gov/PhysicianFeeSched/.
    In order to determine the appropriate work RVUs for these services 
given the time changes, we calculated the value of the extracted time 
and subtracted it from the AMA RUC-recommended work RVUs. For CPT code 
16020, we removed a total of 4 minutes at an intensity of 0.0224 per 
minute, which amounts to the removal of 0.09 of a work RVU. The AMA RUC 
recommended a work RVU of 0.80, the current (CY 2011) work RVU. We are 
assigning an interim final work RVU of 0.71, with refinement to time, 
to CPT code 16020 for CY 2012. For CPT code 16025, we removed a total 
of 5 minutes at an intensity of 0.0224 per minute, which amounts to the 
removal of 0.11 of a work RVU. The AMA RUC recommended a work RVU of 
1.85, the current (CY 2011) work RVU. We are assigning an interim final 
work RVU of 1.74, with refinement to time, to CPT code 16025 for CY 
2012.
    For the CY 2012 new, revised, and potentially misvalued CPT codes 
reviewed in this family of services and not specifically discussed 
here, we agree with the AMA RUC/HCPAC-recommended work RVUs and are 
setting as interim final the work RVUs listed in Table 19.
(4) Musculoskeletal: Hand and Fingers (CPT Code 26341)
[GRAPHIC] [TIFF OMITTED] TR28NO11.051

    For CY 2012, the CPT Editorial Panel created CPT codes 26341 and 
20517 to describe a new technique for treating Dupuytren's contracture 
by injecting an enzyme into the Dupuytren's cord for full finger 
extension and manipulation.
    After clinical review of CPT code 26341 (Manipulation, palmar 
fascial cord (ie, Dupuytren's cord), post enzyme injection (e.g., 
collagenase), single cord), we believe that a work RVU of 0.91 
accurately reflects the work associated with this service. The AMA RUC 
reviewed the survey results for CPT code 26341 and recommended a work 
RVU of 1.66, which corresponds to the survey 25th percentile value. We 
believe the service described by CPT code 26341 is analogous to CPT 
code 97140 (Manual therapy techniques (e.g., mobilization/manipulation, 
manual lymphatic drainage, manual traction), 1 or more regions, each 15 
minutes) which has a work RVU of 0.43. However, CPT code 97140 has no 
post-service visits (global period = XXX), while CPT code 26341 
includes 1 CPT code 99212 level 2 office or outpatient visit (global 
period = 010). To account for this difference, we added the work RVU of 
0.48 for CPT code 99212, to the work RVU of 0.43 for CPT code 97140, 
for a total work RVU of 0.91. Therefore, we are assigning an interim 
final work RVU of 0.91 to CPT code 26341 for CY 2012.
(5) Musculoskeletal: Application of Casts and Strapping (CPT Codes 
29581-29584)
[GRAPHIC] [TIFF OMITTED] TR28NO11.052

    For CY 2012 the CPT Editorial Panel revised the descriptor for CPT 
code 29581, and also created CPT codes 29582, 29583, and 29584 to 
describe the application of multi-layer compression to the upper and 
lower extremities. The CPT Editorial Panel and AMA RUC concluded that 
the revisions to the descriptor for CPT code 29581 were

[[Page 73193]]

editorial only, and the AMA RUC related specialty society (Society for 
Vascular Surgery) believed that resurveying CPT code 29581 was not 
necessary. As such, the AMA RUC recommended ``No Change'' for CPT code 
29581. The new CPT codes 29582, 29583, and 29584 were surveyed through 
the American Physical Therapy Association (the expected dominant 
providers of the services), and the HCPAC reviewed the results and 
issued recommendations to CMS for these 3 new CPT codes.
    After clinical review, we believe that CPT codes 29581 (Application 
of multi-layer compression system; leg (below knee), including ankle 
and foot), 29582 (Application of multi-layer compression system; thigh 
and leg, including ankle and foot, when performed), 29583 (Application 
of multi-layer compression system; upper arm and forearm) and 29584 
(Application of multi-layer compression system; upper arm, forearm, 
hand, and fingers) all describe similar services from a resource 
perspective and should be valued similarly. We believe CPT code 29581 
(work RVU = 0.60) is valued inappropriately high in relation to newly 
created, surveyed, and HCPAC-reviewed CPT codes 29582, 29583, and 
29584. We believe that the HCPAC recommended work RVUs of 0.35 for CPT 
code 29682, 0.25 for CPT code 29583, and 0.35 for CPT code 29584 
accurately reflect the work associated with these services. 
Additionally, we believe that the clinical conditions treated by CPT 
codes 29581 and 29583 are essentially the same, namely the treatment of 
venus ulcers and lymphedema. We recognize that there will be mild 
differences and variation in the application of a multi-layer 
compression system to the upper extremity versus the lower extremity, 
which is accounted for in the intra-service times of the codes. As 
such, we believe a work RVU of 0.25 appropriately accounts for the work 
associated with CPT code 29581. We believe that a survey that addresses 
all 4 CPT codes together as a family and gathers responses from all 
clinicians who furnish the services described by CPT codes 29581 
through 29584 would help assure the appropriate gradation in valuation 
of these 4 services. In sum, on an interim basis for CY 2012 we are 
assigning a work RVU of 0.25 to CPT code 29581, a work RVU of 0.35 to 
CPT code 29582, a work RVU of 0.25 to 29593, and a work RVU of 0.35 to 
CPT code 29584.
(6) Musculoskeletal: Endoscopy/Arthroscopy (CPT Codes 29826, 29880, 
29881)
[GRAPHIC] [TIFF OMITTED] TR28NO11.053

    CPT code 29826 was identified by the AMA RUC Relativity Assessment 
Workgroup through the Codes Reported Together 75 percent or More 
screen. This service is commonly performed with CPT codes 29824, 29827 
and 29828. In addition, as part of the Fourth Five-Year Review, CMS 
identified 29826 through the Harvard-Valued--Utilization > 30,000 
screen.
    Given that CPT code 29826 (Arthroscopy, shoulder, surgical; 
decompression of subacromial space with partial acromioplasty, with 
coraco-acromial ligament (ie, arch) release, when performed) is rarely 
performed as a stand-alone procedure (less than 1 percent of the time), 
the American Academy of Orthopaedic Surgeons (AAOS) sent us a request 
to change the global period from 090 to ZZZ. A global surgical period 
of 090 is reflects a major surgery with a 1-day preoperative period and 
a 90-day postoperative period included in the fee schedule payment 
amount. A global surgical period of ZZZ reflects a service that is 
related to another service and is always included in the global period 
of the other service. These are often referred to as ``add-on'' codes 
or services. We agreed to change the global surgical period for CPT 
code 29826, and CPT code 29826 was surveyed and presented as an add-on 
service with a ZZZ global period.
    After clinical review of CPT code 29826, we believe that the AMA 
RUC-recommended work RVU of 3.00, the survey 25th percentile value, 
accurately values the work associated with this service. We are 
assigning a work RVU of 3.00 to CPT code 29826 on an interim final 
basis for CY 2012.
    For the CY 2012 new, revised, and potentially misvalued CPT codes 
reviewed in this family of services and not specifically discussed 
here, we agree with the AMA RUC/HCPAC-recommended work RVUs and are 
setting as interim final the work RVUs listed in Table 19.
(7) Respiratory: Lungs and Pleura (CPT Codes 32096-32854)

[[Page 73194]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.054

    The CPT Editorial Panel reviewed the lung resection family of codes 
for CY 2012 and deleted 8 codes, revised 5 codes and created 18 new 
codes to describe new thoracoscopic procedures and to clarify coding 
confusion between lung biopsy and lung resection procedures. For the 
wedge resection procedures, the revisions were based on three tiers; 
first, the approach, thoracotomy or thoracoscopy; second, the target to 
remove nodules or infiltrates; and lastly the intent, diagnostic or 
therapeutic (for nodules only, all infiltrates will be removed for 
diagnostic purposes).
    After clinical review of CPT code 32096 (Thoracotomy, with 
diagnostic biopsy(ies) of lung infiltrate(s) (e.g., wedge, incisional), 
unilateral), we believe a work RVU of 13.75 accurately reflects the 
work associated with this service compared to other related services. 
The AMA RUC reviewed the survey results, compared the code to other 
services, and concluded that the survey 25th percentile work RVU of 
17.00 appropriately accounts for the work and physician time required 
to perform this procedure. We determined that the work associated with 
CPT code 32096 was similar in terms of physician time and intensity to 
CPT code 44300 (Placement, enterostomy or cecostomy, tube open (e.g., 
for feeding or decompression) (separate procedure)). We believe 
crosswalking to the work RVU of CPT code 44300 appropriately accounts 
for the work associated with CPT code 32096. Therefore, we are 
assigning a work RVU of 13.75 for CPT code 32096 on an interim final 
basis for CY 2012.
    After clinical review of CPT code 32097 (Thoracotomy, with 
diagnostic biopsy(ies) of lung nodule(s) or mass(es) (e.g., wedge, 
incisional), unilateral), we believe a work RVU of 13.75 accurately 
reflects the work associated with this service compared to other 
related services. The AMA RUC reviewed the survey results, compared the 
code to other services, and recommended the survey 25th percentile work 
RVU of 17.00. We determined that the work associated with CPT code 
32096 was similar to CPT code 32096, to which we have assigned a work 
RVU of 13.75. Therefore, we are assigning a work RVU of 13.75 for CPT 
code 32097 on an interim final basis for CY 2012.
    After clinical review of CPT code 32098 (Thoracotomy, with 
biopsy(ies) of pleura), we believe a work RVU of 12.91 accurately 
reflects the work associated with this service compared to other 
related services. The AMA RUC reviewed the survey results, compared the 
code to other services, and recommended the survey 25th percentile work 
RVU of 14.99. We determined that the work associated with CPT code 
32098 was similar in terms of physician time and intensity to CPT code 
47100 (Biopsy of liver, wedge). We believe crosswalking to the work RVU 
of CPT code 47100 appropriately accounts for the work associated with 
CPT code 32098. Therefore, we are assigning a work RVU of 12.91 to CPT 
code 32098 on an interim final basis for CY 2012.
    After clinical review of CPT code 32100 (Thoracotomy; with 
exploration), we believe a work RVU of 13.75 accurately reflects the 
work associated with this service compared to other related services. 
The AMA RUC reviewed the survey results, compared the code to other 
services, and recommended a work RVU of 17.00. The AMA RUC concluded 
that CPT code 32100 is similar to new CPT code 32096, for which the AMA 
RUC recommended a work RVU of 17.00. We recognize the specialty society 
and AMA RUC assertion that CPT code 32100 should be valued the same as 
CPT codes 32096 and 32097 based on the assessment that the work is 
similar between these three services. We note that we assigned a work 
RVU of 13.75 to CPT codes 32096 and 32097. Accordingly, we are 
assigning a work RVU of 13.75 for CPT code 32100 on an interim final 
basis for CY 2012.
    After clinical review of CPT code 32505 (Thoracotomy; with 
therapeutic wedge resection (e.g., mass, nodule), initial), we believe 
a work RVU of 15.75 accurately reflects the work associated

