Federal Register, Volume 76 Issue 228 (Monday, November 28, 2011)

[Federal Register Volume 76, Number 228 (Monday, November 28, 2011)]
[Rules and Regulations]
[Pages 73026-73474]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-28597]

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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

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(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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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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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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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.
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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.

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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

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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.
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[[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 [email protected]. 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).

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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)
[GRAPHIC] [TIFF OMITTED] TR28NO11.069

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)
[GRAPHIC] [TIFF OMITTED] TR28NO11.070

[[Page 73208]]

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.
BILLING CODE 4120-01-P

[[Page 73209]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.071

[[Page 73210]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.072

[[Page 73211]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.073

[[Page 73212]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.074

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.
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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.
[GRAPHIC] [TIFF OMITTED] TR28NO11.128

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 changes
that have occurred since publication of the CY 2011 final rule with
comment period.
[GRAPHIC] [TIFF OMITTED] TR28NO11.129

[[Page 73270]]

4. Final Sustainable Growth Rate for CY 2010
The SGR for CY 2010 is 8.9 percent. Table 25 shows our preliminary
estimate of the CY 2010 SGR from the CY 2010 PFS final rule with
comment period (74 FR 61965), our revised estimate from the CY 2011 PFS
final rule with comment period (75 FR 73278), and the final figures
determined using the best available data as of September 1, 2011.
[GRAPHIC] [TIFF OMITTED] TR28NO11.130

5. Calculation of CYs 2012, 2011, and 2010 Sustainable Growth Rates
a. Detail on the CY 2012 SGR
All of the figures used to determine the CY 2012 SGR are estimates
that will be revised based on subsequent data. Any differences between
these estimates and the actual measurement of these figures will be
included in future revisions of the SGR and allowed expenditures and
incorporated into subsequent PFS updates.
(1) Factor 1--Changes in Fees for Physicians' Services (Before Applying
Legislative Adjustments) for CY 2012
This factor is calculated as a weighted average of the CY 2012
changes in fees for the different types of services included in the
definition of physicians' services for the SGR. Medical and other
health services paid using the PFS are estimated to account for
approximately 89.4 percent of total allowed charges included in the SGR
in CY 2012 and are updated using the percent change in the Medicare
Economic Index (MEI). As discussed in section IV.C. of this final rule
with comment period, the percent change in the MEI for CY 2012 is 0.6
percent. Diagnostic laboratory tests are estimated to represent
approximately 10.6 percent of Medicare allowed charges included in the
SGR for CY 2012. Medicare payments for these tests are updated by the
Consumer Price Index for Urban Areas (CPI-U), which is 3.6 percent for
CY 2012. Section 3401(l) of the Affordable Care Act requires the
Secretary to reduce the CPI-U update applied to clinical laboratory
tests under the clinical laboratory fee schedule be reduced by a multi-
factor productivity adjustment (MFP adjustment) and, for each of years
2011 through 2015, by 1.75 percentage points (percentage adjustment).
The MFP adjustment will not apply in a year where the CPI-U is zero or
a percentage decrease for a year. Further, the application of the MFP
adjustment shall not result in an adjustment to the fee schedule of
less than zero for a year. However, the application of the percentage
adjustment may result in an adjustment to the fee schedule being less
than zero for a year and may result in payment rates for a year being
less than such payment rates for the preceding year. The applicable
productivity adjustment for CY 2012 is 1.2 percent. Adjusting the CPI-U
update by the productivity adjustment results in a 2.4 percent (3.6
percent (CPI-U)- 1.2 percent (MFP adjustment) update for CY 2012.
However, the percentage reduction of 1.75 percent is applied for CYs
2011 through 2015, as discussed previously. Therefore, for CY 2012,
diagnostic laboratory tests will receive an update of 0.7 percent
(rounded). Table 26 shows the weighted average of the MEI and
laboratory price changes for CY 2012.
[GRAPHIC] [TIFF OMITTED] TR28NO11.131

[[Page 73271]]

We estimate that the weighted average increase in fees for
physicians' services in CY 2012 under the SGR will be 0.6 percent.
(2) Factor 2--The Percentage Change in the Average Number of Part B
Enrollees From CY 2011 to CY 2012
This factor is our estimate of the percent change in the average
number of fee-for-service enrollees from CY 2011 to CY 2012. Services
provided to Medicare Advantage (MA) plan enrollees are outside the
scope of the SGR and are excluded from this estimate. We estimate that
the average number of Medicare Part B fee-for-service enrollees will
increase by 3.5 percent from CY 2011 to CY 2012. Table 27 illustrates
how this figure was determined.
[GRAPHIC] [TIFF OMITTED] TR28NO11.132

An important factor affecting fee-for-service enrollment is
beneficiary enrollment in MA plans. Because it is difficult to estimate
the size of the MA enrollee population before the start of a CY, at
this time we do not know how actual enrollment in MA plans will compare
to current estimates. For this reason, the estimate may change
substantially as actual Medicare fee-for-service enrollment for CY 2012
becomes known.
(3) Factor 3--Estimated Real Gross Domestic Product Per Capita Growth
in CY 2012
We estimate that the growth in real GDP per capita from CY 2011 to
CY 2012 will be 0.6 percent (based on the annual growth in the 10 year
moving average of real GDP per capita (2003 through 2012)). Our past
experience indicates that there have also been changes in estimates of
real GDP per capita growth made before the year begins and the actual
change in real GDP per capita growth computed after the year is
complete. Thus, it is possible that this figure will change as actual
information on economic performance becomes available to us in CY 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
The statutory and regulatory provisions that will affect
expenditures in CY 2012 relative to CY 2011 are estimated to have an
impact on expenditures of -20.7 percent. The impact is primarily due to
the expiration of the physician fee schedule update included in the
Medicare and Medicaid Extenders Act (MMEA) which specified a physician
fee schedule update for CY 2011 only. Additionally, section 3102 of the
Affordable Care Act revised the methodology for calculating the PE
GPCIs for CY 2010 and CY 2011 so that the employee compensation and
rent components of the PE GPCIs reflect only one-half of the relative
cost differences for each locality compared to the national average.
This provision included a hold harmless so that no area's GPCI could
decline and was not budget neutral. In addition, section 103 of the
MMEA extended the floor of 1.0 on the work GPCI through the end of CY
2011. This provision was also not budget neutral. The expiration of the
methodological changes to the PE GPCIs and the floor of the work GPCI
in CY 2012 will cause a reduction in spending in CY 2012 compared to CY
2011.
b. Detail on the CY 2011 SGR
A more detailed discussion of our revised estimates of the four
elements of the CY 2011 SGR follows.
(1) Factor 1--Changes in Fees for Physicians' Services for CY 2011
This factor was calculated as a weighted-average of the CY 2011
changes in fees that apply for the different types of services included
in the definition of physicians' services for the SGR in CY 2011.
We estimate that services paid using the PFS account for
approximately 92.1 percent of total allowed charges included in the SGR
in CY 2011. These services were updated using the CY 2011 percent
change in the MEI of 0.4 percent. We estimate that diagnostic
laboratory tests represent approximately 7.9 percent of total allowed
charges included in the SGR in CY 2011. Medicare payments for these
tests are updated by the CPI-U, which was 1.1 percent for CY 2011.
However, section 3401(l)(2)(iv)(subclause I) of the Affordable Care Act
requires the Secretary to reduce the CPI-U update applied to clinical
laboratory tests by a productivity adjustment, but does not allow the
productivity adjustment to result in a negative CLFS update. The result
is that the CLFS update for CY 2011 was 0.0 percent. Additionally,
section 3401(1)(2)(iv)(II) of the Affordable Care Act reduces the
update applied to clinical laboratory tests by 1.75 percent for CYs
2011 through 2015. Therefore, for CY 2011, diagnostic laboratory tests
received an update of -1.75 percent.
Table 28 shows the weighted-average of the MEI and laboratory price
changes for CY 2011.

[[Page 73272]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.133

After considering the elements described in Table 28, we estimate
that the weighted-average increase in fees for physicians' services in
CY 2011 under the SGR was 0.2 percent. Our estimate of this factor in
the CY 2011 PFS final rule with comment period was 0.2 percent (75 FR
73279).
(2) Factor 2--The Percentage Change in the Average Number of Part B
Enrollees From CY 2010 to CY 2011
We estimate that the average number of Medicare Part B fee-for-
service enrollees (excluding beneficiaries enrolled in Medicare
Advantage plans) increased by 1.8 percent in CY 2011. Table 29
illustrates how we determined this figure.
[GRAPHIC] [TIFF OMITTED] TR28NO11.134

Our estimate of the 1.8 percent change in the number of fee-for-
service enrollees, net of Medicare Advantage enrollment for CY 2011
compared to CY 2010, is different than our original estimate of an
increase of 2.4 percent in the CY 2011 PFS final rule with comment
period (75 FR 73279). While our current projection based on data from 8
months of CY 2011 differs from our original estimate of 2.4 percent
when we had no actual data, it is still possible that our final
estimate of this figure will be different once we have complete
information on CY 2011 fee-for-service enrollment.
(3) Factor 3--Estimated Real Gross Domestic Product Per Capita Growth
in CY 2011
We estimate that the growth in real GDP per capita will be 0.6
percent for CY 2011 (based on the annual growth in the 10-year moving
average of real GDP per capita (2002 through 2011)). Our past
experience indicates that there have also been differences between our
estimates of real per capita GDP growth made prior to the year's end
and the actual change in this factor. Thus, it is possible that this
figure will change further as complete actual information on CY 2011
economic performance becomes available to us in CY 2012.
(4) Factor 4--Percentage Change in Expenditures for Physicians'
Services Resulting From Changes in Statute or Regulations in CY 2011
Compared With CY 2010
The statutory and regulatory provisions that affected expenditures
in CY 2011 relative to CY 2010 are estimated to have an impact on
expenditures of 3.3 percent. These include the Department of Defense
Appropriations Act (DODAA), the Temporary Extension Act (TEA), and the
Preservation of Access to Care for Medicare Beneficiaries and Pension
Relief Act (PACMBPRA) which provided for physician fee schedule
updates. Furthermore, the Affordable Care Act contained provisions
regarding the policy on equipment utilization for imaging services, the
multiple procedure payment reduction policy for imaging services, and
the annual wellness visit providing personalized prevention plan
services.
c. Detail on the CY 2010 SGR
A more detailed discussion of our final revised estimates of the
four elements of the CY 2010 SGR follows.
(1) Factor 1--Changes in Fees for Physicians' Services for CY 2010
This factor was calculated as a weighted-average of the CY 2010
changes in fees that apply for the different types of services included
in the definition of physicians' services for the SGR in CY 2010.
We estimate that services paid under the PFS account for
approximately 91.3 percent of total allowed charges included in the SGR
in CY 2010. These services were updated using the CY 2010 percent
change in the MEI of 1.2 percent. We estimate that diagnostic
laboratory tests represent approximately 8.7 percent of total allowed
charges included in the SGR in CY 2010. Medicare payments for these
tests are updated by the CPI-U, which was -1.4 percent for CY 2010.
However, section 145 of the Medicare Improvements for Patients and
Providers Act (MIPPA), reduced the update applied to clinical
laboratory tests by 0.5 percent for CY 2009 and CY 2010. Therefore, for
CY 2010, diagnostic laboratory tests received an update of -1.9
percent. Since we removed physician-administered drugs from the
definition of ``physicians' services'' for purposes of computing the
SGR and the levels of allowed expenditures and actual

[[Page 73273]]

expenditures beginning with CY 2010, and for all subsequent years,
drugs represent 0.0 percent of Medicare allowed charges included in the
SGR in CY 2010 and later years.
Table 30 shows the weighted-average of the MEI and laboratory price
changes for CY 2010.
[GRAPHIC] [TIFF OMITTED] TR28NO11.135

After considering the elements described in Table 30, we estimate
that the weighted-average increase in fees for physicians' services in
CY 2010 under the SGR was 0.9 percent. This figure is a final one based
on complete data for CY 2010.
(2) Factor 2--The Percentage Change in the Average Number of Part B
Enrollees From CY 2009 to CY 2010
We estimate the change in the number of fee-for-service enrollees
(excluding beneficiaries enrolled in MA plans) from CY 2009 to CY 2010
was 1.1 percent. Our calculation of this factor is based on complete
data from CY 2010. Table 31 illustrates the calculation of this factor.
[GRAPHIC] [TIFF OMITTED] TR28NO11.136

(3) Factor 3--Estimated Real Gross Domestic Product Per Capita Growth
in CY 2010
We estimate that the growth in real per capita GDP was 0.6 percent
in CY 2010 (based on the annual growth in the 10-year moving average of
real GDP per capita (CYs 2001 through 2010)). This figure is a final
one based on complete data for CY 2010.
(d) Factor 4--Percentage Change in Expenditures for Physicians'
Services Resulting From Changes in Statute or Regulations in CY 2010
Compared With CY 2009
Our final estimate for the net impact on expenditures from the
statutory and regulatory provisions that affect expenditures in CY 2010
relative to CY 2009 is 6.1 percent. The statutory and regulatory
provisions that affected expenditures in CY 2010 relative to CY 2009
include the DODAA, the TEA, and the Preservation of Access to Care for
Medicare Beneficiaries and Pension Relief Act (PACMBPRA) which provided
for physician fee schedule updates. Also included are the MIPPA
provisions regarding the physician fee schedule update, PQRI and E-
prescribing incentives, the work GPCIs, and payment provisions related
to certain pathology services. Additionally, the Affordable Care Act
contained provisions regarding the work GPCIs, the policy on equipment
utilization for imaging services, coverage of preventive services, and
a physician enrollment requirement.

B. The Update Adjustment Factor (UAF)

Section 1848(d) of the Act provides that the PFS update is equal to
the product of the the UAF and the MEI. The UAF is applied to make
actual and target expenditures (referred to in the statute as ``allowed
expenditures'') equal. As discussed previously, allowed expenditures
are equal to actual expenditures in a base period updated each year by
the SGR. The SGR sets the annual rate of growth in allowed expenditures
and is determined by a formula specified in section 1848(f) of the Act.
1. Calculation Under Current Law
Under section 1848(d)(4)(B) of the Act, the UAF for a year
beginning with CY 2001 is equal to the sum of the following--
Prior Year Adjustment Component. An amount determined by--
++ Computing the difference (which may be positive or negative)
between the amount of the allowed expenditures for physicians' services
for the prior year (the year prior to the year for which the update is
being determined) and the amount of the actual expenditures for those
services for that year;
++ Dividing that difference by the amount of the actual
expenditures for those services for that year; and
++ Multiplying that quotient by 0.75.
Cumulative Adjustment Component. An amount determined by--
++ Computing the difference (which may be positive or negative)
between the amount of the allowed expenditures for physicians' services
from April 1, 1996, through the end of the prior year and the amount of
the actual expenditures for those services during that period;

[[Page 73274]]

++ Dividing that difference by actual expenditures for those
services for the prior year as increased by the SGR for the year for
which the UAF is to be determined; and
++ Multiplying that quotient by 0.33.
Section 1848(d)(4)(E) of the Act requires the Secretary to
recalculate allowed expenditures consistent with section 1848(f)(3) of
the Act. As discussed previously, section 1848(f)(3) specifies that the
SGR (and, in turn, allowed expenditures) for the upcoming CY (CY 2012
in this case), the current CY (that is, CY 2011) and the preceding CY
(that is, CY 2010) are to be determined on the basis of the best data
available as of September 1 of the current year. Allowed expenditures
for a year generally are estimated initially and subsequently revised
twice. The second revision occurs after the CY has ended (that is, we
are making the second revision to CY 2010 allowed expenditures in this
final rule with comment).
Table 32 shows the historical SGRs corresponding to each period
through CY 2012.
[GRAPHIC] [TIFF OMITTED] TR28NO11.137

Consistent with section 1848(d)(4)(E) of the Act, Table 32 includes
our second revision of allowed expenditures for CY 2010, a
recalculation of allowed expenditures for CY 2011, and our initial
estimate of allowed expenditures for CY 2012. To determine the UAF for
CY 2012, the statute requires that we use allowed and actual
expenditures from April 1, 1996 through December 31, 2011 and the CY
2012 SGR. Consistent with section 1848(d)(4)(E) of the Act, we will be
making revisions to the CY 2011 and CY 2012 SGRs and CY 2011 and CY
2012 allowed expenditures. Because we have incomplete actual
expenditure data for CY 2011, we are using an estimate for this period.
Any difference between current estimates and final figures will be
taken into account in determining the UAF for future years.
We are using figures from Table 32 in the following statutory
formula:
[GRAPHIC] [TIFF OMITTED] TR28NO11.138

[[Page 73275]]

UAF12 = Update Adjustment Factor for CY 2012 = -4.0
percent
Target11 = Allowed Expenditures for CY 2011 = $103.4
billion
Actual11 = Estimated Actual Expenditures for CY 2011 =
$101.1 billion
Target4/96-12/11 = Allowed Expenditures for 4/1/1996-12/
31/2011 = $1,118.7 billion
Actual4/96-12/11 = Estimated Actual Expenditures from 4/
1/1996-12/31/2011 = $1,133.3 billion
SGR12 = -16.9 percent (0.831)
[GRAPHIC] [TIFF OMITTED] TR28NO11.139

Section 1848(d)(4)(D) of the Act indicates that the UAF determined
under section 1848(d)(4)(B) of the Act for a year may not be less than
-0.07 or greater than 0.03. Since -0.04 (-4 percent) is between -0.07
and 0.03, the UAF for CY 2012 will be -0.04.
Section 1848(d)(4)(A)(ii) of the Act indicates that 1.0 should be
added to the UAF determined under section 1848(d)(4)(B) of the Act.
Thus, adding 1.0 to -0.04 makes the UAF equal to 0.96.

C. The Percentage Change in the Medicare Economic Index (MEI)

The MEI is authorized by section 1842(b)(3) of the Act, which
states that prevailing charge levels beginning after June 30, 1973 may
not exceed the level from the previous year except to the extent that
the Secretary finds, on the basis of appropriate economic index data,
that the higher level is justified by year-to-year economic changes.
The current form of the MEI was detailed in the CY 2011 PFS final rule
with comment period (75 FR 73262) which updated the cost structure of
the index from a base year of 2000 to 2006.
The MEI measures the weighted-average annual price change for
various inputs needed to produce physicians' services. The MEI is a
fixed-weight input price index, with an adjustment for the change in
economy-wide multifactor productivity. This index, which has CY 2006
base year weights, is comprised of two broad categories: (1)
Physician's own time; and (2) physician's practice expense (PE).
The physician's compensation (own time) component represents the
net income portion of business receipts and primarily reflects the
input of the physician's own time into the production of physicians'
services in physicians' offices. This category consists of two
subcomponents: (1) Wages and salaries; and (2) fringe benefits.
The physician's practice expense (PE) category represents
nonphysician inputs used in the production of services in physicians'
offices. This category consists of wages and salaries and fringe
benefits for nonphysician staff and other nonlabor inputs. The
physician's PE component also includes the following categories of
nonlabor inputs: Office expenses; medical materials and supplies;
professional liability insurance; medical equipment; medical materials
and supplies; and other professional expenses.
Table 33 presents a listing of the MEI cost categories with
associated weights and percent changes for price proxies for the 2012
update. The CY 2012 final MEI update is 1.8 percent and reflects a 2.3
percent increase in physician's own time and a 1.4 percent increase in
physician's PE. Within the physician's PE, the largest increase
occurred in chemicals, which increased 10.2 percent, and rubber and
plastic products, which increased 5.2 percent.
For CY 2012, the increase in the productivity adjusted MEI is 0.6
percent, which reflects an increase in the MEI of 1.8 percent and a
productivity adjustment of 1.2 percent based on the 10-year moving
average of economy-wide private nonfarm business multifactor
productivity. The Bureau of Labor Statistics (BLS) is the agency that
publishes the official measure of private non-farm business MFP. Please
see http://www.bls.gov/mfp which is the link to the BLS historical
published data on the measure of MFP.
BILLING CODE 4120-01-P

[[Page 73276]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.140

[[Page 73277]]

BILLING CODE 4120-01-C

D. Physician and Anesthesia Fee Schedule Conversion Factors for CY 2012

The CY 2012 PFS CF is $24.6712. The CY 2012 national average
anesthesia CF is $15.5264.
1. Physician Fee Schedule Update and Conversion Factor
a. CY 2012 PFS Update
The formula for calculating the PFS update is set forth in section
1848(d)(4)(A) of the Act. In general, the PFS update is determined by
multiplying the CF for the previous year by the percentage increase in
the MEI times the UAF, which is calculated as specified under section
1848(d)(4)(B) of the Act.
b. CY 2012 PFS Conversion Factor
Generally, the PFS CF for a year is calculated in accordance with
section 1848(d)(1)(A) of the Act by multiplying the previous year's CF
by the PFS update.
We note section 101 of the Medicare Improvements and Extension Act,
Division B of the Tax Relief and Health Care Act of 2006 (MIEA-TRHCA)
provided a 1-year increase in the CY 2007 CF and specified that the CF
for CY 2008 must be computed as if the 1-year increase had never
applied. Section 101 of the Medicare, Medicaid, and SCHIP Extension Act
of 2007 (MMSEA) provided a 6-month increase in the CY 2008 CF, from
January 1, 2008, through June 30, 2008, and specified that the CF for
the remaining portion of CY 2008 and the CFs for CY 2009 and subsequent
years must be computed as if the 6-month increase had never applied.
Section 131 of the MIPPA extended the increase in the CY 2008 CF that
applied during the first half of the year to the entire year, provided
for a 1.1 percent increase to the CY 2009 CF, and specified that the
CFs for CY 2010 and subsequent years must be computed as if the
increases for CYs 2007, 2008, and 2009 had never applied. Section
1011(a) of the DODAA and section 5 of the TEA specified a zero percent
update for CY 2010, effective January 1, 2010 through March 31, 2010.
Section 4 of the Continuing Extension Act of 2010 (CEA) extended the
zero percent update for CY 2010 through May 31, 2010. Subsequently,
section 101(a)(2) of the PACMBPRA provided for a 2.2 percent update to
the CF, effective from June 1, 2010 to November 30, 2010. Section 2 of
the Physician Payment and Therapy Relief Act of 2010 (Pub. L. 111-286)
extended the 2.2 percent through the end of CY 2010. Finally, section
101 of the MMEA provided a zero percent update for CY 2011, effective
January 1, 2011 through December 31, 2011, and specified that the CFs
for CY 2012 and subsequent years must be computed as if the increases
in previous years had never applied. Therefore, under current law, the
CF that would be in effect in CY 2011 had the prior increases specified
above not applied is $25.4999.
In addition, when calculating the PFS CF for a year, section
1848(c)(2)(B)(ii)(II) of the Act requires that increases or decreases
in RVUs may not cause the amount of expenditures for the year to differ
more than $20 million from what it would have been in the absence of
these changes. If this threshold is exceeded, we must make adjustments
to preserve budget neutrality. We estimate that CY 2012 RVU changes
would result in a decrease in Medicare physician expenditures of more
than $20 million. Accordingly, we are increasing the CF by 1.0018 to
offset this estimated decrease in Medicare physician expenditures due
to the CY 2012 RVU changes. We calculate the CY 2012 PFS CF to be
$24.6712. This final rule with comment period announces a reduction to
payment rates for physicians' services in CY 2012 under the SGR
formula. These payment rates are currently scheduled to be reduced
under the SGR system on January 1, 2012. The total reduction in MPFS
rates between CY 2011 and CY 2012 under the SGR system will be 27.4
percent. By law, we are required to make these reductions in accordance
with section 1848(d) and (f) of the Act, and these reductions can only
be averted by an Act of Congress. While Congress has provided temporary
relief from these reductions every year since 2003, a long-term
solution is critical. We will continue to work with Congress to fix
this untenable situation so doctors and beneficiaries no longer have to
worry about the stability and adequacy of their payments from Medicare
under the Physician Fee Schedule.
We illustrate the calculation of the CY 2012 PFS CF in Table 34.
[GRAPHIC] [TIFF OMITTED] TR28NO11.141

We note payment for services under the PFS will be calculated as
follows:

Payment = [(RVU work x GPCI work) + (RVU PE x GPCI PE) + (RVU
malpractice x GPCI malpractice)] x CF.
2. Anesthesia Conversion Factor
We calculate the anesthesia CF as indicated in Table 35. Anesthesia
services do not have RVUs like other PFS services. Therefore, we
account for any necessary RVU adjustments through an adjustment to the
anesthesia CF to simulate changes to RVUs. More specifically, if there
is an adjustment to the work, PE, or malpractice RVUs, these
adjustments are applied to the respective shares of the anesthesia CF
as these shares are proxies for the work, PE, and malpractice RVUs for
anesthesia services. Information regarding the anesthesia work, PE, and
malpractice shares can be found at the following: https://www.cms.gov/center/anesth.asp.
The anesthesia CF in effect in CY 2011 is $21.0515. As explained
previously, in order to calculate the CY 2012 PFS CF, the statute
requires us to calculate the CFs for all previous years

[[Page 73278]]

as if the various legislative changes to the CFs for those years had
not occurred. Accordingly, under current law, the anesthesia CF in
effect in CY 2011 had statutory increases not applied is $15.8085. The
percent change from the anesthesia CF in effect in CY 2011 ($21.0515)
to the CF for CY 2012 ($15.5264) is -26.2 percent. We illustrate the
calculation of the CY 2012 anesthesia CF in Table 35.
[GRAPHIC] [TIFF OMITTED] TR28NO11.142

V. Other Physician Fee Schedule Issues

A. Section 105: Extension of Payment for Technical Component of Certain
Physician Pathology Services

1. Background and Statutory Authority
Section 542(c) of the Medicare, Medicaid, and SCHIP Benefits
Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106-554), as
amended by section 732 of the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003 (MMA) (Pub. L. 108-173), section 104 of
division B of the Tax Relief and Health Care Act of 2006 (MIEA-TRHCA)
(Pub. L. 109-432), section 104 of the Medicare, Medicaid, and SCHIP
Extension Act of 2007 (MMSEA) (Pub. L. 110-173), section 136 of the
Medicare Improvements for Patients and Providers Act of 2008 (MIPPA)
(Pub. L. 110-275) and section 3104 of the Affordable Care Act (Pub. L.
111-148), as amended by section 105 of the Medicare and Medicaid
Extenders Act of 2010 (MMEA) (Pub. L. 111-309), continued payment to
independent laboratories for the technical component (TC) of physician
pathology services for fee-for-service Medicare beneficiaries who are
inpatients or outpatients of a covered hospital through CY 2011. The TC
of physician pathology services refers to the preparation of the slide
involving tissue or cells that a pathologist interprets. The
professional component (PC) of physician pathology services refers to
the pathologist's interpretation of the slide.
When the hospital pathologist furnishes the PC service for a
hospital patient, the PC service is separately billable by the
pathologist. When an independent laboratory's pathologist furnishes the
PC service, the PC service is usually billed with the TC service as a
combined service.
Historically, any independent laboratory could bill the Medicare
contractor under the PFS for the TC of physician pathology services for
hospital patients even though the payment for the costs of furnishing
the pathology service (but not its interpretation) was already included
in the bundled inpatient stay payment to the hospital. In the CY 2000
PFS final rule with comment period (64 FR 59408 and 59409), we stated
that this policy has contributed to the Medicare program paying twice
for the TC service: (1) To the hospital, through the inpatient
prospective payment rate, when the patient is an inpatient; and (2) to
the independent laboratory that bills the Medicare contractor, instead
of the hospital, for the TC service. While the policy also permits the
independent laboratory to bill for the TC of physician pathology
services for hospital outpatients, in this case, there generally would
not be duplicate payment because we would expect the hospital to not
also bill for the pathology service, which would be paid separately to
the hospital only if the hospital were to specifically bill for it. We
further indicated that we would implement a policy to pay only the
hospital for the TC of physician pathology services furnished to its
inpatients.
Therefore, in the CY 2000 PFS final rule with comment period, we
revised Sec. 415.130(c) to state that for physician pathology services
furnished on or after January 1, 2001 by an independent laboratory,
payment is made only to the hospital for the TC of physician pathology
services furnished to a hospital inpatient. Ordinarily, the provisions
in the PFS final rule with comment period are implemented in the
following year. However, the change to Sec. 415.130 was delayed 1-year
(until January 1, 2001), at the request of the industry, to allow
independent laboratories and hospitals sufficient time to negotiate
arrangements.
Full implementation of Sec. 415.130 was further delayed by section
542 of BIPA and section 732 of the MMA, which directed us to continue
payment to independent laboratories for the TC of physician pathology
services for hospital patients for a 2-year period beginning on January
1, 2001 and for CYs 2005 and 2006, respectively. In the CY 2007 PFS
final rule with comment period (71 FR 69788), we amended Sec. 415.130
to provide that, for services furnished after December 31, 2006, an
independent laboratory may not bill the carrier for the TC of physician
pathology services furnished to a hospital inpatient or outpatient.
However, section 104 of the MIEA-TRHCA continued payment to independent
laboratories for the TC of physician pathology services for hospital
patients through CY 2007, and section 104 of the MMSEA further extended
such payment through the first 6 months of CY 2008.
Section 136 of the MIPPA extended the payment through CY 2009.
Section 3104 of the Affordable Care Act amended the prior legislation
to extend the payment through CY 2010. Subsequent to publication of the
CY 2011 PFS final rule with comment period, section 105 of the MMEA
extended the payment through CY 2011.

[[Page 73279]]

2. Revisions to Payment for TC of Certain Physician Pathology Services
Consistent with this statutory change, we proposed to revise Sec.
415.130(d) to specify that for services furnished after December 31,
2011, an independent laboratory may not bill the Medicare contractor
for the TC of physician pathology services furnished to a hospital
inpatient or outpatient. We would implement this provision effective
for TC services furnished on or after January 1, 2012.
We received the following comments.
Comment: Several commenters indicated that it was unclear whether
the TC payment is included in either the inpatient prospective payment
rate or in the outpatient prospective payment system (OPPS) payment
made to the hospital for the service. One commenter noted that there is
no duplicate payment for outpatients because the hospital does not bill
Medicare for the TC of outpatient pathology services in cases where the
independent laboratory bills Medicare.
Response: Payment for the costs of furnishing the pathology service
(but not its interpretation) is already included in the bundled
inpatient stay payment to the hospital. We continue to believe that
this payment provision represents a duplicate payment for the TC
service: (1) To the hospital, through the inpatient prospective payment
rate, when the patient is an inpatient; and (2) to the independent
laboratory that bills the Medicare contractor, instead of the hospital,
for the TC service. We agree that there generally is no duplicate
payment for outpatient services because the hospital does not bill
Medicare when the independent laboratory bills Medicare.
Comment: Commenters indicated that the proposal will shift costs to
hospitals without any comparable change in reimbursement, resulting in
administrative, financial, and operational hardships for both
independent laboratories and hospitals. Under direct billing,
laboratories submit a single bill to Medicare for both the TCs and the
PCs. Without direct billing, laboratories will have to issue two bills,
that is, one to Medicare for the PC and another to the hospitals for
the TC, doubling their billing costs. Hospitals will incur additional
costs of creating new billing systems. Such burdens will fall most
heavily on small, rural, and critical access hospitals which often rely
on independent labs for surgical pathology services. Some hospitals may
choose not to provide surgical pathology services, thereby limiting
access to care.
Response: We believe that the Medicare savings, resulting from the
elimination of duplicate payments, offset the disadvantages to
hospitals and laboratories of any additional administrative burden to
implement the provision. Medicare payment under the IPPS encompasses
almost all services provided to the hospital inpatient during their
admission. We do not believe it would be a substantial burden to
hospitals to bill for services provided by independent laboratories
because this is how they bill for all other laboratory services
provided to hospital inpatients. Further, hospitals and independent
laboratories have had ample time to address modifications to billing
systems.
Comment: A commenter noted that a demonstration project, mandated
by the Affordable Care Act would allow laboratories to bill Medicare
directly for a complex diagnostic test which is ordered by the
patient's physician less than 14-days following the date of the
patient's discharge from the hospital or critical access hospital. The
demonstration will assess the impact of this billing process on access
to care, quality of care, health outcomes, and expenditures. The
commenter requested that we delay implementation of the provision until
the demonstration project is complete.
Response: Section 3113 of the Affordable Care Act requires the
Secretary to conduct a demonstration project under Part B of title
XVIII of the Act under which separate payments are made for certain
complex diagnostic laboratory tests. The demonstration project is
independent of our proposal and involves a limited number of pathology
services, none of which are s paid under the PFS. We continue to
believe that Medicare currently makes a duplicate payment for such
services and we will not delay implementation of this provision until
the demonstration project is complete.
After consideration of all public comments, we are finalizing our
proposal without modification. Absent additional legislation, for
services furnished after December 31, 2011, an independent laboratory
may not bill a Medicare contractor for the TC of physician pathology
services for fee-for service Medicare beneficiaries who are inpatients
or outpatients of a covered hospital. Accordingly, we are finalizing
the proposed revisions to Sec. 415.130(d)(1) and (2) to reflect this
change.