[[Page 73195]]

with this service compared to other related services. The AMA RUC 
reviewed the survey results, compared the code to other services, and 
recommended the survey 25th percentile work RVU of 18.79. We recognize 
that CPT code 32505 has greater physician work and intensity compared 
to CPT code 32096, and we believe the additional 30 minutes of intra-
service work associated with CPT code 32505 accounts for the additional 
work RVUs assigned to this service as compared to CPT code 32096, and 
that this incremental difference is equivalent to 2.00 work RVUs. 
Accordingly, we are assigning a work RVU of 15.75 for CPT code 32505 on 
an interim final basis for CY 2012.
    After clinical review of CPT code 32507 (Thoracotomy; with 
diagnostic wedge resection followed by anatomic lung resection (List 
separately in addition to code for primary procedure)), we believe a 
work RVU of 3.00 accurately reflects the work associated with this 
service compared to other related services. The AMA RUC reviewed the 
survey results, compared the code to other services, and recommended 
the survey 25th percentile work RVU of 3.78. We believe that the work 
associated with this service is similar to the work of CPT code 32506 
and should be valued the same. Accordingly, we are assigning a work RVU 
of 3.00 to CPT code 32507 on an interim final basis for CY 2012.
    For CPT code 32663 (Thoracoscopy, surgical; with lobectomy (single 
lobe)), the AMA RUC recommended a work RVU of 24.64. Upon clinical 
review, we have determined that it is most appropriate to accept the 
AMA RUC recommended work RVU of 24.64 on a provisional basis, pending 
review of the open heart surgery analogs, in this case, CPT code 32480. 
We are requesting the AMA RUC look at the incremental difference in 
RVUs and times between the open and laparoscopic surgeries and 
recommend a consistent valuation of RVUs and time for CPT code 32663 
and other services within this family with this same issue. 
Accordingly, we are assigning a work RVU of 24.64 for CPT code 32663 on 
an interim basis for CY 2012.
    After clinical review of CPT code 32668 (Thoracoscopy, surgical; 
with diagnostic wedge resection followed by anatomic lung resection 
(List separately in addition to code for primary procedure)), we 
believe a work RVU of 3.00 accurately reflects the work associated with 
this service compared to other related services. The AMA RUC reviewed 
the survey results, compared the code to other services, and 
recommended the survey 25th percentile work RVU of 4.00. We believe 
that the work associated with this service is similar to the work of 
CPT code 32506, which we have valued at a work RVU of 3.00. 
Accordingly, we are assigning a work RVU of 3.00 to CPT code 32668 on 
an interim basis for CY 2012.
    For CPT code 32669 (Thoracoscopy, surgical; with removal of a 
single lung segment (segmentectomy)), the AMA RUC recommended a work 
RVU of 23.53. Upon clinical review, we have determined that it is most 
appropriate to accept the AMA RUC recommended work RVU of 23.53 on a 
provisional basis, pending review of the open heart surgery analogs, in 
this case CPT code 32480. We are requesting the AMA RUC look at the 
incremental difference in RVUs and times between the open and 
laparoscopic surgeries and recommend a consistent valuation for CPT 
32669 and other services within this family with this same issue. 
Accordingly, we are assigning a work RVU of 23.53 to CPT code 32669 on 
an interim basis for CY 2012.
    For CPT code 32670 (Thoracoscopy, surgical; with removal of two 
lobes (bilobectomy)) the AMA RUC recommended a work RVU of 28.52. Upon 
clinical review, we have determined that it is most appropriate to 
accept the AMA RUC recommended work RVU of 28.52 on a provisional 
basis, pending review of the open heart surgery analogs, in this case 
CPT code 32482. We are requesting the AMA RUC look at the incremental 
difference in RVUs and times between the open and laparoscopic 
surgeries and recommend a consistent valuation for CPT 32670 and other 
services within this family with this same issue. Accordingly, we are 
assigning a work RVU of 28.52 to CPT code 32670 on an interim basis for 
CY 2012.
    For CPT code 32671 (Thoracoscopy, surgical; with removal of lung 
(pneumonectomy)), the AMA RUC recommended a work RVU of 31.92. Upon 
clinical review, we have determined that it is most appropriate to 
accept the AMA RUC recommended work RVU of 31.92 on a provisional 
basis, pending review of the open heart surgery analogs, in this case 
CPT code 32440. We are requesting the AMA RUC look at the incremental 
difference in RVUs and times between the open and laparoscopic 
surgeries and recommend a consistent valuation for CPT 32671 and other 
services within this family with this same issue. Accordingly, we are 
assigning a work RVU of 31.92 to CPT code 32671 on an interim basis for 
CY 2012.
    For 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), the AMA RUC recommended a work RVU of 27.00. Upon 
clinical review, we have determined that it is most appropriate to 
accept the AMA RUC recommended work RVU of 27.00 on a provisional 
basis, pending review of the open heart surgery analogs, in this case 
CPT code 32491. We are requesting the AMA RUC look at the incremental 
difference in RVUs and times between the open and laparoscopic 
surgeries and recommend a consistent valuation for CPT 32672 and other 
services within this family with this same issue. Accordingly, we are 
assigning a work RVU of 27.00 to CPT code 32672 on an interim basis for 
CY 2012.
    For CPT code 32673 (Thoracoscopy, surgical; with resection of 
thymus, unilateral or bilateral), the AMA RUC recommended a work RVU of 
21.13. Upon clinical review, we have determined that it is most 
appropriate to accept the AMA RUC recommended work RVU of 21.13 on a 
provisional basis, pending review of related CPT codes 60520 
(Thymectomy, partial or total; transcervical approach (separate 
procedure)), 60521 (Thymectomy, partial or total; sternal split or 
transthoracic approach, without radical mediastinal dissection 
(separate procedure)), and 60522 (Thymectomy, partial or total; sternal 
split or transthoracic approach, with radical mediastinal dissection 
(separate procedure)). At this time, we have concerns about appropriate 
relativity between the times and RVUs of these services. We are 
assigning a work RVU of 21.13 to CPT code 32673 on an interim basis for 
CY 2012.
    For the CY 2012 new, revised, and potentially misvalued CPT codes 
reviewed in this family of services and not specifically discussed 
here, we agree with the AMA RUC/HCPAC-recommended work RVUs and are 
setting as interim final the work RVUs listed in Table 19.
(8) Cardiovascular: Heart and Pericardium

[[Page 73196]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.055

(A) Pediatric Cardiovascular Code (CPT Code 36000)
    The AMA RUC recommended that CMS consider a bundled status for CPT 
code 36000, (Introduction of needle or intracatheter, vein) because the 
AMA RUC and many specialty societies believe CPT code 36000 always is a 
component of other services. We agree with the AMA RUC recommendation 
and for CY 2012, CPT code 36000 will have a status code of B (bundled). 
We are publishing the RVUs for CPT code 36000 in the CY 2012 PFS, but 
Medicare will no longer make separate payment for this service.
(B) Renal Angiography Codes (CPT Codes 36251-36254)
    CPT codes 75722 and 75724 were identified through the Codes 
Reported Together 75 percent or More screen. These supervision and 
interpretation codes were commonly billed with the catheter placement 
code 36245. For CY 2012, the specialties submitted a code change 
proposal to the CPT Editorial Panel to bundle the services commonly 
reported together. The panel deleted CPT codes 75722 and 75724 and 
created 4 bundled services (CPT codes 36251, 36252, 36253, and 36254) 
for CY 2012.
    After clinical review of CPT code 36251 (Selective catheter 
placement (first-order), main renal artery and any accessory renal 
artery(s) for renal angiography, including arterial puncture and 
catheter placement(s), fluoroscopy, contrast injection(s), image 
postprocessing, permanent recording of images, and radiologic 
supervision and interpretation, including pressure gradient 
measurements when performed, and flush aortogram when performed; 
unilateral), we believe a work RVU of 5.35 accurately reflects the work 
associated with this service. The AMA RUC reviewed the survey results, 
compared the code to other services, and concluded that the work value 
for CPT code 36251 should be directly crosswalked to CPT code 31267 
(Nasal/sinus endoscopy, surgical, with maxillary antrostomy; with 
removal of tissue from maxillary sinus) (work RVU = 5.45). The AMA RUC 
recommended a work RVU of 5.45 for CPT code 36251. We determined that 
the work associated with CPT code 36251 is closely aligned in terms of 
physician time and intensity with CPT code 52341 (Cystourethroscopy; 
with treatment of ureteral stricture (e.g., balloon dilation, laser, 
electrocautery, and incision) (work RVU=5.35). We believe crosswalking 
to the work RVU of CPT code 52341 appropriately accounts for the work 
associated with CPT code 36251. Therefore, we are assigning a work RVU 
of 5.35 to CPT code 36251 on an interim final basis for CY 2012.
    After clinical review of CPT code 36252 (Selective catheter 
placement (first-order), main renal artery and any accessory renal 
artery(s) for renal angiography, including arterial puncture and 
catheter placement(s), fluoroscopy, contrast injection(s), image 
postprocessing, permanent recording of images, and radiologic 
supervision and interpretation, including pressure gradient 
measurements when performed, and flush aortogram when performed; 
bilateral), we believe a work RVU of 6.99 accurately reflects the work 
associated with this service. The AMA RUC reviewed the survey results, 
compared the code to other services, and concluded that the work value 
for CPT code 36252 should be directly crosswalked to CPT code 43272 
(Endoscopic retrograde cholangiopancreatography (ERCP); with ablation 
of tumor(s), polyp(s), or other lesion(s) not amenable to removal by 
hot biopsy forceps, bipolar cautery or snare technique) (work RVU = 
7.38). While the AMA RUC recommended a work RVU of 7.38 for CPT code 
36252. We believe the intensity of this service is akin to CPT code 
58560 (Hysteroscopy, surgical; with division or resection of 
intrauterine septum (any method)) (work RVU = 6.99). Accordingly, we 
are assigning a work RVU of 6.99 to CPT code 36252 on an interim final 
basis for CY 2012.
    For the CY 2012 new, revised, and potentially misvalued CPT codes 
reviewed in this family of services and not specifically discussed 
here, we agree

[[Page 73197]]

with the AMA RUC/HCPAC-recommended work RVUs and are setting as interim 
final the work RVUs listed in Table 19.
(C) IVC Transcatheter Procedures (CPT Codes 37191-37193)
    After clinical review of CPT code 37192 (Repositioning of 
intravascular vena cava filter, endovascular approach inclusive of 
vascular access, vessel selection, and all radiological supervision and 
interpretation, intraprocedural roadmapping, and imaging guidance 
(ultrasound and fluoroscopy)), we believe a work RVU of 7.35 accurately 
reflects the work associated with this service. The AMA RUC reviewed 
the survey results, compared the code to other services, and concluded 
that the survey 75th percentile intra-service time of 60 minutes and 
the 25th percentile of work RVU of 8.00 accurately describes the 
physician work involved in the service. We determined that the work 
associated with CPT code 37192 is similar to CPT code 93460 (Catheter 
placement in coronary artery(s) for coronary angiography, including 
intraprocedural injection(s) for coronary angiography, imaging 
supervision and interpretation; with right and left heart 
catheterization including intraprocedural injection(s) for left 
ventriculography, when performed), which has a work RVU of 7.35 and has 
the following times: 48 minutes pre-service, 50 minutes intra-service, 
and 30 minutes post-service. As such, we believe that the survey median 
intra-service time of 45 minutes appropriately accounts for the time 
required to furnish the intra-service work of this procedure. 
Therefore, we are assigning a work RVU of 7.35 to CPT code 37192, with 
a refinement to 45 minutes of intra-service time, on an interim final 
basis for CY 2012. A complete listing of the times associated with this 
code is available on the CMS Web site at: https://www.cms.gov/PhysicianFeeSched/.
    After clinical review of CPT code 37193 (Retrieval (removal) of 
intravascular vena cava filter, endovascular approach inclusive of 
vascular access, vessel selection, and all radiological supervision and 
interpretation, intraprocedural roadmapping, and imaging guidance 
(ultrasound and fluoroscopy)), we believe a work RVU of 7.35 accurately 
reflects the work associated with this service. The AMA RUC reviewed 
the survey results, compared the code to other services, and concluded 
that the survey 75th percentile intra-service time of 60 minutes and 
the 25th percentile of work RVU of 8.00 accurately describes the 
physician work involved in the service. We believe that the work 
associated with CPT code 37193 is similiar to CPT code 93460 (Catheter 
placement in coronary artery(s) for coronary angiography, including 
intraprocedural injection(s) for coronary angiography, imaging 
supervision and interpretation; with right and left heart 
catheterization including intraprocedural injection(s) for left 
ventriculography, when performed), which has a work RVU of 7.35 and the 
following times: 48 minutes pre-service, 50 minutes intra-service, and 
30 minutes post-service. As such, we believe that the survey median 
intra-service time of 45 minutes appropriately accounts for the time 
required to furnish the intra-service work associated with this 
procedure. Therefore, we are assigning a work RVU of 7.35 to CPT code 
37193, with a refinement to 45 minutes of intra-service time, on an 
interim final basis for CY 2012. A complete listing of the times 
associated with this code is available on the CMS Web site at: https://www.cms.gov/PhysicianFeeSched/.
    After clinical review of CPT code 37619 (Ligation of inferior vena 
cava), we believe a work RVU of 30.00 accurately reflects the work 
associated with this service. The AMA RUC reviewed the survey results, 
compared the code to other services, and concluded that the survey 
respondents underestimated the total physician work for this rarely 
performed service, by underestimating the significant post-operative 
work. The AMA RUC recommended a work RVU of 37.60 for CPT code 37619. 
We determined that the work associated with this service is more 
aligned with reference CPT code 37617 (Ligation, major artery (e.g., 
post-traumatic, rupture); abdomen) (work RVU = 23.97), therefore we 
believe the survey median work RVU of 30.00 is more appropriate. 
Accordingly, we are assigning a work RVU of 30.00 to CPT code 37619 on 
an interim final basis for CY 2012.
    For the CY 2012 new, revised, and potentially misvalued CPT codes 
reviewed in this family of services and not specifically discussed 
here, we agree with the AMA RUC/HCPAC-recommended work RVUs and are 
setting as interim final the work RVUs listed in Table 19.
(9) Hemic and Lymphatic Systems: General, Bone Marrow or Stem Cell 
Services/Procedures (CPT Codes 38230 and 38232)
[GRAPHIC] [TIFF OMITTED] TR28NO11.056

    For CY 2012, the CPT Editorial Panel split CPT code 38230 into two 
separate codes: 38230 (Bone marrow harvesting for transplantation; 
allogeneic), and 38232 (Bone marrow harvesting for transplantation; 
autologous) to more accurately reflect current practice. For CY 2012, 
we changed the global period from 010 to 000 for CPT code 38230, and 
also assigned a global period of 000 to CPT code 38232, as these 
services rarely require overnight hospitalization and physician follow-
up in the days following the procedure.
    After clinical review of CPT codes 38230 and 38232, we believe that 
a work RVU of 3.09 appropriately accounts for the work associated with 
these services. The AMA RUC reviewed the specialty society survey 
results and, after comparison to similar CPT codes, the AMA RUC 
recommended the survey median work RVU of 4.00 for CPT code 38230, and 
the survey median work RVU of 3.50 for CPT code 38232. We believe that 
the work for these services is very similar and should be valued the 
same. CPT code 38230 currently (CY 2011) has a work RVU of 4.85 with a 
ten-day global period that includes 1 CPT code 99213 level 3 office or 
outpatient visit, and 1 CPT code 99238 discharge day management 
service. To

[[Page 73198]]

convert CPT code 38230 from a 10-day global period to a 0-day global 
period, one could subtract out the work RVUs for CPT code 99213 (work 
RVU = 0.97) and CPT code 99238 (work RVU = 1.28), resulting in a work 
RVU of 2.60. However, we believe that a work RVU of 2.60 would place 
these services too low compared to similar services. We believe that 
the CPT code 32830 survey 25th percentile work RVU of 3.09 accurately 
captures the intensity of these two services. Therefore, we are 
assigning a work RVU of 3.09 to CPT codes 32830 and 32832 on an interim 
final basis for CY 2012.
(10) Digestive: Liver (CPT Code 47000)
[GRAPHIC] [TIFF OMITTED] TR28NO11.057

    We identified CPT code 47000 (Biopsy of liver, needle; 
percutaneous) as potentially misvalued through the Harvard-Valued--
Utilization > 30,000 screen.
    After clinical review of CPT code 47000, we believe that the 
current (CY 2011) work RVU of 1.90 be maintained. The AMA RUC reviewed 
the specialty society survey data, and also concluded that a work RVU 
of 1.90 be maintained. We request that the AMA RUC and CPT Editorial 
Panel consider reviewing all the percutaneous biopsy CPT codes to 
incorporate imaging guidance into the RVU and descriptor where 
appropriate. We are assigning a work RVU of 1.90 to CPT code 47000 on 
an interim final basis for CY 2012.
(11) Digestive: Abdomen, Peritoneum, and Omentum (CPT Codes 49082-
49084)
[GRAPHIC] [TIFF OMITTED] TR28NO11.058

    The AMA RUC identified CPT codes 49080 and 49081 through the 
Harvard-Valued--Utilization > 100,000 screen. The related specialty 
societies noted that the services have evolved since the codes were 
initially established and need separate codes that distinguish 
paracentesis performed without imaging guidance and paracentesis 
performed with imaging guidance. For CY 2012, the CPT Editorial Panel 
deleted CPT codes 49080 and 49081 and created 3 new CPT codes, 49082, 
49083, and 49084, to more accurately describe the current medical 
practice.
    After clinical review of CPT code 49082 (Abdominal paracentesis 
(diagnostic or therapeutic); without imaging guidance), we believe that 
a work RVU of 1.24 accurately accounts for the work associated with 
this service. The AMA RUC recommended a work RVU of 1.35 for CPT code 
49082, which corresponds to the current (CY 2011) work RVU for CPT code 
49080 (CY 2011 descriptor: Peritoneocentesis, abdominal paracentesis, 
or peritoneal lavage (diagnostic or therapeutic); initial). For CPT 
code 49082 we believe that the survey response rate (9 of 517) is too 
low to produce a reliable estimate. We believe that CPT code 49082 is 
similar in time and intensity to CPT code 32562 (Instillation(s), via 
chest tube/catheter, agent for fibrinolysis (e.g., fibrinolytic agent 
for break up of multiloculated effusion); subsequent day) which has a 
work RVU of 1.24 and 10 minutes of intra-service time. Therefore, we 
are assigning a work RVU of 1.24, with a refinement to 10 minutes of 
intra-service time, to CPT code 49082 for CY 2012. A complete listing 
of the times associated with this CPT code is available on the CMS Web 
site at: https://www.cms.gov/PhysicianFeeSched/.
    After clinical review of CPT codes 49083 (Abdominal paracentesis 
(diagnostic or therapeutic); with imaging guidance) and 49084 
(Peritoneal lavage, including imaging guidance, when performed), we 
believe that a work RVU of 2.00 accurately accounts for the work 
associated with these services. After comparison to similar CPT codes, 
the AMA RUC recommended a work RVU of 2.00 for CPT code 49083 and a 
work RVU of 2.50 for CPT code 49084. We agree with the AMA RUC-
recommended work RVU of 2.00 for CPT code 49083, and believe that CPT 
code 49084 requires similar work and should be valued the same. 
Therefore, we are assigning a work RVU of 2.00 to CPT codes 49083 and 
49084 on an interim final basis for CY 2012.
(12) Nervous: Spine and Spinal Cord (CPT Codes 62367-62370)

[[Page 73199]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.059

    For CY 2012 the AMA RUC Relativity Assessment Workgroup identified 
CPT codes 62367, 62368, 95990, and 95991 as part of the Codes Reported 
Together 75 percent or More screen. For CY 2012, the CPT Editorial 
Panel created 2 new CPT codes, 62369 and 62370, to report electronic 
analysis of programmable implanted pump for intrathecal or epidural 
drug infusion with reprogramming and refill requiring and not requiring 
physician's skill and editorially revised 3 existing CPT codes, CPT 
code 62367 to report without reprogramming or refill and CPT codes 
95990 and 95991 to report refilling and maintenance of implantable pump 
or reservoir for drug delivery requiring and not requiring physician 
skill. The changes to CPT code 95990 and 95991 were editorial only and 
did not require a review of the physician work or practice expense.
    After clinical review of CPT code 62370 (Electronic analysis of 
programmable, implanted pump for intrathecal or epidural drug infusion 
(includes evaluation of reservoir status, alarm status, drug 
prescription status); with reprogramming and refill (requiring 
physician's skill)), we believe that a work RVU of 0.90 accurately 
accounts for the work associated with this service. After a comparison 
to similar services, the AMA RUC recommended a work RVU of 1.10 for CPT 
code 62370 based on a crosswalk to CPT code 56605 (Biopsy of vulva or 
perineum (separate procedure); 1 lesion). We believe that a work RVU of 
1.10 for CPT code 62370 is too high compared to similar services in 
this family. We find CPT code 62370 to be similar in intensity and 
complexity to CPT code 93281 (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 physician analysis, review and report; multiple lead pacemaker 
system) (work RVU = 0.90). We believe that a work RVU of 0.90, which is 
between the specialty society survey 25th percentile and median work 
RVU, appropriately reflects the work of CPT code 62370. Therefore, we 
are assigning a work RVU of 0.90 to CPT code 62370 on an interim final 
basis for CY 2012.
    For the CY 2012 new, revised, and potentially misvalued CPT codes 
reviewed in this family of services and not specifically discussed 
here, we agree with the AMA RUC/HCPAC-recommended work RVUs and are 
setting as interim final the work RVUs listed in Table 19.
(13) Nervous: Extracranial Nerves, Peripheral Nerves, and Autonomic 
Nervous System (CPT Codes 64633-64636)
[GRAPHIC] [TIFF OMITTED] TR28NO11.060

    CPT code 64626 was identified by the AMA RUC's Five-Year Review 
Identification Workgroup as potentially misvalued through the Site-of-
Service Anomaly screen. The specialty society requested and the AMA RUC 
agreed that CPT codes 64622, 64623, 64626, 64627 be referred to CPT to 
clarify that imaging is required. For CY 2012, the CPT Editorial Panel 
deleted four CPT codes (64622-64623, and 64626-64627) and created four 
new CPT codes (64633-64636) to describe neurolysis reported per joint 
(2 nerves per each joint) instead of per nerve, under image guidance.
    After clinical review of CPT codes 64633 (Destruction by neurolytic 
agent, paravertebral facet joint nerve(s); cervical or thoracic, with 
image guidance (fluoroscopy or CT), single facet joint), 64634 
(Destruction by neurolytic agent, paravertebral facet joint nerve(s); 
cervical or thoracic, with image guidance (fluoroscopy or CT), each 
additional facet joint (List separately in addition to code for primary 
procedure)), 64635 (Destruction by neurolytic agent, paravertebral 
facet joint nerve(s); lumbar or sacral, with image guidance 
(fluoroscopy or CT), single facet joint), and 64636 (Destruction by 
neurolytic agent, paravertebral facet joint nerve(s); lumbar or sacral, 
with image guidance (fluoroscopy or CT), each additional facet joint 
(List separately in addition to code for primary procedure)), we 
believe that the specialty society survey 25th percentile work RVUs of 
3.84, 1.32, 3.78, and 1.16 (respectively) accurately reflect the work 
associated with these services. These are also the AMA RUC-recommended 
work RVUs for these services. For CPT codes 64635 and 64636, we believe 
that the survey median intra-service times of 28 minutes and 15 minutes 
(respectively) appropriately allow for the intra-service work 
associated with furnishing these services. The AMA RUC recommended an 
intra-service time of 30 minutes for CPT code 64635, and an intra-
service time of 20 minutes for CPT code 64636.

[[Page 73200]]

In sum, on an interim final basis for CY 2012 we are finalizing a work 
RVU of 3.84 for CPT code 64633 and a work RVU of 1.32 for CPT code 
64634, without refinement to the AMA RUC-recommended time. On an 
interim final basis for CY 2012 we are finalizing a work RVU of 3.78 
for CPT code 64635 and a work RVU of 1.16 for CPT code 64636, with 
refinement to the AMA RUC-recommended time. A complete listing of the 
times associated with these procedures is available on the CMS Web site 
at: https://www.cms.gov/PhysicianFeeSched/. Additionally, we request 
that the AMA RUC review CPT code 64681 (Destruction by neurolytic 
agent, with or without radiologic monitoring; superior hypogastric 
plexus) which was the reference service for CPT codes 64633 and 64635.
(14) Diagnostic Radiology: Abdomen (CPT Code 74174)
[GRAPHIC] [TIFF OMITTED] TR28NO11.061

    CPT codes 74175 and 72191 were identified by the AMA RUC Relativity 
Assessment Workgroup's Codes Reported Together 75 percent or More 
screen, with both services reported over 95 percent of the time 
together. For CY 2012, the CPT Editorial Panel created CPT code 74174 
which bundles the work of CPT codes 74175 and 72191 when reported 
together on the same date of service.
    We reviewed CPT code 74174 (Computed tomographic angiography, 
abdomen and pelvis; with contrast material(s), including noncontrast 
images, if performed, and image postprocessing), and are accepting the 
AMA RUC-recommended work RVUs and times on an interim basis for CY 
2012. We request that the AMA RUC review the component CPT codes: 74175 
(Computed tomographic angiography, abdomen, with contrast material(s), 
including noncontrast images, if performed, and image postprocessing) 
and 72191 (Computed tomographic angiography, pelvis, with contrast 
material(s), including noncontrast images, if performed, and image 
postprocessing). On an interim basis for CY 2012 we are assigning a 
work RVU of 2.20 to CPT code 74174.
(15) Pathology and Laboratory: Cytopathology (CPT Codes 88104, 88106, 
and 88108)
[GRAPHIC] [TIFF OMITTED] TR28NO11.062