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
On June 25, 2010, the Preservation of Access to Care for Medicare
Beneficiaries and Pension Relief Act of 2010 (PACMBPRA) (Pub. L. 111-
192) was enacted. Section 102 of this Act entitled, ``Clarification of
3-Day Payment Window,'' clarified when certain services furnished to
Medicare beneficiaries in the 3-days (or, in the case of a hospital
that is not a subsection (d) hospital, during the 1-day) preceding an
inpatient admission should be considered ``operating costs of inpatient
hospital services'' and therefore included in the hospital's payment
under the Hospital Inpatient Prospective Payment System (IPPS). This
policy is generally known as the ``3-day payment window.'' Under the 3-
day payment window, a hospital (or an entity that is wholly owned or
wholly operated by the hospital) must include on the claim for a
Medicare beneficiary's inpatient stay, the technical portion of any
outpatient diagnostic services and nondiagnostic services related to
the admission provided during the payment window. The new law makes the
policy pertaining to admission-related nondiagnostic services more
consistent with common hospital billing practices. Section 102 of the
PACMBPRA is effective for services furnished on or after June 25, 2010.
2. Background
We discussed changes to the 3-day payment window policy in the
interim final rule with comment period that was issued as part of last
year's IPPS final rule (75 FR 50346). The PACMBPRA made no changes to
the billing of ``diagnostic services'' furnished during the 3-day
payment window, which are included in the ``operating costs of
inpatient hospital services'' pursuant to section 1886(a)(4) of the
Act. All diagnostic services furnished to a Medicare beneficiary by a
hospital (or an entity wholly owned or wholly operated by the
hospital), on the date of a beneficiary's admission or during the 3-
days (1-day for a non-subsection (d) hospital) immediately preceding
the date of a beneficiary's inpatient hospital admission, continue to
be included on the Part A bill for the beneficiary's inpatient stay at
the hospital. In accordance with section 102(a)(1) of the PACMBPRA, for
outpatient services

[[Page 73280]]

furnished on or after June 25, 2010, all nondiagnostic services, other
than ambulance and maintenance renal dialysis services, provided by the
hospital (or an entity wholly owned or wholly operated by the hospital)
on the date of a beneficiary's inpatient admission and during the 3
calendar days (1 calendar day for a nonsubsection (d) hospital)
immediately preceding the date of admission are deemed related to the
admission and, therefore, must be billed with the inpatient stay,
unless the hospital attests that certain nondiagnostic services are
unrelated to the hospital claim (that is, the preadmission
nondiagnostic services are clinically distinct or independent from the
reason for the beneficiary's inpatient admission). In such cases, the
unrelated outpatient hospital nondiagnostic services are covered by
Medicare Part B, and the hospital may separately bill for those
services.
Prior to the enactment of the 3-day payment window clarification
under section 102 of the PACMBPRA, the term ``related to the
admission'' was defined in section 40.3, Chapter 3, Inpatient Hospital
Billing, of the Medicare Claims Processing Manual (Pub. 100-04) to mean
an exact match between the principal ICD-9 CM diagnosis codes for the
outpatient encounter and the inpatient admission. On November 5, 1990,
section 4003(a) of the Omnibus Budget Reconciliation Act of 1990 (Pub.
L. 101-508) amended the statutory definition of ``operating cost of
inpatient hospital services'' in section 1886(a)(4) of the Act to
include the costs of certain services furnished prior to admission.
Section 4003(a) also required that these preadmission services be
included on the Medicare Part A bill for the subsequent inpatient stay.
With this amendment, section 1886(a)(4) of the Act defines the
operating costs of inpatient hospital services to include diagnostic
services (including clinical diagnostic laboratory tests) or other
services related to the admission (as defined by the Secretary) that
are furnished by the hospital (or by an entity that is wholly owned or
wholly operated by the hospital) to the patient during the 3-days prior
to the date of the patient's admission to the hospital.
Section 1886(a)(4) of the Act was further amended by section 110 of
the Social Security Amendments of 1994 (Pub. L. 103-432) enacted on
October 31, 1994. This provision revised the payment window for
hospitals that are excluded from the IPPS to include only those
services furnished by the hospital or an entity wholly owned or wholly
operated by the hospital during the 1-day (instead of the previous 3-
days) prior to the patient's hospital inpatient admission. The hospital
and hospital units excluded from the IPPS and affected by this policy
are psychiatric hospitals and units, inpatient rehabilitation hospitals
and units, long-term care hospitals, children's hospitals, and cancer
hospitals. In the FY 1996 IPPS final rule (60 FR 45840), we noted that
the term ``day,'' as referenced in the 3-day or 1-day payment window
policy refers to the entire calendar day immediately preceding the date
of admission and not the 24-hour time period that immediately precedes
the hour of admission.
On February 11, 1998, we published a final rule (63 FR 6864), that
responded to public comments received on a prior interim final rule on
this policy. In that final rule, we confirmed that ambulance services
and chronic maintenance of renal dialysis services are excluded from
the 3-day payment window. This final rule with comment period also
clarified that the payment window applies to outpatient services that
are otherwise billable under Part B and does not apply to nonhospital
services that are generally covered under Part A (such as home health,
skilled nursing facility, and hospice). In addition the rule clarified
the terms ``wholly owned or operated'' and ``admission-related'' for
nondiagnostic services.
The 1998 final rule (63 FR 6866) defined an entity as wholly owned
or wholly operated if a hospital has direct ownership or control over
another entity's operations. Specifically, 42 CFR 412.2(c)(5)(i)
states, ``An entity is wholly owned by the hospital if the hospital is
the sole owner of the entity. An entity is wholly operated by a
hospital if the hospital has exclusive responsibility for conducting
and overseeing the entity's routine operations, regardless of whether
the hospital also has policymaking authority over the entity.'' The
1998 final rule also stated ``that we have defined services as being
related to the admission only when there is an exact match between the
ICD-9-CM diagnosis code assigned for both the preadmission services and
the inpatient stay'' and that ``[a]'' hospital-owned or hospital-
operated physician clinic or practice is subject to the payment window
provision.'' Therefore, related preadmission nondiagnostic services
provided by a wholly owned or wholly operated physician clinic or
practice are also included in the 3-day (or 1-day) payment window
policy, and services were considered related when there was an exact
match between ICD-9 CM diagnosis codes for the outpatient encounter and
the inpatient admission.
Prior to the June 25, 2010 enactment of section 102(a)(1) of
PACMBPRA (Pub. L. 111-192), the payment window policy for preadmission
nondiagnostic services was rarely applied in the wholly owned or
operated physician's office or clinic because, as we previously noted,
the policy required an exact match between the principal ICD-9 CM
diagnosis codes for the outpatient services and the inpatient
admission. Because of the exact match policy, very few services
furnished in a physician's office or clinic that is wholly owned or
operated by the hospital would be subject to the policy. Because the
policy applied only in such narrow circumstances, until the recent
statutory change, we have not provided further guidance to wholly owned
or wholly operated physician offices on how nondiagnostic services are
to be included on hospital bills when the 3-day payment window applied.
However, the statutory change to the payment window policy made by Pub.
L. 111-192 significantly broadened the definition of nondiagnostic
services that are subject to the payment window to include any
nondiagnostic service that is clinically related to the reason for a
patient's inpatient admission, regardless of whether the inpatient and
outpatient diagnoses are the same.
The FY 2012 IPPS proposed (76 FR 25960) and final rules (76 FR
51705) further discuss the application of the 3-day payment window for
both preadmission diagnostic and related nondiagnostic services
furnished to a patient at wholly owned or wholly operated physician
practices after June 25, 2010. We do not know how many physician
offices are wholly owned or wholly operated. Our expectation is that
most hospital-owned entities providing outpatient services would be
considered part of the hospital, likely as an outpatient department,
and not as separate physician clinics or practices or other entities
such as clinical laboratories. However, we believe there may be at
least some hospital clinics that meet the definition of a wholly owned
or wholly operated physician practice. When a physician furnishes a
service in a hospital, including an outpatient department of a
hospital, Medicare pays the physician under the physician fee schedule,
generally at a facility-based payment rate that is lower than the
``nonfacility'' payment rate in order to avoid duplication of payment
for supplies, equipment, and staff that are paid directly to the
hospital by Medicare.

[[Page 73281]]

3. Applicability of the 3-Day Payment Window Policy for Services
Furnished in Physician Practices
In circumstances where the 3-day payment window applies to
nondiagnostic services related to an inpatient admission furnished in a
wholly owned or wholly operated physician practice, we proposed that
Medicare would make payment under the physician fee schedule for the
physicians' services that are subject to the 3-day payment window at
the facility rate. As explained more fully later in this section, the
services that are subject to the 3-day payment window would be billed
to Medicare in a similar manner to services that are furnished in a
hospital, including an outpatient department of a hospital. We proposed
that, effective on or after January 1, 2012, when a physician furnishes
services to a beneficiary in a hospital's wholly owned or wholly
operated physician practice and the beneficiary is admitted as an
inpatient within 3 days (or, in the case of non-IPPS hospitals, 1 day),
the payment window will apply to all diagnostic services furnished and
to any nondiagnostic services that are clinically related to the reason
for the patient's inpatient admission regardless of whether the
reported inpatient and outpatient diagnosis codes are the same.
Comment: A few commenters expressed concern over the proposed
phrase of ``physician clinics or practices,'' suggesting that CMS
proposed to define the application of this provision too narrowly
because the statutory provision on the 3-day payment window refers to
``entity'' and not specifically to physician clinics or practices.
Another commenter suggested the phrase ``Free-standing facility or
clinic'' to be more appropriate for the 3-day window payment policy,
and refers CMS to the definition of ``Free-standing facility'' set
forth in 42 CFR 413.65(a)(2).
Response: We appreciate commenters' attention to the discrepancy
between the proposed term ``physician clinics or practices'' and the
statutory reference to ``entity,'' and we agree that Public Law 111-192
applies the 3-day payment window policy to services related to the
admission including all diagnostic services and clinically related
services that are not diagnostic services, other than ambulance and
maintenance renal dialysis services, for which payment may be made
under Medicare Part B and that are provided by a hospital (or an entity
wholly owned or operated by the hospital) to a patient. We agree with
commenters that the statute does not limit this provision solely to
physician offices or clinics. The term ``entity'' applies to Part B
entities that provide diagnostic or related nondiagnostic services
which would include a host of entities including clinical laboratory
facilities and ambulatory surgical centers, and any other entity
providing Part B outpatient services. If these entities are wholly
owned or wholly operated by a hospital per the definitions set forth in
the 1998 IPPS final rule (63 FR 6866), the 3-day payment window would
apply to the preadmission diagnostic and nondiagnostic services
provided by those entities when those preadmission services are
clinically related to a patients inpatient admission within the payment
window. We will amend our proposed regulation text defining facility
practice expense RVUs to use the term ``entity'' in Sec.
414.22(b)(5)(1)(A) instead of ``physician practice'' as proposed ``(A)
the facility PE RVUs apply to services furnished to patients in the
hospital, skilled nursing facility, mental health center, ambulatory
surgical center, or in a wholly owned or wholly operated entity
furnishing preadmission services pursuant to Sec. 412.2(c)(5).''
The principal focus of our CY 2012 proposed rule and our discussion
in the IPPS FY 2012 final rule with comment period was on physician
offices and clinics. We are concerned that hospitals may not realize
that some of the services provided by wholly owned or wholly operated
entities that might furnish preadmission services, other than physician
practices and clinics, such as ambulatory surgical centers, are subject
to the payment window. The purpose of this discussion in the CY 2012
PFS proposed rule was to address how a wholly owned or wholly operated
physician practice would bill for professional and technical services
when provided within the 3-day payment window. We believe that
physician practices are the majority of wholly hospital owned or wholly
operated Part B entities providing nondiagnostic services that are
related to an inpatient admission. We previously addressed
applicability of the payment window policy to wholly owned or wholly
operated entities in our 1998 final rule, and at that time emphasized
that diagnostic services are always included in the 3-day payment
window (75 FR 6866). In this final rule with comment period, we are
addressing the policy's application to entities that are wholly owned
or wholly operated physician practices and clinics, and we note that
wholly owned or wholly operated entities providing diagnostic services
always have been subject to the payment window. We encourage hospitals
to bring any other wholly owned or wholly operated Part B entities into
compliance with the 3-day payment window policy as discussed in this
final rule. If needed, we will address specifics related to other Part
B entities in future rulemaking.
Although rural health clinics (RHCs) and Federally qualified health
centers (FQHCs) would be considered ``entities,'' we are not applying
the 3-day payment window policy to these entities. Medicare pays RHCs
and FQHCs for their services through an all-inclusive rate that
incorporates payment for all covered items and services provided to a
beneficiary on a single day by an RHC/FQHC physician, physician
assistant, nurse practitioner, clinical nurse midwife, clinical
psychologist, clinical social worker, or visiting nurse; and related
services and supplies (Publication 100-04 (Medicare Claims Processing
Manual), chapter 19, section 20.1). RHCs and FQHCs can only bill and be
paid for services included in their all-inclusive rate. Although the
majority of those services are professional services, it is impossible
to distinguish within the all-inclusive rate the amount of the payment
for any particular patient that represents the professional versus the
technical portion. As previously discussed, the 3-day payment window
policy requires a hospital to include in its bill for an inpatient
admission the technical portion of any outpatient diagnostic services
and admission-related nondiagnostic services provided during the
preadmission payment window. Professional services are not considered
to be operating costs of inpatient hospital services and, accordingly,
are not subject to the 3-day payment window policy. Given that the 3-
day payment window policy does not include professional services, and
that RHCs and FQHCs are paid an all-inclusive rate within which the
professional and technical portions are indeterminate, we do not
consider RHC or FQHC services to be subject to the 3-day payment window
policy. However, if in the future RHCs or FQHCs are no longer paid an
all-inclusive rate, but rather, under a prospective or other payment
system that allows distinction between the PC and TC for services, the
3-day payment policy would apply in these settings In addition the list
of covered services paid through the RHC and FQHC benefits is
relatively small. Practitioners who furnish additional services in RHCs
or FQHCs bill Medicare Part B for any additional

[[Page 73282]]

services provided to a Medicare beneficiary during an RHC or FQHC
visit. Any such additional services would not be considered RHC or FQHC
services, but rather, would be considered the practitioner's services.
If a patient is admitted as an inpatient, the additional services
payable under Part B are subject to the 3-day payment window. With
regard to the comment suggesting that we adopt the definition of
``free-standing facility'' in lieu of the term wholly owned or wholly
operated entity, we believe the reference under section 1886(a)(4) of
the Act to ``an entity wholly owned or operated by the hospital'' was
intended to identify entities that have a significant degree of
integration with the hospital but, for whatever reason, are not
considered provider-based. As such, we do not believe it would be
appropriate ``to use the term ``free-standing facility'' to describe
wholly owned or wholly operated entities. As defined in Sec. 412.2
(c)(5)(i), an entity is considered wholly owned or wholly operated by
the hospital, and preadmission services furnished by the entity are
subject to 3-day payment window policy, if the hospital is the sole
owner of the entity or if the hospital has exclusive responsibility for
conducting and overseeing the entity's routine operations, regardless
of whether the hospital also has policymaking authority ``over the
entity.'' We continue to believe that this is the appropriate
description of entity wholly owned or operated by the hospital.
Comment: Several commenters requested that CMS distinguish wholly
owned and wholly operated physician practices from ``provider based''
physician practices and confirm that the proposed 3-day window payment
policy makes no change in how provider-based physician practices
currently bill Medicare for physician and non-physician practitioner
services.
Response: As described previously, we believe the statutory
reference in section 1886(a)(4) to an entity wholly owned or wholly
operated by the hospital was not intended to identify provider-based
entities. Rather, we believe the language was intended to identify
entities that have a significant degree of integration with the
hospital but, for whatever reason, are not considered to have provider-
based status. As previously discussed, a hospital must include on the
hospital claim for a Medicare beneficiary's inpatient stay, the
technical portion of any outpatient diagnostic services and admission-
related nondiagnostic services provided by the hospital, or by an
entity that is wholly owned or wholly operated by the hospital, during
the payment window. Entities with provider-based status are considered
to be part of the hospital and the hospital should already be including
costs of related outpatient services provided within the 3-day payment
window on the claim for the inpatient admission. We agree with the
commenters that the proposed 3-day window payment policy, adopted in
this final rule with comment period, makes no change in how provider-
based physician practices currently bill Medicare for the professional
work of physician and non-physician practitioner services Those
services are not subject to the 3-day payment window policy.
Comment: A number of commenters wanted CMS to further define
admission-related nondiagnostic services. Some commenters encouraged
CMS to return to the definition of admission-related that requires an
exact match on the ICD-9-CM diagnosis codes for the inpatient and
outpatient claims. They suggested that if an exact match is no longer
an appropriate definition of nondiagnostic admission-related, CMS
should develop some equally clear and easy standard. Some commenters
went on to suggest that CMS identify all the nondiagnostic services
that should be considered ``clinically related'' to an inpatient
admission and subject to the 3-day payment window payment policy.
Response: We have stated that ``an outpatient service is related to
the admission if it is clinically associated with the reason for a
patient's inpatient admission'' (75 FR 50347). We believe that
determining whether an outpatient service is ``clinically related''
requires knowledge of the specific clinical circumstances surrounding a
patient's inpatient admission and can only be determined on a case by
case basis. In the August 16, 2010 interim final rule with comment
period (75 FR 50348), we indicated that we would develop a process for
hospitals to attest on the outpatient hospital claim that nondiagnostic
services are not clinically related to the admission when the hospital
believes that certain provided outpatient services are unrelated. We
discuss that mechanism for hospital billing of unrelated nondiagnostic
services in the FY 2012 final rule (76 FR 51708). We also indicated
that a hospital would be required to maintain documentation in the
beneficiary's medical record to support their claim that the outpatient
nondiagnostic services are unrelated to the beneficiary's inpatient
admission. Because the 3-day payment window applies equally to services
provided by the hospital or the hospital's wholly owned or wholly
operated entities, we would expect hospitals to make the same
determination and documentation for services provided by wholly owned
or wholly operated entities. Therefore, we expect hospitals and their
wholly owned and wholly operated entities to ascertain whether
nondiagnostic services provided in the 3-day payment window are
clinically related to the subsequent inpatient admission given the
context of the patient's unique clinical circumstances. If the
nondiagnostic services are related, we expect the wholly owned or
wholly operated entity to use the appropriate payment modifier,
discussed in greater detail under section V.B.3.a of this final rule
with comment period, to indicate that services are clinically related
to the subsequent inpatient admission. If the nondiagnostic services
are not clinically related, we would expect the hospital or wholly
owned or wholly operated entity to document the reason those services
are not clinically related in the beneficiary's medical record, and we
would expect the wholly owned or wholly operated entity to receive the
full nonfacility payment for provided services. We note that all
diagnostic services provided in the 3-day payment window prior to an
inpatient admission are subject to the 3-day payment window policy.
a. Payment Methodology
In the proposed rule, we indicated that we would establish a new
Medicare HCPCS modifier that will signal claims processing systems to
provide payment to wholly owned or wholly operated entities at the
facility rate. We proposed to pay only the Professional Component (PC)
for CPT/HCPCS codes with a Technical Component (TC)/PC split that are
provided in the 3-day (or, in the case of non-IPPS hospitals, 1-day)
payment window in a hospital's wholly owned or wholly operated
physician practice. We proposed to pay at the facility rate for codes
without a TC/PC split to avoid duplicate payment for the technical
resources required to provide the preadmission services as those costs
will be included on the hospital's inpatient claim for the related
inpatient admission. The facility rate includes physician work,
malpractice, and the facility practice expense, which is a payment to
support services provided by the physician office when a physician
treats patients at another facility. We proposed to modify our
regulation at Sec. 414.22(b)(5)(i), which defines the sites of service
that result in a facility practice expense RVU for payment, to add an
entity that is wholly

[[Page 73283]]

owned or wholly operated by a hospital, as defined in Sec.
412.2(c)(5)(ii) when that entity furnishes preadmission services.
We indicated in the proposed rule that we would establish a new
HCPCS modifier through sub-regulatory guidance. We said that we would
require that this modifier be appended to the physician preadmission
diagnostic and admission-related nondiagnostic services, reported with
HCPCS codes, which are subject to the 3-day payment window policy. We
stated that each wholly owned or wholly operated physician's practice
would need to manage its billing processes to ensure that it billed for
its physician services appropriately when a related inpatient admission
has occurred.
We stated that the hospital will be responsible for notifying the
practice of related inpatient admissions for a patient who received
services in a wholly owned or wholly operated physician practice within
the 3-day (or, when appropriate, 1-day) payment window prior to the
inpatient stay. We proposed to make the new modifier effective for
claims with dates of service on or after January 1, 2012, and we
proposed that wholly owned or wholly operated physician practices would
receive payment at the facility rate for related nondiagnostic services
and receive payment for only the professional component for diagnostic
services effective for services furnished on or after January 1, 2012.
Comment: Many commenters expressed concern that CMS has ``erred in
their assumptions'' that the costs of preadmission services provided in
entities wholly owned or wholly operated by a hospital are ``costs of
the hospital.'' A few commenters suggested that it would be unlikely
that outpatient visits furnished in a wholly owned or wholly operated
entity would be documented in the medical record or captured in the
hospital's accounting system before the inpatient admission and
therefore, would not be properly included on the hospital's cost
report. These commenters requested that CMS provide specific
instructions on how hospitals should include the technical component
costs of the physician office visit on hospital cost reports. Finally,
a few commenters requested clarification on whether the facility cost
involved with services furnished at a wholly owned or wholly operated
entity are taken into account in determining prospective hospital
inpatient payment under the IPPS. Another commenter asserted that even
if the hospital includes charges for the wholly owned or wholly
operated entity on the hospital's inpatient claim, the hospital's
inpatient payment will not reflect this change until the costs are
reflected in historical data used to calculate the prospective
inpatient payment rates.
Response: We expect hospitals to include the technical component
portion of all diagnostic and clinically related nondiagnostic services
furnished by wholly owned or wholly operated entities in the 3-day
payment window on their cost report. Hospitals should accumulate the
costs incurred and the adjustments required for these services and
report as costs with related organizations on the Medicare cost report.
The costs for these services should be reported on the Medicare cost
report as routine and/or ancillary accordingly, to achieve a proper
matching of revenues and expenses. Each year, the IPPS uses the most
recent full year of cost report data available to establish the
relative cost-based weights. For example, for the FY 2012 IPPS update,
we used data from cost reports that began during FY 2009, that is, on
or after October 1, 2008 and before October 1, 2009, in computing the
relative weights.
We expect that the cost of diagnostic and related nondiagnostic
services that are provided in wholly owned or wholly operated entities
during the 3-day payment window will be included in the data used to
determine future IPPS relative payment weights. This cycle of having
costs and charges reflected in the payment rates for future years is
part of the longstanding methodology behind setting hospital
prospective payment rates. Hospitals should already be including the
costs of diagnostic services furnished by wholly owned or wholly
operated entities on their cost report because the 3-day payment window
policy for diagnostic services is longstanding. Furthermore, we note
that the inclusion of charges for diagnostic and related nondiagnostic
services that are provided in wholly hospital owned or wholly operated
entities during the 3-day payment window on an inpatient claim could
increase the probability that the claim for the inpatient admission
would garner outlier payments.
Comment: Many commenters requested that CMS delay implementation a
full year so that hospitals and wholly owned or wholly operated
entities may appropriately develop internal claims processing
procedures to ensure hospital/entity coordination when billing services
subject to the payment window. Many commenters objected to CMS's
proposal to allow each wholly owned or wholly operated physician
practice to manage its billing practices and requested additional
guidance from CMS to ensure that they bill appropriately and for
requiring that the hospital be responsible for notifying the physician
practice of an inpatient admission. Several commenters noted that
physician practices may use independent software systems for patient
registration, scheduling, billing, and accounting and went on to stress
that the coordination efforts to ensure appropriate billing will be a
substantial burden on both the hospital and the physician practice and
that CMS is essentially asking practices to hold claims for all
Medicare encounters at least 7 to 10 days after every office service is
rendered.
Response: We appreciate commenters concerns for implementation and
understand that each wholly owned or operated entity will face unique
operational challenges as they incorporate the 3-day payment window
policy into billing practices. While we understand that some entities
may need to hold claims for a longer time period to comply with the
policy, we note that the 3-day payment window policy is a hospital
requirement. We believe that hospitals can assist their wholly owned or
wholly operated entities in managing the unique aspects of billing for
services subject to the payment window policy. In light of the
consistent message from commenters that the billing and accounting
systems are not yet coordinated, we are concerned that many hospitals
and their wholly owned or wholly operated entities will not be able to
establish the internal procedures and communication pathways needed to
comply with the law by January 1, 2012. For this reason we will delay
implementation until July 1, 2012.
Beginning on January 1, 2012, CMS payment modifier PD (Diagnostic
or related nondiagnostic item or service provided in a wholly owned or
wholly operated entity to a patient who is admitted as an inpatient
within 3 days, or 1 day) will be available, and wholly owned or wholly
operated entities should begin to append the modifier to claims subject
to the 3-day payment window at that time. We expect that hospitals and
their wholly owned or wholly operated entities will continue working
toward establishing internal processes to ensure compliance with
section 102 of PACMBPRA as quickly as possible to achieve coordinated
billing for services subject to the 3-day payment window policy. We
will require hospitals and their wholly owned or wholly operated
entities to fully coordinate their billing and to properly bill for
diagnostic and related nondiagnostic services subject to the

[[Page 73284]]

3-day payment window policy beginning July 1, 2012. We encourage
hospitals to adjust their internal processes as quickly as possible to
ensure a smooth implementation.
With regard to the comment that the hospital should not need to
notify its wholly owned or wholly operated entities, we note that the
3-day payment policy implemented on October 1, 1991, is an existing
statutory requirement located in the statutory definition of hospital
operating costs, and that the purpose of this final rule is to clarify
the implementation of the policy when a entity that is wholly owned or
wholly operated by a hospital furnishes preadmission diagnostic and
related nondiagnostic services to a patient who is later admitted as an
inpatient within the payment window. In the FY 2012 IPPS final rule we
responded to a comment on this topic, stating that because the hospital
owns the facility, it is our expectation that the hospital will be able
to coordinate and track the patient activity of the facilities it owns.
The full adoption of electronic medical record should help facilitate
coordination and tracking of patients within and among hospital systems
(76 FR 51709).
Comment: One commenter asked if the ``minimally necessary'' privacy
standard required by Health Insurance Portability and Accountability
Act (HIPAA) would be met if hospital registration staff could access
the patient database at a physician's office.
Response: We believe that neither hospital nor entity staff would
violate a patient's privacy by notifying each other about admissions or
furnished services for purposes of coordinating billing under the 3-day
payment window policy. Wholly owned or wholly operated entities can
exchange this information for billing purposes. The HIPAA regulations
at 45 CFR Sec. Sec. 164.502 and 164.506 allow a covered entity to use
or disclose protected health information for ``treatment, payment, or
health care operations.'' HIPAA covered entities should be able to
carry out these requirements in accordance with those provisions.
Comment: A few commenters expressed concern that if a hospital
fails to notify the wholly owned or operated practice of an inpatient
admission, and if the practice submits the claim to Medicare without
the appropriate modifier, the practice risks an overpayment or charges
of filing a false claim.
Response: We expect hospitals and wholly owned or operated entities
to ensure that claims submitted to Medicare for payment are in
compliance with Medicare policy. We are delaying our proposed
implementation from January 1, 2012 to July 1, 2012 to give hospitals
and their wholly owned or wholly operated entities sufficient time to
develop a compliant billing system and to develop a coordinated billing
practice to ensure correct use of the new payment modifier. We would
expect entities that find they have billed in error to submit a
replacement claim, but we would expect this to be a rare occurrence.
Comment: A few commenters inquired about physicians billing for
subordinate personnel under an ``incident to'' arrangement for purposes
of the 3-day payment window policy in the nonfacility setting.
Commenters also asked if drug and biological therapies were considered
services subject to the payment window policy, and a few commenters
specifically asked if CMS will deny Medicare payments for the TC for
any diagnostic imaging or diagnostic testing provided within the 3-days
of a hospital admission.
Response: The 3-day payment window makes no change to how an entity
bills for physician services in the nonfacility setting. If, for
example, an admitted hospital inpatient received services at a wholly
owned or wholly operated entity prior to his admission, and some of
those services were delivered by a nurse incident to the physician's
service, the physician would still bill for those services under the 3-
day payment window policy. The 3-day payment window applies to all
diagnostic and related nondiagnostic services provided within the
window, including drug therapies and imaging services, assuming those
services are related to the inpatient admission.
We realize that the time frames associated with the global surgical
package for many surgical services could overlap with the 3-day (or 1-
day) payment window policy. Global surgical payment rules apply to
major and minor surgeries, and endoscopies. Section 40.1 of the Claims
Processing Manual (100-04 chapter 12 Physician/Nonphysician
Practitioners) defines the global surgical package. Procedures can have
a global surgical period of 0, 10, or 90-days. Generally, the global
period for major surgeries is 1 day prior to the surgical procedure and
90 days immediately following the procedure. For minor surgeries, the
global period is the day of the procedure and 10 days immediately
following the procedure.
Medicare payment for the global surgical package is based on the
typical case for a procedure, and includes preoperative visits, intra-
operative services, and complications following surgery, postoperative
visits, postsurgical pain management, supplies, and miscellaneous other
services such as dressing changes and removal of sutures or staples.
Medicare makes a single payment to the treating physician (or group
practice) for the surgical procedure and any of the pre- and post-
operative services typically associated with the surgical procedure
provided within the global surgical period (10 or 90-days). The same
section of the Claims Processing Manual (100-04 chapter 12 Physician/
Nonphysician Practitioners) also discusses the services that are not
included in payment for the global surgical period. In general, these
services are unrelated to the surgery, are diagnostic or are part of
the decision to pursue surgery, or are related to the surgery but are
so significant they warrant an additional payment. Some examples of
services not included in payment for the global surgical period include
the initial evaluation of the problem by the surgeon to determine the
need for major surgery; services of another physician; visits unrelated
to the diagnosis for the surgical procedure unless the visits occur due
to surgical complications; treatment that is not part of the normal
recovery from surgery; diagnostic tests; distinct surgical procedures
that are not re-operations; treatment for postoperative complications
that require a return trip to the operating room; critical care
unrelated to the surgery where a seriously injured or burned patient is
critically ill and requires the constant attention of the physician;
and immunosuppressive therapy for organ transplants.
The time frames for application of the 3-day payment window and the
global surgical package could overlap. In some cases, the application
of the 3-day payment window is straightforward. For example, a patient
could have minor surgery in a wholly owned or wholly operated
physician's office and, due to complications, need to be admitted
within 3-days to an acute care hospital paid under the IPPS for follow-
up surgery. Under the 3-day payment window policy, the practice expense
portion of the initial surgery and any pre- and post-operative visits
associated with the surgery (both those subject to the global surgery
rules and separate diagnostic procedures) should be included on the
hospital's Part A claim for the inpatient admission. The wholly owned
or wholly operated physician practice would bill for the surgery
performed for the inpatient as well as for the initial surgical
procedure performed in the physician practice that