    CPT code 88104 was identified through the AMA RUC Relativity 
Assessment Workgroup by the Harvard-Valued--Utilization > 100,000. 
Additionally, CPT codes 88106-88108 were identified as part of the 
Cytopathology family for AMA RUC review.
    After clinical review of CPT code 88104 (Cytopathology, fluids, 
washings or brushings, except cervical or vaginal; smears with 
interpretation), we believe that the current (CY 2011) work RVU of 0.56 
accurately reflects the work associated with this service. We also 
believe that 24 minutes of intra-service time, the survey median, and 
no pre- or post-service time is appropriate for this service. That AMA 
RUC also recommended a work RVU of 0.56 for CPT code 88104 and 24 
minutes of intra-service time with no pre- or post-service time. 
Therefore, we are maintaining the current work RVU of 0.56 and 24 
minutes of intra service time for CPT code 88104 on an interim final 
basis for CY 2012.
    After clinical review of CPT code 88106 (Cytopathology, fluids, 
washings or brushings, except cervical or vaginal; simple filter method 
with interpretation) we believe that a work RVU of 0.37 accurately 
reflects the work associated with this service. The AMA RUC reviewed 
the survey results for CPT code 88106 and recommended a work RVU of 
0.56. However, we believe that this value overstates the work of this 
service when compared to the CPT code 88104. We believe that CPT code 
88106 is similar in intensity to CPT code 88104, and that the primary 
factor distinguishing the work of the two services is the intra-service 
time. As previously, CPT code 88104 has a work RVU of 0.56, and 24 
minutes of intra-service time. For CPT code 88106, we believe 16 
minutes of intra-service time, the survey median, is appropriate for 
this service. Therefore, we believe that the work RVU for CPT code 
88106 should be reduced proportionately to reflect the lower intra-
service time in order to maintain relativity with the CPT code 88104.
    In calculating the RVU for CPT code 88106, we determined the RVU 
per minute (0.56/24 = 0.023) for the CPT code 88104. Then we multiplied 
the RVU per minute (0.023) of CPT code 88104 by the intra-service 
minutes for CPT code 88106 (0.023*16 = 0.37). We believe a work RVU of 
0.37 appropriately maintains relativity with CPT code 88104. Therefore, 
we are assigning a work RVU of 0.37 for CPT code 88106 and an intra-
service time of 16 minutes on an interim final basis for CY 2012. The 
times assigned to this CPT code are available on the CMS Web site at: 
https://www.cms.gov/PhysicianFeeSched/.
    After clinical review of CPT code 88108 (Cytopathology, 
concentration technique, smears and interpretation

[[Page 73201]]

(e.g., Saccomanno technique)), we believe that a work RVU of 0.44 
accurately reflects the work associated with this service. The AMA RUC 
reviewed the survey results for CPT code 88106 and recommended a work 
RVU of 0.56. However, we believe that this value overstates the work of 
this service when compared to CPT code 88104. We believe that CPT code 
88108 is similar in intensity to CPT code 88104, and that the primary 
factor distinguishing the work of the two services is the intra-service 
time. CPT code 88104 has a work RVU of 0.56, and 24 minutes of intra-
service time. For CPT code 88108, we believe 19 minutes of intra-
service time, the survey median, is appropriate for this service. 
Therefore, we believe that the work RVU for CPT code 88108 should be 
reduced proportionately to reflect the lower intra-service time in 
order to maintain relativity with CPT code 88104.
    In calculating the RVU for CPT code 88108, we determined the RVU 
per minute (0.56/24 = 0.023) for the CPT code 88104. Then we multiplied 
the RVU per minute (0.023) of CPT code 88104 by the intra-service 
minutes for CPT code 88108 (0.023*19 = 0.44). We believe a work RVU of 
0.44 appropriately maintains relativity with CPT code 88104. Therefore 
we are assigning a work RVU of 0.44 and an intra-service time of 19 
minutes to CPT code 88108 on an interim final basis for CY 2012. The 
times assigned to this CPT code are available on the CMS Web site at: 
https://www.cms.gov/PhysicianFeeSched/.
(16) Psychiatry: Psychiatric Therapeutic Procedures (CPT Code 90845, 
90867-90869)
[GRAPHIC] [TIFF OMITTED] TR28NO11.063

CPT code 90845 was first considered as part of the Fourth Five-Year 
Review. However, in that review process, the related specialty 
societies referred the family of services to the CPT Editorial Panel to 
consider a revision to the code descriptors. During the CPT review 
process, CPT recommended removing CPT code 90845 from the list of codes 
for revision, as CPT believed revisions to the descriptor were 
unnecessary because the work inherent in providing this service was the 
same regardless of provider.
    After clinical review of CPT code 90845 (Psychoanalysis), including 
a review of the information provided by the specialty societies and the 
AMA RUC, we believe that the current (2011) work RVU of 1.79 and the 
current times should be maintained for this code until the other codes 
in the family are revised by CPT and reviewed by the AMA RUC. The AMA 
RUC recommended a work RVU of 2.10 for CPT code 90845. We would like to 
refrain from establishing a new interim final value for CPT code 90845 
until we can view this CPT code relative to the revised codes in the 
family, which we anticipate reviewing for CY 2013. Therefore, we are 
maintaining the current work RVU of 1.79 and current times for CPT code 
90845 on an interim basis for CY 2012. A complete listing of the times 
associated with CPT code 90845 is available on the CMS Web site at: 
https://www.cms.gov/PhysicianFeeSched/.
    For CY 2011 the CPT Editorial Panel converted Category III codes 
0160T and 0161T to Category I status CPT codes 90867 and 90868, which 
were contractor priced on the Physician Fee Schedule. For CY 2012, the 
CPT Editorial Panel modified CPT codes 90867 and 90868, and created CPT 
code 90869. These three CPT codes are priced on the Physician Fee 
Schedule for CY 2012.
    After clinical review of CPT code 90867 (Therapeutic repetitive 
transcranial magnetic stimulation (TMS) treatment; initial, including 
cortical mapping, motor threshold determination, delivery and 
management), we believe that the AMA RUC-recommended survey median work 
RVU of 3.52 appropriately reflects the work associated with this 
service. However, we believe that the survey 75th percentile intra-
service time of 60 minutes appropriately accounts for the time required 
to furnish the intra-service work of this procedure. The AMA RUC 
recommended 65 minutes of intra-service time for CPT code 90867. We are 
assigning a work RVU of 3.52, with refinement to 60 minutes of intra-
service time, to CPT code 90867 on an interim final basis for CY 2012. 
A complete listing of the times associated with CPT code 90867 is 
available on the CMS Web site at: https://www.cms.gov/PhysicianFeeSched/.
    After clinical review of CPT code 90869 (Therapeutic repetitive 
transcranial magnetic stimulation (TMS) treatment; subsequent motor 
threshold re-determination with delivery and management), we believe 
that a work RVU of 3.00 appropriately accounts for the work associated 
with this service. The original specialty society recommendation to the 
AMA RUC for CPT code 90869 was for a work RVU of 3.00, and the AMA RUC 
recommended to us a work RVU of 3.20, the survey median. We believe 
that CPT code 90869 is similar in time and intensity to CPT code 95974 
(Electronic analysis of implanted neurostimulator pulse generator 
system (e.g., rate, pulse amplitude and duration, configuration of wave 
form, battery status, electrode selectability, output modulation, 
cycling, impedance and patient compliance measurements); complex 
cranial nerve neurostimulator pulse generator/transmitter, with 
intraoperative or subsequent programming, with or without nerve 
interface testing, first hour) (work RVU = 3.00), and the work should 
be valued the same. Therefore, we are assigning a work RVU of 3.00 to 
CPT code 90869 on an interim final basis for CY 2012.
    For the CY 2012 new, revised, and potentially misvalued CPT codes 
reviewed in this family of services and

[[Page 73202]]

not specifically discussed here, we agree with the AMA RUC/HCPAC-
recommended work RVUs and are setting as interim final the work RVUs 
listed in Table 19.
(17) Ophthalmology: Special Ophthalmological Services (92071 and 92072)
[GRAPHIC] [TIFF OMITTED] TR28NO11.064

    For the Fourth Five-Year Review, we identified CPT code 92070 
through the Harvard-Valued--Utilization > 30,000 screen. Upon review of 
this service, the specialty societies agreed that there are two 
distinct uses for CPT code 92070 that have substantially different 
levels of work. For CY 2012, the CPT Editorial Panel agreed and deleted 
CPT code 92070 and created two new CPT codes (92071 and 92072) to 
distinguish reporting of fitting of contact lens for treatment of 
ocular surface disease and fitting of contact lens for management of 
keratoconus.
    CPT code 92070 (Fitting of contact lens for treatment of disease, 
including supply of lens) is being deleted for CY 2012 and the 
utilization from CPT code 92070 is expected to be captured by new CPT 
code 92071(Fitting of contact lens for treatment of ocular surface 
disease). As CPT code 92070 was typically billed with an E/M service on 
the same day, we believe that CPT code 92071 will also be billed 
typically with an E/m service on the same day. We believe some of the 
activities conducted during the pre- and post-service times of the 
procedure code and the E/M visit overlap and, therefore, should not be 
counted twice in developing the procedure's work value. As described 
earlier in section III.A. of this final rule with comment period, to 
account for this overlap, we reduced the pre-service evaluation and 
post-service time by one-third. For CPT code 92071 we reduced the pre-
service evaluation time and the post service time from 5 minutes to 3 
minutes.
    In order to determine the appropriate work RVU for CPT code 92071, 
given the time change, we calculated the value of the extracted time 
and subtracted it from the AMA RUC-recommended work RVU. For CPT code 
92071, we removed a total of 4 minutes at an intensity of 0.0224 per 
minute, which amounts to the removal of 0.09 of a work RVU. The AMA RUC 
recommended a work RVU of 0.70, the current (CY 2011) work RVU for CPT 
code 92070. Therefore, we are assigning an interim final work RVU of 
0.61, with refinement to time, to CPT code 92071 for CY 2012. A 
complete listing of the times assigned to CPT code 92071 is available 
on the CMS Web site at: https://www.cms.gov/PhysicianFeeSched/.
    For the CY 2012 new, revised, and potentially misvalued CPT codes 
reviewed in this family of services and not specifically discussed 
here, we agree with the AMA RUC/HCPAC-recommended work RVUs and are 
setting as interim final the work RVUs listed in Table 19.
(18) Special Otorhinolaryngologic Services: Audiologic Function Tests 
(CPT Codes 92558, 92587 and 92588)
[GRAPHIC] [TIFF OMITTED] TR28NO11.065

    We identified CPT code 92587 through the CMS Fastest Growing 
screen. For CY 2011, the specialty society surveyed this service, 
however, after reviewing the survey data, they concluded that more than 
one service is being represented under this code and requested the 
service be referred back to the CPT Editorial Panel for further 
clarification. For CY 2012, the CPT Editorial Panel created CPT code 
92558 to describe evoked otoacoustic emissions screening and revised 
CPT codes 92587 and 92588 clarify the otoaucoustic emissions 
evaluations.
    New CPT code 92558 (Evoked otoacoustic emissions; screening 
(qualitative measurement of distortion product or transient evoked 
otoacoustic emissions), automated analysis) describes a screening 
service that does not fall within the statutory definition of a 
physicians' service, per section 1848 of the Act. As such, CPT code 
92558 will have procedure status of X on the PFS for CY 2012, which 
indicates that this service is not within the statutory definition of 
``physicians' service'' for PFS payment purposes. We will not pay for 
CPT code 92558 under the PFS. We note that the HCPAC recommended a work 
RVU of 0.17, with 5 minutes of intra-service time and 2 minutes of 
immediate post-service time, for CPT code 92558.
    After clinical review of CPT code 92587 (Distortion product evoked 
otoacoustic emissions; limited evaluation (to confirm the presence or 
absence of hearing disorder, 3-6 frequencies) or transient evoked 
otoacoustic emissions, with interpretation and report), we believe that 
the survey 25th percentile work RVU of 0.35 accurately describes the 
work associated with this service. The HCPAC reviewed the survey 
results, and

[[Page 73203]]

after a comparison to similar CPT codes, recommended a work RVU of 0.45 
for CPT code 92587, which is between the survey 25th percentile and 
median values. We believe that CPT code 92587 is similar in time and 
intensity to CPT code 97124 (Therapeutic procedure, 1 or more areas, 
each 15 minutes; massage, including effleurage, petrissage and/or 
tapotement (stroking, compression, percussion)) (work RVU = 0.35), and 
that the survey 25th percentile value appropriately reflects the 
relativity of this service. Therefore, we are assigning a work RVU of 
0.35 to CPT code 92587 on an interim final basis for CY 2012.
    After clinical review of CPT code 92588 (Distortion product evoked 
otoacoustic emissions; comprehensive diagnostic evaluation 
(quantitative analysis of outer hair cell function by cochlear mapping, 
minimum of 12 frequencies), with interpretation and report), we believe 
that the survey 25th percentile work RVU of 0.55 accurately describes 
the work associated with this service. The HCPAC reviewed the survey 
results, and after a comparison to similar CPT codes, recommended the 
survey median work RVU of 0.62 for CPT code 92588. We believe that CPT 
code 92588 is similar in work to CPT code 92570 (Acoustic immittance 
testing, includes tympanometry (impedance testing), acoustic reflex 
threshold testing, and acoustic reflex decay testing) (work RVU = 
0.55), and that the survey 25th percentile work RVU of 0.55 
appropriately reflects the relativity of this service. Therefore, we 
are assigning a work RVU of 0.55 to CPT code 92588 on an interim final 
basis for CY 2012.
(19) Special Otorhinolaryngologic Services: Evaluative and Therapeutic 
Services (CPT Codes 92605 and 92618)
[GRAPHIC] [TIFF OMITTED] TR28NO11.066

    As a result of the Medicare Improvements for Patients and Providers 
Act of 2008, starting in July 2009, speech-language pathologists were 
able to bill Medicare independently as private practitioners. The 
American Speech-Language-Hearing Association (ASHA) requested that we, 
in light of the legislation, base speech-language pathology services on 
professional work values and not through the practice expense 
component. As a result, we requested that the AMA RUC review the 
speech-language pathology codes for professional work as requested by 
ASHA. After reviewing the survey data for CPT code 92605, the specialty 
society indicated and the HCPAC agreed that CPT code 92605 would be 
better captured as a ``per hour'' code. For CY 2012, the CPT Editorial 
Panel revised CPT code 92605 to indicate ``first hour'' and created a 
new add-on code (CPT code 92618) to capture each additional 30 minutes.
    Revised CPT code 92605 (CY 2012 long descriptor: Evaluation for 
prescription of non-speech-generating augmentative and alternative 
communication device, face-to-face with the patient; first hour) 
currently (CY 2011) has a procedure status indicator of B on the PFS, 
which indicates that payment for the service is always bundled into 
payment for other services not specified. We continue to believe that 
payment for this service is included in other services and, therefore, 
that CPT code 92605 should maintain the procedure status indicator of B 
on the PFS. As new CPT code 92618 (Evaluation for prescription of non-
speech-generating augmentative and alternative communication device, 
face-to-face with the patient; each additional 30 minutes (List 
separately in addition to code for primary procedure)) is the add-on 
procedure code to CPT code 92605, we believe that payment for that 
service should also be considered bundled into payment for other 
services, and therefore, should also have a procedure status indicator 
of B on the PFS. For CPT code 92605 the HCPAC recommended the survey 
25th percentile work RVU of 1.75. For CPT code 92618 the HCPAC 
recommended the survey 25th percentile work RVU of 0.65. We are 
publishing these RVUs in the CY 2012 PFS, however, as stated 
previously, both codes will have a procedure status indicator of B and 
will not be separately payable on the PFS.
(20) Cardiovascular: Cardiac Catheterization (93451-93568)

[[Page 73204]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.067

    In the CY 2012 final rule with comment period (75 FR 73334 through 
73337), we discussed generally the concept of bundling services and 
specifically, new CY 2011 CPT codes that describe the bundling of two 
or more existing component services performed together 95 percent or 
more of the time. As we noted in that rule, we expect this bundling of 
component services to continue over the next several years as the work 
efficiencies for services commonly furnished together are recognized. 
Stakeholders should expect that increased bundling of services into 
fewer codes will result in reduced PFS payment for a comprehensive 
service. Specifically, the decrease in RVUs assigned to the 
comprehensive service, as compared to the total RVUs of the sum of the 
individual component services, reflects the efficiencies in work and/or 
PE that occur when component services are furnished together.
    For CY 2011, the AMA RUC provided CMS with recommendations for 
several categories of new comprehensive services that historically have 
been reported under multiple component codes. These services fell into 
the three major clinical categories of: Endovascular revascularization, 
computed tomography (CT), and diagnostic cardiac catheterization. In 
the CY 2011 final rule with comment period, we acknowledged that while 
each category of services is unique, since bundling of component 
services is likely to occur more often in the coming years, we believe 
a consistent approach is especially important when valuing bundled 
services to ensure that RVUs reflect work efficiencies.
    As discussed in the CY 2011 final rule with comment period, the AMA 
RUC used a variety of methodologies in developing RVUs for 
comprehensive codes in these three categories of bundled services. To 
develop the RVUs for the comprehensive endovascular revascularization 
services, the AMA RUC generally recommended the median work RVUs from 
the physician survey performed by the specialty society. The 
recommended values for the comprehensive services are an average of 27 
percent lower than the summed RVUs of the component services (taking 
into consideration any MPPR that would currently apply) included in the 
bundle. To develop the RVUs for comprehensive CT services, the AMA RUC 
recommended taking the sum of 100 percent of the current work RVUs for 
the code with the highest RVUs and 50 percent for the second code. 
Under this methodology, the recommended work RVUs for the comprehensive 
CT codes are consistently approximately 25 percent lower than the sum 
of the RVUs for the component services (75 FR 7335 through 7336). We 
agreed in the CY 2011 final rule with comment period that the decreased 
work RVUs that the AMA RUC recommended for comprehensive services in 
these two categories reflected a reasonable estimation of the work 
efficiencies created by the bundling of the component services. 
Therefore, for CY 2011, we accepted as interim final work RVUs the AMA 
RUC-recommended values for endovascular revascularization and CT 
services, and we are finalizing our interim final work RVUs without 
modification for CY 2012 (Table 15) see section III.B.1. of this final 
rule with comment period.
    In contrast to the endovascular revascularization and CT codes, the 
AMA RUC recommended values for the comprehensive diagnostic cardiac 
catheterization codes did not appear to reflect the efficiencies in 
work and/or PE that occur when component services are furnished 
together. To develop the RVUs for comprehensive diagnostic cardiac 
catheterization services, the AMA RUC generally recommended the lower 
of either the sum of the current RVUs for the component services or the 
physician survey 25th percentile value. In most cases, the AMA RUC's 
recommendation for the comprehensive service was actually the sum of 
the current work RVUs for the component services, and we stated in the 
CY 2011 final rule with comment period that we were unsure how this 
approach is resource-based with respect to physician work. We also were 
concerned that the results of the physician survey overstated the work 
for these well-established procedures because the 25th percentile work 
RVU value was usually higher than the sum of the current RVUs for the 
component services. Finally, we noted that, in

[[Page 73205]]

contrast to the RVU survey results, survey physician times for the 
comprehensive codes were significantly reduced as compared to the 
summed minutes of the component codes.
    In contrast to the result of combining the component codes into 
comprehensive endovascular revascularization and CT bundles where 
efficiencies were reflected through significant reductions in the RVUs 
(average of 27 percent and 25 percent respectively), the AMA RUC-
recommended RVUs for the comprehensive codes for diagnostic cardiac 
catheterization were an average of only one percent lower. We noted 
that if we were to accept the AMA RUC's recommended values for these 
cardiac catheterization codes, we essentially would be agreeing with 
the presumption that there are negligible work efficiencies gained in 
the bundling of these services. On the contrary, we believed that the 
AMA RUC did not fully consider or account for the efficiency gains when 
the component services are furnished together, which was also supported 
by the significant reduction in reported service time on the survey. 
Therefore, in the CY 2011 final rule with comment period, we requested 
that the AMA RUC reexamine the cardiac catheterization codes as quickly 
as possible, given the significant PFS utilization and spending for 
these services, and put forward an alternative approach to valuing 
these services that would produce relative values that are resource-
based and account for efficiencies inherent in bundling.
    For CY 2011, we also stated that we believed the new comprehensive 
diagnostic cardiac catheterization codes would be overvalued under the 
AMA RUC's CY 2011 recommendations. To address this potential 
overvaluation, we employed an interim methodology to approximate the 
efficiencies garnered through the bundling of the component codes to 
determine alternative CY 2011 interim values for the cardiac 
catheterization codes based on the information that we had at the time. 
Given that the AMA RUC recommendations for the bundling of endovascular 
revascularization and CT codes resulted in average reductions in the 
RVUs of 27 percent and 25 percent respectively, we believed an 
approximation of work efficiencies garnered through the bundling of the 
component codes could be up to 27 percent. Since we were referring the 
cardiac catheterization codes back to the AMA RUC, requesting that the 
AMA RUC provide CMS with a better estimate of the work efficiencies, we 
believed at the time that applying a conservative estimate of the work 
efficiencies was appropriate as an interim measure. Accordingly, to 
account for efficiencies inherent in bundling, we set the work RVUs for 
all of the bundled CY 2011 cardiac catheterization codes for which we 
received AMA RUC recommendations to 10 percent less than the sum of the 
current work RVUs for the component codes, taking into consideration 
any MPPR that would apply under current PFS policy.
    At our request, the AMA RUC reviewed these codes again for CY 2012 
and reiterated its previous recommendations, maintaining that there are 
negligible work efficiencies gained in the bundling of these services. 
The AMA RUC noted that over the 20 years that cardiac catheterization 
services have been available to patients, several of the codes being 
bundled have been bundled and unbundled a number of times in the past 
and that in each instance, the CMS has retained the RVUs of component 
codes. In response to CMS' observation that the recently surveyed 
physician times of the new CY 2011 comprehensive codes were 
significantly reduced, the AMA RUC stated that the new times were 
correct and that the previous times were grossly overstated. That is, 
the previous times originating from the Harvard valuation process 
rather than the survey process were inaccurate. The AMA RUC explained 
that the specialty societies have not previously addressed inaccurate 
physician times in any of the previous bundling/unbundling 
opportunities, because the societies deemed physician time unimportant 
and stakeholders focused on the work RVUs of the services instead. 
Stakeholders also strongly argued that no one had previously validated 
the physician time for the services in place for 20 years, although 
they continued to urge CMS to accept that the RVUs developed through 
the same process remain unchanged.
    Comments: The commenters believed that cardiac catheterization 
codes were already under-valued, and therefore the AMA RUC could not 
find any additional efficiencies in its recommendation to CMS regarding 
the bundling of these codes. Commenters noted some of the component 
catheterization codes were reviewed by the AMA RUC in 2007 for PE which 
has already resulted in reduced payments for those services. Commenters 
also asserted that catheterization codes were developed and intended to 
be used in conjunction with one another and that each code represents a 
distinct portion of the catheterization procedure. The commenters 
surmised that there is no duplication in service time, equipment or 
supplies. Finally, commenters believed CMS did not base its 10-percent 
reduction of cardiac catheterization RVUs on any data analysis.
    Response: We disagree with the AMA RUC's recommendation that there 
are negligible efficiencies in physician work when the component 
services of diagnostic cardiac catheterization are performed together. 
Although the AMA RUC did not revise their estimate of physician work 
for these newly bundled services, we find it difficult to accept that 
there are no efficiencies in the 20 year evolution of cardiac 
catheterization services. Improvements in technologies associated with 
cardiac catheterization and the increased familiarity with performing 
these high frequency services support some reduction in both the 
physician times and the RVUs. We do not believe that the AMA RUC 
recommendations for CY 2012 fully considered these areas for additional 
efficiencies. Given the AMA RUC's valuation of newly bundled services 
for endovascular revascularization and CT codes, we were reasonably 
assured that the approximation of work efficiencies through bundling 
could be up to 27 percent. We ultimately used a very conservative 
estimate of 10 percent for the work efficiencies we would expect to be 
present when multiple component cardiac catheterization services are 
bundled together into a single comprehensive service for valuing these 
services for CY 2011.
    In lieu of a more specific estimate from the AMA RUC, and using the 
best information available to us at this time, we believe it is 
appropriate to assign as interim final for CY 2012 our CY 2011 interim 
values with a 10 percent reduction in work efficiencies. Specifically, 
for CY 2012, we are assigning the following interim final work RVUs for 
the following CPT codes: 2.72 for CPT code 93451 (Right heart 
catheterization including measurement(s) of oxygen saturation and 
cardiac output, when performed), 4.75 for CPT code 93452 (Left heart 
catheterization including intraprocedural injection(s) for left 
ventriculography, imaging supervision and interpretation, when 
performed), 6.24 for CPT code 93453 (Combined right and left heart 
catheterization including intraprocedural injection(s) for left 
ventriculography, imaging supervision and interpretation, when 
performed), 4.79 for CPT code 93454 (Catheter placement in coronary 
artery(s) including intraprocedural injection(s) for coronary 
angiography, imaging supervision and interpretation),

[[Page 73206]]