[[Page 73285]]

started the global period. The wholly owned or wholly operated
physician practice would apply the HCPCS modifier to indicate that the
3-day payment window applies to each of those services. Medicare would
pay the physician practice for the initial surgical procedure and the
related procedure following inpatient admission at the facility rate.
Finally, any preadmission diagnostic tests conducted by the wholly
owned or wholly operated physician practice in the 3-day payment window
would be included on the physician practice's claim with the HCPCS
modifier, and Medicare would pay the wholly owned or wholly operated
physician practice only the professional portion of the service.
However, the situation could arise where a global surgical period
overlaps with the 3-day payment window, but the actual surgical
procedure with the global surgical package occurred before the 3-day
payment window. In this case, several post-operative services, such as
follow-up visits, would occur during the global period, but the surgeon
would not bill separately for those services. We proposed that services
with a global surgical package would be subject to the 3-day payment
window policy when wholly owned or wholly operated physician practices
furnish preadmission diagnostic and nondiagnostic services that are
clinically related to an inpatient admission when the date of the
actual surgical procedure falls within the 3-day payment window policy.
However, when the actual surgical procedure for a service that has a
global surgical package is furnished on a date that falls outside the
3-day payment window, the 3-day window policy would not apply. We do
not believe it would be appropriate to require the wholly owned or
wholly operated physician practice to unbundle the post operative
services associated with the global surgical procedure so that the
practice expense portion of those services could be paid under the PFS
at the facility rate and the costs included on the hospital's inpatient
claim. However, any service that a wholly owned or wholly operated
physician practice would bill separately from the global surgical
package, such as a separate initial evaluation of a problem by the
surgeon to determine the need for surgery or separate diagnostic tests,
would continue to be subject to the 3-day payment window policy.
We did not receive any comments on our proposal to include
diagnostic and related nondiagnostic services with a global surgical
package in the 3-day payment window when the date of the surgical
procedure falls within the 3 day payment window, and we are finalizing
our policy without modification.
b. Identification of Wholly Owned or Wholly Operated Physician
Practices
The 1998 final rule (63 FR 6864) defined wholly owned or wholly
operated as a hospital's direct ownership or control over another
entity's operations. In that rule, we added the regulation at 42 CFR
412.2(c)(5)(i) which states, ``An entity is wholly owned by the
hospital if the hospital is the sole owner of the entity. An entity is
wholly operated by a hospital if the hospital has exclusive
responsibility for conducting and overseeing the entity's routine
operations, regardless of whether the hospital also has policymaking
authority over the entity.''
Physician practices self-designate whether they are owned or
operated by a hospital during the Medicare enrollment process.
Currently, a physician practice enrolls in Medicare with CMS form
``855B.'' This enrollment form reports pertinent practice information
such as ownership, organizational structure, and operational duties.
Likewise, hospitals enroll in Medicare using CMS form ``855A'' also
reporting pertinent hospital information such as ownership,
organizational structure and operational duties. Medicare
Administrative Contractors update files of physician practices that are
owned and operated by hospitals, and the files of hospitals that own
those physician practices, in their claims processing systems and use
that data to confirm an ownership relationship for identified physician
practices. We will investigate the feasibility of establishing national
system edits within the Common Working File to fully identify whether a
physician practice is wholly owned or wholly operated by a hospital and
to associate such practice with its affiliated hospital.
Comment: Many commenters requested further clarification of the
definition of ``wholly owned or wholly operated.'' A few commenters
encouraged CMS to adopt the definition of ``wholly-owned'' as the term
is described in 42 CFR 413.65(e)(1) which states ``The business
enterprise is 100 percent owned by the main provider'' while other
commenters requested examples of ownership interest and requested that
CMS display a list of hospitals and their wholly owned or wholly
operated entities. Other commenters encouraged CMS to modify the
definition of ``wholly operated'' to provide more granularity than
simply stating ``conducting and overseeing the entity's routine
operations.''
Response: While we appreciate commenters' suggestions on revising
the definition of wholly owned or wholly operated, section 102 of the
PACMBPRA only clarified the scope of services furnished to Medicare
beneficiaries within the 3-days (or, in the case of a hospital that is
not a subsection (d) hospital, during the 1 day) preceding an inpatient
admission that should be considered ``operating costs of inpatient
hospital services'' and, therefore, included in the hospital's
inpatient payment. In describing the scope of services subject to the
3-day window policy, section 102 did not change the existing statutory
reference to ``an entity wholly owned or operated by the hospital.'' We
have had in place longstanding definitions of these terms and,
therefore, we did not propose a change to our longstanding definitions.
We continue to believe that our longstanding definitions are consistent
with the statute and appropriately descriptive for this purpose.
Therefore, we will retain our current definitions.
The 3-day payment window policy has been applicable for all
preadmission diagnostic and related nondiagnostic services provided by
wholly owned or wholly operated entities for over a decade. In 1998, we
clarified the definition of ``wholly owned'' and ``wholly operated,''
and we responded to comments on specific owner and operator
relationships (63 FR 6866). In this rule, we discussed several
different illustrative examples of ownership and operational interests
and how the 3-day payment window will apply in each circumstance. These
examples provide guidelines to help each entity determine whether they
believe they are wholly owned or wholly operated by a hospital. For
ease of reference, we are reprinting those responses here:
Arrangement: A hospital owns a physician clinic or a
physician practice that performs preadmission testing for the hospital.
Policy: A hospital-owned or hospital operated physician clinic or
practice is subject to the payment window provision. The technical
portion of preadmission diagnostic services performed by the physician
clinic or practice must be included in the inpatient bill and may not
be billed separately. A physician's professional service is not subject
to the window.
Arrangement: Hospital A owns Hospital B, which in turn
owns Hospital C. Does the payment window apply if preadmission services
are performed at Hospital C and the patient is admitted to Hospital A?
Policy: Yes. We would consider that Hospital A owns both

[[Page 73286]]

Hospital B and Hospital C, and the payment window would apply in this
situation.
Arrangement: Corporation Z owns Hospitals A and B. If
Hospital A performs preadmission services and the patient is
subsequently admitted as an inpatient to Hospital B, are the services
subject to the payment window? Policy: No. The payment window does not
apply to situations in which both the admitting hospital and the entity
that furnishes the preadmission services are owned by a third entity.
The payment window includes only those situations in which the entity
furnishing the preadmission services is wholly owned or operated by the
admitting hospital itself.
Arrangement: A hospital refers its patient to an
independent laboratory for preadmission testing services. The
laboratory does not perform testing by arrangement with the admitting
hospital. Are the laboratory services subject to the payment window
provisions? Policy: No. The payment window does not apply to situations
in which the admitting hospital is not the sole owner operator of the
entity performing the preadmission testing.
Arrangement: Hospital A is owned by Corporations Y and Z
in a joint venture. Corporation Z is the sole owner of Hospital B. Does
the payment window apply when one of these hospitals furnishes
preadmission services and the patient is admitted to the other
hospital? Policy: No. As noted previously, the payment window provision
does not apply to situations in which both the admitting hospital and
the entity that furnishes the preadmission services are owned or
operated by a third entity.
Arrangement: A clinic is solely owned by Corporation Z and
is jointly operated by Corporation Z and Hospital A. Does the payment
window apply if preadmission services are furnished by the clinic and
the patient is subsequently admitted to Hospital A? Policy: No. The
payment window does not apply because Hospital A is neither the sole
owner nor operator of the clinic.
Comment: Some commenters caution CMS about using the 855 form as a
definitive source of information on the owner and operator status of a
physician practice or other entity stating, correctly, that the 855
forms do not indicate whether a practice is wholly owned or wholly
operated. Commenters suggest that CMS will need a different mechanism
to identify ownership interests.
Response: We agree that the 855 forms are not a complete record of
wholly owned or wholly operated status, but we believe they may furnish
contractors with some information to indicate entities with wholly
owned or wholly operated status. We encourage entities to contact their
Medicare claims processing contractor to update any 855 information
that may be incomplete or out of date.
After consideration of the public comments we received, we are
finalizing our proposal with clarification of the term ``entity'' and a
modification of the implementation date from January 1, 2012 to July 1,
2012. The 3-day payment window policy applies to nondiagnostic services
that are clinically related to an inpatient admission when preadmission
services are furnished in a wholly owned or wholly operated entity and
the patient is later admitted as an inpatient within the payment
window. In such cases, Medicare will make payment for the preadmission
services under the physician fee schedule at the facility rate.
Specifically, a new Medicare HCPCS modifier PD will be available to
wholly owned or wholly operated entities beginning January 1, 2012 and
may be appended to Part B claims lines to identify preadmission
services that are subject to the 3-day window policy. However, we will
not formally implement the PD modifier for use by wholly hospital owned
or wholly operated entities until July 1, 2012 in order to provide
wholly owned or operated entities sufficient time to coordinate their
billing practices for clinically related nondiagnostic preadmission
services. The PD modifier will signal claims processing systems to
provide payment only for the PC for CPT/HCPCS codes with a TC/PC split
and to pay services without a PC/TC split at the facility rate when
they are provided in the 3-day (or, in the case of non-IPPS hospitals,
1-day) payment window. The facility rate will be paid for codes without
a TC/PC split to avoid duplicate payment for the technical resources
required to provide the services. We agree with commenters that the
statutory term ``entity'' is broader than physician practices or
clinics. Accordingly, we are modifying our proposal to revise our
regulatory definition of facility practice expense RVUs at section 42
CFR 414.22 by revising paragraph (b)(5)(i)(A) to include a wholly owned
or wholly operated entity. In addition, the technical costs of
diagnostic and related nondiagnostic services of the wholly owned or
wholly operated entity subject to the 3-day payment window shall be
included on the hospital's inpatient claim for the related inpatient
admission and reflected appropriately on the hospital cost report. The
definitions of ``wholly owned'' and ``wholly operated'' continue to be
those set forth in the 1998 IPPS final rule (63 FR 6864), and this
policy makes no change to the requirement that all diagnostic services
furnished during the 3-day payment window must be included on the
hospital claim for the inpatient admission.

C. Therapy Services--Outpatient Therapy Caps for CY 2012

Section 1833(g) of the Act (as amended by section 4541 of the
Balanced Budget Act of 1997) applies an annual, per beneficiary
combined cap on expenses incurred for outpatient physical therapy and
speech-language pathology services under Medicare Part B. A separate
but identical cap also applies for outpatient occupational therapy
services under Medicare Part B. The caps apply to expenses incurred for
therapy services furnished in outpatient settings, other than in an
outpatient hospital setting which is described under section
1833(a)(8)(B) of the Act. The caps were in effect during 1999, from
September 1, 2003 through December 7, 2003, and continuously beginning
January 1, 2006. The caps are a permanent provision, that is, there is
no end date specified in the statute for therapy caps.
Beginning January 1, 2006, the DRA provided for exceptions to the
therapy caps until December 31, 2006. Provisions for the exceptions
process for therapy caps was further extended through December 31, 2010
pursuant to four subsequent amendments (in MEIA-TRHCA, MMSEA, MIPPA,
and Affordable Care Act). Section 1833(g)(5) of the Act (as amended by
section 104 of the MMEA) extended the exceptions process for therapy
caps through December 31, 2011.
The therapy cap amounts are required to be updated each year based
on the MEI. The updated cap amount for CY 2012 is computed by
multiplying the cap amount for CY 2011, which is $1,870, by the MEI for
CY 2012, and rounding to the nearest $10. This amount is added to the
CY 2011 cap to obtain the CY 2012 cap. Since the MEI for CY 2012 is 0.6
percent, the therapy cap amount for CY 2012 is $1,880.
Our authority to provide for exceptions to therapy caps
(independent of the statutory exclusion for outpatient hospital therapy
services) will expire on December 31, 2011, unless the Congress acts to
extend it. If the current exceptions process expires, the caps will be
applicable in accordance with

[[Page 73287]]

the statute, except for services furnished and billed by outpatient
hospital departments.

IV. Other Provisions of the Final Rule

A. Part B Drug Payment: Average Sales Price (ASP) Issues

Section 1847A of the Act requires use of the average sales price
(ASP) payment methodology for payment for drugs and biologicals
described in section 1842(o)(1)(C) of the Act furnished on or after
January 1, 2005. The ASP methodology applies to most drugs furnished
incident to a physician's service, drugs furnished under the DME
benefit, certain oral anti-cancer drugs, and oral immunosuppressive
drugs.
1. Widely Available Market Price (WAMP)/Average Manufacturer Price
(AMP)
Section 1847A(d)(1) of the Act states that ``The Inspector General
of HHS shall conduct studies, which may include surveys, to determine
the widely available market prices (WAMP) of drugs and biologicals to
which this section applies, as the Inspector General, in consultation
with the Secretary, determines to be appropriate.'' Section 1847A
(d)(2) of the Act states, ``Based upon such studies and other data for
drugs and biologicals, the Inspector General shall compare the ASP
under this section for drugs and biologicals with--
The widely available market price (WAMP) for these drugs
and biologicals, (if any); and
The average manufacturer price (AMP) (as determined under
section 1927(k) (1) of the Act) for such drugs and biologicals.''
Section 1847A(d)(3)(A) of the Act states that, ``The Secretary may
disregard the ASP for a drug or biological that exceeds the WAMP or the
AMP for such drug or biological by the applicable threshold percentage
(as defined in subparagraph (B)).'' Section 1847A(d)(3)(C) of the Act
states that if the Inspector General (OIG) finds that the ASP for a
drug or biological is found to have exceeded the WAMP or AMP by this
threshold percentage, the OIG ``shall inform the Secretary (at such
times as the Secretary may specify to carry out this subparagraph) and
the Secretary shall, effective as of the next quarter, substitute for
the amount of payment otherwise determined under this section for such
drug or biological, the lesser of--
The widely available market price for the drug or
biological (if any); or
103 percent of the average manufacturer price as
determined under section 1927(k)(1) of the Act for the drug or
biological.''
The applicable threshold percentage is specified in section
1847A(d)(3)(B)(i) of the Act as 5 percent for CY 2005. For CY 2006 and
subsequent years, section 1847A(d)(3)(B)(ii) of the Act establishes
that the applicable threshold percentage is ``the percentage applied
under this subparagraph subject to such adjustment as the Secretary may
specify for the WAMP or the AMP, or both.'' In the CY 2006 (70 FR
70222), CY 2007 (71 FR69680), CY 2008 (72 FR 66258), CY 2009 (73 FR
69752), and CY 2010 (74 FR 61904) PFS final rules with comment period,
we specified an applicable threshold percentage of 5 percent for both
the WAMP and AMP. We based this decision on the fact that data was too
limited to support an adjustment to the current applicable threshold
percentage.
For CY 2011, we proposed to specify two separate adjustments to the
applicable threshold percentages. When making comparisons to the WAMP,
we proposed the applicable threshold percentage to remain at 5 percent.
The applicable threshold percentage that we proposed for the AMP is
addressed later in this section of the preamble. The latest WAMP
comparison was published in 2008, and the OIG is continuing to perform
studies comparing ASP to WAMP. Based on available OIG reports that have
been published comparing WAMP to ASP, we did not have sufficient
information at the time to determine that the 5 percent threshold
percentage is inappropriate and should be changed. As a result, we
believed that continuing the 5 percent applicable threshold percentage
for the WAMP was appropriate for CY 2011. Therefore, we proposed to
revise Sec. 414.904(d)(3) to specify the 5 percent WAMP threshold for
CY 2011. After soliciting and reviewing comments, we finalized our
proposal to continue the 5 percent WAMP threshold for CY 2011 (75 FR
73469).
For CY 2012, we again proposed to specify a separate adjustment to
the applicable threshold percentage for WAMP comparisons. When making
comparisons to the WAMP, we proposed the applicable threshold
percentage to remain at 5 percent. We still do not have sufficient
information to determine that the 5 percent threshold percentage is
inappropriate and, as a result, we believe that continuing the 5
percent applicable threshold percentage for the WAMP is appropriate for
CY 2012. As we noted in the CY 2011 PFS final rule with comment period
(75 FR 73470), we understand that there are complicated operational
issues associated with the WAMP-based substitution policy. We continue
to proceed cautiously in this area. We remain committed to providing
stakeholders, including providers and manufacturers of drugs impacted
by potential price substitutions with adequate notice of our intentions
regarding such, including the opportunity to provide input with regard
to the processes for substituting the WAMP for the ASP.
Comment: Several commenters supported maintaining the WAMP
threshold at 5 percent, and not making price substitutions based on
WAMP data until a framework has been developed, proposed, and
finalized. Commenters agreed the price substitutions based on WAMP
should be treated separately from substitutions based on AMP.
Commenters also cited concerns about the lack of a specific definition
for WAMP that would allow for the consistent collection of data and
concerns about the time periods used by the OIG in their comparisons as
reasons to further delay price substitutions based on WAMP. One
commenter suggested incorporating a final check against WAMP into the
AMP substitution policy that is discussed in the following sections.
Response: We agree with commenters concerns that the WAMP-based
price substitutions currently are problematic. Unlike the OIG's AMP
studies, the published WAMP studies do not show whether the prices for
the examined groups of drugs consistently exceed the applicable
percentage threshold across multiple quarters like the AMP studies.
Because of the lack of data regarding WAMP to ASP comparisons and the
dissimilar approaches in OIG studies, we will continue to treat WAMP
separately from AMP in our ASP price substitution policies, and we will
not implement a price substitution policy based on the comparison of
WAMP to ASP at this time. For this reason, we decline to adopt the
commenter's suggestion that we use WAMP as a final check on AMP-based
price substitutions, which are discussed later in this rule. However,
we will continue to work with the OIG and stakeholders to evaluate the
relationship between WAMP and ASP, and based on comments, we will
maintain the WAMP threshold at 5 percent. We will consider proposing a
policy for the substitution of WAMP at a later date.
After reviewing the comments, we will continue to maintain separate
price substitution policies for comparisons based on WAMP and AMP. We
are finalizing our proposal to continue the 5 percent WAMP threshold
for CY2012

[[Page 73288]]

and regulation text at 42 CFR 414.904(d)(3)(iv).
2. AMP Threshold and Price Substitutions
As mentioned previously in section V.A.1. of this final rule with
comment period, when making comparisons of ASP to AMP, the applicable
threshold percentage for CY 2005 was specified in statute as 5 percent.
Section 1847A(d)(3) of the Act allows the Secretary to specify
adjustments to this threshold percentage for years subsequent to 2005.
For CY 2006 (70 FR 70222), CY 2007 (71 FR 69680), CY 2008 (72 FR
66258), CY 2009 (73 FR 69752), and CY 2010 (74 FR 61904), the Secretary
made no adjustments to the threshold percentage; it remained at 5
percent.
For CY 2011, we proposed, with respect to AMP substitution, to
apply the applicable percentage subject to certain adjustments such
that substitution of AMP for ASP will only be made when the ASP exceeds
the AMP by 5 percent in two consecutive quarters immediately prior to
the current pricing quarter, or three of the previous four quarters
immediately prior to the current quarter. We further proposed to apply
the applicable AMP threshold percentage only for those situations where
AMP and ASP comparisons are based on the same set of National Drug
Codes (NDCs) for a billing code (that is, ``complete'' AMP data).
Furthermore, we proposed a price substitution policy to substitute
103 percent of AMP for 106 percent of ASP for both multiple and single
source drugs and biologicals as defined respectively at section
1847(A)(c)(6)(C) and (D) of the Act. Specifically, we proposed that
this substitution--
Would occur when the applicable threshold percentage has
been met for two consecutive quarters immediately prior to the current
pricing quarter, or three of the previous four quarters immediately
prior to the current quarter;
Would permit for a final comparison between the OIG's
volume-weighted 103 percent of AMP for a billing code (calculated from
the prior quarter's data) and the billing code's volume weighted 106
percent ASP (as calculated by CMS for the current quarter) to avoid a
situation in which the AMP-based price substitution would exceed that
quarter's ASP; and
That the duration of the price substitution would last for
only one quarter.
We also sought comment on other issues related to the comparison
between ASP and AMP, such as the following--
Any effect of definitional differences between AMP and
ASP, particularly in light of the definition of AMP as revised by
section 2503 of the Affordable Care Act;
The impact of any differences in AMP and ASP reporting by
manufacturers on price substitution comparisons; and
Whether and/or how general differences and similarities
between AMP and manufacturer's ASP would affect comparisons between
these two.
In the CY 2011 PFS final rule with comment, we did not finalize our
proposed adjustments to the 5 percent AMP threshold or our price
substitution policy because of legislative changes, regulatory changes,
and litigation that affected this issue. Specifically--
A preliminary injunction issued by the United States
District Court for the District of Columbia in National Association of
Chain Drug Stores et al v. Health and Human Services, Civil Action No.
1:07-cv-02017 (RCL) was still in effect;
We were continuing to expect to develop regulations to
implement section 2503 of the Affordable Care Act, which amended the
definition of AMP, and section 202 of the Federal Aviation
Administration Air Transportation Modernization and Safety Improvement
Act (Pub. L. 111-226) as enacted on August 10, 2010, which further
amended section 1927(k) of the Act; and
We proposed to withdraw certain provisions of the AMP
final rule published on July 17, 2007 (75 FR 54073).
As a result, we finalized the portion of our proposal that sets the
AMP threshold at 5 percent for CY 2011 and revised the regulation text
accordingly (75 FR 73471).
The preliminary injunction was vacated by the United States
District Court for the District of Columbia on December 15, 2010.
Currently, we continue to expect that regulations to implement section
2503 of the Affordable Care Act and section 202 of the Federal Aviation
Administration Air Transportation Modernization and Safety Improvement
Act will be developed. However, these statutory amendments became
effective on October 1, 2010 without regard to whether or not final
regulations to carry out such amendments have been promulgated by such
date. Moreover, our Medicaid final rule published on November 15, 2010
finalized regulations requiring manufacturers to calculate AMP in
accordance with section 1927(k)(1) of the Act (75 FR 69591). Since
statutory and regulatory provisions exist and are currently utilized by
manufacturers for the calculation and submission of AMP data, we
revisited the AMP threshold and price substitution issues.
a. AMP Threshold
Section 1847A(d)(3) of the Act allows the Secretary to specify
adjustments to the AMP threshold percentage for years subsequent to
2005, and to specify the timing for any price substitution. Therefore,
for CY 2012, with respect to AMP substitution, we proposed (76 FR
42829) to apply the applicable percentage subject to certain
adjustments. Specifically, a price substitution of AMP for ASP will be
made only when the ASP exceeds the AMP by 5 percent in two consecutive
quarters immediately prior to the current pricing quarter, or three of
the previous four quarters immediately prior to the current quarter.
In general, the ASP methodology reflects average market prices for
Part B drugs for a quarter. The ASP is based on the average sales price
to all purchasers for a calendar quarter. The AMP, in turn, primarily
represents the average price paid by wholesalers for drugs distributed
to retail community pharmacies and by retail community pharmacies that
purchase drugs directly from the manufacturers, and also includes a
subset of drugs sold to other purchasers. Accordingly, while the ASP
payment amount for a billing code may exceed its AMP for that billing
code for any given quarter, this may reflect only a temporary
fluctuation in market prices that would be corrected in a subsequent
quarter. We believe this is demonstrated by how few billing codes
exceed the applicable threshold percentage over multiple quarters. For
example, in the Inspector General's report ``Comparison of Average
Sales Prices and Average Manufacturer Prices: An Overview of 2009,''
only 11 of 493 examined billing codes exceeded the applicable threshold
percentage over multiple quarters (OEI-03-10-00380). We are concerned
that substitutions based on a single quarter's ASP to AMP comparison
will not appropriately or accurately account for temporary
fluctuations. We believe that applying this threshold percentage
adjusted to reflect data from multiple quarters will account for
continuing differences between ASP and AMP, and allow us to more
accurately identify those drugs that consistently trigger the
substitution threshold and thus warrant price substitution.
We further proposed to apply the applicable AMP threshold
percentage only for those situations where AMP and ASP comparisons are
based on the same set of NDCs for a billing code (that

[[Page 73289]]

is, ``complete'' AMP data). Prior to 2008, the OIG calculated a volume-
weighted AMP and made ASP and AMP comparisons only for billing codes
with such ``complete'' AMP data. In such comparisons, a volume-weighted
AMP for a billing code was calculated when NDC-level AMP data was
available for the same NDCs used by us to calculate the volume-weighted
ASP. Beginning in the first quarter of 2008, the OIG also began to make
ASP and AMP comparisons based on ``partial'' AMP data (that is, AMP
data for some, but not all, NDCs in a billing code). For these
comparisons, the volume-weighted AMP for a billing code is calculated
even when only such limited AMP data is available. That is, the volume-
weighted AMP calculated by the Inspector General is based on fewer NDCs
than the volume-weighted ASP calculated by CMS. Moreover, volume-
weighted ASPs are not adjusted by the Inspector General to reflect the
fewer number of NDCs in the volume-weighted AMP.
Because the OIG's partial AMP data comparison did not reflect all
of the NDCs used in our volume-weighted ASP calculations, we discussed
our concern about using the volume-weighted AMP in the CY 2011 PFS
proposed rule. We believed that such AMP data may not adequately
account for market-related drug price changes and may lead to the
substitution of incomplete and inaccurate volume-weighted prices.
Payment amount reductions that result from potentially inaccurate
substitutions may impact physician and beneficiary access to drugs.
Therefore, consistent with our authority as set forth in section
1847A(d)(1) and (3) of the Act, we proposed in the CY 2011 PFS proposed
rule that the substitution of 103 percent of AMP for 106 percent of ASP
should be limited to only those drugs with ASP and AMP comparisons
based on the same set of NDCs.
In response to our CY 2011 proposed rule, the OIG changed its
methodology for ``partial'' AMP data comparisons beginning with its
report titled ``Comparison of First-Quarter 2010 Average Sales Prices
and Average Manufacturer Prices: Impact on Medicare Reimbursement for
Third Quarter 2010.'' Specifically, in addition to calculating a
volume-weighted AMP based on ``partial'' data and identifying billing
codes that exceeded the price substitution threshold, the OIG began to
replace each missing NDC-level AMP with corresponding NDC-level ASP
data. The OIG then calculated a volume-weighted AMP for the billing
code. If the volume-weighted AMP continued to exceed the price
substitution threshold, the report attributed this to an actual
difference between ASPs and AMPs in the marketplace (OEI-03-10-00440).
We appreciate that the Inspector General has acknowledged the
importance of protecting beneficiary and physician access in its
methodology change. However, section 1847(A)(d)(2)(B) of the Act
specifically indicates that the comparison be made to AMP as determined
under section 1927(k)(1) of the Act. Moreover, we continue to be
concerned that comparisons based on partial AMP data may not adequately
account for market-related drug price changes and may lead to the
substitution of incomplete and inaccurate volume-weighted prices.
Therefore, for CY 2012, we proposed to apply the applicable AMP
threshold percentage only for those situations where AMP and ASP
comparisons are based on the same set of NDCs for a billing code (that
is, ``complete'' AMP data). Furthermore, we proposed to revise Sec.
414.904(d)(3) to reflect corresponding regulatory text changes.
Comment: One commenter supported the proposal to continue the use
of a 5 percent applicable AMP threshold percentage. However, one
commenter expressed specific concerns that a 5 percent threshold might
not be accurate for CY 2012 given the changes to the statutory
definition of AMP and the lack of detailed guidance available to the
public about the reporting of AMP. Other commenters also expressed more
general concerns about what they described as potential changes to the
relationship of ASP and AMP because of the statutory changes to the
definition of AMP.
Response: We will discuss general comments on the relationship of
AMP and ASP in the following sections. With respect to the applicable
AMP threshold percentage, we have no specific information that
indicates that the threshold percentage should be modified at this time
and we agree with the comment supporting the continued use of the 5
percent threshold. The 5 percent threshold has been in place since CY
2005.
Comment: Several commenters agreed with the concept of safeguards
or limits on the application of AMP-based price substitutions. The
commenters specifically agreed with basing price comparisons (and
related calculations) on the same sets of NDCs because it is a more
exact comparison than the use of unmatched sets of NDCs and is expected
to more accurately reflect trends in the marketplace. One comment also
suggested that AMP and ASP be calculated using the same sales volumes.
Response: We will discuss comments about additional safeguards we
will use in the application of AMP based price substitutions, including
duration of the substitution, and the exclusion of codes that exceed
AMP for only one quarter in the following sections. We agree that the
use of ``complete'' AMP data is likely to provide a more accurate
comparison than the use of unmatched sets of NDCs, and we believe that
the use of ``complete'' data will result in consistent volume weighting
for ASP and AMP.
After reviewing the public comments, we are finalizing the 5
percent threshold for AMP comparisons for CY 2012 and the corresponding
regulation text at 42 CFR 414.904(d)(3)(iii) as proposed, except that
we are correcting one typographical error in which we referred to ASP
instead of AMP. We are also finalizing the proposal that specifies that
the AMP for a billing code is calculated using the same set of NDCs
used to calculate the ASP for the billing code and corresponding
regulation text at 42 CFR 414.904(d)(3)(iii)(B).
b. AMP Price Substitution
(1) Inspector General Studies
Section 1847A(d) of the Act requires the Inspector General to
conduct studies of the widely available market price for drugs and
biologicals to which section 1847A of the Act applies. However, it does
not specify the frequency of when such studies should be conducted. The
Inspector General has conducted studies comparing AMP to ASP for
essentially each quarter since the ASP system has been implemented.
Since 2005, the OIG has published 25 reports pertaining to the price
substitution issue (see Table 36), of which 23 have identified billing
codes with volume-weighted ASPs that have exceeded their volume-
weighted AMPs by the applicable threshold percentage.
BILLING CODE 4120-01-P

[[Page 73290]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.143

[[Page 73291]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.144

BILLING CODE 4120-01-C
In the quarterly report comparing AMP to ASP, titled ``Comparison
of Third-Quarter 2010 Average Sales Price and Average Manufacturer
Prices: Impact on Medicare Reimbursement for First Quarter 2011'' (OEI-
03-11-00160), the Inspector General found that of 365 billing codes
with ``complete'' AMP data in the third quarter of 2010, only 14 met
the 5 percent threshold; that is, ASP exceeded AMP by at least 5
percent. Eight of these 14 billing codes also exceeded the AMP by at
least 5 percent in one or more of the previous four quarters; only two
drugs had ASPs that exceeded the 5 percent threshold in all four
quarters under review. This Inspector General report further indicates
that, ``If reimbursement amounts for all 14 codes with complete AMP
data had been based on 103 percent of the AMPs during the first quarter
of 2011, we estimate that Medicare expenditures would have been reduced
$10.3 million in that quarter alone.'' The savings found by the
Inspector General constitute potential savings for the Medicare program
and beneficiaries. Since the publication of the proposed rule, the OIG
has released two additional AMP comparison studies (OEI-03-11-00540,
and OEI-03-11-00360)., Report OEI-03-11-00360, entitled ``Comparison of
Fourth Quarter 2010 Average Sales Prices and Average Manufacturer
Prices: Impact on Medicare Reimbursement for Second Quarter 2011,'' has
findings that indicate the potential for cost savings through the
implementation of price substitution, and it states that ``of the 338
drug codes with complete AMP data, 15 exceeded the 5 percent threshold.
If reimbursement amounts for all 15 codes had been based on 103 percent
of the AMPS in the second quarter of 2011, Medicare would have saved an
estimated $1.3 million. Under CMS proposed price substitution policy,
reimbursement amounts for 5 of the 15 drugs would have been reduced,
saving an estimated $554,000.'' The more recent report describes more
modest cost savings than the report cited in the proposed rule.
(2) Proposal
As discussed previously, section 1847A(d)(3) of the Act provides
authority for us to determine the applicable percentage subject to
``such adjustment as the Secretary may specify for the widely available
market price or the average manufacturer price, or both.'' We also have
authority to specify the timing of any ASP substitution. Consistent
with this authority, we proposed a policy to substitute 103 percent of
AMP for 106 percent of ASP where the applicable percentage threshold
has been satisfied for the two consecutive quarters immediately prior
to the current pricing quarter, or for three of the previous four
quarters immediately prior to the current pricing quarter. This policy
would apply to single source drugs and biologicals, multiple source
drugs, and biosimilar biological products as defined at section
1847A(c)(6)(C), (D), and (H) of the Act.
Comment: As mentioned previously, several commenters agreed with
the concept of safeguards or limits on the application of AMP-based
price substitutions. Of the commenters who specifically discussed the
duration of ASP deviations above AMP, all agreed that deviations
lasting only one quarter could be attributed to temporary market
changes or fluctuations and should not trigger a piece substitution.
There were no comments regarding which subsets of part B drugs or
biologicals that the policy should apply to.
Response: We agree with the commenters and believe that focusing on
those drugs that consistently exceed the applicable percentage
threshold over multiple quarters is appropriate because we believe such
an approach will minimize the potential for disruption to

[[Page 73292]]

access in cases of temporary market fluctuations.
After reviewing the public comments, we are finalizing our proposal
that implements the substitution of 103 percent of AMP for 106 percent
of ASP where the applicable percentage threshold has been satisfied for
the two consecutive quarters immediately prior to the current pricing
quarter, or for three of the previous four quarters immediately prior
to the current pricing quarter and corresponding regulation text at 42
CFR 414.904(d)(3)(iii)(A). This policy will apply to single source
drugs and biologicals, multiple source drugs, and biosimilar biological
products as defined at section 1847A(c)(6)(C), (D), and (H) of the Act.
(3) Timeframe for and Duration of Price Substitutions
As stated in Sec. 414.804(a)(5), a manufacturer's average sales
price must be submitted to CMS within 30 days of the close of the
quarter. We then calculate an ASP for each billing code in accordance
with the process outlined at Sec. 414.904. Then, as described in our
CY 2005 PFS final rule (69 FR 66300), we implement these new prices
through program instructions or otherwise at the first opportunity
after we receive the data, which is the calendar quarter after receipt.
Section 1847A(d)(3)(C) of the Act indicates that a price
substitution would be implemented ``effective as of the next quarter''
after the OIG has informed us that the ASP for a drug or biological
exceeds its AMP by the applicable percentage threshold. The OIG does
not receive new ASPs for a given quarter until after we have finalized
our calculations for the quarter. Also, the results of the OIG's
pricing comparisons are not available until after the ASPs for a given
quarter have gone into effect. Therefore, we anticipate that there will
be a three-quarter lag for substituted prices from the quarter in which
manufacturer sales occurred, though this will depend in great part upon
the timeframe in which we obtain comparison data from the OIG. Table 37
provides an example of this timeframe.
Comment: Two commenters expressed concern about the three quarter
lag, how the duration disconnects price substitution policy from the
marketplace, and the potential for divergence between ASP and AMP
during the lag period. One commenter suggested that the proposal not be
implemented unless a shorter turnaround could be put in place; one
commenter stated that the lag should not exceed the ASP methodology's
two quarter lag. Another commenter stated that the associated
regulation text at 42 CFR 414.904(d)(iii)(A) may not accurately
describe the timeframes for the comparisons because the comparison is
not actually done using data from quarters that immediately precede the
substitution.
Response: In developing our policy, we carefully considered the lag
associated with the AMP based price substitution. ASPs reported to the
OIG incorporate a two quarter lag between the reported sales and the
time that an ASP is posted. Section 1847A(d)(3)(C) of the Act provides
that the Secretary substitute prices as of the next quarter after the
OIG informs the Secretary that the ASP exceed the AMP by the applicable
threshold. This results in a minimum of a three quarter lag from the
date that manufacturer sales occurred for the price substituted
products and the price substitution. Given the current operational
environment and the statutory requirement to implement price
substitutions after the OIG provides information about drugs for which
ASP exceed AMP by the applicable threshold (which is also reflected in
regulation text at 42 CFR 414.904(d)(i)), it is not possible to reduce
the lag at this time. We disagree with the assertion that the
regulation text does not accurately describe the time frame for our
price substitution policy. Our policy for comparisons between AMP and
ASP is discussed later in this preamble and reflects the use of data
from the most recent quarter where OIG data and ASPs are available.