5.54 for CPT code 93455 (with catheter placement(s) in bypass graft(s) 
(internal mammary, free arterial, venous grafts) including 
intraprocedural injection(s) for bypass graft angiography with catheter 
placement(s) in bypass graft(s) (internal mammary, free arterial, 
venous grafts) including intraprocedural injection(s) for bypass graft 
angiography), 6.15 for CPT code 93456 (Catheter placement in coronary 
artery(s) including intraprocedural injection(s) for coronary 
angiography, imaging supervision and interpretation with right heart 
catheterization), 6.89 for CPT code 93457 (Catheter placement in 
coronary artery(s) including intraprocedural injection(s) for coronary 
angiography, imaging supervision and interpretation with catheter 
placement(s) in bypass graft(s) (internal mammary, free arterial, 
venous grafts) including intraprocedural injection(s) for bypass graft 
angiography and right heart catheterization), 5.85 for CPT code 93458 
(Catheter placement in coronary artery(s) including intraprocedural 
injection(s) for coronary angiography, imaging supervision and 
interpretation with left heart catheterization including 
intraprocedural injection(s) for left ventriculography, when 
performed), 6.60 for CPT code 93459 (Catheter placement in coronary 
artery(s) including intraprocedural injection(s) for coronary 
angiography, imaging supervision and interpretation with left heart 
catheterization including intraprocedural injection(s) for left 
ventriculography, when performed, catheter placement(s) in bypass 
graft(s) (internal mammary, free arterial, venous grafts) with bypass 
graft angiography), 7.35 for CPT code 93460 (Catheter placement in 
coronary artery(s) including intraprocedural injection(s) for coronary 
angiography, imaging supervision and interpretation with right and left 
heart catheterization including intraprocedural injection(s) for left 
ventriculography, when performed), 8.10 for CPT code 93461 (Catheter 
placement in coronary artery(s) including intraprocedural injection(s) 
for coronary angiography, imaging supervision and interpretation with 
right and left heart catheterization including intraprocedural 
injection(s) for left ventriculography, when performed, catheter 
placement(s) in bypass graft(s) (internal mammary, free arterial, 
venous grafts) with bypass graft angiography), 1.11 for CPT code 93563 
(Injection procedure during cardiac catheterization including image 
supervision, interpretation, and report; for selective coronary 
angiography during congenital heart catheterization), 1.13 for CPT code 
93564 (Injection procedure during cardiac catheterization including 
image supervision, interpretation, and report; for selective coronary 
angiography during congenital heart catheterization for selective 
opacification of aortocoronary venous or arterial bypass graft(s) 
(e.g., aortocoronary saphenous vein, free radial artery, or free 
mammary artery graft) to one or more coronary arteries and in situ 
arterial conduits (e.g., internal mammary), whether native or used for 
bypass to one or more coronary arteries during congenital heart 
catheterization, when performed), 0.86 for CPT code 93565 (Injection 
procedure during cardiac catheterization including image supervision, 
interpretation, and report; for selective coronary angiography during 
congenital heart catheterization for selective left ventricular or left 
arterial angiography), 0.86 for CPT code 93566 (Injection procedure 
during cardiac catheterization including image supervision, 
interpretation, and report; for selective coronary angiography during 
congenital heart catheterization for selective right ventricular or 
right atrial angiography), 0.97 for CPT code 93567 (Injection procedure 
during cardiac catheterization including image supervision, 
interpretation, and report; for selective coronary angiography during 
congenital heart catheterization for supravalvular aortography), and 
0.88 for CPT code 93568 (Injection procedure during cardiac 
catheterization including image supervision, interpretation, and 
report; for selective coronary angiography during congenital heart 
catheterization for pulmonary angiography).
[GRAPHIC] [TIFF OMITTED] TR28NO11.068

    For the CY 2012 new, revised, and potentially misvalued CPT codes 
reviewed in this family of services and not specifically discussed 
here, we agree with the AMA RUC/HCPAC-recommended work RVUs and are 
setting as interim final the work RVUs listed in Table 19.
(21) Pulmonary: Other Procedures (CPT Codes 94060, 94726-94729, 94780 
and 94781)
    We identified CPT code 94060 through the MPC List screen. The AMA 
RUC Relativity Assessment Workgroup identified CPT codes 94240, 94260, 
94350, 94360, 94370, and 94725 through the Codes Reported Together 75 
percent or More screen. These codes are commonly billed together with 
CPT code 94720, 94360, 94240, and 94350. For CY 2012, the specialty 
society submitted a codes change proposal to the CPT Editorial Panel to 
bundle the services commonly reported together. As a result, CPT 
created CPT codes 94726, 94727, 94728, and 94729. For CY 2012, CPT also 
created CPT codes 94780 and 94781 to report car seat testing 
administered to the patient in the private physician's office.
    After clinical review, we determined that CPT codes 94060 
(Bronchodilation responsiveness, spirometry as in 94010, pre- and post-
bronchodilator

[[Page 73207]]

administration), 94726 (Plethysmography for determination of lung 
volumes and, when performed, airway resistance), 94727 (Gas dilution or 
washout for determination of lung volumes and, when performed, 
distribution of ventilation and closing volumes), and 94728 (Airway 
resistance by impulse oscillometry), involve very similar work and 
should have the same work RVU. CPT code 94240 (Functional residual 
capacity or residual volume: helium method, nitrogen open circuit 
method, or other method) (work RVU=0.26) is being deleted for CY 2012 
and the utilization associated with that service is expected to be 
captured under new CPT codes 94726 and 92727. We believe that a work 
RVU of 0.26 appropriately reflects the work associated with CPT codes 
94060, 94726, 94727, and 94728. We believe this value is further 
supported by CPT code 97012 (Application of a modality to 1 or more 
areas; traction, mechanical) (work RVU=0.25) which has similar time and 
intensity. The AMA RUC recommended a work RVU of 0.31 for CPT codes 
94060, 94726, 94727, and 94728, which corresponded to each surveys 25th 
percentile work RVU. We are assigning a work RVU of 0.26 to CPT codes 
94060, 94726, 94727, and 94728 on an interim final basis for CY 2012.
    After clinical review of CPT code 94729 (Diffusing capacity (e.g., 
carbon monoxide, membrane) (List separately in addition to code for 
primary procedure)), we believe that a work RVU of 0.17 accurately 
reflects the work associated with this service. Based on comparison to 
similar services, the AMA RUC recommended a work RVU of 0.19 for CPT 
code 94729. We believe that CPT code 94010 (Spirometry, including 
graphic record, total and timed vital capacity, expiratory flow rate 
measurement(s), with or without maximal voluntary ventilation) (work 
RVU=0.17) is similar in time and intensity to CPT code 94729, and that 
the codes should have the same work RVU. Therefore, we are assigning a 
work RVU of 0.17 to CPT code 94729 on an interim final basis for CY 
2012.
    For the CY 2012 new, revised, and potentially misvalued CPT codes 
reviewed in this family of services and not specifically discussed 
here, we agree with the AMA RUC/HCPAC-recommended work RVUs and are 
setting as interim final the work RVUs listed in Table 19.
(22) Neurology and Neuromuscular Procedures: Nerve Conduction Tests 
(CPT Codes 95885-95887)
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    CPT codes 95860, 95861, 95863 and 95864 were identified by the AMA 
RUC Relativity Assessment Workgroup through the Codes Reported Together 
75 percent or More screen. These codes are billed commonly with CPT 
code 95904. The specialty societies submitted a code change proposal to 
the CPT Editorial Panel to bundle the services commonly reported 
together. For CY 2012, the CPT Editorial Panel created 3 new add-on 
procedure codes: CPT codes 95885, 95886, and 95887. The CPT Editorial 
Panel noted, and the AMA RUC agreed, that these 3 new codes were 
approved with the intent that the specialties will take additional time 
and bring forward a more comprehensive coding solution which bundles 
services commonly performed together for CY 2013.
    We reviewed CPT codes 95885 (Needle electromyography, each 
extremity, with related paraspinal areas, when performed, done with 
nerve conduction, amplitude and latency/velocity study; limited), 95886 
(Needle electromyography, each extremity with related paraspinal areas 
when performed, done with nerve conduction, amplitude and latency/
velocity study; complete, five or more muscles studied, innervated by 
three or more nerves or four or more spinal levels), 95887 (Needle 
electromyography, non-extremity (cranial nerve supplied or axial) 
muscle(s) done with nerve conduction, amplitude and latency/velocity 
study), and are accepting the AMA RUC-recommended work RVUs and times 
on an interim basis, pending review of the other electromyography 
services for CY 2012. On an interim basis for CY 2012 we are assigning 
a work RVU of 0.35 to CPT code 95885, a work RVU of 0.92 to CPT code 
95886, and a work RVU of 0.73 to CPT code 95887.
(23) Neurology and Neuromuscular Procedures: Autonomic Function Tests 
(CPT Codes 95938 and 95939)
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    CPT code pairs 95925/95926 and 95928/95929 were identified by the 
AMA RUC Relativity Assessment Workgroup Codes Reported Together 75 
percent or More screen. For CY 2012, the CPT Editorial Panel created 
CPT code 95938 to capture the reporting of CPT codes 95925 and 95926 
together, and CPT codes 95939 to capture the reporting CPT codes 95928 
and 95929 together. The specialty society had obtained valid survey 
results for CPT code 95938 but not for 95939, as only 31 percent of the 
respondents indicated the vignette was typical. The AMA RUC and 
specialty societies agreed that a new survey should be conducted for CY 
2013.
    We reviewed CPT codes 95938 (Short-latency somatosensory evoked 
potential study, stimulation of any/all peripheral nerves or skin 
sites, recording from the central nervous system; in upper and lower 
limbs) and 95939 (Motor evoked potential study; in upper and lower 
limbs), and are accepting the AMA RUC-recommended work RVUs and times 
on an interim basis, pending resurvey of CPT code 95939. We also 
request that the AMA RUC review the component CPT codes 95925, 95926, 
95928, and 95929. On an interim basis for CY 2012 we are assigning a 
work RVU of 0.86 to CPT code 95938, and a work RVU of 2.25 to CPT code 
95939.
(24) Other CY 2012 New, Revised, and Potentially Misvalued CPT Codes 
Not Specifically Discussed Previously
    For all other CY 2012 new, revised, and potentially misvalued CPT 
codes not specifically discussed previously, we agree with the AMA RUC/
HCPAC recommended work RVUs and are setting as interim final the work 
RVUs listed in Table 19.
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BILLING CODE 4120-01-C
2. Establishing Interim Final Direct PE RVUs for CY 2012
a. Background
    The AMA RUC provides CMS with recommendations regarding direct PE 
inputs, including clinical labor, supplies, and equipment, for new, 
revised, and potentially misvalued codes. We review the AMA RUC-
recommended direct PE inputs on a code-by-code basis, including the 
recommended facility PE inputs and/or nonfacility PE inputs, as 
clinically appropriate for the code. We determine whether we agree with 
the AMA RUC's recommended direct PE inputs for a service or, if we 
disagree, we refine the PE inputs to represent inputs that better 
reflect our estimate of the PE resources required for the service in 
the facility and/or nonfacility settings. We also confirm that CPT 
codes should have facility and/or nonfacility direct PE inputs and make 
changes based on our clinical judgment and any PFS payment policies 
that would apply to the code.
b. Methodology
    We have accepted for CY 2012, as interim final and without 
refinement, the direct PE inputs based on the recommendations submitted 
by the AMA RUC for the codes listed in Table 20. For the remainder of 
the AMA RUC's direct PE recommendations, we have accepted the PE 
recommendations submitted by the AMA RUC as interim final, but with 
refinements. These codes and the refinements to their direct PE inputs 
are listed in Table 21.
    Generally, we only establish interim final direct PE inputs for 
services when the RUC has provided a new recommendation. For CY 2012, 
we are establishing interim final direct PE inputs for several codes 
for which the RUC did not provide direct PE recommendations. In the 
case of these codes, we believe it is necessary to establish new 
interim final direct PE inputs for codes not recently reviewed by the 
RUC for the same reasons we explain in greater detail in section II.B 
(``Potentially Misvalued Services Under the Physician Fee Schedule'') 
of this final rule with comment period: In order to maintain 
appropriate relativity among those codes and other related codes or 
between the PE and work components of PFS payment. There are two 
situations that have prompted us to establish interim final direct PE 
inputs for particular codes without a corresponding direct PE 
recommendation from the RUC.
    The first situation occurs when the direct PE inputs of new, 
combined codes are developed without parallel review of the direct PE 
inputs of the component codes that describe the same services. For CY 
2012, this situation applies to three sets of codes. CPT has created a 
new code, 74174, to describe CTA of the abdomen and pelvis. Prior to CY 
2012, practitioners would have reported the combined service using two 
separate codes (74175 to describe CTA of the abdomen and 72191 to 
describe CTA of the pelvis). CPT similarly created a new combined code 
to describe short latency somatosensory evoked potential studies of the 
upper and lower limbs (95938). This combined service would have been 
previously reported using CPT codes 95925 (short latency somatosensory 
evoked potential studies of the upper limbs) and 95926 (short latency 
somatosensory evoked potential studies of the lower limbs). Finally, 
CPT created 95939 to describe central motor evoked potential study of 
the upper and lower limbs. This combined service would have been 
previously reported using component CPT codes 95928 (central motor 
evoked potential study of the upper limbs) and 95929 (central motor 
evoked potential study of the lower limbs).
    Since each of these sets of component and combined codes is used to 
report the same service, we believe that it is important to maintain 
relativity among the associated practice expense values. We received 
direct PE recommendations from the RUC for the new codes describing 
combined services, but we did not receive corresponding recommendations 
regarding the existing codes describing the component services. The new 
direct PE inputs for the combined services are not fully congruent with 
the current direct PE inputs for the component codes. Therefore, 
maintaining the direct PE inputs for the existing component codes until 
we receive a RUC recommendation would result in at least one year of 
incongruent practice expense values. Therefore, we believe that it 
would be inappropriate to develop PE values for these sets of codes 
based on these inputs. Since we do not have corresponding 
recommendations regarding the existing component codes, we cannot 
maintain appropriate relativity among the codes without either refining 
the direct PE inputs of the new combined codes to conform to the 
existing component codes or refining the direct PE inputs of the 
existing component codes to conform to the direct PE inputs of the new 
combined codes. The direct PE inputs for each of the existing component 
codes were developed over 5 years ago. Since the direct PE inputs for 
the new combined codes were developed more recently, we believe that 
they better reflect current typical practice. Therefore, in order to 
maintain appropriate relativity among these sets of codes that describe 
the same services and in order to use the most accurate information 
available, we used the direct PE inputs for the new, combined codes in 
order to develop appropriate refinements to the direct PE inputs for 
the existing, component codes. The refinements to the current PE inputs 
for these codes are included in Table 21 and they will be considered 
interim final for CY 2012. In conjunction with our request for 
comprehensive review of code families as described in section II.B. of 
this final rule with comment period, we encourage the RUC to review 
component codes when developing recommendations regarding combined 
codes.
    The second situation arises when the physician work values of 
particular codes are reviewed as part of the potentially misvalued code 
initiative without parallel review of the

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corresponding direct PE inputs. In these cases, we have reviewed the 
existing direct PE inputs of the services in the context of the new 
physician work and time recommendations and, when appropriate, 
established refined interim final direct PE inputs consistent with 
existing policies. These codes are: 70470 (Computed tomography, head or 
brain; without contrast material, followed by contrast material(s) and 
further sections), 73030 (Radiologic examination, pelvis; 1 or 2 
views), 73030 (Radiologic examination, shoulder; complete, minimum of 2 
views), 73620 (Radiologic examination, foot; 2 views), and 93971 
(Duplex scan of extremity veins including responses to compression and 
other maneuvers; unilateral or limited study). We are adopting on an 
interim final basis for CY 2012 the refinements to the current direct 
PE inputs for these codes as shown in Table 21, and these values are 
reflected in the CY 2012 PFS direct PE database. That database is 
available under downloads for the CY 2012 PFS final rule with comment 
period on the CMS Web site at: http://www.cms.gov/PhysicianFeeSched/PFSFRN/list.asp#TopOfPage.
c. Common and Code-Specific Refinements
    While Table 21 details the CY 2012 refinements of the AMA RUC's 
direct PE recommendations at the code-specific level, we discuss the 
general nature of some common refinements and the reasons for 
particular refinements in the following section.
(1) Changes in Physician Time
    Some direct PE inputs are directly affected by revisions in 
physician time described in section III.B.1 of this final rule with 
comment period. Specifically, changes in the intra-service portions of 
the physician time and changes in the number or level of postoperative 
visits associated with the global periods result in corresponding 
changes to direct PE inputs.
    Changes in Intra-service Physician Time in the Nonfacility Setting. 
For most codes valued in the nonfacility setting, a portion of the 
clinical labor time allocated to the intra-service period reflects 
minutes assigned for assisting the physician with the procedure. To the 
extent that we are refining the times associated with the intra-service 
portion of such procedures, we have adjusted the corresponding intra-
service clinical labor minutes in the nonfacility setting.
    For equipment associated with the intra-service period in the 
nonfacility setting, we generally allocate time based on the typical 
number of minutes a piece of equipment is being used and, therefore, 
not available for use with another patient during that period. In 
general, we allocate these minutes based on the description of typical 
clinical labor activities. To the extent that we are making changes in 
the clinical labor times associated with the intra-service portion of 
procedures, we have adjusted the corresponding equipment minutes 
associated with the codes.
    Changes in the Number or Level of Postoperative Office Visits in 
the Global Period. For codes valued with post-service physician office 
visits during a global period, most of the clinical labor time 
allocated to the post-service period reflects a standard number of 
minutes allocated for each of those visits. To the extent that we are 
refining the number or level of postoperative visits, we have modified 
the clinical staff time in the post-service period to reflect the 
change. For codes valued with post-service physician office visits 
during a global period, we allocate standard equipment for each of 
those visits. To the extent that we are making a change in the number 
or level of postoperative visits associated with a code, we have 
adjusted the corresponding equipment minutes. For codes valued with 
post-service physician office visits during a global period, a certain 
number of supply items are allocated for each of those office visits. 
To the extent that we are making a change in the number of 
postoperative visits, we have adjusted the corresponding supply item 
quantities associated with the codes. We note that many supply items 
associated with post-service physician office visits are allocated for 
each office visit (for example, a minimum multi-specialty visit pack 
(SA048) in the CY 2012 direct PE database). For these supply items, the 
quantities in the direct PE database should reflect the number of 
office visits associated with the code's global period. However, some 
supply items are associated with post-service physician office visits 
but are only allocated once during the global period because they are 
typically used during only one of the post-service office visits (for 
example, pack, post-op incision care (suture) (SA054) in the direct PE 
database). For these supply items, the quantities in the proposed 
notice direct PE database reflect that single quantity.
    These refinements are reflected in the final CY 2011 PFS direct PE 
database and detailed in Table 21.
(2) Equipment Minutes
    In general, the equipment time inputs correspond to the intra-
service portion of the clinical labor times. Certain highly technical 
pieces of equipment and equipment rooms are less likely to be used by a 
clinician over the full course of a procedure and are typically 
available for other patients during time that may still be in the 
intra-service portion of the service. We adjust those equipment times 
accordingly. We refer interested stakeholders to our extensive 
discussion of these policies in the context of our CY 2011 interim 
final direct PE inputs in section III.B.2 of this final rule with 
comment period. We are refining the CY 2012 AMA RUC direct PE 
recommendations to conform to these equipment time policies. These 
refinements are reflected in the final CY 2011 PFS direct PE database 
and detailed in Table 21.
(3) Moderate Sedation Inputs
    In section II.A.3 of this final rule with commenter period, we 
finalized a standard package of direct PE inputs for services where 
moderate sedation is considered inherent in the procedure. We refer 
interested parties to our extensive discussion of these policies as 
proposed and finalized in section III.A.3 of this final rule with 
comment period. We are refining the CY 2012 AMA RUC direct PE 
recommendations to conform to these policies. These refinements are 
reflected in the final CY 2012 PFS direct PE database and detailed in 
Table 21.
(4) Standard Minutes for Clinical Labor Tasks
    In general, the minutes associated with certain clinical labor 
tasks are standardized depending on the type of procedure, its typical 
setting, its global period, and the other procedures with which it is 
typically reported. In the case of some services, the RUC has 
recommended a numbers of minutes either greater or lesser than time 
typically allotted for certain tasks. In those cases, CMS clinical 
staff has reviewed the deviations from the standards to determine their 
clinical appropriateness. Where the recommended exceptions have not 
been accepted, we have refined the interim final direct PE inputs to 
match the standard times for those tasks and each of those refinements 
appears in Table 21.
(5) Supply and Equipment Invoices
    When clinically appropriate, the AMA RUC generally recommends the 
use of supply and equipment items that already exist in the direct PE 
database for new, revised, and potentially misvalued codes. Some 
recommendations include supply or equipment items that are not 
currently in the direct PE database. In these cases, the AMA RUC has 
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recommended a new item be created and has facilitated CMS' pricing of 
that item by working with the specialty societies to provide sales 
invoices to us. We appreciate the contributions of the AMA RUC in that 
process.
    We received invoices for several new supply and equipment items for 
CY 2012. We have accepted each of these items and added them to the 
direct PE database. In general, the prices listed on the submitted 
invoices match the items listed in the RUC direct PE recommendations. 
However, in some cases, the relationship between submitted invoices and 
the items listed on the direct PE recommendations is not clear. For 
example, some submitted invoices only list total charges that include 
all of the line items on the invoice, including charges for costs other 
than the price of the equipment listed on the recommendation. When the 
price for all of those line items is apparent, we subtract that amount 
from the total charges to determine the appropriate price of the 
equipment. For example, equipment item invoices often include line 
items reflecting a limited quantity of disposable supplies for use 
during procedures. When these supplies are built into the overall price 
of the equipment and they also appear as direct PE inputs, we subtract 
the price of the supplies from the overall price of the equipment since 
we have an empirical basis for determining the price of the excluded 
line item and the price of those supplies is built into the payment 
rate for the service. When we have no way of determining how much of 
the total price listed on the invoice includes amounts attributed to 
excluded line items, we cannot accept the invoice as acceptable 
information to establish or update a price input. In terms of the CY 
2012 direct PE recommendations, we point out that while we have 
accepted the RUC's recommendation for direct PE inputs for SBRT 
treatment delivery, we could not accept the accompanying invoices to 
update the price of the ``SRS system, SBRT, six systems, average'' 
equipment (ER083). Each of these invoices included line items that we 
would not accept as part of the cost of the equipment, such as costs 
for training technologists to use the equipment, and the price for 
these items were not separately identifiable. Therefore, we did not 
update the equipment price for ER083 in establishing interim final 
direct PE inputs for CY 2012.
(6) Application of Casts and Strapping (CPT codes 29581-29584)
    The RUC recommended establishing a new supply input for CPT codes 
29582 (Application of multi-layer venous wound compression system, 
below knee; thigh and leg, including ankle and foot, when performed), 
29583 (Application of multi-layer venous wound compression system, 
below knee; upper arm and forearm), and 29584 (Application of multi-
layer venous wound compression system, below knee; upper arm, forearm, 
hand, and fingers). Accompanying the RUC recommendations, we received 
an invoice that reflected a price of $16.39 per system when purchased 
as part of case of eight. In response to this recommendation, we have 
created a supply item called ``multi-layer compression system 
bandages'' (SG096) with a price input of $16.39. As discussed in 
section III.B.1.b. of this final rule for comment period, for CY 2012 
the CPT Editorial Panel revised the descriptor for CPT code 29581 
(Application of multi-layer compression system; leg (below knee), 
including ankle and foot), and also created CPT codes 29582, 29583, and 
29584 to describe the application of multi-layer compression to the 
upper and lower extremities. The CPT Editorial Panel and AMA RUC 
concluded that the revisions to the descriptor for CPT code 29581 were 
editorial only, and the specialty society believed that resurveying CPT 
code 29581 was not necessary. As such, the AMA RUC did not review the 
direct PE inputs for CPT code 29581. After clinical review, we believe 
that CPT codes 29581, 29582, 29583, and 29584 all describe similar 
services from a resource perspective. In line with this determination, 
we are treating all four codes as physical therapy services and 
replacing the supply input called ``dressing, multi layer system, 
venous ulcer'' (SG093) in 29581 with the new supply item ``multi-layer 
compression system bandages'' (SG096) on an interim basis for CY 
2012.In section III.B.1.b (Establishing Interim final RVUs for CY 2012) 
of this CY 2012 PFS final rule, we believe that a survey that addresses 
all 4 CPT codes together as a family and gathers responses from all 
clinicians who furnish the services described by CPT codes 29581 
through 29584 would help assure the appropriate gradation in valuation 
of these 4 services Therefore, for CY 2012 we are holding the work, 
practice expense, and malpractice values interim.
(7) Image Guidance for Biopsies
    The RUC submitted direct PE inputs for CPT codes CPT codes 47000 
(Biopsy of liver, needle; percutaneous) and 32405 (Biopsy, lung or 
mediastinum, percutaneous needle) including minutes allocated to a CT 
room. As reflected in Table 21, we refined both recommendations to 
exclude the CT room. For 47000, CPT instructs practitioners to report 
separate codes when image guidance is used to furnish the service. 
Therefore, it would be inappropriate to include the equipment used for 
image guidance as a direct PE input for 47000. For 32405, we note that 
the recommendations for the new nonfacility direct PE inputs for the 
code were developed using the direct PE inputs for recently CPT code 
49083 (Abdominal paracentesis (diagnostic or therapeutic); with imaging 
guidance) and that code does not include use of a CT room as a 
typically used resource. These refinements are reflected in the final 
CY 2012 PFS direct PE database.
(8) Extracranial Nerves, Peripheral Nerves, and Autonomic Nervous 
System
    For CY 2012, CPT created CPT Editorial Panel deleted four codes and 
created four new codes to describe neurolysis reported per joint (2 
nerves per each joint) instead of per nerve under image guidance. The 
new codes are: 64633 (Destruction by neurolytic agent, paravertebral 
facet joint nerve(s); cervical or thoracic, with image guidance 
(fluoroscopy or CT), single facet joint); 64634 (Destruction by 
neurolytic agent, paravertebral facet joint nerve(s); cervical or 
thoracic, with image guidance (fluoroscopy or CT), each additional 
facet joint (List separately in addition to code for primary 
procedure)); 64635 (Destruction by neurolytic agent, paravertebral 
facet joint nerve(s); lumbar or sacral, with image guidance 
(fluoroscopy or CT), single facet joint); and 64636 (Destruction by 
neurolytic agent, paravertebral facet joint nerve(s); lumbar or sacral, 
with image guidance (fluoroscopy or CT), each additional facet joint 
(List separately in addition to code for primary procedure)).
    The RUC submitted direct practice expense inputs for these new 
codes that describe existing services. For codes 64633 and 64635, in 
addition to the cannula (SD011), the radiofrequency generator (EQ214), 
and other inputs, the direct PE input recommendation included a very 
expensive supply item called ``kit, probe, radiofrequency, XIi-enhanced 
RF probe'' (SA100). The recommendation did not provide a rationale as 
to why this highly priced kit should be included as a direct PE input 
for these existing services when the four predecessor codes that 
described the services prior to CY 2012 included neither this item nor 
any similarly priced disposable supply. Therefore, we are refining the 
RUC recommendation by removing the supply item SA100