[[Page 73293]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.145

Given this lag in time, the ASP for a billing code may have
decreased since the OIG's comparison. Therefore, consistent with our
authorities in section 1847A(d)(3) of the Act and our desire to provide
accurate payments consistent with these provisions, we believe that the
timing of any substitution policy should permit a final comparison
between the OIG's volume-weighted 103 percent AMP for a billing code
(calculated from the data from sales three quarters prior) and the
billing code's volume-weighted 106 percent ASP (as calculated by CMS
for the upcoming quarter). In Table 37 for example, this comparison
would be done between the HCPCS payment limits calculated for Q1-12,
and the OIG's volume-weighted AMPs from their examination of Q4-11
payment limits. This final comparison would assure the Secretary that
the 106 percent ASP payment limit for the current pricing quarter
continues to exceed 103 percent of the OIG's calculated AMP in order to
avoid a situation in which the Secretary would inadvertently raise the
Medicare payment limit through this price substitution policy. We
specifically requested comments on this proposal.
Comment: We did not receive any specific comments about this issue.
However several commenters touched on issues related to the final
comparison. One commenter expressed concerns that there is no mechanism
to rescind a substitution, while another comment remarked about the
fact that AMPs could be restated for up to 12 quarters, and stated the
assumption that a restated AMP would be used in the final comparison.
Another commenter (discussed in section VI.A.1. of this final rule with
comment period) suggested that WAMP be incorporated into the proposed
final check.
Response: We appreciate the comments that have asked us to consider
additional limits or safeguards related to the implementation of the
AMP-based price substitution. As we developed the details of this
proposal, we considered the lag period and the impact of brief periods
where ASP exceeds AMP by more than the threshold percentage. At this
time we still believe that when all of our limits (the comparison of
``complete'' AMP data against ASPs for the same NDCs, the 5 percent
threshold, the requirement that ASP exceed the threshold for more than
one quarter, and the final check against 106 percent of ASP that would
otherwise be applied in a quarter) are considered together, they create
satisfactory safeguards to prevent the inadvertent or unnecessary
triggering of a price substitution, which, in turn, could affect
provider payments and access to drugs. We also do not believe that
additional limits or safeguards, particularly ones that have not
already been proposed, should be applied at this time because they will
not be subject to public comment.

[[Page 73294]]

We would like to clarify that our approach utilizes the OIG's
calculation of AMP and does not incorporate the use of restated AMPs.
We are not persuaded to incorporate restated AMPs into the calculation
because, as discussed earlier in the rule and noted by commenters, AMP
can fluctuate from quarter to quarter. The use of a restated AMP would
require additional calculations and the incorporation of additional
analysis similar to the safeguards finalized in this rule that confirm
that the AMP to ASP comparison is not just a one quarter fluctuation
that may not represent the actual state of the marketplace. The use of
restated AMPs may also lead to comparisons that are beyond the 3
quarter lag and changes the comparison from one based on a single
quarter to being based on potentially changing data; the ASP
methodology generally relies on data from a single time period. We
believe that additional pricing variations, which could result from the
use of restated AMPs over multiple quarters could further increase
providers' uncertainty about payment rates. The final comparison
between the OIG's volume-weighted 103 percent AMP for a billing code
(calculated from the data from sales three quarters prior) and the
billing code's volume-weighted 106 percent ASP (as calculated by CMS
for the upcoming quarter) is intended to minimize the effect of the
three quarter lag and further minimize the effect of AMP fluctuation on
our substitution policy, and we believe that this final check, as well
as the additional safeguards described in this rule, are sufficient. An
additional check based on restated AMP is not necessary at this time.
After reviewing the public comments, we are finalizing our proposal
regarding the final comparison between AMP and ASP and the related
regulation text at 42 CFR 414.904(d)(3)(ii)(B).
ASP payment limits are calculated on a quarterly basis as per
section 1847A(c)(5)(A) of the Act, and we are particularly mindful that
the ASP-based payment allowance for a billing code may change from
quarter to quarter. As such, we proposed that any price substitution
based on the comparison that triggered its application would last for
one quarter.
Comment: Several commenters supported the one quarter duration for
the price substitution.
Response: We agree with the comments. No commenters provided
alternatives to the one quarter duration of the price substitution.
We are finalizing the one quarter duration for AMP-based price
substitutions and the related regulation text at Sec.
414.904(d)(3)(i). We note that in a subsequent quarter, the OIG may
identify that a volume-weighted ASP continues to exceed the volume-
weighted AMP for a billing code that previously triggered a price
substitution. In this scenario, if the criteria for the price
substitution policy are met, we would substitute 103 percent of the
OIG's updated volume-weighted AMP for that billing code.
(4) Implementation of AMP-Based Price Substitution and the Relationship
of ASP to AMP
In the preceding section, we have discussed various details,
limitations, and safeguards regarding the AMP-based price
substitutions. In general, comments regarding these items supported our
proposals regarding those items, and agreed that we were being
consistent with the cautious approach described in the proposal and
previous rules. In this section, we will discuss whether the AMP based
price substitutions should be implemented in CY 2012.
In general, we believe that our proposal to substitute 103 percent
of AMP for 106 percent of ASP provides us with a viable mechanism for
generating savings for the Medicare program and its beneficiaries
because it will allow Medicare to pay based on lower market prices for
those drugs and biologicals that consistently exceed the applicable
threshold percentage. Moreover, it will enable us to address a
programmatic vulnerability identified by the OIG.
In the CY 2010 proposed rule, we sought comment on other issues
related to the comparison between ASP and AMP, and in the CY 2012
proposed rule we sought comments on the following issues again--
The effect of definitional differences between AMP and
ASP, particularly in light of the definition of AMP as revised by
section 2503 of the Affordable Care Act;
The impact of any differences in AMP and ASP reporting by
manufacturers on price substitution comparisons; and
Whether and/or how general differences and similarities
between AMP and manufacturer's ASP would affect comparisons between
these two.
Although most commenters agree with specific details of our
proposals that we described and finalized, nearly all of the commenters
were concerned about the impact of recent changes to the definition of
AMP and how they would affect the relationship of AMP to ASP.
Comment: Comments disagreeing with the proposed CY 2012
implementation of the AMP-based price substitution policy generally
related to the three previous bullet points and cited the following
concerns:
A lack of experience with the new definitions of AMP and
an incomplete understanding of the relationship between ASP and the new
definitions of AMP by the industry and CMS, particularly for AMP
reporting of drugs with payment limits that are determined under the
ASP methodology. Commenters indicated that the definition of AMP in the
Affordable Care Act that describes drugs sold to retail community
pharmacies is expected to increase AMP, but commenters expressed
uncertainty about how the updated definition in the FAA Air
Transportation Modernization and Safety Improvement Act would affect
the AMP/ASP relationship.
A lack of guidance in recent rulemaking and statutory
provisions about assumptions that manufacturers should use in order to
uniformly calculate AMP. In particular, commenters were concerned about
how the phrase ``not generally dispensed through a retail community
pharmacy,'' which was added in the updated definition of AMP in the FAA
Air Transportation Modernization and Safety Improvement Act, might be
defined in rulemaking;
Uncertainty about how future rulemaking regarding the AMP
would affect the ASP/AMP relationship;
Inconsistency in how AMP and ASP incorporate prompt pay
discounts; and
Concern about any further reductions in payments to
providers, particularly small practices and the potential effect on
access to care.
Commenters also stated that implementation of a price substitution
policy in 2012 was not consistent with the ``slow and cautious''
approach that we have described in previous rulemaking. They
recommended delaying the implementation of a price substitution policy
until additional guidance about AMP has been finalized and more
experience has been gained.
Response: We agree that the definition of AMP has continued to
evolve over time. The updated definitions of AMP in section 2503 of the
Affordable Care act and section 202 of the Federal Aviation
Administration Air Transportation Modernization and Safety Act (which
includes injected, infused, implanted, instilled, and inhaled drugs)
became effective on October 1, 2010 and remain in effect at this time.
Although rulemaking that

[[Page 73295]]

pertains to specific issues and operational details regarding
manufacturer reporting of AMP is pending, the current reporting
process, including the updated definitions of AMP, is in place.
Although we appreciate the comments that recommended that we delay the
implementation of the AMP-based price substitution policy until a later
time, we do not believe implementation of a price substitution policy
should be further delayed for a number of reasons.
First, we disagree that implementation of the policy in CY 2012 is
inconsistent with a slow and cautious approach regarding price
substitution. While additional guidance and experience with the new
definitions of AMP would be helpful, our 6-years' experience in
monitoring AMP and ASP have shown that very few ASP payment limits
exceed the existing AMP threshold (even absent the safeguards that we
are finalizing in this rule). Moreover, most of the drugs that exceed
the threshold in previous reports are infrequently used. We understand
that the updated definition of AMP encompasses sales of injected,
infused, instilled, inhaled, and implanted drugs that are not generally
dispensed through a retail community pharmacy, including a wider range
of customers and discounted sales to non-pharmacy entities, and
commenters' concerns that implementation of the most recent definition
could decrease AMP for certain drugs. However, we do not have any
specific information from commenters that persuades us to believe that
the AMP-based price substitution policy will be applied frequently or
to high cost/high volume items, despite the changes to the definition
of AMP. Therefore, we believe that proceeding with implementation in
2012 is consistent with a slow and cautious approach toward this
policy.
Second, we have worked closely with the OIG and have reviewed 25
price substitution reports from the OIG over the past 6 years. The
drugs and biologicals identified as candidates for price substitution
were typically uncommonly used and many were inexpensive items. Based
on this experience, we do not believe that this policy will
substantially affect providers' financial situation, access to care for
beneficiaries, the payment rate for highly utilized and expensive drugs
and biologicals, or the manufacturers of these items. Further, we are
finalizing in this rule additional safeguards to prevent the triggering
of the price substitutions for drugs that do not consistently exceed
the AMP threshold. We believe these safeguards are both consistent with
a cautious approach and provide assurance that the price substitution
policy will be applied only when appropriate.
Finally, while the Affordable Care Act did change the definition of
AMP, and AMP data captures sales differently than ASP, the Congress did
not modify its mandate that the OIG compare AMP to ASP for purposes of
section 1847A(d)(3), nor did it change how prompt pay discounts are
treated under ASP. Thus, in our view, the statute requires the
Secretary to use AMP, as modified by the Affordable Care Act and
updated by the FAA Air Transportation Modernization and Safety
Improvement Act, as the basis for a comparison value and an alternative
payment limit for ASP, and we will not make further revisions to the
proposed implementation of this policy at this time. We appreciate the
comments that we have received regarding this proposal and we look
forward to continuing to work with the OIG and stakeholders on this
matter.
In summary we are finalizing the implementation of an AMP based
substitution policy to substitute 103 percent of AMP for 106 percent of
ASP beginning in CY 2012 and proposed regulation text at 42 CFR
414.904(d)(3), as described in the ASP section of this rule. We note
that although this policy will become effective on January 1, 2012,
because of the three quarter lag, the earliest that price substitutions
could occur is April 1, 2012.
Comment: Several commenters were also concerned that there is no
mechanism for public notification and comments in advance of specific
substitutions. Two commenters requested that CMS allow for dialogue
about specific substitutions between the manufacturer and CMS.
Response: Although there is no statutory requirement that CMS
notify the public about specific price substitutions or to accept
comments regarding specific substitutions, we agree that public
notification about specific price substitutions is important and will
help us operate in a transparent manner. CMS will post a list of the
HCPCS codes for which the policy is applied at the time that a
quarter's ASPs are first posted to the CMS ASP Web site (http://www.cms.gov/McrPartBDrugAvgSalesPrice/). This will provide
approximately two weeks' notice before the substituted payment amount
goes into effect. Our experience with ASP has shown that this two week
notification regarding ASPs has provided stakeholders with time to
comment and inquire about potential problems regarding the new
quarter's prices, and time for CMS to respond. We will accept inquiries
about the list at the CMS ASP emailbox at [email protected].
However, we have not proposed, nor are we implementing, a mechanism for
dialogue with stakeholders regarding specific substitutions, such as
formal dispute resolution procedures, due to the relatively tight
timeframe and commenters' concerns about further increasing the lag
period.
3. ASP Reporting Update
a. ASP Reporting Template Update
For purposes of this part, unless otherwise specified, the term
``drugs'' will hereafter refer to both drugs and biologicals. Sections
1847A and 1927(b) of the Act specify quarterly ASP data reporting
requirements for manufacturers. Specific ASP reporting requirements are
set forth in section 1927(b)(3) of the Act. For the purposes of
reporting under section 1847A of the Act, the term ``manufacturer'' is
defined in section 1927(k)(5) of the Act and means any entity engaged
in the following: Production; preparation, propagation, compounding,
conversion or processing of prescription drug products; either directly
or indirectly by extraction from substances of natural origin, or
independently by means of chemical synthesis, or by a combination of
extraction and chemical synthesis; or packaging, repackaging, labeling,
relabeling, or distribution of prescription drug products. The term
manufacturer does not include a wholesale distributor of drugs or a
retail pharmacy licensed under State law. However, manufacturers that
also engage in certain wholesaler activities are required to report ASP
data for those drugs that they manufacture. Note that the definition of
manufacturers for the purposes of ASP data reporting includes
repackagers.
Section 1927(b)(3)(A)(iii) of the Act specifies that manufacturers
must report their average sales price and the number of units by NDC.
As established by 42 CFR part 414 subpart J, manufacturers are required
to report data at the NDC level, which includes the following elements:
(1) The manufacturer ASP; (2) the Wholesale Acquisition Cost (WAC) in
effect on the last day of the reporting period; (3) the number of units
sold; and (4) the NDC. The reported ASP data are used to establish the
Medicare payment amounts.
Section 1927(b)(3)(A)(iii)(II) of the Act specifies that the
manufacturer must report the WAC if it is required for payment to be
made under section 1847A of the Act. In the 2004 IFC that

[[Page 73296]]

implemented the ASP reporting requirements for Medicare Part B drugs
and biologicals (66 FR 17935), we specified that manufacturers must
report the ASP data to CMS using our Addendum A template. In 2005, we
expanded the template to include WAC and additional product description
details (70 FR 70221). We also initiated additional changes to the
template in 2008 (73 FR 76032).
In order to facilitate more accurate and consistent ASP data
reporting from manufacturers, we have proposed additional revisions to
the Addendum A template. Specifically, we have proposed to revise
existing reporting fields and add new fields to the Addendum A template
as follows--
To split the current NDC column into three separate
reporting fields, corresponding to the three segments of an NDC;
To add a new field to collect an Alternate ID for products
without an NDC; and
To expand the current FDA approval number column to
account for multiple entries and supplemental numbers.
We have also added a macro to the Addendum A template that will
allow manufacturers to validate the format of their data prior to
submission. This will help verify that data are complete and submitted
to CMS in the correct format, thereby minimizing time and resources
spent on identifying mistakes or errors. We note that the use of this
macro does not preclude or supersede manufacturers' responsibility to
provide accurate and timely ASP data in accordance with the reporting
obligation under section 1927(b)(3) of the Act. We also note that
manufacturers who misrepresent or fail to report manufacturer ASP data
will remain subject to civil monetary penalties, as applicable and
described in sections 1847A and 1927(b) of the Act and codified in
regulations at Sec. 414.806.
Comment: Two commenters requested that the ``Alternate ID'' field
be increased to a 23-character capacity from the proposed 13 character
limit. Both commenters cited specific instances where their products
are identified by an alpha-numeric identification that would exceed the
limit of the proposed field.
Response: We agree with the importance of being able to accommodate
Alternate IDs of various lengths. We have expanded the Alternate ID
field to accommodate 23 characters. This will ensure the field is
consistent with a variety of existing alternative product identifiers.
Comment: A commenter objected to the description in the revised
Addendum A user guide regarding the inclusion of negative and zero
values as valid ASP, Units, and WAC. The commenter stated that the
required inclusion of all discounts in the ASP could create negative or
zero ASP, Units or WAC values. They believed that negative numbers are
invalid for these fields and urged CMS to revise the User Guide to
indicate that negative values are not ``valid'' for ASP, ASP units, and
WAC in Addendum A. They also requested that the Guide instead instruct
manufacturers who have negative values to report ``0.000'' as
manufacturers are instructed to do when they have no ASP, ASP units or
WAC to report.
Response: We disagree with this comment. 1847A(c)(3) in the Act
states, ``In calculating the manufacturer's average sales price under
this subsection, such price shall include volume discounts, prompt pay
discounts, cash discounts, free goods that are contingent on any
purchase requirement, chargebacks, and rebates * * *.'' This allows for
lagged discounts, which may in turn create a negative ASP value. We
therefore maintain the request for negative numbers within the User
Guide and Addendum A template.
Comment: One commenter requested that the Agency provide the
updated Addendum A template to manufacturers as soon as possible to
facilitate internal system changes. The proposal for the reporting
changes to be effective January 1, 2012 would appear to subject
manufacturers to the new reporting format for the Q4 2011 reporting
period due January 30, 2012. Manufacturers using their own systems, as
well as those utilizing systems provided by a third party, will need
adequate time to program and validate the system changes prior to the
submission deadline.
Response: We agree with the need to give manufacturers as much time
as possible to incorporate the revisions to the Addendum A template
into their administrative systems. The finalized template will be
posted online as soon as possible following the publication of the CY
2012 PFS final rule. However, we still require that this template be
used to submit such data that is due at the end of January 2012. We
also remind readers that submissions will continue to require
certification that reported Average Sales Prices were calculated
accurately and that all information and statements made in the
submission are true, complete, and current.
In summary we are finalizing our proposal to amend the Addendum A
template, including the use of a data validation macro and with the
expansion of the ``Alternate ID'' field. The companion Users' Guide and
other documents will be available on our ASP Web site: https://www.cms.gov/McrPartBDrugAvgSalesPrice/ as soon as possible following
the publication of this final rule.
b. Reporting of ASP Units and Sales Volume for Certain Products
As required by 42 CFR part 414 subpart J, manufacturers report ASP
price and volume data at the NDC level. This is appropriate for most
drug and biological products because an NDC is usually associated with
a consistent amount of product that is being sold. Our experience with
manufacturer reporting of ASPs has revealed that a limited number of
drug products, as defined by an NDC, might contain a variable amount of
active ingredient. This situation is common for plasma derived clotting
factors; for example, we are aware of one product where a vial
described as nominally containing 250 international units (IUs) of
clotting factor activity might actually contain between 220 and 400
IUs. Although the exact factor activity is specified on the label, the
amount of IUs contained in an NDC might vary between manufacturing
lots. For these types of products, it is possible that vials with the
same NDC but different amounts of clotting factor activity (as measured
in IUs) might be sold during the same ASP reporting period. For drugs
paid under Medicare Part B, such variability in the amount of drug
product within an NDC appears to apply mostly to clotting factors that
are prepared from plasma sources; it also applies to a few other
products, including a plasma protein product used to treat antitrypsin
deficiency.
As stated in the section 1847A(b)(2) of the Act, for years after
2004, the Secretary has the authority to ``establish the unit for a
manufacturer to report and methods for counting units as the Secretary
determines appropriate to implement.'' There are limited situations
when ASP price and volume reporting by product NDC may affect the
accuracy of subsequent pricing calculations done by us (for example,
when an NDC is associated with a variable amount of drug product as
described in the paragraph previously). We believe that in such cases
it is appropriate to amend the definition of the ASP unit associated
with the NDC that is reported to us by manufacturers for the purposes
of calculating ASP. Under the authority in the section

[[Page 73297]]

1847A(b)(2) of the Act, we proposed that we will maintain a list of
HCPCS codes for which manufacturers report ASPs for NDCs on the basis
of a specified unit. The specified unit will account for situations
where labeling indicates that the amount of drug product represented by
an NDC varies. Our initial list appears in Table 38 and is limited to
items with variable amounts of drug product per NDC as described
previously. However, we proposed to update this list as appropriate
through program instruction or otherwise because we believe that the
ability to make changes in a subregulatory manner will provide us with
the flexibility to quickly and appropriately react to sales and
marketing practices for specific drug products, including the
introduction of new drugs or drug products. We plan to amend the list
as necessary and to keep updates on the CMS ASP Web site at: http://www.cms.gov/McrPartBDrugAvgSalesPrice/01_overview.asp. Our proposal
would be effective for ASP reports received on or after January 1, 2012
and would be reflected in our April 1, 2012 quarterly update.
In conjunction with the proposals in the preceding paragraph and
the expectation that nearly all ASP price and sales volume reporting
will continue to be at the NDC level (that is, the reported ASP sales
and volume will be associated with a non-variable amount that is
represented by the NDC), we proposed a clarification to existing
regulation text at Sec. 414.802. Current regulation text states that
``Unit means the product represented by the 11-digit National Drug
Code.'' We proposed to update the definition to account for situations
when an alternative unit of reporting must be used; the definition of
the term unit will continue to be based on reporting of ASP data per
NDC unless otherwise specified by CMS to account for situations where
the amount of drug product represented by an NDC varies.
Comment: One commenter agreed with the proposal to revise reporting
instructions for products which contain variable amounts of drug per
NDC in order to align ASP reporting more closely with typical industry
pricing conventions and to maintain the accuracy of ASP determinations,
and recommended that CMS provide as much advance notice as possible
about changes to the proposed list.
Response: Based on the comment, we will finalize this provision and
the associated regulation text at 42 CFR 414.802 that defines an ASP
``unit.'' We plan to update the list of products that must be reported
in units other than an NDC that is presented in Table 38, post it on
the CMS ASP Web site (http://www.cms.gov/McrPartBDrugAvgSalesPrice/)
soon after the rule is published, and incorporate updates for new
products as discussed in the proposal.
BILLING CODE 4120-01-P

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[GRAPHIC] [TIFF OMITTED] TR28NO11.146

BILLING CODE 4120-01-C
The instructions for reporting products with variable amounts of
drug product, along with general instructions on completing the revised
ASP Data Form (Addendum A), will be delineated in a User Guide that
will be available on the ASP Web site. In the User Guide, we will also
be revising our instructions for the reporting of dermal grafting
products as follows--
If an NDC is not associated with a dermal grafting
product, manufacturers should enter the UPC or other unique identifier
(such as an internal product number) in the alternate ID column; and
Manufacturers should report ASP prices and sales volumes
for dermal grafting products in units of area by square centimeter.
The User Guide will be available on the CMS ASP Web site at: http://www.cms.hhs.gov/McrPartBDrugAvgSalesPrice/01_overview.asp. The Web
site will also contain the revised ASP Data Form (Addendum A) and
examples of how ASP data must be reported and formatted for submission.
We would also like to remind manufacturers that additional
information about reporting ASP data to us is available (for examples,
see the following: (69 FR 17936), (69 FR 66299), (70 FR 70215), (71 FR
69665), (72 FR 66256), (73 FR 69751), and (74 FR 61904)). Also, a link
to the ASP Frequently Asked Questions (FAQs) is posted in the ``Related
Links Inside CMS'' section of the ASP Overview Web page. We welcome
comments on the ASP reporting proposals that are described in this
section.
4. Out of Scope Comments
We received comments pertaining to: (1) Coding and pricing for new
molecular diagnostic codes; (2) the continued use of G0440 and G0441 in
2012 as well as general comments on the coding and payment of skin
substitute products; (3) updating supplying and dispensing fees for
Part B drugs; (4) low reimbursement rates in a HCPCS-based claims
systems for pharmacies and other community based practices; (5) the
exclusion of prompt pay discounts from ASP calculations; and, (6) a
request to pay all Part B drugs under the Part D benefit.
These comments are outside the scope of this rule, and therefore
are not addressed in this final rule with comment period.

B. Discussion of Budget Neutrality for the Chiropractic Services
Demonstration

Section 651 of MMA requires the Secretary to conduct a
demonstration for up to 2 years to evaluate the feasibility and
advisability of expanding coverage for chiropractic services under
Medicare. Current Medicare coverage

[[Page 73299]]

for chiropractic services is limited to manual manipulation of the
spine to correct a subluxation described in section 1861(r)(5) of the
Act. The demonstration expanded Medicare coverage to include: ``(A)
care for neuromusculoskeletal conditions typical among eligible
beneficiaries; and (B) diagnostic and other services that a
chiropractor is legally authorized to perform by the State or
jurisdiction in which such treatment is provided''. The demonstration
was conducted in four geographically diverse sites, two rural and two
urban regions, with each type including a Health Professional Shortage
Area (HPSA). The two urban sites were 26 counties in Illinois and Scott
County, Iowa, and 17 counties in Virginia. The two rural sites were the
States of Maine and New Mexico. The demonstration, which ended on March
31, 2007, was required to be budget neutral as section 651(f)(1)(B) of
MMA mandates the Secretary to ensure that ``the aggregate payments made
by the Secretary under the Medicare program do not exceed the amount
which the Secretary would have paid under the Medicare program if the
demonstration projects under this section were not implemented.''
In the CY 2006, 2007, and 2008 PFS final rules with comment period
(70 FR 70266, 71 FR 69707, 72 FR 66325, respectively), we included a
discussion of the strategy that would be used to assess budget
neutrality (BN) and the method for adjusting chiropractor fees in the
event the demonstration resulted in costs higher than those that would
occur in the absence of the demonstration. We stated that BN would be
assessed by determining the change in costs based on a pre-post
comparison of total Medicare costs for beneficiaries in the
demonstration and their counterparts in the control groups and the rate
of change for specific diagnoses that are treated by chiropractors and
physicians in the demonstration sites and control sites. We also stated
that our analysis would not be limited to only review of chiropractor
claims because the costs of the expanded chiropractor services may have
an impact on other Medicare costs for other services.
In the CY 2010 PFS final rule with comment period (74 FR 61926), we
discussed the evaluation of this demonstration conducted by Brandeis
University and the two sets of analyses used to evaluate budget
neutrality. In the ``All Neuromusculoskeletal Analysis,'' which
compared the total Medicare costs of all beneficiaries who received
services for a neuromusculoskeletal condition in the demonstration
areas with those of beneficiaries with similar characteristics from
similar geographic areas that did not participate in the demonstration,
the total effect of the demonstration on Medicare spending was $114
million higher costs for beneficiaries in areas that participated in
the demonstration. In the ``Chiropractic User Analysis,'' which
compared the Medicare costs of beneficiaries who used expanded
chiropractic services to treat a neuromusculoskeletal condition in the
demonstration areas, with those of beneficiaries with similar
characteristics who used chiropractic services as was currently covered
by Medicare to treat a neuromusculoskeletal condition from similar
geographic areas that did not participate in the demonstration, the
total effect of the demonstration on Medicare spending was a $50
million increase in costs.
As explained in the CY 2010 PFS final rule, we based the BN
estimate on the ``Chiropractic User Analysis'' because of its focus on
users of chiropractic services rather than all Medicare beneficiaries
with neuromusculoskeletal conditions, as the latter included those who
did not use chiropractic services and who may not have become users of
chiropractic services even with expanded coverage for them (74 FR 61926
through 61927). Users of chiropractic services are most likely to have
been affected by the expanded coverage provided by this demonstration.
Cost increases and offsets, such as reductions in hospitalizations or
other types of ambulatory care, are more likely to be observed in this
group.
As explained in the CY 2010 PFS final rule (74 FR 61927), because
the costs of this demonstration were higher than expected and we did
not anticipate a reduction to the PFS of greater than 2 percent per
year, we finalized a policy to recoup $50 million in expenditures from
this demonstration over a 5-year period, from CYs 2010 through 2014 (74
FR 61927). Specifically, we are recouping $10 million for each such
year through adjustments to the chiropractic CPT codes. Payment under
the PFS for these codes will be reduced by approximately 2 percent. We
believe that spreading this adjustment over a longer period of time
will minimize its potential negative impact on chiropractic practices.
We are continuing the implementation of the required budget
neutrality adjustment by recouping $10 million in CY 2012. Our Office
of the Actuary estimates chiropractic expenditures in CY 2012 will be
approximately $470 million based on actual Medicare spending for
chiropractic services for the most recent available year. To recoup $10
million in CY 2012, the payment amount under the PFS for the
chiropractic CPT codes (CPT codes 98940, 98941, and 98942) will be
reduced by approximately 2 percent. We are reflecting this reduction
only in the payment files used by the Medicare contractors to process
Medicare claims rather than through adjusting the RVUs. Avoiding an
adjustment to the RVUs would preserve the integrity of the PFS,
particularly since many private payers also base payment on the RVUs.
The following is the summary of the public comments we received and
our responses.
Comment: One commenter, representing chiropractors, indicated that
they continue to oppose our methodology for assuring budget neutrality
under the demonstration. Instead of the application of an adjustment to
the national chiropractor fee schedule, the commenter believes the
Congressional intent was for CMS to make an adjustment to the totality
of services payable under the Part B Trust Fund because of the language
in section 651(f)(A) of the MMA, which directs the Secretary to
``provide for the transfer from the Federal Supplementary Insurance
Trust Fund * * * of such funds as are necessary for the costs of
carrying out the demonstration projects under this section.'' The
commenter states that more information is necessary to fully understand
the findings provided by the evaluator, Brandeis University.
Response: Section 651(f)(1)(B) of the MMA requires that the
Secretary ``shall ensure that the aggregate payments made by the
Secretary under the Medicare program do not exceed the amount which the
Secretary would have paid under the Medicare program if the
demonstration projects under this section were not implemented.'' The
statute does not specify a particular methodology for ensuring budget
neutrality, but leaves that decision to the Secretary. Our methodology
meets the statutory requirement and appropriately impacts the
chiropractic profession that is directly affected by the demonstration.
With respect to the commenter that requested more information, we
note that the final evaluation report, which describes, among other
things, our methodology for calculating budget neutrality for this
demonstration, is located on our Web site at the following URL: http://www.cms.gov/reports/downloads/Stason_ChiroDemoEvalFinalRpt_2010.pdf.
The evaluation examined the impact of expanded coverage for

[[Page 73300]]

chiropractic care on Medicare expenditures and found that chiropractic
users in the demonstration areas had higher Medicare expenditures than
chiropractic users in comparison areas that did not have the expanded
coverage. Therefore, as proposed and reiterated in the 2006, 2007,
2008, 2009, 2010, and 2011 PFS rules, we are implementing this
methodology and recouping from the chiropractor fee schedule codes. Our
methodology meets the statutory requirement for budget neutrality and
appropriately impacts the chiropractic profession that is directly
affected by the demonstration.
Comment: The same commenter representing chiropractors noted that
the increase in costs from the demonstration was completely due to the
Illinois site, and not the other four sites. The commenter ``has
concerns that the Chicago area did not meet the criteria for an
appropriate demonstration site for this project.'' The commenter
believes it is ``premature to use demonstration findings to estimate
the cost of a national roll out of the expansion of chiropractic
services without further analysis of the demonstration project data.''
Response: Section 651(c)(1) of the Act required the demonstration
be conducted in 4 geographically diverse sites, specifically two rural
and two urban regions, with each type including a HPSA. We discussed
the design of this demonstration with the chiropractic industry and
others prior to implementation. Based on these discussions, we included
additional criteria for site selection in the design of this
demonstration. The Chicago area met the site selection criteria for
this demonstration. We refer readers to the January 28, 2005 notice (70
FR 4130) for a discussion of our site selection criteria and the sites
selected for participation based on these criteria.
Regardless of the differences in the costs associated with the
demonstration areas, the evaluation conducted by Brandeis University
found that expanding coverage for chiropractic services under the
demonstration resulted in increased Medicare expenditures, and the
Secretary must recoup these costs in order to meet the budget
neutrality requirement of the law.
In response to the comment suggesting that the data from this
demonstration should not be used to estimate the cost of a national
rollout of the expansion of chiropractic services, we note the data
from the demonstration is the only information CMS had at the time of
the Report to the Congress for estimating the costs of a national
rollout.
After consideration of the public comments received, we are
continuing the implementation of the required budget neutrality
adjustment by recouping $10 million in CY 2012 by reducing the payment
amount under the PFS for chiropractic codes (that is, CPT codes 98940,
98941, and 98942) by approximately 2 percent.

C. Productivity Adjustment for the Ambulatory Surgical Center Payment
System, and the Ambulance, Clinical Laboratory, and DMEPOS Fee
Schedules

Section 3401 of the Affordable Care Act requires that the update
factor under certain payment systems be annually adjusted by changes in
economy-wide productivity. The year that the productivity adjustment is
effective varies by payment system. Specifically, section 3401 of the
Affordable Care Act requires that in CY 2011 (and in subsequent years)
update factors under the ambulatory surgical center (ASC) payment
system, the ambulance fee schedule (AFS), the clinical laboratory fee
schedule (CLFS) and the DMEPOS fee schedule be adjusted by changes in
economy wide productivity. Section 3401(a) of the Affordable Care Act
amends section 1886(b)(3)(B) of the Act to add clause (xi)(II) which
sets forth the definition of this productivity adjustment. The statute
defines the productivity adjustment to be equal to the 10-year moving
average of changes in annual economy-wide private nonfarm business
multifactor productivity (MFP) (as projected by the Secretary for the
10-year period ending with the applicable fiscal year, year, cost
reporting period, or other annual period). Historical published data on
the measure of MFP is available on the Bureau of Labor Statistics'
(BLS) Web site at http://www.bls.gov/mfp.
As stated in the CY 2012 PFS proposed rule (76 FR 42834 and 35),
the projection of MFP is currently produced by IHS Global Insight, Inc.
(IGI). The methodology for calculating MFP for the ASC payment system,
and the AFS, CLFS, and DMEPOS fee schedules was finalized in the CY
2011 PFS final rule with comment period (75 FR 73394 through 73399). As
described in the CY 2011 PFS final rule with comment period (75 FR
73394), IGI replicates the MFP measure calculated by the BLS using a
series of proxy variables derived from the IGI US macro-economic
models. For CY 2012, we proposed to revise the IGI series used to proxy
the labor index used in the MFP forecast calculation from man-hours in
private nonfarm establishments (billions of hours--annual rate) to
hours of all persons in private nonfarm establishments, (2005 =
100.00), adjusted for labor composition effects. We proposed this
revision after further analysis showed that the proposed series is a
more suitable proxy for the BLS private nonfarm business sector labor
input series since it accounts for the changes in skill-mix of the
workforce over time (referred to above as labor composition effects).
The BLS labor input series includes labor composition effects. We did
not propose any additional changes to the IGI MFP forecast methodology
or its application to the CPI-U update factors for the ASC payment
system, and the AFS, CLFS, and DMEPOS fee schedules.
We received one comment on our proposal to revise the labor proxy
used to forecast MFP.
Comment: A commenter stated that CMS did not explain what the
practical effect on reimbursements is likely to be after incorporating
the new labor proxy. The commenter claimed that without this
information, stakeholders are unable to provide comments on the effect
of this change. The commenter urged CMS to provide a full explanation
of how the proposed change is likely to impact the various fee
schedules to which it will apply and also requested that CMS delay the
implementation of this proposal in order to give the full and fair
opportunity to comment.
Response: We disagree with the commenter's claim that we did not
provide sufficient detail to comment on our proposal to revise the
labor proxy used to calculate the MFP forecast. As stated in the CY
2012 proposed rule, our proposal to revise the labor proxy was based on
our determination of the most technically appropriate labor proxy that
most closely approximates the BLS private nonfarm business sector labor
input series that is used to calculate BLS historical MFP. We note that
when we evaluated the various labor proxies, we found that the
correlation coefficient between the proposed revised IGI labor proxy
and the BLS labor proxy was 0.992 compared to a correlation coefficient
between the IGI labor proxy for CY 2011 and the BLS labor proxy of
0.987. Stated differently, the proposed IGI labor proxy is more
consistent both in concept and in its movements with BLS' published
labor proxy. Therefore, we believe that the proposal to revise the
labor proxy is technically appropriate and helps achieve our objective
to replicate the BLS historical MFP measure as closely as possible. We
believe that enough detail was provided regarding the revised labor
proxy for

[[Page 73301]]

stakeholders to comment since the proposed revision to the labor proxy
was not based on the impact of this revision on the MFP forecast, but
on the determination of a more technically suitable approximation of
the BLS labor input series as explained in the proposed rule. However,
in response to the comment, we note that the historical average growth
in the revised IGI labor proxy tended to be just slightly higher than
the historical average growth of the IGI labor proxy for CY 2011.
Therefore, we are finalizing our proposal to use hours of all
persons in private nonfarm establishments, (2005 = 100.00), adjusted
for labor composition effects as the proxy for labor index used in the
MFP forecast calculation.

D. Clinical Laboratory Fee Schedule: Signature on Requisition

1. History and Overview
In the March 10, 2000 Federal Register (65 FR 13082), we published
a proposed rule entitled ``Medicare Program; Negotiated Rulemaking:
Coverage and Administrative Policies for Clinical Diagnostic Laboratory
Services,'' to announce and solicit comments on the results of our
negotiated rulemaking committee tasked to establish national coverage
and administrative policies for clinical diagnostic laboratory services
payable under Part B of Medicare.
In the November 23, 2001 Federal Register (66 FR 58788), we
published a final rule, which established these national coverage and
administrative policies. In that final rule, we explained our policy on
ordering clinical diagnostic laboratory services and revised regulatory
language in Sec. 410.32. Our regulation at Sec. 410.32(a) includes a
requirement that states ``[a]ll diagnostic x-ray tests, diagnostic
laboratory tests, and other diagnostic tests must be ordered by the
physician who is treating the beneficiary.'' In the November 23, 2001
final rule (66 FR 58809), we added paragraph (d)(2) to Sec. 410.32 to
require that the physician or qualified nonphysician practitioner (NPP)
(that is, clinical nurse specialists, clinical psychologists, clinical
social workers, nurse-midwives, nurse practitioners, and physician
assistants) who orders the service must maintain documentation of
medical necessity in the beneficiary's medical record. In both the
March 10, 2000 proposed rule (65 FR 13089) and the November 23, 2001
final rule (66 FR 58802), we noted that ``[w]hile the signature of a
physician on a requisition is one way of documenting that the treating
physician ordered the test, it is not the only permissible way of
documenting that the test has been ordered.'' In the preamble of these
rules, we described the policy of not requiring physician signatures on
requisitions for clinical diagnostic laboratory tests, but implicitly
left in place the existing requirements for a written order to be
signed by the ordering physician or NPP for clinical diagnostic
laboratory tests, as well as other types of diagnostic tests. We
further stated, in the March 10, 2000 proposed rule (65 FR 13089) and
the November 23, 2001 final rule (66 FR 58802), that we would publish
instructions to Medicare contractors clarifying that the signature of
the ordering physician or NPP on a requisition for a clinical
diagnostic laboratory test, is not required for Medicare purposes.
On March 5, 2002, we issued a program memorandum (Transmittal AB-
02-030, Change Request 1998) implementing the administrative policies
set forth in the November 23, 2001 final rule, including the following
instruction:

Medicare does not require the signature of the ordering
physician on a laboratory service requisition. While the signature
of a physician on a requisition is one way of documenting that the
treating physician ordered the service, it is not the only
permissible way of documenting that the service has been ordered.
For example, the physician may document the ordering of specific
services in the patient's medical record.

On January 24, 2003, we issued a program transmittal (Transmittal
1787, Change Request 2410) to manualize the March 5, 2002 program
memorandum. The transmittal page, entitled ``Section 15021, Ordering
Diagnostic Tests, manualizes Transmittal AB-02-030, dated March 5,
2002'', stated: ``In accordance with negotiated rulemaking for
outpatient clinical diagnostic laboratory services, no signature is
required for the ordering of such services or for physician pathology
services.'' In the manual instructions in that transmittal (that is,
Transmittal 1787), we stated in a note: ``No signature is required on
orders for clinical diagnostic tests paid on the basis of the physician
fee schedule or for physician pathology services.'' The manual
instructions inadvertently omitted the reference to clinical diagnostic
laboratory tests. Thus, the transmittal seemed to extend the policy set
forth in the November 23, 2001 final rule (that no signature is
required on requisitions for clinical diagnostic laboratory tests paid
under the CLFS) to also apply to clinical diagnostic tests paid on the
basis of the PFS and physician pathology services. In addition, the
manual instructions used the term ``order'' instead of ``requisition,''
which we understand caused some confusion. In addition, when we
transitioned from paper manuals to the current electronic Internet Only
Manual (IOM) system, these manual instructions were inadvertently
omitted from the new Benefit Policy Manual (BPM).
On August 28, 2008, we issued a program transmittal (Transmittal
94, Change Request 6100) to update the BPM to incorporate language that
was previously contained in section 15021 of the Medicare Carriers
Manual. The reissued language stated, ``No signature is required on
orders for clinical diagnostic tests paid on the basis of the clinical
laboratory fee schedule, the physician fee schedule, or for physician
pathology services.'' After the publication of the August 2008 Program
Transmittal (Transmittal 94), we received numerous inquiries from
laboratories, diagnostic testing facilities, and hospital
representatives who had questions about whether the provision applied
to all diagnostic services, including x-rays, magnetic resonance
imaging (MRIs), and other nonclinical laboratory fee schedule
diagnostic services.
To resolve any confusion surrounding the implementation of the CLFS
policy in 2001 and subsequent transmittals, we restated and solicited
public comments on our policy in the July 13, 2009 proposed rule (74 FR
33641 and 33642), entitled ``Medicare Program; Payment Policies Under
the Physician Fee Schedule and Other Revisions to Part B for CY 2010''
(CY 2010 PFS proposed rule). At that time, our policy was that the
signature of a physician or NPP was not required on a requisition for
clinical diagnostic laboratory tests paid on the basis of the CLFS.
However, we were clear that we would still require that it must be
evident, in accordance with our regulations at Sec. 410.31(d)(2) and
(3), that the physician or NPP had ordered the services .
We clarified that this policy regarding requisitions for clinical
diagnostic laboratory tests would not supersede other applicable
Medicare requirements (such as those related to hospital conditions of
participation (CoPs)), which require the medical record to include an
order signed by the physician or NPP who is treating the beneficiary.
In addition, we stated that we did not believe that our policy
regarding signatures on requisitions for clinical diagnostic laboratory
tests supersedes other requirements mandated by professional standards
of practice or obligations regarding orders and medical records
promulgated by

[[Page 73302]]

Medicare, the Joint Commission, or State law; nor did we believe the
policy would require providers to change their business practices.
In the CY 2010 PFS proposed rule (74 FR 33641 and 33642), we also
restated and solicited public comment on our longstanding policy,
consistent with the principle in Sec. 410.32(a), that a written order
for diagnostic tests including those paid under the CLFS and those that
are not paid under the CLFS (for example, that are paid under the PFS
or under the OPPS), such as X-rays, MRIs, and the technical component
(TC) of physician pathology services, must be signed by the ordering
physician or NPP. We were clear that the policy that signatures are not
required on requisitions for clinical diagnostic laboratory tests paid
under the CLFS applied only to requisitions (as opposed to written
orders).
Additionally, in the CY 2010 PFS proposed rule (74 FR 33642) we
solicited public comments about the distinction between an order and a
requisition. We noted that an ``order'' as defined in our IOM, 100-02,
Chapter 15, Section 80.6.1, is a communication from the treating
physician or NPP requesting that a diagnostic test be performed for a
beneficiary. The order may conditionally request an additional
diagnostic test for a particular beneficiary if the result of the
initial diagnostic test ordered yields a certain value determined by
the treating physician or NPP (for example, if test X is negative, then
perform test Y). We further clarified in the CY 2010 PFS final rule
with comment period (74 FR 61930) that an order may be delivered via
any of the following forms of communication:
A written document signed by the treating physician or
NPP, which is hand-delivered, mailed, or faxed to the testing facility.
A telephone call by the treating physician or NPP or his
or her office to the testing facility.
An electronic mail, or other electronic means, by the
treating physician or NPP or his or her office to the testing facility.
If the order is communicated via telephone, both the treating
physician or NPP, or his or her office, and the testing facility must
document the telephone call in their respective copies of the
beneficiary's medical records.
In contrast, in the CY 2010 PFS proposed rule (74 FR 33642), we
defined a ``requisition'' as the actual paperwork, such as a form,
which is furnished to a clinical diagnostic laboratory that identifies
the test or tests to be performed for a patient. The requisition may
contain patient information, ordering physician information, referring
institution information, information on where to send reports, billing
information, specimen information, shipping addresses for specimens or
tissue samples, and checkboxes for test selection. We believed the
requisition was ministerial in nature, assisting laboratories with the
billing and handling of results, and serves as an administrative
convenience to providers and patients. We believed that a written
order, which may be part of the medical record, and the requisition,
were two different documents, although a requisition that is signed may
serve as an order.
During the public comment period for the CY 2010 PFS proposed rule,
we received numerous comments on these issues. Subsequently, in the CY
2010 PFS final rule with comment period (74 FR 61931), we stated that
we would continue to carefully consider the issue of physician
signatures on requisitions and orders and that we planned to revisit
these issues in the future.
In the CY 2011 PFS proposed rule (75 FR 40162 through 40163), we
proposed to require a physician's or NPP's signature on requisitions
for clinical diagnostic laboratory tests paid on the basis of the CLFS.
We stated that we believed this policy would result in a less confusing
process because a physician's signature would be required for all
requisitions and orders, eliminating the uncertainty over whether the
documentation is a requisition or an order, whether the type of test
being ordered requires a signature, or which payment system does or
does not require a physician's or NPP's signature. We also stated that
we believed the requirement would not increase the burden on physicians
and it would be easier for the reference laboratory technicians to know
whether a test was appropriately requested, which would minimize
potential compliance problems for laboratories during the course of a
subsequent Medicare audit because a signature would be consistently
required. We solicited public comments on the CY 2011 PFS proposed
rule.
After careful consideration of all the comments received, we
finalized our proposed policy without modification to require a
physician's or NPP's signature on requisitions for clinical diagnostic
laboratory tests paid under the CLFS in the CY 2011 PFS final rule with
comment period (75 FR 73483), which became effective on January 1,
2011. This policy did not affect physicians or NPPs who chose not to
use requisitions to request clinical diagnostic laboratory tests paid
under the CLFS. Such physicians or NPPs could continue to request such
tests by other means, such as by using the annotated medical records,
documented telephonic requests, or electronic requests.
2. Proposed Changes
In the June 30, 2011 Federal Register (76 FR 38344), we proposed to
retract the policy we finalized in the CY 2011 PFS final rule with
comment period (75 FR 73483) and reinstate the prior policy that the
signature of the physician or NPP is not required on a requisition for
Medicare purposes for a clinical diagnostic laboratory test paid under
the CLFS. We proposed this policy based on continued and new concerns
noted by stakeholders regarding the practical effect of the finalized
policy on beneficiaries, physicians, and NPPs.
While we did not solicit further comments on the signature on
requisition issue in the CY 2011 PFS final rule with comment period, we
did receive additional feedback from industry stakeholders on the issue
after its publication in the Federal Register. Industry stakeholders
identified many scenarios where it would be difficult to obtain the
physician's or NPP's signature on the requisition for clinical
diagnostic laboratory tests paid under the CLFS. Industry stakeholders
asserted that there are many different situations where the physician
or NPP would direct staff to prepare requisitions for laboratory tests,
but then would be unavailable to provide his or her signature on the
requisition. As an example, and one that was raised by commenters on
the CY 2011 PFS proposed rule, in the long-term care setting, the
physician is typically not available in person on a daily basis. In
these cases, the physician may keep abreast of the patient's condition
by calling the nursing staff. If a patient's condition indicates that a
clinical diagnostic laboratory test is required, the nursing staff
typically transcribes the order from the physician over the telephone
onto a requisition. The information has to be transmitted to the
laboratory and, in this scenario, there is no physician's or NPP's
signature on the requisition. Another example that occurs in many
settings, including nursing homes, all types of hospitals (inpatient as
well as outpatient), and physician offices, involves specimens that are
packaged for transmission to the laboratory with a requisition by
nursing staff. Because the specimen often is transferred directly from
the patient to the nursing staff without, in most cases, a physician's
or NPP's intervention, the

[[Page 73303]]

requisition that accompanies the specimen does not bear the signature
of the physician or NPP.
Even in cases where the physician or NPP sees the patient in his or
her offices for an appointment and recommends that clinical diagnostic
laboratory testing be performed, we now better understand that,
typically, the information is transcribed from the medical record onto
a paper requisition by office staff after the physician or NPP and the
patient have concluded their interaction. In practice, we can see how
requiring the physician or NPP to sign the paper requisition could, in
some cases, be very inconvenient and disruptive to the physician, NPP,
the beneficiary, and other patients. The physician or NPP may need to
take time either during appointments with subsequent patients or
between patient appointments to make sure that the requisition is
signed for a particular patient prior to his or her departure from the
office. In addition, a beneficiary might have to wait for a physician
or NPP to complete the requisition signature process before the
beneficiary could depart from the office.
Another situation identified by industry stakeholders that we did
not previously consider concerns physicians or NPPs who maintain
several practice locations. A patient may see his or her physician or
NPP only at one particular practice location. If that patient presents
to the practice location with a medical issue that the physician or NPP
believes warrants immediate laboratory testing, but the physician or
NPP is physically at a different location that day, the physician or
NPP may be able to direct his or her nursing staff to prepare a
requisition for the laboratory test. But, if the physician or NPP must
sign the requisition, there could be a delay of several days or longer
before the physician or NPP is able to do so, which means the patient
would have to wait to have the laboratory test performed.
The aforementioned scenarios have detrimental implications for
expeditious patient care that were not evident to us until the new
policy was effectuated and we started hearing from stakeholders in the
industry that would be negatively impacted by the policy. In response
to a comment suggesting that physicians be educated about this new
requirement to alleviate problems of non-compliance, we stated, in the
CY 2011 PFS final rule with comment period (75 FR 73482), that we would
update our manuals and direct the Medicare contractors to educate
physicians and NPPs on this policy. After publication of the CY 2011
PFS final rule with comment period, it became even clearer to us that
some physicians, NPPs, and clinical diagnostic laboratories were not
aware of, or did not understand, the policy. Therefore, in the first
calendar quarter of 2011, we focused on developing educational and
outreach materials to educate those affected by this policy. Further,
we issued a statement that, once the educational campaign conducted in
the first quarter of 2011 was fully underway, we would expect
requisitions to be signed. While developing educational and outreach
materials, we realized how difficult and burdensome the actual
implementation of this policy was for physicians and NPPs and that, in
some cases, the implementation of this policy could have a negative
impact on patient care. At that point, we decided that the better
course of action was to re-examine the policy.
We re-examined our policy and our reasons for adopting this policy
in light of industry stakeholders' comments received after publication
of the CY 2011 PFS final rule with comment period and comments received
on the CY 2011 PFS proposed rule. We reviewed our beliefs and
assumptions regarding the effect of our policy on access to care and
with respect to administrative burden on physicians and NPPs, the
effect on innovation, and the impact on laboratories. We originally
believed that the policy would not have a negative impact on
beneficiary access to care. However, we now believe that we
underestimated the potential impact on beneficiary health and safety.
As discussed previously, care may be delayed under this policy in
situations where the physician or NPP orders the test but is not
available onsite to sign the requisition. For example, we understand
there are concerns that certain populations of patients, such as
nursing home patients and patients confined to their homes, may have
laboratory tests ordered urgently by a distant physician or NPP to
obtain information that is imminently needed in order to assess a need
for immediate referral to a hospital, emergency department or other
facility. If the ordering physician or NPP is not onsite, it is
unlikely that he or she would be able to receive, sign, and return a
requisition in the timeframe needed to respond to the patient's urgent
clinical status. We had not anticipated this impact on care when we
finalized our policy.
We also believed that the administrative burden on physicians and
NPPs would be minimal and would result in a less confusing process.
Physicians and NPPs must document their orders, in some form, in one or
more of the medical records of the patient. We still believe that
signing a laboratory requisition at the time of the order, if the
requisition is ready for signature, imposes little burden on the
physician or NPP, while significantly increasing our ability to
minimize improper payments due to fraud and abuse. However, we believe
we may have underestimated the number of occasions in which the
physician or NPP cannot perform both steps concurrently. We now
understand that it is not always the case that a physician or NPP can
perform both steps concurrently. For instance, a physician may sign an
order at the time of delivering care, but the requisition may not be
available for signature until sometime later. In that situation, the
physician may need to interrupt a subsequent examination in order to
sign a completed requisition so that the patient may leave with the
requisition. Given recently released estimates of physician shortfalls
in primary care (for example, as referenced in remarks by the Health
Resources and Services Administration (HRSA) Administrator to the
Bureau of Health Professions Advisory Committee on April 21, 2009), the
cost of lost physician time must also be revalued upwards.
Alternatively, the beneficiary may have to wait for the physician or
NPP to conclude his or her subsequent appointment, which could be as
long as 30 minutes or more. Neither of these situations--interrupting
the physician or NPP in a subsequent appointment or making the
beneficiary wait for an inconvenient period of time--is acceptable.
Further, we believed that the policy resulted in a less confusing
process because a physician or NPP signature would be required for all
requisitions and orders, eliminating uncertainty over whether the
documentation is a requisition or an order, whether the type of test
being ordered requires a signature, or which payment system does or
does not require a physician or NPP signature. However, based on
industry stakeholder comments subsequent to the publication of the CY
2011 PFS final rule with comment period, we now believe this process
may not be less confusing. Further, industry stakeholders assured us
that they had not been confused about the former physician/NPP
signature policy and that they never intended for us to interpret their
call for consistency in the signature process to mean that they should
be burdened with an additional requirement when they were already
signing the medical record.

[[Page 73304]]

In addition, we believed that many stakeholders either had
converted or were in the process of converting to an electronic health
records process that would negate the need for a requisition.
Electronic health records and electronic transmission of health
information are key pieces of this Administration's economic recovery
plan and, moreover, are key elements of our plan to improve healthcare
quality and efficiency. From the additional stakeholder concerns
subsequent to our CY 2011 PFS final rule with comment period, we are
sensitive to the increasing migration of information transfer away from
paper forms, such as requisitions, to the direct electronic submission
of requests for services. After we adopted the new policy, stakeholders
expressed their concerns that the requirement for a signature would
increase paperwork, in direct opposition to our promotion of time-
saving electronic communications. We believe that the requirement for a
signature on the requisition does not impact stakeholders who utilize
an electronic process for ordering clinical diagnostic laboratory tests
because the policy only applies to requisitions, which are paper forms.
Our intent was not to suggest that a requisition was necessary in those
cases. However, we recognize that members of the provider and supplier
community still believe this regulation could inhibit their use of
innovative technology and investment in healthcare IT resources.
Therefore, we recognize that we underestimated the potential for
paperwork burden.
Finally, we believed that the policy would make it easier for a
reference laboratory to know whether a test is appropriately requested
and to minimize potential compliance problems. Specifically, we
believed that the policy would improve a laboratory's ability to
authenticate requisitions. However, based on industry stakeholder
concerns received after the CY 2011 PFS final rule with comment period
and comments submitted on the CY 2011 PFS proposed rule (75 FR 40161
through 40163), we now believe this aspect of the policy is less
financially beneficial than we had estimated, because the percentage of
laboratory requests covered by the policy may be smaller than we
predicted and may continue to shrink as new technology is adopted. We
also believed the policy provided a mechanism for laboratories to
fulfill their responsibility to ensure that they only provide and bill
for services on the direct order of a physician or NPP because the
signature on the requisition would provide documentation and evidence
that the physician or NPP had ordered the service. However, industry
stakeholders expanded on comments to the CY 2011 PFS proposed rule and
informed us that there was a cost to adopting a rigid mechanism of
establishing authenticity. Laboratories believe it is more efficient
for them to use internal procedures and controls to ensure that they do
not provide and bill for services without a physician authorization
rather than through a Federal policy. Thus, we believe the expected
benefits of the policy may be less than we originally estimated.
In summary, there were many situations that we did not recognize as
problematic until we finalized the requisition signature policy and
stakeholders began to implement it. Upon review of the concerns that
industry stakeholders raised after we finalized our policy in the CY
2011 PFS final rule with comment period, and in reconsideration of
comments to the CY 2011 PFS proposed rule, we proposed to retract the
policy that was finalized in the CY 2011 PFS final rule with comment
period, which required a physician's or NPP's signature on a
requisition for clinical diagnostic laboratory tests paid under the
CLFS (75 FR 73483). We proposed to reinstate our prior policy that the
signature of the physician or NPP is not required on a requisition for
a clinical diagnostic laboratory test paid under the CLFS for Medicare
purposes.
We remain concerned about the costs and impact of fraud and abuse
on the Medicare program. The requirement that the treating physician or
NPP must document the ordering of the test remains, as does our
longstanding policy that requires orders, including those for clinical
diagnostic laboratory tests, to be signed by the ordering physician or
NPP. We believe that all parties share in the responsibility of
ensuring that Medicare services are provided only in accordance with
all applicable statutes and regulations, such as the requirement for a
physician or NPP order. In many instances, such as in the case of
orders originating in hospitals, we believe that retaining all the
other requirements previously discussed, especially requiring the
physician or NPP who orders the service to maintain documentation of
medical necessity in the beneficiary's medical record according to
Sec. 410.32(d)(2)(i), as well as the hospital CoPs on medical record
services at Sec. 482.24, are sufficient. However, we note that
hospital CoPs do not apply to other settings, such as private offices.
We believe it is the responsibility of the clinical diagnostic
laboratory, as it is for the provider of any service, to have
sufficient processes and safeguards in place to ensure that all
services are delivered only when ordered by a physician or NPP. This
proposed rule does not preclude an individual laboratory from requiring
a physician's or NPP's signature on the requisition. The laboratory may
develop its own compliance procedures to ensure that it only furnishes
services in response to a physician or NPP order. Such procedures could
include internal audits, agreements with ordering physicians or NPPs to
provide medical record evidence of the order in the event of an
internal or external audit, steps to confirm the existence of an order
under certain circumstances, or any other measures including the
acceptance of risk by the clinical laboratory. We believe this
financial and compliance responsibility was implicit in the 2001 final
rule (66 FR 58788), was reiterated in the March 5, 2002 transmittal
(Change Request 2410, Transmittal AB-02-030), and has remained a
consistent element of the subsequent instructions.
Comment: All commenters supported CMS's proposal to retract the
policy requiring a physician's or NPP's signature on a requisition for
clinical diagnostic laboratory tests paid under the CLFS, which was
finalized in the CY 2011 PFS final rule with comment period. All
commenters also supported the proposal to reinstate the prior policy
that the signature of the physician or NPP is not required on a
requisition for a clinical diagnostic laboratory test paid under the
CLFS for Medicare purposes.
Response: We thank the commenters for their support and, as
discussed below, are finalizing our proposal without modification.
After consideration of the public comments received, we are
finalizing our proposal to retract the policy that was finalized in the
CY 2011 PFS final rule with comment period, which required a
physician's or NPP's signature on a requisition for clinical diagnostic
laboratory tests paid under the CLFS (75 FR 73483) and to reinstate our
prior policy that the signature of the physician or NPP is not required
on a requisition for a clinical diagnostic laboratory test paid under
the CLFS for Medicare purposes.