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from both 64633 and 64635. We note that the direct PE inputs for these 
codes are interim for CY 2012, and we will consider any submitted 
information regarding the use of this supply in furnishing these 
services prior to finalizing the direct PE inputs for CY 2013.
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3. Establishing Interim Final Malpractice RVUs for CY 2012
    According to our malpractice methodology discussed in section 
II.C.1. of this final rule with comment period, we have assigned 
malpractice RVUs for CY 2012 new and revised codes by utilizing a 
crosswalk to a source code with a similar malpractice risk-of-service. 
We have reviewed the AMA RUC-recommended malpractice source code 
crosswalks for CY 2012 new and revised codes, and we are accepting 
nearly all of them on an interim final basis for CY 2012. For four CPT 
codes describing multi-layer compression systems, we are assigning a 
source code crosswalk different from the source code crosswalks 
recommended by the AMA RUC and HCPAC.
    For CPT codes 29582 (Application of multi-layer venous wound 
compression system, below knee; thigh and leg, including ankle and 
foot, when performed), 29583 (Application of multi-layer venous wound 
compression system, below knee; upper arm and forearm), and 29584 
(Application of multi-layer venous wound compression system, below 
knee; upper arm, forearm, hand, and fingers), the AMA RUC recommended a 
malpractice source code crosswalk to CPT code 29540 (Strapping; ankle 
and/or foot). For CPT codes 29582 and 29584 the HCPAC recommended a 
malpractice source code crosswalk to CPT code 97124 (Therapeutic 
procedure, 1 or more areas, each 15 minutes; massage, including 
effleurage, petrissage and/or tapotement (stroking, compression, 
percussion)), and for CPT code 29583 the HCPAC recommended a 
malpractice source code crosswalk to CPT code 97762 (Checkout for 
orthotic/prosthetic use, established patient, each 15 minutes).
    In addition to providing recommendations on malpractice source code 
crosswalks, the AMA RUC also provides recommendations to us on 
utilization crosswalks, which are largely used to estimate utilization 
shifts for budget neutrality. CPT codes 29582, 29583, and 29584 are new 
for CY 2012. The AMA RUC recommended, and we agreed, that the estimated 
utilization for CPT codes 29582, 29583, and 29584 would have previously 
been reported using CPT code 97140 (Manual therapy techniques (e.g., 
mobilization/manipulation, manual lymphatic drainage, manual traction), 
1 or more regions, each 15 minutes). After review, we believe that CPT 
code 97140 provides the most appropriate malpractice source code 
crosswalk for CPT codes 29582, 29583, and 29584. Therefore, we are 
assigning CPT code 97140 as the malpractice source code

[[Page 73265]]

crosswalk for CPT codes 29582, 29583, and 29584 on an interim basis for 
CY 2012.
    As discussed in section III.B.1.b. of this final rule with comment 
period, for CY 2012 the CPT Editorial Panel revised the descriptor for 
CPT code 29581 (Application of multi-layer compression system; leg 
(below knee), including ankle and foot), and also created CPT codes 
29582, 29583, and 29584 to describe the application of multi-layer 
compression to the upper and lower extremities. The CPT Editorial Panel 
and AMA RUC concluded that the revisions to the descriptor for CPT code 
29581 were editorial only, and the specialty society believed that 
resurveying CPT code 29581 was not necessary. As such, the AMA RUC 
issued a recommendation of ``No Change'' to us for CPT code 29581. 
After clinical review, we believe that CPT codes 29581, 29582, 29583, 
and 29584 all describe similar services from a resource perspective. In 
line with this determination, we assigned CPT code 29581 the same 
interim work RVU as CPT code 29583. Because we find these services to 
be so similar, to we also believe that it is appropriate for CPT codes 
29581 and 29583 to have the same malpractice source code crosswalk. 
Therefore, we are assigning CPT code 97140 as the malpractice source 
code crosswalk for CPT code 29581 on an interim basis for CY 2012. In 
section III.B.1.b. of this final rule with comment period, we requested 
that the layer compression systems family of services be surveyed 
together and that the AMA RUC and HCPAC review their recommendations to 
us for these services. For CY 2012 we are holding the work, practice 
expense, and malpractice values interim pending resurvey and review.
    In addition to changes to the AMA RUC-recommended malpractice 
crosswalk mentioned previously, we also added HCPCS code G0451 to the 
malpractice crosswalk. As discussed in section III.B.1.b. of this final 
rule with comment period, for CY 2012 we created HCPCS code G0451 
(Development testing, with interpretation and report, per standardized 
instrument form) to replace CPT code 96110 (Developmental screening, 
with interpretation and report, per standardized instrument form), as 
CPT code 96110 will be excluded from payment on the physician fee 
schedule effective January 1, 2012. We assigned CPT code 96110 as the 
malpractice source code crosswalk for HCPCS code G0451.
    In accordance with our malpractice methodology, we have adjusted 
the malpractice RVUs of the CY 2012 new/revised codes for difference in 
work RVUs (or, if greater, the clinical labor portion of the fully 
implemented PE RVUs) between the source code and the new/revised code 
to reflect the specific risk-of-service for the new/revised codes. 
Table 22 lists the CY 2012 new/revised CPT codes and their respective 
source codes used to set the interim final CY 2012 malpractice RVUs. 
Revised CPT codes that are crosswalked to themselves (that is, CPT code 
27096 to 27096) are not listed.
BILLING CODE 4120-01-P

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BILLING CODE 4120-01-C

IV. Allowed Expenditures for Physicians' Services and the Sustainable 
Growth Rate

A. Medicare Sustainable Growth Rate (SGR)

    The SGR is an annual growth rate that applies to physicians' 
services paid by Medicare. The use of the SGR is intended to control 
growth in aggregate Medicare expenditures for physicians' services. 
Payments for services are not withheld if the percentage increase in 
actual expenditures exceeds the SGR. Rather, the PFS update, as 
specified in section 1848(d)(4) of the Act, is adjusted based on a 
comparison of allowed expenditures (determined using the SGR) and 
actual expenditures. If actual expenditures exceed allowed 
expenditures, the update is reduced. If actual expenditures are less 
than allowed expenditures, the update is increased.
    Section 1848(f)(2) of the Act specifies that the SGR for a year 
(beginning with CY 2001) is equal to the product of the following four 
factors:
    (1) The estimated change in fees for physicians' services;
    (2) The estimated change in the average number of Medicare fee-for-
service beneficiaries;
    (3) The estimated projected growth in real GDP per capita; and
    (4) The estimated change in expenditures due to changes in statute 
or regulations.
    In general, section 1848(f)(3) of the Act requires us to publish 
SGRs for 3 different time periods, no later than November 1 of each 
year, using the best data available as of September 1 of each year. 
Under section 1848(f)(3)(C)(i) of the Act, the SGR is estimated and 
subsequently revised twice (beginning with the FY and CY 2000 SGRs) 
based on later data. (The Act also provides for adjustments to be made 
to the SGRs for FY 1998 and FY 1999. See the February 28, 2003 Federal 
Register (68 FR 9567) for a discussion of these SGRs). Under section 
1848(f)(3)(C)(ii) of the Act, there are no further revisions to the SGR 
once it has been estimated and subsequently revised in each of the 2 
years following the preliminary estimate. In this final rule with 
comment, we are making our preliminary estimate of the CY 2012 SGR, a 
revision to the CY 2011 SGR, and our final revision to the CY 2010 SGR.
1. Physicians' Services
    Section 1848(f)(4)(A) of the Act defines the scope of physicians' 
services covered by the SGR. The statute indicates that ``the term 
physicians' services includes other items and services (such as 
clinical diagnostic laboratory tests and radiology services), specified 
by the Secretary, that are commonly performed or furnished by a 
physician or in a physician's office, but does not include services 
furnished to a Medicare+Choice plan enrollee.''
    We published a definition of physicians' services for use in the 
SGR in the November 1, 2001 Federal Register (66 FR 55316). We defined 
physicians' services to include many of the medical and other health 
services listed in section 1861(s) of the Act. Since that time, the 
statute has been amended to add new Medicare benefits. As the statute 
changed, we modified the definition of physicians' services for the SGR 
to include the additional benefits added to the statute that meet the 
criteria specified in section 1848(f)(4)(A).
    As discussed in the CY 2010 PFS final rule with comment period (74 
FR 61961), the statute provides the Secretary with clear discretion to 
decide whether physician-administered drugs should be included or 
excluded from the definition of ``physicians' services.'' Accordingly, 
we removed physician-administered drugs from the definition of 
``physicians' services'' in section 1848(f)(4)(A) of the Act for 
purposes of computing the SGR and the levels of allowed expenditures 
and actual expenditures beginning with CY 2010, and for all subsequent 
years. Furthermore, in order to effectuate fully the Secretary's policy 
decision to remove drugs from the definition of ``physicians' 
services,'' we removed physician-administered drugs from the 
calculation of allowed and actual expenditures for all prior years.
    Thus, for purposes of determining allowed expenditures, actual 
expenditures for all years, and SGRs beginning with CY 2010 and for all 
subsequent years, we are specifying that physicians' services include 
the following medical and other health services if bills for the items 
and services are processed and paid by Medicare carriers (and those 
paid through intermediaries where specified) or the equivalent services 
processed by

[[Page 73269]]

the Medicare Administrative Contractors:
     Physicians' services.
     Services and supplies furnished incident to physicians' 
services, except for the expenditures for drugs and biologicals which 
are not usually self-administered by the patient.
     Outpatient physical therapy services and outpatient 
occupational therapy services.
     Services of PAs, certified registered nurse anesthetists, 
certified nurse midwives, clinical psychologists, clinical social 
workers, nurse practitioners, and certified nurse specialists.
     Screening tests for prostate cancer, colorectal cancer, 
and glaucoma.
     Screening mammography, screening pap smears, and screening 
pelvic exams.
     Diabetes outpatient self-management training (DSMT) 
services.
     MNT services.
     Diagnostic x-ray tests, diagnostic laboratory tests, and 
other diagnostic tests (including outpatient diagnostic laboratory 
tests paid through intermediaries).
     X-ray, radium, and radioactive isotope therapy.
     Surgical dressings, splints, casts, and other devices used 
for the reduction of fractures and dislocations.
     Bone mass measurements.
     An initial preventive physical exam.
     Cardiovascular screening blood tests.
     Diabetes screening tests.
     Telehealth services.
     Physician work and resources to establish and document the 
need for a power mobility device.
     Additional preventive services.
     Pulmonary rehabilitation.
     Cardiac rehabilitation.
     Intensive cardiac rehabilitation.
     Kidney disease education services.
     Personalized prevention plan services.
2. Preliminary Estimate of the SGR for 2012
    Our preliminary estimate of the CY 2012 SGR is -16.9 percent. We 
first estimated the CY 2012 SGR in March 2011, and we made the estimate 
available to the MedPAC and on our Web site. Table 23 shows the March 
2011 estimate and our current estimates of the factors included in the 
CY 2012 SGR. The majority of the difference between the March estimate 
and our current estimate of the CY 2012 SGR is explained by net 
adjustments that reflect higher physician fees and fee-for-service 
enrollment after our March estimate was prepared. Estimates of 2012 
real per capita GDP are also lower than were included in our March, 
2011 estimate of the SGR.
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3. Revised Sustainable Growth Rate for CY 2011
    Our current estimate of the CY 2011 SGR is 6.0 percent. Table 24 
shows our preliminary estimate of the CY 2011 SGR that was published in 
the CY 2011 PFS final rule with comment period (75 FR 73278) and our 
current estimate. The majority of the difference between the 
preliminary estimate and our current estimate of the CY 2011 SGR is 
explained by adjustments to reflect two intervening legislative chan