[[Page 73305]]

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
Preventive care and beneficiary wellness are important to the
Medicare program and have become an increasing priority. In section
4103 of the Affordable Care Act, the Congress expanded Medicare Part B
benefits to include an annual wellness visit providing personalized
prevention plan services (hereinafter referred to as an annual wellness
visit). The annual wellness visit is described more fully in section
1861(hhh) of the Act, and coverage was effective for services furnished
on or after January 1, 2011. Regulations for Medicare coverage of the
annual wellness visit are established at 42 CFR 410.15. The annual
wellness visit may be performed by a physician, nonphysician
practitioner (physician assistant, nurse practitioner, or clinical
nurse specialist), or a medical professional (including a health
educator, a registered dietitian, or a nutrition professional, or other
licensed practitioner) or a team of such medical professionals, working
under the direct supervision of a physician. In summary, for CY 2011,
the first annual wellness visit includes--
Establishment of an individual's medical and family
history;
Establishment of a list of current medical providers and
suppliers involved in providing medical care to the individual;
Measurement of an individual's height, weight, body mass
index (or waist circumference, if appropriate), blood pressure, and
other routine measurements as deemed appropriate, based on the
beneficiary's medical and family history;
Detection of any cognitive impairment that the individual
may have;
Review of the individual's potential (risk factors) for
depression;
Review of the individual's functional ability and level of
safety;
Establishment of a written screening schedule for the
individual such as a checklist for the next 5 to 10 years, as
appropriate, based on recommendations of the United States Preventive
Services Task Force, the Advisory Committee on Immunization Practices,
and the individual's health status, screening history, and age-
appropriate preventive services covered by Medicare;
Establishment of a list of risk factors for which primary,
secondary or tertiary interventions are recommended or underway for the
individual, including any mental health conditions or any such risk
factors or conditions that have been identified through an initial
preventive physical examination (IPPE), and a list of treatment options
and their associated risks and benefits;
Furnishing of personalized health advice to the individual
and referrals, as appropriate, to health education or preventive
counseling services or programs aimed at reducing identified risk
factors and improving self-management; and
Any other element determined appropriate through the
national coverage determination process (NCD).
In summary, for CY 2011, subsequent annual wellness visits
include--
An update of the individual's medical and family history;
An update of the list of current providers and suppliers
that are regularly involved in providing medical care to the
individual;
Measurement of an individual's weight (or waist
circumference), blood pressure and other routine measurements as deemed
appropriate, based on the individual's medical and family history;
Detection of any cognitive impairment that the individual
may have;
An update to the written screening schedule for the
individual;
An update to the list of risk factors and conditions for
which primary, secondary, or tertiary interventions are recommended or
are underway for the individual;
Furnishing of personalized health advice to the individual
and referrals, as appropriate, to health education or preventive
counseling services;
Any other element determined appropriate through the NCD
process.
The annual wellness visit is specifically designed as a wellness
visit that focuses on identification of certain risk factors,
personalized health advice, and referral for additional preventive
services and lifestyle interventions (which may or may not be covered
by Medicare). The elements included in the annual wellness visit differ
from comprehensive physical examination protocols with which some
providers may be familiar since the annual wellness visit is a visit
that is specifically designed to provide personalized prevention plan
services as defined in the Act.
Section 1861(hhh)(1)(A) of the Act specifies that a personalized
prevention plan for an individual includes a health risk assessment
(HRA) that meets the guidelines established by the Secretary. In
general, an HRA is an evaluation tool designed to provide a systematic
approach to obtaining accurate information about the patient's health
status, injury risks, modifiable risk factors, and urgent health needs.
This evaluation tool is completed prior to, or as part of, an annual
wellness visit. The information from the HRA is reflected in the
personalized prevention plan that is created for the individual.
Although the annual wellness visit was effective on January 1,
2011, section 4103 of the Affordable Care Act provided the Secretary
additional time to establish guidelines for HRAs after consulting with
relevant groups and entities (see section 1861(hhh)(4)(A) of the Act).
A technology assessment from the Agency for Healthcare Research and
Quality (AHRQ) was commissioned to describe key features of HRAs, to
examine which features were associated with successful HRAs, and to
discuss the applicability of HRAs to the Medicare population. The
finalized technology assessment was posted on July 6, 2011 and is
publicly available on the CMS Web site at http://www.cms.gov/determinationprocess/downloads/id79ta.pdf.
We collaborated with the Centers for Disease Control and Prevention
(CDC), due to their in-depth knowledge of HRAs, and because the CDC was
directed by section 4004(f) of the Affordable Care Act to develop
guidelines for a personalized prevention plan tool. In the November 16,
2010 Federal Register (75 FR 70009), CDC issued a notice to solicit
feedback regarding HRA guidance development. Public comments were
received from numerous relevant groups and entities including: The
American Academy of Family Physicians, the American Dietetic
Association, the American Geriatrics Society, the American College of
Cardiology, Care Continuum Alliance, physician practices, public health
agencies, healthcare research groups, and the general public.
The CDC convened a public meeting in Atlanta, Georgia in February
2011 to facilitate the development of guidance for HRAs. (See the
December 30, 2010 Federal Register (75 FR 82400)--announcement for
``Development of Health Risk Assessment Guidance, Public Forum''). This
meeting allowed broad public input from stakeholders and the general
public into the

[[Page 73306]]

development of guidelines for evidence-based HRAs. The Interim Guidance
for Health Risk Assessments developed by the CDC is available on the
CMS Web site at http://www.cms.gov/coveragegeninfo/downloads/healthriskassessmentsCDCfinal.pdf. The CDC guidance resulted from a
compilation and review of the current scientific evidence, the AHRQ
technology assessment, and expert advice from those working in the
field of HRA and wellness, and takes into account public feedback from
the request for information and the public meeting. The CDC guidance
includes questions and topics to be addressed as deemed appropriate for
the beneficiary's age. Additional information regarding the CDC
guidance development process is included as part of the guidance
document. The CDC plans to publish ``A Framework for Patient-Centered
Health Assessments, a Morbidity and Mortality Weekly Report (MMWR).''
The MMWR will include additional information applicable to the
successful implementation of the HRA, such as the CDC interim guidance
document, as well as information related to implementation, feedback,
and follow-up that evidence suggests is critical for improving health
outcomes using this process. We look forward to stakeholders engaging
in the development of innovative tools or methods, which would provide
health professionals the flexibility to adapt the HRA guidance to
evaluate additional topics, as appropriate, to provide a foundation for
development of a personalized prevention plan as part of the annual
wellness visit. We also look forward to stakeholders engaging in the
development of innovative electronic solutions for conducting a HRA and
integration with electronic health records.
b. Implementation--Summary of Proposed Rule and Comments
Consistent with section 1861(hhh) of the Act and the initial CDC
guidance document, we proposed to amend 42 CFR 410.15 by: (1) Adding
the term ``health risk assessment'' and its definition; (2) revising
the definitions of ``first annual wellness visit providing personalized
prevention plan services'' and ``subsequent annual wellness visit
providing personalized prevention plan services;'' and (3)
incorporating the use and results of an HRA into the provision of
personalized prevention plan services during the annual wellness visit.
The following is a summary of the provisions of the proposed rule
and the comments received. We received 59 public comments from national
and State professional associations, national medical advisory and
patient advocacy groups, health insurance associations, health care
systems, manufacturers, a government agency, and other national
healthcare organizations. Thirty-two (32) comments supported
incorporation of an HRA into the annual wellness visit and 5 were
opposed. The remaining 22 comments provided feedback about the impact
of the annual wellness visit as a whole requested modifications or
additional elements to the annual wellness visit, and coverage for
additional preventive services and vaccines.
Most supporters generally agreed with the proposed major HRA
components. One commenter indicated that the inclusion of the HRA would
help make care more preventive and proactive, and help avoid long-term
maladies associated with aging and chronic diseases. Some commenters
expressed concern that the proposal was too prescriptive and did not
allow for sufficient flexibility. Other commenters were concerned that
the HRA components were not sufficiently targeted to specific diseases.
One commenter was of the opinion that there was a lack of evidence for
the usefulness of an HRA, and believed the best evidence on the
efficacy of comprehensive health risk assessment for the elderly comes
from highly specialized geriatric assessment clinics capable of
targeting individuals at high risk and providing longitudinal follow-
up. This commenter believed that it would be impossible to replicate
similar interventions without follow-up visits, and indicated that
additional research is needed to determine how an HRA can be
effectively translated into primary care practice.
Regarding flexibility of the HRA, some commenters supported a more
flexible approach to HRA development and use, while others requested
that a standardized tool be developed and certified by either CMS or an
outside accrediting organization. A few commenters believed the HRA
would be difficult for health professionals to implement since the CDC
guidance had not been published and work had not been completed on
establishing standards for interactive web-based programs to furnish
HRAs, referencing other components of section 4103 of the Affordable
Care Act.
In the proposed rule, we requested public comment on the overall
impact and burden of the annual wellness visit on health professional
practices, including the impact that incorporation and use of an HRA
would have on health professionals and their practices. Two commenters
believed that the incorporation of an HRA supports a systematic
approach to patient wellness, providing a foundation for development of
a personalized prevention plan and they supported the inclusion of a
minimum set of topics as part of the HRA. Four commenters indicated
that the use of an HRA would have a significant impact on health
professional practices. One commenter stated that inclusion of an HRA
would be somewhat or very difficult. Another was concerned that health
professionals would be penalized if an individual refuses to complete
an HRA or follow the personalized prevention plan recommendations.
Another commenter was concerned with the lack of a publicly available
HRA.
Of those commenters that provided feedback on the potential burden
of the HRA as part of both first and subsequent AWVs on health
professional practices, the comments ranged from requesting that HRAs
be optional and used at the discretion of a health professional, to
requesting that the CDC develop a standardized HRA tool for use with
the Medicare aged population. One commenter opined that a quality HRA
will provide health professionals information that shows patient
progress over time without adding additional effort on the
practitioner. This same commenter also believed that HRAs could have a
positive impact on health professional practices by helping patients
understand their health care needs. Three commenters indicated that
development and implementation of an HRA that meets CDC guidelines
could be a significant burden. One commenter recommended that the HRA
implementation date be extended to July 1, 2012. Three comments
expressed concern with what they believed to be a rigid approach that
would require questions for all Medicare beneficiaries in conjunction
with prevention plan services that they believed would not be
applicable for every beneficiary on an annual basis.
(1) Definition of a ``Health Risk Assessment''
We proposed to revise Sec. 410.15 by adding the term ``health risk
assessment'' and defining such term as an evaluation tool that meets
the following requirements:
Collects self-reported information about the beneficiary.
Can be administered independently by the beneficiary or
administered by a health professional prior to or as part of the AWV
encounter.
Is appropriately tailored to and takes into account the
communication

[[Page 73307]]

needs of underserved populations, persons with limited English
proficiency, and persons with health literacy needs.
Takes no more than 20 minutes to complete.
Addresses, at a minimum, the following topics:
++ Demographic data, including but not limited to age, gender,
race, and ethnicity.
++ Self assessment of health status, frailty, and physical
functioning.
++ Psychosocial risks, including but not limited to depression/life
satisfaction, stress, anger, loneliness/social isolation, pain, or
fatigue.
++ Behavioral risks, including but not limited to tobacco use,
physical activity, nutrition and oral health, alcohol consumption,
sexual practices, motor vehicle safety (seat belt use), and home
safety.
++ Activities of daily living (ADLs), including but not limited to
dressing, feeding, toileting, grooming, physical ambulation (including
balance/risk of falls), and bathing.
++ Instrumental activities of daily living (IADLs), including but
not limited to shopping, food preparation, using the telephone,
housekeeping, laundry, mode of transportation, responsibility for own
medications, and ability to handle finances.
The standards outlined in the definition of the term health risk
assessment represent a minimum set of topics that need to be addressed
as part of an HRA, while allowing the health professional the
flexibility to evaluate additional topics, as appropriate, to provide a
foundation for development of a personalized prevention plan.
Comment: Commenters requested flexibility regarding the elements
included in the HRA and/or the time allotted for administration. Four
comments indicated that the amount of time allotted for HRA
administration was not adequate, given the number of HRA components.
Response: We believe it is important to balance the
comprehensiveness of the HRA with the potential burden on patients and
health professional time constraints. The elements included in the HRA
definition are those that experts in the field of HRAs advised are
scientifically valid and for which there is evidence of effectiveness.
In a study on HRA design, Mills and colleagues reported that there was
a ``significant drop-off in completion after 20 minutes of engagement''
(Mills et al. J R Soc Med Sh Rep 2011;2:71. DOI 10.1258/
shorts.2011.011015). We believe that the components of the HRA that we
proposed could be completed by most patients within 20 minutes.
Comment: One commenter believes that information related to
elements of the annual wellness visit could be collected efficiently
through the HRA, such as family history, screening history, a list of
providers and suppliers regularly involved in the individual's care,
and current medications. Another commenter suggested that the HRA
collect information about patient access to preventive services,
including history of appropriate vaccinations.
Response: We recognize that medical and family history (including
current medications) and preventive services utilization history are
important components of the annual wellness visit and for inclusion in
the patient's medical record. While we agree that these topics are
important components in the provision of personalized prevention plan
services, we believe it is important to balance the comprehensiveness
of the HRA with the potential burden on patients and health
professional time constraints. Medical and family history (as defined
in Sec. 410.15(a)) and development or update of the list of providers
and suppliers that are involved in the patient's care are typically
asked and reviewed by the health professional during the AWV encounter.
Thus, we are not adopting the commenter's suggestions to add these
topics as mandatory components of the HRA.
Comment: A few commenters requested that CMS include falls
screening in the HRA. One commenter believes that fall risk assessments
should be consistent with the clinical practice guidelines established
by major geriatric societies, which include recommendations for
screening with further assessment and referral as indicated. Another
commenter requested that functional status data be collected through
the HRA to enhance the fall risk assessment during the annual wellness
visit.
Response: While we appreciate the suggestions offered by the
commenters, the HRA is not meant to replace the patient and family
history that is usually asked and reviewed by the health professional,
but rather to be an adjunct to it, providing information on behaviors
known only to the patient. It has been determined by medical providers
and other experts in the field of HRA that risk for falls (for example,
impaired balance) can best be assessed in a face-to-face encounter with
a health professional. We note that a review of the beneficiary's level
of safety is already required as part of the first annual wellness
visit. Self assessment of health status, frailty, and physical
functioning, along with physical activity and seat belt use (which is
assessed as a safety measure), were included in the proposed definition
of an HRA, which will be updated at each subsequent annual wellness
visit. Discussion of these topics opens the possibility of additional
provider inquiry in assessing other safety risks. Thus, we are not
adopting the commenter's suggestion to add more detailed information
about fall risk to the HRA.
Comment: One commenter supported the emphasis on the beneficiary's
role in completing the HRA and suggested that we expand upon this
effort to further engage patients in the AWV and the provision of
personalized prevention plan services by adding patient goals for
health and wellness as components of the HRA.
Response: Patient goals are identified through the process of
shared decision-making where the health professional works with the
patient to discover what is important to the patient and the patient's
motivation to change behavior, as part of the provision of personalized
prevention plan services during the annual wellness visit encounter.
Thus, we are not adopting the commenter's suggestions to add patient
goals as a component of the HRA.
Comment: Other commenters requested that the HRA incorporate the
collection of more detailed nutrition data and data that may help
health professionals assess risk for diabetes, heart disease, and
cancer.
Response: Questions related to nutrition and hypertension were
included in the proposed HRA definition. A more detailed nutrition
assessment could be conducted by the provider if answers to the HRA
questions indicate an issue with nutrition. Cancer risk can be
identified through a complete patient history. As discussed in a
previous response, the HRA is not meant to replace the patient and
family history that is usually asked and reviewed by the health
professional, but rather to be an adjunct to it, providing information
on behaviors known only to the patient. Adding additional mandatory
information as part of the HRA would increase the time it takes to
complete the HRA, and we are mindful that adding too much information
could be burdensome to patients. Thus, we are not mandating a more
detailed nutritional assessment in the HRA.
Comment: A few commenters suggested that the HRA include tobacco
use questions, collect information about tobacco use screening, and
utilization of tobacco use cessation counseling. One

[[Page 73308]]

commenter requested that counseling for tobacco use cessation be
included as part of subsequent annual wellness visits.
Response: We note that the definition of an HRA includes among
other things, behavioral risks such as tobacco use. We agree that
tobacco use cessation counseling is important for those individuals
that use tobacco products. If positive tobacco use is identified during
the annual wellness visit, additional questions can be asked by the
health professional followed by the process of motivational
interviewing (the health professional offers personalized information
to the patient) and shared decision-making (the health professional
works with the patient to discover what is important to the patient and
the patient's motivation to change behavior) in the development of the
personalized prevention plan during the annual wellness visit
encounter.
In Sec. 410.15(a), we defined first and subsequent annual wellness
visits to include provisions for the furnishing of personalized health
advice and referrals, as appropriate, to health education or preventive
counseling services, including among other things, tobacco use
cessation. We note that Medicare covers counseling to prevent tobacco
use as an ``additional preventive service'' under Medicare Part B
(additional information available in Pub. 100-03, Medicare National
Coverage Determinations Manual, Chapter 1, Section 210.4.1). We believe
that the health professionals who are furnishing the annual wellness
visits, whether they are first or subsequent annual wellness visits,
will establish or update an appropriate list of referrals for education
services and preventive counseling services for each individual.
Comment: One commenter supported and appreciated the recognition of
the importance of behavioral risks as part of the HRA. However, the
commenter suggested that ``sexual practices'' be replaced with a term
that would provide a more comprehensive view of the individual's mental
and physical health, such as ``sexual health.''
Response: We agree with the comment and are changing the language
in the final rule. Specifically, we are modifying paragraph (v)(D) of
the definition of the term ``health risk assessment'' to read
``Behavioral risks, including but not limited to, tobacco use, physical
activity, nutrition and oral health, alcohol consumption, sexual
health, motor vehicle safety (seat belt use), and home safety.''
Comment: Many commenters were of the opinion that memory should be
included in the HRA. One commenter agreed with the provisions of the
proposed rule that did not include cognitive assessment as part of the
HRA, however, the commenter believed that general questions about
memory should be included in the HRA. Other commenters were concerned
that an appropriate screening instrument for cognitive impairment was
not included in either the HRA or annual wellness visit, and requested
modifications to the definition of ``detection of any cognitive
impairment'' to include use of an appropriate screening instrument.
Response: We agree with commenters that detection of cognitive
impairment is important. We note that ``detection of any cognitive
impairment'' is already part of the annual wellness visit, consistent
with the statutory elements described in section 1861(hhh)(2) of the
Act. As Boustani and colleagues (Ann Internal Medicine 2003;138:927-
937) noted: ``Dementia causes a high burden of suffering for patients,
their families, and society. For patients, it leads to increased
dependency and complicates other comorbid conditions. For families, it
leads to anxiety, depression, and increased time spent caring for a
loved one. The annual societal cost of dementia is approximately $100
billion (health care and related costs as well as lost wages for
patients and family caregivers).'' Because information related to
cognitive impairment is already addressed as part of the annual
wellness visit, we do not believe it is necessary to duplicate the
collection of this information through the HRA.
We also note that an evidence-based, standardized screening tool
for dementia is not currently available for assessment of cognitive
impairments. The USPSTF noted: ``[M]ost screening tests have been
evaluated in studies with small sample sizes, and the populations of
patients on whom screening instruments have been tested have varied
greatly, making it difficult to determine the overall performance of
screening tests for dementia'' (http://www.uspreventiveservicestaskforce.org/3rduspstf/dementia/dementrr.pdf).
Since there is no nationally recognized screening tool for the
detection of cognitive impairments at the present time, we are not
making any changes to the definition of ``detection of any cognitive
impairment'' at this time. We believe that physicians can use their
best clinical judgment in the detection and diagnosis of cognitive
impairments, along with determining whether additional resources may
need to be used in the course of screening and treatment of the
patient.
We appreciate the interest in the identification and development of
an appropriate cognitive screening instrument. We are collaborating
with the National Institute on Aging, the Department of Veterans
Affairs, CDC, AHRQ, and other relevant stakeholders to assess the
current methods for detecting cognitive impairment to develop
recommendations for health professionals with respect to appropriate
responses to both positive and negative cognitive impairment assessment
results. We will continue to monitor advancements in screening,
collaborate with the USPSTF, and will consider revising this element if
the evidence is sufficient and a standardized screening test becomes
available. Thus, at this time, we are not adopting the suggestion to
include additional mandatory components related to memory or cognitive
assessment within the HRA.
Comment: Two comments supported inclusion of history of alcohol
consumption in the HRA, but recommended that we add substance or drug
use history to the HRA. One commenter indicated that illicit substance
use and prescription drug misuse are significant concerns among older
adults. Another commenter indicated that intravenous drug use is a risk
factor for HIV transmission.
Response: We are not adopting the commenters' suggestions to
include these topics as mandatory components in the HRA to reflect a
history of drug use. Other components included in the HRA definition,
such as those pertaining to alcohol consumption, provide an opportunity
for health professionals to ask additional questions related to
additional areas of potential substance use, including prescription
drug misuse and illicit drug use.
(2) Changes to the Definitions of ``First Annual Wellness Visit'' and
``Subsequent Annual Wellness Visit''
In Sec. 410.15, we adopted the components of the annual wellness
visit, consistent with the statutory elements described in section
1861(hhh)(2) of the Act. The first and subsequent annual wellness
visits, as defined in Sec. 410.15(a), are meant to represent a
beneficiary visit focused on prevention. Among other things, the annual
wellness visit encourages beneficiaries to obtain the preventive
services covered by Medicare that are appropriate for them. First and
subsequent annual wellness visits also include elements that focus on
the furnishing of personalized health advice and referral, as
appropriate, to health education, preventive counseling services,
programs aimed at improving

[[Page 73309]]

self-management, and community-based lifestyle interventions.
We proposed to revise the definitions for first and subsequent
annual wellness visits to incorporate the use and results of an HRA in
the provision of personalized prevention plan services during the
annual wellness visit. The HRA is integral to the provision of
personalized prevention plan services, consistent with section
1861(hhh) of the Act. We proposed to incorporate the HRA by revising
the definitions for first and subsequent annual wellness visits as
follows--
Specify that the annual wellness visit take into account
the results of an HRA;
Add the review (and administration, if needed) of an HRA
as an element of both first and subsequent annual wellness visits; and
Specify that the establishment of a written screening
schedule for the individual, such as a checklist, includes and takes
into account the HRA.
The HRA facilitates a systematic method for identifying health
behaviors and risk factors known to the patient (for example: tobacco
use, physical activity, and nutritional habits) for which the medical
provider can discuss and provide tailored feedback aimed at reducing
risk factors as well as reducing the potential for developing the
diseases to which they are related.
During the annual wellness visit encounter, the HRA information is
utilized by the health professional in a thought process intended to
develop a personalized prevention plan for the patient to improve
health status and delay the onset of disease. For instance, if the
information provided by the HRA indicated that the beneficiary had a
current or past history of tobacco use, the health professional may
deem it appropriate to perform those commonly used aspects of a
clinical evaluation (for instance, listening to (auscultation) the
heart and lungs) in order to provide the appropriate personalized
health advice and referrals for additional preventive services such as
tobacco use cessation counseling.
We believe that the incorporation of the HRA will increase the
efficiency of the health professional's effort during the annual
wellness visit. For instance, during the annual wellness visit
encounter, the health professional furnishing the annual wellness visit
would review the information reported in the HRA, which would serve as
the basis for a personalized prevention plan provided during the annual
wellness visit encounter. The beneficiary would leave the visit with
personalized health advice, appropriate referrals, and a written
individualized screening schedule, such as a check list. We would not
expect that the health professional would provide only general
recommendations during the annual wellness visit encounter and then
mail a personalized prevention plan that incorporates an HRA to the
beneficiary outside of the annual wellness visit encounter. While the
annual wellness visit is a wellness visit that focuses on wellness and
disease prevention, a follow-up visit to treat an identified illness
may be needed to address an urgent health issue. For example, if a
beneficiary is determined to have high blood pressure, a follow- up
visit for further review of symptoms and evaluation and management,
along with determining whether additional interventions are necessary,
may be performed after the completion of the annual wellness visit as a
separate service.
We also proposed changes to the definition of the term ``subsequent
annual wellness visit providing personalized prevention plan services''
to clarify that the health professional should furnish personalized
prevention plan services and updated information if there have been
changes since the beneficiary's last annual wellness visit, whether
that was a first annual wellness visit or a subsequent annual wellness
visit. In the CY 2011 PFS final rule, we stated in the definition for
subsequent annual wellness visits that certain elements should be
updated based on information developed during the first annual wellness
visit (for example, lists of risk factors and screening schedules).
Since all annual wellness visits that follow the first annual wellness
visit are considered subsequent annual wellness visits, the health
professional should update elements that were developed during the
previous annual wellness visit if there have been changes. We received
one comment regarding the proposed changes to update elements of the
annual wellness visit developed during the previous annual wellness
visit. The commenter agreed with the proposed changes. The proposed
changes to the definition for subsequent annual wellness visits, which
we are finalizing in this final rule with comment period are as
follows:
Newly redesignated paragraph (iii) states ``an update of
the list of current providers and suppliers that are regularly involved
in providing medical care to the individual as that list was developed
for the first annual wellness visit providing personalized prevention
plan services or the previous subsequent annual wellness visit
providing personalized prevention plan services''.
Newly redesignated paragraph (vi)(B), states ``the list of
risk factors and conditions for which primary, secondary or tertiary
interventions are recommended or are underway for the individual as
that list was developed at the first annual wellness visit providing
personalized prevention plan services or the previous subsequent annual
wellness visit providing personalized prevention plan services''.
Comment: A few comments requested that the annual wellness visit
and HRA be treated as a combined approach to satisfy the elements that
comprise personalized prevention plan services. One commenter was of
the opinion that the HRA only addresses two of the annual wellness
visit components: potential risk factors for depression, and functional
ability and level of safety. This same commenter believes that the HRA
should not be considered another component of the annual wellness
visit, but rather the mechanism that helps drive the content of the
office visit and the provision of personalized prevention plan
services. Another commenter expressed concerns about whether an annual
wellness visit would be covered by Medicare Part B if a beneficiary
declined to fill out or complete an HRA.
Response: We agree with the commenters that an HRA is an important
part of the annual wellness visit. We do not agree that the HRA must
reflect all of the elements of the annual wellness visit, as this
approach would be unduly duplicative and also burdensome to patients
completing the HRA. As we discussed in the proposed rule, we believe
that incorporation of the HRA supports a systematic approach to patient
wellness and is integral to the furnishing of personalized prevention
plan services during the annual wellness visit. The results of the HRA
will facilitate and provide the foundation for the development of the
personalized prevention plan. Thus, we are not making additional
changes in response to these comments. While the statute requires that
the HRA be included, and taken into account in the provision of
personalized prevention plan services as part of the annual wellness
visit, the statute and this rule do not speak to how a health
professional should address items left blank. We expect that health
professionals will act in good faith to assist beneficiaries to
complete the items relevant to the development of a personalized
prevention plan.
In the proposed rule, we included language that specified that
first and subsequent annual wellness visits providing personalized
prevention plan

[[Page 73310]]

services take into account the results of a HRA. In response to the
comments received, we are modifying the introductory text of the
definition of the term ``first annual wellness visit providing
personalized prevention plan services'' to specify that the first AWV
includes and takes into account the results of an HRA, consistent with
section 1861(hhh)(1) of the Act. We continue to believe that review
(and administration, if needed) of the HRA are also integral pieces of
the provision of personalized prevention plan services. Therefore, we
are finalizing the addition of new paragraph (i) ``review (and
administration, if needed) of a health risk assessment'' to the
definition of the term ``first annual wellness visit providing
personalized prevention plan services.''
Comment: A few commenters expressed concern with what they believed
to be a rigid approach that would require questions for all Medicare
beneficiaries in conjunction with prevention plan services that they
believed would not be applicable for every beneficiary on an annual
basis.
Response: We agree with the commenters that a patient may not need
to complete a full HRA if he or she obtains an annual wellness visit
every year as permitted by the statute, but update the HRA. Therefore,
we are modifying the introductory text and new paragraph (i) of the
definition of the term ``subsequent annual wellness visit providing
personalized prevention plan services'' to specify that the HRA be
updated as part of subsequent visits. These changes will reduce the
burden for both patients and health professionals while ensuring that
the HRA is updated to reflect relevant changes.
Comment: Many commenters provided suggestions regarding
administration of the HRA, specifically requesting that CMS allow a
physician's office to mail the HRA to the beneficiary prior to the
appointment or administer the HRA over the phone. Commenters asked for
clarification about the staff that would be appropriate to administer
the HRA.
One commenter suggested a hierarchy of preferred administration
methods, starting with internet-based systems, kiosk-style systems,
automated telephone response systems, and paper-based mail-in systems.
However, the same commenter, along with several others, opined that the
paper-based system may be the most appropriate for Medicare
beneficiaries. Commenters believed that beneficiaries may not be
comfortable with or use the internet for health information.
Response: As we stated in the proposed rule, we believe that the
health professional should consider the beneficiary's needs when
determining whether assistance would be needed for the beneficiary to
complete the HRA, including whether administrative support by health
professionals is necessary. We believe it is important that health
professionals have the flexibility to address additional topics as
appropriate, based on patient needs, consistent with our final rule.
Thus, there is not only one type of HRA that will meet the CDC
guidelines.
While we appreciate the commenters' concerns, we are not assigning
particular tasks or restrictions for specific members of the team in
this final rule. We believe it is better for the supervising physician
to assign specific tasks to qualified team members (as long as they are
licensed in the State and working within their State scope of
practice). This approach gives the physician and the team the
flexibility needed to address the beneficiary's particular needs on a
particular day.
As we discussed in the proposed rule, the CDC plans to publish ``A
Framework for Patient-Centered Health Assessments, a Morbidity and
Mortality Weekly Report (MMWR).'' The MMWR will include additional
information applicable for the successful implementation of the HRA,
such as the CDC interim guidance document, as well as information
related to implementation, feedback, and follow-up that evidence
suggests is critical for improving health outcomes using this process.
Comment: Some comments recommended that CMS identify HRA tools that
meet the criteria outlined in the proposed rule and also provide for an
accreditation or certification process for HRA instruments.
Response: We believe it is important that health professionals have
the flexibility to address additional topics as appropriate, based on
patient needs, consistent with our final rule. Thus, there is not only
one type of HRA that will meet the CDC guidelines.
As we discussed in the proposed rule, the CDC plans to publish ``A
Framework for Patient-Centered Health Assessments, a Morbidity and
Mortality Weekly Report (MMWR).'' The MMWR will include additional
information applicable for the successful implementation of the HRA,
such as the CDC interim guidance document, as well as information
related to implementation, feedback, and follow-up that evidence
suggests is critical for improving health outcomes using this process.
While we are not including requirements for accreditation or
certification of HRA instruments in this final rule, we may consider a
certification process in the future.
We requested comments on the impact of the elements included in the
definitions of first and subsequent annual wellness visits and
requested comments on the modification of those annual wellness visit
elements for which the Secretary has the authority to determine
appropriateness.
Comment: One comment indicated that the annual wellness visit
helped health professionals address preventive services in a more
organized manner and believed the annual wellness visit was being
furnished without difficulty. Another offered support for the
establishment of a written screening schedule. One commenter believed
that the annual wellness visit provided little benefit for the patient
and created more burdens for the physician, while another believed that
the annual wellness visit elements were rigid and onerous compared to
other preventive services.
Some commenters requested that CMS include a comprehensive physical
exam as part the annual wellness visit. Other commenters requested that
additional biometric assessments and routine blood work also be
included as part of the AWV. One indicated that furnishing and coding
for a separate physical exam may be confusing for physicians and deter
the provision of the annual wellness visit. One commenter said that the
physical exam is necessary to develop an accurate and appropriate list
of risk factors and conditions for which primary, secondary, and
tertiary interventions are recommended or are underway. Other
commenters requested that laboratory tests and blood work should also
be included in the annual wellness visit since the commenter considers
blood work and laboratory tests standards in physician practice.
Response: In Sec. 410.15, we adopted the components of the annual
wellness visit, consistent with the statutory elements described in
section 1861(hhh)(2) of the Act. The first and subsequent annual
wellness visits, as defined in Sec. 410.15(a), are meant to represent
a beneficiary visit focused on prevention. The annual wellness visit is
not a ``routine physical check-up'' that some beneficiaries may receive
periodically from their physician or practitioner. The annual wellness
visit is specifically designed as a wellness visit that focuses on
identification of certain risk factors, personalized health advice, and
referral for additional preventive services and lifestyle

[[Page 73311]]

interventions (which may or may not be covered by Medicare). Therefore,
we are not adopting the suggestion to mandate a comprehensive physical
examination as part of the annual wellness visit.
Regarding requests that routine blood work be included in the
annual wellness visit, we note that Medicare Part B already covers the
following screenings that include blood work--
Cardiovascular disease screenings once every 5 years
(lipid panel, cholesterol, lipoprotein, and triglycerides); and
Diabetes screening tests for beneficiaries that meet
certain conditions (2 screening tests per year for beneficiaries
diagnosed with pre-diabetes; 1 screening per year if previously tested,
but not diagnosed with pre-diabetes, or if never tested). Given that
these are separate Part B benefits, we are not adding routine blood
work as a component of the annual wellness visit.
Comment: We received several comments that supported the
establishment of a written screening schedule that includes both
services that are covered by Medicare as well as community-based
services that may not be covered by Medicare. One commenter stated that
coordination with wellness programs would greatly enhance the
effectiveness of personalized prevention plan services as a tool to
reduce individual health risks. Commenters explained that the
discussion of appropriate preventive services should not be limited
based on insurance coverage. Other commenters requested that health
professionals consider providing voluntary HIV screening, and referrals
for medical nutrition therapy, home health services, and outpatient
rehabilitation services. Regarding mental health services, one
commenter opined that there is a lack of mental health professionals
involved in primary care and, thus, requested that CMS add a
requirement to the annual wellness visit for referral to mental health
professionals.
Response: We appreciate the comments received and agree that it is
important for health professionals that furnish the annual wellness
visit to include information regarding appropriate preventive services,
based on the beneficiary's current risk factors. That being said, the
annual wellness visit includes the following element: ``furnishing of
personalized health advice to the individual and a referral, as
appropriate, to health education or preventive counseling services or
programs aimed at reducing identified risk factors and improving self-
management, or community-based lifestyle interventions to reduce health
risks and promote self-management and wellness, including weight loss,
physical activity, smoking cessation, fall prevention, and nutrition.''
We believe that the health professional who is furnishing an annual
wellness visit will determine an appropriate list of referrals for
education services and preventive counseling services for each
individual as part of the provision of personalized prevention plan
services. We believe that the definitions for first and subsequent
annual wellness visits address commenters' concerns regarding referrals
for community-based services, mental health issues, and medical
nutrition therapy. Therefore, we are not making the requested changes.
(3) Additional Comments
Comment: One commenter was concerned that the term ``physician'' is
defined, for purposes of the definition of ``health professional,'' to
be either a doctor of medicine or a doctor of osteopathy as defined in
section 1861(r)(1) of the Act. The commenter suggests that we use the
full definition of ``physician'' as defined in section 1861(r) of the
Act, instead. The commenter stated that doctors accredited through the
Council on Chiropractic Education are prepared to practice as primary
care chiropractic physicians.
Response: We did not propose to make any changes to the definition
of ``physician'' as used in Sec. 410.15 in the proposed rule and this
comment is outside the scope of our current rulemaking. We are not
making any changes in this final rule.
Comment: One commenter suggested that fall risk screening should be
administered by physical therapists and other appropriately qualified
professionals, along with requiring, for those individuals at risk for
falls, that physical therapists create a plan of care.
Response: While we appreciate the commenter's concerns, we are not
assigning particular tasks for specific members of the team, such as
those tasks suggested by the commenter, in this final rule. We believe
it is better for the supervising physician to assign specific tasks to
qualified team members (as long as they are licensed in the State and
working within their State scope of practice). This approach gives the
physicians and the team the flexibility needed to address the
beneficiary's particular needs on a particular day. It also empowers
the physician to determine whether specific medical professionals (such
as physical or occupational therapists) who will be working on his or
her wellness team are needed on a particular day. The physician is able
to determine the coordination of various team members during the annual
wellness visit.
Comment: Another commenter requested that the Secretary use
authority under Sec. 4105 of the Affordable Care Act to remove the
IPPE referral requirement for abdominal aortic aneurysm screening, and
make the one-time screening available via referral during the annual
wellness visit.
Response: This comment is outside the scope of our proposed
rulemaking as we made no proposals with respect to section 4105 of the
Affordable Care Act. Our current coverage for abdominal aortic aneurysm
screening is established in Sec. 410.19. Thus, we are not making any
changes based on this comment at the present time.
Comment: One commenter expressed concern that the proposed rule did
not include voluntary advanced care planning as part of the annual
wellness visit and was disappointed that the proposed rule was silent
on this issue.
Response: In the proposed rule, we did not propose to add voluntary
advanced care planning to the definitions for first or subsequent
annual wellness visits. We are not making changes as suggested by this
commenter at this time.
Comment: We received a few comments regarding the relationship
between the IPPE and the annual wellness visit. Some commenters
recommended that we eliminate the IPPE since they believe that it is
similar to the provisions of the annual wellness visit.
Response: We appreciate the attention drawn to the similarity
between the IPPE and the annual wellness visit. While we did model some
elements of the annual wellness visit after elements in the IPPE, we
note that these statutory provisions are separate and distinct benefits
and that Medicare beneficiaries are eligible to receive both of these
benefits in sequence if regulatory requirements are met.
Comment: A few commenters were disappointed that CMS did not add
screening for depression and screening for risk of falls to the
elements included in subsequent annual wellness visits. Commenters
disagreed with CMS' assertion that lack of information regarding
optimal frequency for depression screening was a sufficient reason for
not including depression screening in subsequent annual wellness
visits, and that the risk of change over a 12-month period is
significant.

[[Page 73312]]

Response: We agree that depression screening is important.
Effective October 14, 2011, Medicare covers screening for depression in
adults as an ``additional preventive service.'' The decision memorandum
is available on the CMS Coverage Web site at https://www.cms.gov/medicare-coverage-database/details/nca-decision-memo.aspx?NCAId=251&ver=6&NcaName=Screening+for+Depression+in+Adults&bc=AiAAAAAAIAAA&. We believe that providing this screening as a separate
Part B benefit will help to address the commenter's concerns.
We also acknowledge that assessment of functional ability and level
of safety are important, and we agree that for certain individuals,
functional status and safety assessments (for example, fall prevention)
may be important to consider on a more routine basis. The annual
wellness visit does allow for an individualized approach with a
personalized prevention plan. For certain individuals where these areas
are determined to be priorities, specific evaluations may be voluntary
parts of subsequent visits. We also note that the HRA (which is updated
during subsequent annual wellness visits) includes components related
to functional ability and level of safety such as self assessment of
health status, frailty, physical functioning, and behavioral risks,
such as seat belt use and home safety. Therefore, we are not making the
suggested changes.
Comment: We received several comments requesting that we expand or
modify Medicare coverage of preventive services.
Response: While we appreciate the commenters' support for expanded
coverage of preventive services under the Part B program, we did not
solicit comments concerning ``additional preventive services'' in our
proposed rule and these comments are outside the scope of this
rulemaking. To the extent that the public is seeking expanded coverage
for additional preventive services under Sec. 410.64, we are required
by statute to use the national coverage determination process.
Information on how to request an NCD is available in our Guidance
Document: ``Factors CMS Considers in Opening a National Coverage
Determination,'' at http://www.cms.gov/mcd/ncpc_view_document.asp?id=6. We will also continue to monitor access to
preventive services and may also consider using the authority granted
by section 4105 of the Affordable Care Act in the future.
Comment: One commenter recommended that CMS provide more education
and outreach regarding the annual wellness visit. Others requested that
CMS provide guidance to beneficiaries and health professionals
regarding the elements included in the annual wellness visit.
Response: We agree that it is important to provide information
about Medicare's coverage of the annual wellness visit. We have
conducted significant educational campaigns in 2011 to encourage the
use of the annual wellness visit. We will issue other educational
information to Medicare providers and beneficiaries, including an
MLNMatters article regarding implementation of the changes to the
annual wellness visit as described in this final rule.
(4) Summary
In summary, as a result of the comments received, we are finalizing
the provisions of the proposed rule, with the following modifications,
in this final rule:
We are modifying sub-paragraph (v)(C) of the definition of
the term ``health risk assessment'' to read, ``Psychosocial risks,
including but not limited to, depression/life satisfaction, stress,
anger, loneliness/social isolation, pain, and fatigue'' to correct a
typographical error in the proposed rule.
We are modifying paragraph (v)(D) of the definition of the
term ``health risk assessment'' to read, ``Behavioral risks, including
but not limited to, tobacco use, physical activity, nutrition and oral
health, alcohol consumption, sexual health, motor vehicle safety (seat
belt use), and home safety.''
We are modifying the introductory text of the definition
of the term ``subsequent annual wellness visit providing personalized
prevention plan services'' to read as follows: ``subsequent annual
wellness visit providing personalized prevention plan services means
the following services furnished to an eligible beneficiary by a health
professional that include, and take into account the results of an
updated health risk assessment, as those terms are defined:''
We are modifying newly designated paragraph (i) of the
definition of ``subsequent annual wellness visit providing personalized
prevention plan services'' to read as follows: ``(i) Review (and
administration, if needed) of an updated health risk assessment (as
defined in this section).''
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
In the CY 2011 PFS final rule with comment period (75 FR 73411), we
stated ``that when the HRA is incorporated in the AWV, we will
reevaluate the values for HCPCS codes G0438 and G0439''. As discussed
in the CY 2011 PFS final rule with comment period, the services
described by CPT codes 99204 and 99214 already include ``preventive
assessment'' forms. For CY 2012, we believe that the current payment
crosswalk for HCPCS codes G0438 and G0439 continue to be most
accurately equivalent to a level 4 E/M new or established patient
visit; and therefore, we proposed to continue to crosswalk HCPCS codes
G0438 and G0439 to CPT codes 99204 and 99214, respectively.
Comment: Commenters were generally supportive of the addition of
the HRA element when furnishing AWV services effective January 1, 2012.
However, many commenters disagreed that the CDC guidance that the HRA
is best completed on-line and prior to an AWV visit was appropriate for
the Medicare population. One commenter noted that ``access to a
meaningful HRA requires accommodation for individuals with physical,
sensory, or cognitive limitations'' and Medicare beneficiaries often
have multiple co-morbidities that will limit their ability to complete
an HRA without assistance from a health professional.
Most commenters agreed that CPT codes 99204 and 99214 include
``preventive assessment,'' but continued to believe the payment is
insufficient for the complexity of the HRA elements created by CDC and
that the administration of the HRA will place a burden on practitioners
and, even more so on their office staff, for which they would not be
compensated under the equivalent of a level 4 E/M office visit payment.
We wish to clarify that not only does the physician work in 99204 and
99214 include ``preventive assessment'' but that we finalized in our
2011 PFS final rule with comment period (75 FR 73409) the addition of
preventive assessment forms as a direct PE input to HCPCS codes G0438
and G0439 as we had for HCPCS code G0402 (Initial preventive physical
examination; face-to-face visit, services limited to new beneficiary
during the first 12 months of Medicare enrollment) in addition to the
PE inputs for CPT Codes 99204 and 99214.

[[Page 73313]]

Many commenters did not identify a specific adjustment to account
for the additional complexity introduced by the HRA, but indicated that
they should be compensated for the additional time that their staff
will have to dedicate to helping Medicare beneficiaries complete the
HRA over the phone or in person at their AWV. A few commenters provided
a specific recommendation for reflecting staff resources needed to
support the HRA and suggested that CMS add the RVUs for CPT code 99420
(Administration and interpretation of a Health Risk Assessment
Instrument), which is currently not covered, to the current practice
expense RVUs for the AWV. Some commenters requested that CMS add
additional physician work RVUs to the AWV without specifying how much
to add. One commenter suggested adding CPT code 99406 (smoking and
tobacco use cessation visit, intermediate, greater than 3 minutes up to
10 minutes) to the level 4 payment to reflect the additional physician
work associated with adding the HRA element to the AWV visit.
Response: We appreciate commenters' support of the addition of the
HRA element. We agree with commenters that Medicare beneficiaries
likely will need assistance from physician office staff in completing
the HRA envisioned in the CDC Interim Guidance on Health Risk
Assessments available at http://www.cms.gov/coveragegeninfo/downloads/healthriskassessmentsCDCfinal.pdf. Therefore, we will increase the PE
RVUs from the current level 4 E/M service to include greater clinical
labor time. We believe that some beneficiaries may be able to complete
the HRA on their own, that others may need assistance completing the
HRA, and that many will need some assistance completing more
challenging questions. Because the CDC estimates that an HRA should
take no more than 20 minutes to complete, we increased the clinical
labor time for the initial AWV by half, 10 minutes, to reflect
additional staff work across the range of beneficiary capability. For
the subsequent AWV, typically we would expect Medicare beneficiaries to
update the HRA. Therefore, we increased the clinical labor time for the
subsequent AWV by 5 minutes. In response to the commenter request that
we add the RVUs for CPT code 99420 (Administration and interpretation
of a Health Risk Assessment Instrument) to the AWV RVUs, we note that
our addition of 10 minutes to the initial AWV is similar to the 15
minutes of clinical labor time the AMA RUC has valued for 99420.
Currently this code is not covered, and CMS has not reviewed the RUC's
recommended RVUs. The AMA RUC's valuation of 99420 also includes a
paper booklet. We have not included that additional practice expense
input into the RVUs for the AWV because it duplicates the ``preventive
assessment forms'' already included in the direct PE inputs for HCPCS
codes G0438 and G0439.
We disagree with the commenters that believe review of the HRA
during the AWV requires additional physician work. The level 4 E/M code
RVUs that are used to establish payment for the initial and subsequent
AWV already include physician review of preventive assessment forms.
While we agree that greater staff time will be required to help
Medicare beneficiaries to complete the HRA, we do not believe that
review of the HRA during the visit constitutes more physician work than
is already contemplated by a level 4 E/M visit.
In consideration of public comments, we are finalizing our CY 2012
proposal for the first and subsequent AWV services with modification.
Beginning January 1, 2012, we will crosswalk G0438 and G0439 to CPT
codes 99204 and 99214, with the addition of direct PE inputs for
preventive assessment forms as finalized in CY 2011 final rule with
comment period (75 FR 73409) and, for CY 2012, an increase the direct
PE inputs for clinical labor time to recognize an additional 10 and 5
minutes, respectively. We agree with commenters that furnishing a
meaningful HRA to Medicare beneficiaries will require accommodation and
that those beneficiaries may need assistance from physician office
staff when completing the HRA. The following Table 39, shows the final
total RVUs adjusted for the inclusion of additional clinical labor time
to support beneficiary completion of the required HRA element during
the first and subsequent AWV services furnished on or after January 1,
2012.
[GRAPHIC] [TIFF OMITTED] TR28NO11.147

[[Page 73314]]

F. Quality Reporting Initiatives

1. Physician Payment, Efficiency, and Quality Improvements--Physician
Quality Reporting System
a. Program Background and Statutory Authority
The Physician Quality Reporting System is a quality reporting
program that provides incentive payments and payment adjustments to
identified eligible professionals who satisfactorily report data on
quality measures for covered professional services furnished during a
specified reporting period. The Physician Quality Reporting System was
initially implemented in 2007 as a result of section 101 of Division B
of the Tax Relief and Health Care Act of 2006. The Physician Quality
Reporting System was extended and further enhanced as a result of the
Medicare, Medicaid, and SCHIP Extension Act of 2008 (MMSEA), the
Medicare Improvements for Patients and Providers Act of 2009 (MIPPA),
which was enacted on July 15, 2008, and the Affordable Care Act, which
was enacted on March 23, 2010.
Changes to the Physician Quality Reporting System as a result of
these laws, as well as information about the Physician Quality
Reporting System in 2007, 2008, 2009, 2010, and 2011 are discussed in
detail in the CY 2008 PFS proposed and final rules (72 FR 38196 through
38204 and 72 FR 66336 through 66353, respectively), CY 2009 PFS
proposed and final rules (73 FR 38558 through 38575 and 73 FR 69817
through 69847, respectively), CY 2010 PFS proposed and final rules (74
FR 33559 through 33600 and 74 FR 61788 through 61861, respectively),
and CY 2011 PFS proposed and final rules (75 FR 73487 through 73552).
Further detailed information, about the Physician Quality Reporting
System, related laws, and help desk resources, is available on the CMS
Web site at http://www.cms.gov/PQRS.
We received numerous comments that were not related to our specific
proposals for the 2012 Physician Quality Reporting System. While we
appreciate the commenters' feedback, these comments are outside the
scope of the issues addressed in this final rule with comment period.
b. Methods of Participation
There are two ways an eligible professional may participate in the
Physician Quality Reporting System: (1) as an individual eligible
professional or (2) as part of a group practice under the Physician
Quality Reporting System group practice reporting option (GPRO). The
details of each method of participation are described in this section.
(1) Individual Eligible Professionals
As defined at 42 CFR 414.90(b) the term ``eligible professional''
means any of the following: (1) a physician; (2) a practitioner
described in section 1842(b)(18)(C) of the Act; (3) a physical or
occupational therapist or a qualified speech-language pathologist; or
(4) a qualified audiologist. For more information on which
professionals are eligible to participate in the Physician Quality
Reporting System, we refer readers to the ``List of Eligible
Professionals'' download located in the ``How to Get Started section of
the Physician Quality Reporting CMS Web site at: http://www.cms.gov/PQRS/03_How_To_Get_Started.asp#TopOfPage.
(2) Group Practices
(A) Background and Authority
As required by section 1848(m)(3)(C)(i) of the Act, we established
and have had in place since January 1, 2010, a process under which
eligible professionals in a group practice are treated as
satisfactorily submitting data on quality measures under the Physician
Quality Reporting System if, in lieu of reporting measures under the
Physician Quality Reporting System, the group practice reports measures
determined appropriate by the Secretary, for example measures that
target high-cost chronic conditions and preventive care, in a form and
manner, and at a time specified by the Secretary. Section
1848(m)(3)(C)(ii) of the Act requires that this process provide for the
use of a statistical sampling model to submit data on measures, for
example the model used under the Medicare Physician Group Practice
(PGP) demonstration project under section 1866A of the Act. We
established a GPRO for the Physician Quality Reporting System under 42
CFR 414.90(g).
(B) Definition of Group Practice
Under 42 CFR 414.90(b), a ``group practice'' means ``a single Tax
Identification Number (TIN) with two or more eligible professionals, as
identified by their individual National Provider Identifier (NPI), who
have reassigned their Medicare billing rights to the TIN''. We proposed
(76 FR 42840) to change the definition of ``group practice'' under 42
CFR 414.90(b). Specifically, we proposed that under the Physician
Quality Reporting System, a ``group practice'' would consist of a
physician group practice, as defined by a TIN, with 25 or more
individual eligible professionals (or, as identified by NPIs) who have
reassigned their billing rights to the TIN.
For the 2010 Physician Quality Reporting System, our definition of
``group practice'' was limited to practices with 200 or more eligible
professionals because our intent was to model the Physician Quality
Reporting System GPRO after a quality reporting program that group
practices may already be familiar with--the PGP demonstration. Since
participation in the PGP demonstration was limited to large group
practices, we wanted to initially limit participation in the Physician
Quality Reporting System GPRO to similar large group practices. In
2011, we expanded this definition to include practices with 2-199
eligible professionals because we developed a second reporting option
(GPRO II) specifically for smaller group practices that was based
largely on the Physician Quality Reporting System reporting options for
individual eligible professionals. We have since observed that many of
these smaller group practices that self-nominated to participate in
GPRO II for 2011 subsequently elected to opt out of participation in
the GPRO II for 2011 so that members of the group practices can
participate in the Physician Quality Reporting System individually
instead. Out of 107 total groups that self-nominated for GPRO II, only
25 group practices comprised of 2-10 eligible professionals and 15
group practices comprised of 11-25 eligible professionals are still
participating in GPRO II for 2011 at this time.
Since the GPRO II seems to be a less attractive reporting option
than GPRO I, we proposed (76 FR 42840) to consolidate GPRO I and II
into a single GPRO. Since our experience with using the GPRO submission
web interface under the Physician Quality Reporting System has been
limited to larger practices or practices participating in demonstration
projects, we hesitated to expand what we referred to as GPRO I to all
group practices until we gain some experience with smaller practices on
a larger scale. For example, we believe that participation under the
Physician Quality Reporting System GPRO is a more effective method of
participation for larger as opposed to smaller group practices. As
described in section VI.F.1.e.6 of this final rule with comment period,
a group practice must take extra steps to participate in the Physician
Quality Reporting System GPRO, for example reporting on more measures
overall than is required for individual eligible professionals. In
contrast, members of a group practice who choose to participate in the

[[Page 73315]]

Physician Quality Reporting System as individual eligible professionals
could satisfactorily report by reporting as few as 3 measures. We
believe the additional reporting burden associated with participating
under the Physician Quality Reporting System GPRO may make the GPRO
less attractive for smaller practices. We also believe that smaller
group practices are more closely akin to individual eligible
professionals with respect to participation under the Physician Quality
Reporting System. For these reasons, we proposed to change the
definition of ``group practice'' at 42 CFR 414.90(b) to groups with 25
or more eligible professionals.
We recognize that a group's size can fluctuate throughout the year
as professionals move from practice to practice. We allow for
fluctuation of the group practice's size throughout the reporting
period. However, we proposed (76 FR 42840) that the group practice's
size after the group practice's participation is approved by CMS must
continue to meet the definition of a group practice as proposed in 42
CFR 414.90(b) for the entire reporting period.
We also proposed (76 FR 42840) that under 42 CFR 414.90(g)(1), a
group practice of any size (including solo practitioners) or comprised
of multiple TINs participating in a Medicare approved demonstration
project of other programs would also be deemed to be participating in
the Physician Quality Reporting System GPRO. For example, the PGP
demonstration, as well as the Medicare Shared Savings Program
(governing accountable care organizations (ACOs)), and Pioneer ACO have
incorporated or proposed to incorporate aspects of the Physician
Quality Reporting System reporting requirements and incentives under
those respective programs.
Our intention to recognize (deem) group practices participating in
such other programs or demonstration projects as having participated in
the Physician Quality Reporting System was to ensure that such groups
would not be barred from participating in the group practice reporting
option under the eRx Incentive program, since we previously required
and have proposed to continue to require that group practices
interested in participating in the eRx Incentive Program GPRO also
participate in the Physician Quality Reporting System GPRO. We are not
changing the eligibility for group practices, including those
participating in the programs mentioned previously, to participate in
the eRx Incentive program. As discussed in the changes to the eRx
Incentive Program in section VI.F.1.e.2. later in this final rule with
comment period, however, a group practice must self-nominate to
participate under the eRx Incentive Program's group practice reporting
option. We invited comments on the proposed change to the definition of
``group practice'' under 42 CFR 414.90(b) under the Physician Quality
Reporting System and also, whether we should retain the existing
definition under the regulation despite our proposal to retain only the
GPRO I for 2012. Following is a summary of the comments received that
were related to this proposal.
Comment: Some commenters supported our proposed definition of group
practice. One commenter supported our proposed definition of group
practice due to low participation by smaller group practices in the
2011 GPRO II. Other commenters supported our proposed inclusion of
smaller group practices comprised of 25-199 eligible professionals into
the 2011 GPRO I model.
Response: We agree. For the reasons stated previously, we are
finalizing our proposal to change the definition of ``group practice''
at 42 CFR 414.90(b) to groups with 25 or more eligible professionals.
Comment: One commenter opposed our proposal to eliminate GPRO II
and only allow group practices to participate under GPRO I. The
commenter noted that the low participation rate was likely due to the
limited number of measures groups available for reporting.
Response: We appreciate the commenter's feedback. However, due to
low participation in GPRO II in 2011 and the fact that the number of
measures groups available for reporting in 2012 remains limited, we are
eliminating the GPRO II reporting option for 2012. We are continuing to
explore other options that would enable smaller group practices to
participate in GPRO for future years of the program.
Comment: Several commenters were opposed to our proposal to define
group practices as groups consisting of 25 or more eligible
professionals. These commenters urged us to continue to include groups
consisting of 2-24 eligible professionals to participate in the
Physician Quality Reporting System GPRO.
Response: As stated previously, in 2011, we expanded the 2010
definition of group practice to include groups comprised of 2-199
eligible professionals because we developed GPRO II, but we proposed to
eliminate the GPRO II reporting option due to low participation levels
in GPRO II. To reflect our desire to continue to have group practices
smaller than 200 eligible professionals participate in the 2012
Physician Quality Reporting System GPRO, we proposed to change the
definition of group practice to groups comprised of 25 or more eligible
professionals. We are interested in allowing group practices comprised
of less than 25 eligible professionals to participate in the Physician
Quality Reporting System via the GPRO in the future. However, at this
time, it is not operationally feasible for us to allow groups smaller
than 25 eligible professionals to participate in GPRO, as the sampling
methodology and method for reporting under the GPRO was designed to
accommodate larger groups. We are thinking of ways to modify this GPRO
to accommodate smaller groups in the future. Furthermore, it is not
likely that group practices comprised of 2-24 eligible professionals
will be able to meet the patient sample threshold for satisfactory
reporting under the GPRO. We are working to develop the GPRO so that it
may be a viable reporting option for group practices smaller than 25
eligible professionals in future program years.
Comment: One commenter stated that, although the commenter believed
that it was reasonable to require that a group practice continue to
meet the definition of a group practice while participating in the
Physician Quality Reporting System GPRO, the commenter suggested that
we provide notice to groups that fall below the group practice
definition during the reporting period.
Response: The group size is determined at the time of self-
nomination and during the first quarter vetting period. However, if we
find that a group practice should fall below our finalized minimum
group size of 25 at any point during the reporting period, if feasible,
we will work with the group practice to inform the group practice of
its remaining reporting options, since, as the group size would be
smaller than our minimum group practice size threshold, the group would
cease to be able to participate under the Physician Quality Reporting
System GPRO.
Based on the comments received and for the reasons stated above, we
are finalizing our proposal to change the definition of ``group
practice'' at 42 CFR 414.90(b) to recognize groups with 25 or more
eligible professionals. In addition, as we did not receive comments to
make a technical change to 42 CFR 414.90(g)(1) to eliminate the
reference to group practices in demonstrations that are deemed to have
participated in the Physician Quality Reporting System, we are
finalizing that change to the regulation. We believe that this language
is unnecessary given the regulation at 42 CFR 414.92(b). In addition,
we believe

[[Page 73316]]

that retaining the reference at 42 CFR 414.90(g)(1) may cause confusion
with regard to participation under the Physician Quality Reporting
System or inappropriately suggest that duplicate Physician Quality
Reporting System incentive payments are available to group practices
under both the Physician Quality Reporting System and the other types
of programs mentioned previously. We are also finalizing our proposal
to make a technical change to 42 CFR 414.92(b), which defines group
practices participating under the eRx GPRO discussed in section
VI.F.2.b. of this final rule, to more broadly address group practices
in other types of programs that incorporate Physician Quality Reporting
System reporting requirements and incentives, so that the regulation
does not solely reference demonstrations.
(C) Process for Physician Group Practices To Participate as Group
Practices
In order to participate in the Physician Quality Reporting System
GPRO for 2012 and subsequent years, we proposed to require group
practices to complete a self-nomination process and to meet certain
technical and other requirements described in the proposed rule (76 FR
42841 and 42842). As in prior years, we proposed to require these self-
nomination and additional process requirements so that we may identify
which group practices are interested in participating in the Physician
Quality Reporting System as a GPRO as well as to ensure that group
practices participating in the GPRO understand the process for
satisfactorily reporting Physician Quality Reporting System quality
measures under the GPRO method of reporting.
We proposed that the self-nomination statement would be submitted
by the group practice wishing to participate in the GPRO for the first
time via a web-based tool. However, we also stated that if it is not
operationally feasible for us to collect self-nomination statements via
a web-based tool for 2012, we would require group practices interested
in participating in the Physician Quality Reporting System GPRO to
submit a self-nomination statement via a letter accompanied by an
electronic file submitted in a format specified by us (such as a
Microsoft Excel file). At this time, it is not technically feasible to
collect self-nomination statements via a web-based tool. Therefore,
until the web-based tool is fully capable of accepting self-nomination
statements, we are finalizing our proposal that group practices submit
the self-nomination statement via a letter accompanied by an electronic
file submitted in a format specified by us (such as a Microsoft Excel
file) that includes the group practice's TIN(s) and name of the group
practice, the name and email address of a single point of contact for
handling administrative issues as well as the name and email address of
a single point of contact for technical support purposes. However, once
the web-based tool is capable of accepting self-nomination statements,
which we anticipate will occur by the 2013 Physician Quality Reporting
System, the web-based tool is the method for a group practice to submit
a self-nomination statement for the respective program year.
A group practice that submits an incomplete self-nomination
statement (such as, a valid email address is not provided), would not
be considered for inclusion in the 2012 Physician Quality Reporting
System GPRO, though as we noted in the proposed rule, we would notify a
group practice should we receive an incomplete self-nomination
statement.
We proposed that the Physician Quality Reporting System GPRO self-
nomination statement must also indicate the group practice's compliance
with the following requirements:
Agree to attend and participate in all mandatory GPRO
training sessions.
Is an established Medicare provider that has billed
Medicare Part B on or after January 1 and prior to October 29 of the
year prior to the reporting period for the respective year. For
example, for purposes of participating in the 2012 Physician Quality
Reporting System GPRO, the group practice must have billed Medicare
Part B on or after January 1, 2011 and prior to October 29, 2011.
Agree to have the results on the performance of their
Physician Quality Reporting System measures publicly posted on the
Physician Compare Web site.
Obtain and/or have access to the identity management
system specified by CMS (such as, but not limited to, the Individuals
Authorized Access to CMS Computer Systems, or IACS) to submit Medicare
clinical quality data to a CMS clinical data warehouse.
Provide CMS access (upon request for health oversight
purposes like validation) to review the Medicare beneficiary data on
which Physician Quality Reporting System GPRO submissions are founded
or provide to CMS a copy of the actual data (upon request for health
oversight purposes like validation).
To ensure that accurate data is being reported, we reserve the
right to validate the data submitted by GPROs.
For 2012 and future years, we proposed that a group practice that
wishes to participate in both the Physician Quality Reporting System
and eRx GPRO (see the eRx Incentive Program's section
VI.F.2.(b).(2).(B) of this final rule with comment period) must
indicate its desire to participate in both programs in its self-
nomination statement.
In addition, in the proposed rule (76 FR 42841 and 42842), we
stated that we were interested in testing the extraction of EHR data
submitted by group practices through the GPRO web interface in 2012.
Group practices wishing to participate in this test must state their
interest to participate in the group practice's self-nomination letter.
We further proposed (76 FR 42842) that group practices that wish to
self-nominate must do so by January 31 of the calendar year in which
the group practice wishes to participate in the Physician Quality
Reporting System GPRO. For example, in order to participate in the GPRO
for the 2012 Physician Quality Reporting System, the group practice
will need to self-nominate by January 31, 2012. Upon receipt of the
self-nomination statements, we would assess whether the participation
requirements for the respective reporting period were met by each group
practice using Medicare claims data from the year prior to the
respective reporting period. We would not preclude a group practice
from participating in the GPRO if we discover, from analysis of the
Medicare claims data, that there are some eligible professionals
(identified by NPIs) that are not established Medicare providers (that
is, have not billed Medicare Part B on or after January 1 and prior to
or on October 29 of the year prior to the respective reporting period)
as long as the group has at least the minimum proposed number (that is,
25) of established Medicare providers required to participate in the
Physician Quality Reporting System as a group practice. Eligible
professionals, as classified by their NPIs, who do not submit Medicare
Part B claims for PFS covered professional services during the
reporting period, however, will not be included in our payment
calculations.
Furthermore, we proposed (76 FR 42842) that group practices who
have previously participated in the Physician Quality Reporting System
GPRO would automatically be qualified to participate in the GPRO in
2012 and future program years. For example, group practices that were
selected to participate in the 2011

[[Page 73317]]

Physician Quality Reporting System GPRO I or GPRO II (provided the
group practice is still comprised of at least 25 eligible
professionals) would automatically be qualified to participate in the
2012 Physician Quality Reporting System GPRO and will not need to
complete the 2012 Physician Quality Reporting System GPRO qualification
process. These practices will, however, need to notify CMS in writing
of their desire to continue participation in the Physician Quality
Reporting System GPRO for the respective program year.
We indicated that we recognized that, for various reasons, there
potentially could be a discrepancy between the number of eligible
professionals (that is, NPIs) submitted by the practice during the
self-nomination process and the number of eligible professionals
billing Medicare under the practice's TIN as people move in and out of
practices. Therefore, if we find more NPIs in the Medicare claims than
the number of NPIs submitted by the practice during the self-nomination
process and this will result in the practice being subject to different
criteria for satisfactory reporting, we will notify the practice of
this finding as part of the self-nomination process. At this point, the
practice will have the option of either agreeing to be subject to the
different criteria for satisfactory reporting or opting out of
participation in the Physician Quality Reporting System GPRO to enable
the members of their practice to participate in the Physician Quality
Reporting System as individual eligible professionals.
We invited public comment regarding our proposed process for group
practices to participate in the Physician Quality Reporting System
GPRO. We received the following comment regarding this proposal.
Comment: One commenter stated that, instead of requiring group
practices who have previously participated in the Physician Quality
Reporting System GPRO in prior years to self-nominate each year, we
should consider group practices who have formerly participated in the
Physician Quality Reporting System GPRO as participating until the
group practice opts out of GPRO participation.
Response: We appreciate the commenter's feedback. However, we note
that the self-nomination process that we have proposed and are
finalizing applies only to group practices that wish to participate in
the Physician Quality Reporting System GPRO for the first time. Group
practices that have previously participated in the GPRO do not need to
submit a self-nomination statement to indicate their desire to
participate in the GPRO in future program years. However, we note that
group practices that have previously participated in the GPRO may have
to participate in other GPRO activities, such as attending
informational sessions that demonstrate how to report under the GPRO
for the respective program year.
Based on the comments received and for the reasons stated
previously, we are finalizing the self-nomination and participation
processes for group practices under the Physician Quality Reporting
System GPRO. As we noted previously, it was not technically feasible to
develop a web-based tool by the time of this final rule, and therefore,
for 2012, self-nomination statements must be submitted via a letter
accompanied by and electronic file described previously.
c. Reporting Period
Since the implementation of the Physician Quality Reporting System
in 2007, depending on an eligible professional's chosen reporting
mechanism, we have offered up to two different reporting periods for
satisfactorily reporting Physician Quality Reporting System quality
measures: a 12-month reporting period (from January 1 through December
31of the respective program year) and a 6-month reporting period (from
July 1 through December 31of the respective program year). Section
1848(m)(5)(F) of the Act requires CMS to provide alternative reporting
periods and criteria for measures groups and registry reporting. To
comply with this provision, for 2012 and subsequent years, we proposed
(76 FR 42842) to retain the 6-month reporting period option for the
reporting of Physician Quality Reporting System measures groups via
registry. We invited but received no comments on our proposal to retain
the 6-month reporting period for measures groups via registry. For the
reasons described previously, we are finalizing our proposal to retain
the 6-month reporting period for 2012 and beyond. We are therefore
modifying 42 CFR 414.90(f)(1)(ii)(B) to reflect this finalized
proposal.
Additionally, we proposed (76 FR 42842) to modify 42 CFR Sec.
414.90(g)(1) to specify a 12-month reporting period (that is, January
1through December 31of the respective program year) for the Physician
Quality Reporting System GPRO. We received no comments regarding our
proposal to modify 42 CFR Sec. 414.90(g)(1) to specify a 12-month
reporting period (that is, January 1 through December 31of the
respective program year) for the Physician Quality Reporting System
GPRO for 2012 and beyond, and are therefore, finalizing this proposal.
As such, we are making technical changes to modify the clause numbers
under 42 CFR 414.90(g) to reflect our finalized proposal to indicate a
12-month reporting period for the GPRO under 42 CFR 414.90.
Furthermore, for 2012 and subsequent years, we proposed (76 FR
42842) to modify 42 CFR 414.90(f)(1) to specify a 12-month reporting
period (that is, January 1 through December 31of the respective program
year), consistent with section 1848(m)(6)(C)(i)(II) of the Act, for the
satisfactory reporting of Physician Quality Reporting System quality
measures for claims, registry, and EHR-based reporting. In proposing
these modifications to 42 CFR 414.90, we proposed to eliminate the 6-
month reporting period for claims and registry previously available
under the Physician Quality Reporting System (with the exception of
reporting measures groups via registry). Although we did not propose a
6-month reporting period for claims and registry reporting, we note
that the 12-month reporting period aligns with other CMS quality
reporting programs. In addition, the elimination of the 6-month
reporting period for claims and registry reporting (for reporting
individual measures via registry) will align the reporting periods of
these mechanisms with the EHR reporting mechanism and the GPRO. We
further believe that the elimination of the 6-month reporting period
for claims and registry reporting (for reporting individual measures
via registry) will help to streamline and simplify the reporting
requirements for the Physician Quality Reporting System without
substantial burden to eligible professionals who may still
satisfactorily report using the 12-month reporting period.
We invited public comment on our proposal to eliminate the 6-month
reporting period for claims and registry reporting (for reporting
individual measures via registry). The following is a summary of the
comments regarding this proposal.
Comment: Some commenters supported our proposal to eliminate the 6-
month reporting period as we proposed. The commenters concurred with
our desire to align our reporting periods with that of other CMS
quality reporting programs.
Response: We appreciate the commenters' support. We are finalizing
our proposal to eliminate the 6-month reporting period claims and
registry reporting (individual measures via registries).

[[Page 73318]]

Comment: Several commenters were opposed to our proposal to
eliminate the 6 month reporting period for reporting under the
Physician Quality Reporting System. One commenter suggested that having
an additional 6-month reporting period in which to report would allow
eligible professionals to still correct errors that are detected after
the distribution of interim feedback reports. Another commenter stated
that the 6-month reporting period may be used by eligible professionals
as an additional opportunity to meet the requirements for satisfactory
reporting under the Physician Quality Reporting System.
Response: As we noted previously, we are finalizing our proposal to
retain the 6-month reporting option for reporting on measures groups
via registry. Therefore, the 6-month reporting period is still
available to those eligible professionals wishing to use this reporting
period. As we stated in the proposed rule (76 FR 42842), we proposed to
eliminate the 6-month reporting option (for certain mechanisms and
types of measures) in order to streamline the program. We understand
that this eliminates additional options under which eligible
professionals may participate in the Physician Quality Reporting
System. However, we believe that data based on a 12-month reporting
period provides more meaningful insight to patient experience and care
than data collected during a shorter, 6-month reporting period. The Tax
Relief and Health Care Act of 2006 (TRHCA), enacted on December 20,
2006, required the Secretary to implement the first reporting period on
July 1, 2007. Therefore, a 6-month reporting period from July 1, 2007
through December 31, 2007 was the first reporting period in which
eligible professionals could report on quality measures under the
Physician Quality Reporting System (then called the Physician Quality
Reporting Initiative or PQRI). We retained the 6-month reporting option
to encourage participation in the program. 2012 will mark the 6th year
of the Physician Quality Reporting System. As such, we believe that
eligible professionals have had ample time to familiarize themselves
with the program and its requirements. Therefore, we believe our desire
to streamline the program, align our reporting periods with other
various CMS programs, and collect more meaningful data outweighs
stakeholders' desire to retain the 6-month reporting period we are
eliminating.
Based on the comments received and for the reasons stated above,
for 2012 and beyond, we are finalizing our proposal to modify 42 CFR
414.90(f)(1) to specify a 12-month reporting period (that is, January 1
through December 31of the respective program year) for the satisfactory
reporting of Physician Quality Reporting System quality measures for
claims, registry, and EHR-based reporting. In addition to the 12-month
reporting period available for all reporting methods, we are also
finalizing a 6-month reporting period (that is, July 1 through December
31 of the respective program year) for reporting measures groups via
registry.
d. Reporting Mechanisms--Individual Eligible Professionals
For the purpose of reporting quality measures under the Physician
Quality Reporting System, we proposed (76 FR 42842) to retain the
claims-based, registry-based, and EHR-based reporting mechanism for
2012 and beyond. Accordingly, we proposed to modify 42 CFR 414.9(f) to
reflect this proposal. We proposed to retain these reporting mechanisms
in order to provide eligible professionals with multiple mechanisms
from which to satisfactorily report Physician Quality Reporting System
quality measures. We hope that offering multiple reporting mechanisms
will aid in encouraging participation in the Physician Quality
Reporting System.
We invited public comment concerning the general, proposed
reporting mechanisms for the Physician Quality Reporting System for
2012 and beyond. The following is a summary of the comments received
that were related to our proposal to retain the claims, registry, and
EHR-based reporting mechanisms for 2012 and beyond.
Comment: One commenter suggested that the program move towards one
method of reporting, rather than provide different methods of reporting
under the Physician Quality Reporting System.
Response: We appreciate the commenter's feedback. However, as we
stated in the proposed rule (76 FR 42842), we believe it is important
to provide eligible professionals with multiple reporting mechanisms to
encourage and facilitate satisfactory participation in the Physician
Quality Reporting System. We also note that eligible professionals
continue to actively utilize all 3 reporting mechanisms. For example,
the 2009 Reporting Experience indicates that in 2009, approximately
190,000 eligible professionals and 33,000 eligible professionals
participated in the Physician Quality Reporting System via the claims-
based and registry-based reporting mechanism, respectively. The EHR-
based reporting mechanism was not included as a Physician Quality
Reporting System reporting mechanism until 2010.
Comment: Several commenters supported our proposal to retain the
claims, registry, and EHR-based reporting mechanisms for 2012 and
beyond in order to provide multiple reporting mechanisms for which
eligible professionals may use to report on Physician Quality Reporting
quality measures.
Response: We agree and appreciate the commenters' feedback. We are
finalizing the claims, registry, and EHR-based reporting mechanisms for
2012 and beyond.
Comment: Some commenters encouraged us to provide resources to
assist eligible professionals in choosing a reporting mechanism.
Response: For 2012 and beyond, as in previous years, we will
provide various resources to assist eligible professionals in choosing
a reporting mechanism as well as general guidance on how to participate
in the Physician Quality Reporting System through, for example,
resources posed on the Physician Quality Reporting System Web site
(http://www.cms.gov/PQRS/), national provider calls, special open door
forums, and the QualityNet Help Desk.
Based on the comments received and for the reasons explained
previously, we are finalizing the claims, registry, and EHR-based
reporting mechanisms under the Physician Quality Reporting System for
2012 and beyond.
As in previous years, the individual quality measures or measures
groups an eligible professional selects will dictate the applicable
reporting mechanism(s). In addition, while eligible professionals can
attempt to qualify for a Physician Quality Reporting System incentive
under multiple reporting mechanisms, the eligible professional must
satisfy the criteria for satisfactory reporting for the respective
program year, with respect to a single reporting mechanism to qualify
for an incentive. We will not combine data submitted via multiple
reporting mechanisms to determine incentive eligibility.
(1) Claims-Based Reporting
As we noted previously, we proposed (76 FR 42843) to retain the
claims-based reporting mechanism for the Physician Quality Reporting
System for 2012 and beyond. For eligible professionals who choose to
participate in the Physician Quality Reporting System by submitting
data on individual quality measures or measures groups through the
claims-based reporting mechanism, we proposed (76 FR 42843) that the
eligible professional be required to submit the appropriate Physician
Quality Reporting

[[Page 73319]]

System quality data codes (QDCs) on the professionals' Medicare Part B
claims.
QDCs for the eligible professional's selected individual Physician
Quality Reporting System quality measures or measures group may be
submitted to CMS at any time during the reporting period for the
respective program year. However, as required by section 1848(m)(1)(A)
of the Act, all claims for services furnished during the reporting
period, would need to be processed by no later than two months after
the end of the reporting period, to be included in the program year's
Physician Quality Reporting System analysis. For example, all claims
for services furnished for the 2012 Physician Quality Reporting System
would need to be processed by no later than two months after the end of
the reporting period for the 2012 Physician Quality Reporting System,
that is, processed by February 22, 2013 for the reporting period that
ends December 31, 2012.
We invited public comment on our proposed requirements for eligible
professionals who choose the claims-based reporting mechanism for 2012
and beyond. The following is a summary of the comments we received
regarding this proposal.
Comment: Some commenters supported our proposal to retain the
claims-based reporting mechanism, since many small practices may not be
linked to registry or EHR systems.
Response: We agree and appreciate the commenter's feedback.
Based on the comments received and for the reasons stated in our
responses and above, we are finalizing our proposal to retain the
claims-based reporting mechanism under the Physician Quality Reporting
System for 2012 and beyond.
(2) Registry-Based Reporting
(A) Requirements for the Registry-based Reporting Mechanism--
Individual Eligible Professionals
As stated previously, we proposed (76 FR 42843) to retain the
registry-based reporting mechanism via a qualified registry (as defined
in section VI.F.1.2.B.) for the Physician Quality Reporting System for
2012 and beyond. With regard to specific requirements for registry-
based reporting for individual eligible professionals under the
Physician Quality Reporting System, we proposed that, in order to
report quality data on the Physician Quality Reporting System
individual quality measures or measures groups for the respective
program year through a qualified registry, an eligible professional or
group practice would be required to enter into and maintain an
appropriate legal arrangement with a qualified Physician Quality
Reporting System registry. Such arrangements would provide for the
registry's receipt of patient-specific data from the eligible
professional and the registry's disclosure of quality measures results
and numerator and denominator data on Physician Quality Reporting
System quality measures or measures groups on behalf of the eligible
professional to CMS. Thus, the registry would act as a Health Insurance
Portability and Accountability Act of 1996 (Pub. L. 104-191) (HIPAA)
Business Associate and agent of the eligible professional. Such agents
are referred to as ``data submission vendors.'' The ``data submission
vendors'' would have the requisite legal authority to provide clinical
quality measures results and numerator and denominator data on
individual quality measures or measures groups on behalf of the
eligible professional for the Physician Quality Reporting System.
We proposed that the registry, acting as a data submission vendor,
would submit CMS-defined, registry-derived measures information to our
designated database for the Physician Quality Reporting System, using a
CMS-specified record layout, which will be provided to the registry by
CMS. Similarly, we proposed that eligible professionals choosing to
participate in the Physician Quality Reporting System through the
registry-based reporting mechanism for the respective program year must
select a qualified Physician Quality Reporting System registry and
submit information on Physician Quality Reporting System individual
quality measures or measures groups to the selected registry in the
form and manner and by the deadline specified by the registry.
We proposed to post a list of qualified registries for the
Physician Quality Reporting System for the respective program year on
the Physician Quality Reporting System section of the CMS Web site at
http://www.cms.gov/pqrs, which would include the registry name, contact
information, the measures and/or measures group (if qualified) for
which the registry is qualified and intends to report for the
respective program year, and information regarding the cost of the
registry to eligible professionals. However, we do not anticipate
making this list available prior to the start of the respective program
year. That is, we do not anticipate making the list of qualified
registries for the 2012 Physician Quality Reporting System available
prior to the start of the 2012 program year. We anticipate posting the
names of the Physician Quality Reporting System qualified registries
for the respective reporting period in the following 3 phases based on:
(1) the registry's success in submitting Physician Quality Reporting
System quality measures results and numerator and denominator data on
the quality measures in a prior Physician Quality Reporting System
program year (2008, 2009, 2010, 2011, etc.); (2) the registry's
submission of a letter indicating their continued interest in being a
Physician Quality Reporting System registry by October 31 of the year
prior to the program year (that is, by October 31, 2011 for the 2012
program year); and (3) the registry's compliance with the Physician
Quality Reporting System registry requirements for the respective
program year as indicated by CMS' registry vetting process. The listing
of a qualified registry will depend on which of the 3 proposed phases
is most applicable to the registry. The manner in which we post the
list of qualified registries is based on prior experience with
participation in the Physician Quality Reporting System as a registry
vendor.
We invited public comment on our proposed process and requirements
for using the registry-based reporting mechanism for individual
eligible professionals. The following is a summary of the comments we
received regarding this proposal.
Comment: Several commenters supported our proposal to retain the
registry reporting mechanism. One commenter stated that eligible
professionals have met the criteria for satisfactory reporting at
greater rates than when using the claims-based reporting mechanism.
Some commenters stated that we should encourage use of registry-based
reporting.
Response: We appreciate the commenter's feedback and are finalizing
our proposal to retain the registry-based reporting mechanism.
Comment: One commenter noted that use of the registry-based
reporting mechanism results in additional costs to the eligible
professional wishing to participate in the Physician Quality Reporting
System via the registry-based reporting mechanism.
Response: We understand that the use of registries may result in
additional costs to the eligible professional, as many registries
charge for their services. However, we note that the registry-based
reporting mechanism optional and is only one of three mechanisms that
may be used to report Physician Quality Reporting System measures.
There is no up-front, monetary cost associated with participating in
the

[[Page 73320]]

Physician Quality Reporting System via the claims-based reporting
mechanism.
Comment: One commenter suggested that we develop a free, national
registry that would meet the requirements for being a ``qualified''
registry so that a free registry option would be available for eligible
professionals.
Response: We respectfully disagree. As we noted previously, many
but not all registries charge for their services. As such, it is
possible for eligible professionals to elect a free registry on which
to report Physician Quality Reporting System quality measures. As there
are free registry options, we do not see the need for a national
registry.
Based on the comments received and for the reasons stated
previously, we are finalizing the requirements described above for
individual eligible professionals choosing the registry-based reporting
option for the 2012 Physician Quality Reporting System and beyond.
(B) 2012 Qualification Requirements for Registries
Although we proposed to establish the registry-based reporting
mechanism as a way to report Physician Quality Reporting System quality
measures for 2012 and beyond, we proposed (76 FR 42843 through 42845)
the following qualification requirements only apply for the 2012
program year. For the Physician Quality Reporting System in 2012, as in
prior program years, we proposed to require a self-nomination process
for registries wishing to submit Physician Quality Reporting System
quality measures or measures groups on behalf of eligible professionals
for services furnished during the applicable reporting periods in 2012.
This qualification process allows us to ensure that registries are
fully informed of the Physician Quality Reporting System reporting
process and to ensure the registry is qualified, thereby improving the
likelihood of accurate reporting.
We note that third party intermediaries may participate in various
capacities under the Physician Quality Reporting System. In addition,
in an effort to encourage the electronic submission of quality measures
data from eligible professionals' EHRs, we proposed EHR-based
reporting, as discussed later in this section. As a result, we believe
it is important to distinguish entities that collect their data from an
EHR from those entities that collect their data from other sources. As
such, as discussed here and later in this section, we proposed, the
following two categories of third party intermediaries that would be
able to submit Physician Quality Reporting System measures data on
behalf of eligible professional: (1) a registry, as defined at 42 CFR
414.90(b), which would be any data submission vendor submitting data
from a source other than an EHR on behalf of eligible professionals
that meets the proposed registry qualification requirements later in
this section; and (2) EHR data submission vendors, which would be a
data submission vendor that obtains its data from an eligible
professional's EHR and that meets the 2012 EHR qualification
requirements. However, for operational reasons, we may reserve the
right to limit such entities to a single role such that the entity
would need to decide whether it wants to serve as a registry or EHR
data submission vendor but not both. We note that a registry could
serve as an ``EHR data submission vendor'' to the extent that it
obtains data from an eligible professional's EHR, but would need to
meet the proposed 2012 EHR qualification requirements. To be considered
a qualified registry for purposes of serving as a registry under the
program and submitting individual quality measures on behalf of
eligible professionals who choose the registry reporting mechanism for
2012, we proposed that both registries new to the Physician Quality
Reporting System and those previously qualified must:
Be in existence as of January 1, 2012.
Have at least 25 participants by January 1, 2012.
Provide at least 1 feedback report, based on the data
submitted to them for the 2012 Physician Quality Reporting System
incentive reporting period, but if technically feasible, provide at
least 2 feedback reports throughout the year to participating eligible
professionals. Although it is not a requirement that registries provide
interim feedback reports, we believe it is in the stakeholder's
interest to require early registry collection of data for purposes of
providing a feedback report to eligible professionals before the end of
the 2012 Physician Quality Reporting System incentive reporting period
to determine what steps, if any, an eligible professional should take
or may rectify to meet the criteria for satisfactory reporting.
For purposes of distributing feedback reports to eligible
professionals, collect an eligible professional's email addresses and
have documentation from the eligible professional authorizing the
release of his or her email address.
Not be owned and managed by an individual locally-owned
single-specialty group (in other words, single-specialty practices with
only 1 practice location or solo practitioner practices are prohibited
from self-nominating to become a qualified Physician Quality Reporting
System registry).
Participate in ongoing 2012 Physician Quality Reporting
System mandatory support conference calls hosted by CMS (approximately
1 call per month), including an in-person registry kick-off meeting to
be held at CMS headquarters in Baltimore, MD. Registries that miss more
than one meeting will be precluded from submitting Physician Quality
Reporting System data for the reporting year (2012).
Be able to collect all needed data elements and transmit
to CMS the data at the TIN/NPI level for at least 3 measures, which is
the minimum amount of measures on which an eligible professional is
required to report, in the 2012 Physician Quality Reporting System
(according to the posted 2012 Physician Quality Reporting System
Measure Specifications);
Be able to calculate and submit measure-level reporting
rates or, upon request, the data elements needed to calculate the
reporting rates by TIN/NPI.
Be able to calculate and submit, by TIN/NPI, a performance
rate (that is, the percentage of a defined population who receive a
particular process of care or achieve a particular outcome based on a
calculation of the measure's numerator and denominator specifications)
for each measure on which the TIN/NPI reports or, upon request the
Medicare beneficiary data elements needed to calculate the performance
rates.
Be able to separate out and report on Medicare Part B FFS
patients.
Provide the name of the registry.
Provide the reporting period start date the registry will
cover.
Provide the reporting period end date the registry will
cover.
Provide the measure numbers for the Physician Quality
Reporting System quality measures on which the registry is reporting.
Provide the measure title for the Physician Quality
Reporting System quality measures on which the registry is reporting.
Report the number of eligible instances (reporting
denominator).
Report the number of instances a quality service is
performed (performance numerator).
Report the number of performance exclusions, meaning the
quality action was not performed for a valid reason as defined by the
measure specification.
Report the number of reported instances, performance not
met (eligible professional receives credit for

[[Page 73321]]

reporting, not for performance), meaning the quality action was not
performed for no valid reason as defined by the measure specification.
Be able to transmit this data in a CMS-approved XML
format.
Comply with a CMS-specified secure method for data
submission, such as submitting the registry's data in an XML file
through an identity management system specified by CMS or another CMS-
approved method, such as use of appropriate Nationwide Health
Information Network specifications, if technically feasible.
Submit an acceptable ``validation strategy'' to CMS by
March 31, 2012. A validation strategy ascertains whether eligible
professionals have submitted accurately and on at least the minimum
number (80 percent) of their eligible patients, visits, procedures, or
episodes for a given measure, which, as described in section
VI.F.1.e.2., is the minimum percentage of patients on which an eligible
professional must report on any given measure. Acceptable validation
strategies often include such provisions as the registry being able to
conduct random sampling of their participant's data, but may also be
based on other credible means of verifying the accuracy of data content
and completeness of reporting or adherence to a required sampling
method.
Perform the validation outlined in the strategy and send
the results to CMS by June 30, 2013 for the 2012 reporting year's data.
Enter into and maintain with its participating
professionals an appropriate Business Associate agreement that provides
for the registry's receipt of patient-specific data from the eligible
professionals, as well as the registry's disclosure of quality measure
results and numerator and denominator data and/or patient-specific data
on Medicare beneficiaries on behalf of eligible professionals who wish
to participate in the Physician Quality Reporting System.
Obtain and keep on file signed documentation that each
holder of an NPI whose data are submitted to the registry has
authorized the registry to submit quality measure results and numerator
and denominator data and/or patient-specific data on Medicare
beneficiaries to CMS for the purpose of Physician Quality Reporting
System participation. This documentation must be obtained at the time
the eligible professional signs up with the registry to submit
Physician Quality Reporting System quality measures data to the
registry and must meet any applicable laws, regulations, and
contractual business associate agreements.
Provide CMS access (upon request for health oversight
purposes like validation) to review the Medicare beneficiary data on
which 2012 Physician Quality Reporting System registry-based
submissions are founded or provide to CMS a copy of the actual data
(upon request).
Provide CMS a signed, written attestation statement via
mail or email which states that the quality measure results and any and
all data including numerator and denominator data provided to CMS are
accurate and complete.
Use Physician Quality Reporting System measure
specifications and the CMS provided measure calculation algorithm, or
logic, to calculate reporting rates or performance rates unless
otherwise stated. CMS will provide registries a standard set of logic
to calculate each measure and/or measures group they intend to report
in 2012.
Provide a calculated result using the CMS supplied measure
calculation logic and XML file for each measure that the registry
intends to calculate. The registries will be required to show that they
can calculate the proper measure results (that is, reporting and
performance rates) using the CMS-supplied logic and send the calculated
data back to CMS in the specified format.
In addition to meeting all the requirements specified previously
for the reporting of individual quality measures via registry, for
registries that intend to report on 2012 Physician Quality Reporting
System measures groups, we proposed that both registries new to the
Physician Quality Reporting System and those previously qualified must:
Indicate the reporting period chosen for each eligible
professional who chooses to submit data on measures groups.
Base reported information on measures groups only on
patients to whom services were furnished during the 2012 reporting
period.
Agree that the registry's data may be inspected or a copy
requested by CMS and provided to CMS under our oversight authority.
Be able to report consistent with the reporting criteria
requirements, as specified in section IV.F.1.e.2.
We noted in the proposed rule that we intended to post the final
2012 Physician Quality Reporting System registry requirements on the
Physician Quality Reporting System section of the CMS Web site at
http://www.cms.gov/pqrs by November 15, 2011 or shortly thereafter. We
anticipate that new registries that wish to self-nominate for 2012
would be required to do so by January 31, 2012.
Furthermore, we proposed (76 FR 42845) that registries that were
``qualified'' for 2011 and wish to continue to participate in 2012 will
not need to be ``re-qualified'' for 2012, but instead are only required
to demonstrate that they can meet the new 2012 data submission
requirements. For technical reasons, however, we did not expect to be
able to complete this vetting process for the new 2012 data submission
requirements until mid-2012. Therefore, for 2012, we indicated we may
not be able to post the names of registries that are qualified for the
2012 Physician Quality Reporting System until we have determined the
previously qualified registries that wish to be qualified for the 2012
Physician Quality Reporting System are in compliance with the new
registry requirements.
We proposed that registries ``qualified'' for 2011, who are
successful in submitting 2011 Physician Quality Reporting System data,
and wish to continue to participate in 2012 would indicate their desire
to continue participation for 2012 by submitting a self-nomination
statement via a web-based tool to CMS indicating their continued
interest in being a Physician Quality Reporting System registry for
2012 and their compliance with the 2012 Physician Quality Reporting
System registry requirements by no later than October 31, 2011.
Additionally, registries that were qualified but unsuccessful in
submitting 2011 Physician Quality Reporting System data (that is, fail
to submit 2011 Physician Quality Reporting System data per the 2011
Physician Quality Reporting System registry requirements) must go
through a full self-nomination vetting process for 2012.
We further proposed that by March 31, 2012, registries that are
unsuccessful at submitting registry data in the correct data format for
2011 must be able to meet the 2012 Physician Quality Reporting System
registry requirements and go through the full vetting process again.
This would include CMS receiving the registry's self-nomination by
March 31, 2012. We proposed that the aforementioned registry
requirements would also apply for the purpose of a registry qualifying
to submit the electronic prescribing measure for the 2012 eRx Incentive
Program. We anticipate finalizing the list of 2012 Physician Quality
Reporting System registries by Summer 2012.
For eligible professionals considering this reporting mechanism, we
point out that even though a registry is listed as

[[Page 73322]]

``qualified,'' we cannot guarantee or assume responsibility for the
registry's successful submission of the required Physician Quality
Reporting System quality measures results or measures group results or
required data elements submitted on behalf of a given eligible
professional.
We invited public comments on the proposed requirements to be
considered a qualified registry for purposes of the 2012 Physician
Quality Reporting System. We also sought comment on disallowing
previously-qualified registries from submitting data on Physician
Quality Reporting System quality measures in future years if it is
found that the data the registries provide are found to be
significantly inaccurate (76 FR 42845). The following is a summary of
the comments received regarding those proposals.
Comment: One commenter supported our proposal to have registries
and EHRs (including both direct EHR-based reporting and EHR data
submission vendors) provide at least two feedback reports throughout
the year to participating eligible professionals, if technically
feasible.
Response: We appreciate the commenter's support and are finalizing
this requirement.
Comment: One commenter sought clarification on the terms ``needed
data elements.''
Response: The type of data we are referring to is the same type of
data we required in prior years; however, the specific data elements
will be addressed in subsequent guidance. We anticipate that the data
elements will be similar to the elements contained within the 2011
Physician Quality Reporting System Registry XML Specifications which
are posted on the PQRS section of the CMS Web site at http://www.cms.gov/PQRS/20_AlternativeReportingMechanisms.asp#TopOfPage. This
information is made available within 4-6 weeks of the publication of
this final rule to allow interested vendors the opportunity to evaluate
their systems for the needed functionality and implement any new
capabilities as needed.
Comment: One commenter was opposed to our requirement that
registries qualified for 2012 only report on Medicare Part B FFS
patients.
Response: We appreciate the commenter's feedback. However, as the
Physician Quality Reporting System is a Medicare program, we would like
to concentrate the data we collect on data that assesses the quality of
care our beneficiaries receive. Furthermore, since we can only receive
data on Medicare beneficiaries via claims, which is another reporting
mechanism we are finalizing for 2012 and beyond, and we are interested
in collecting the same type of data throughout each reporting
mechanism, we are finalizing the requirement that registries only
report on Medicare Part B FFS patients.
Comment: One commenter was opposed to our proposed vetting
timelines to qualify registries for the 2012 Physician Quality
Reporting System. The commenter urged us to accelerate the
qualification process for registries.
Response: We appreciate the commenter's feedback. However, we must
allow sufficient time after the publication of the qualification
requirements in this final rule with comment period for vendors to
decide if they wish to participate in the Physician Quality Reporting
System and become qualified. After self-nomination, we attempt to allow
ample time for vendors to submit test files and resubmit them if their
first submission is unacceptable. We would like to give every
interested vendor as much time to qualify as is possible without
delaying the dissemination of this information (who is a qualified
vendor) to eligible professionals who may wish to use one of these
systems or vendors to participate in the Physician Quality Reporting
System.
Comment: Some commenters urged us to post the list of qualified
registries for the Physician Quality Reporting System prior to the
start of the respective program year. Some commenters also asked that
we post cost information. Commenters believed that providing the list
of registries earlier, as well as posting cost information, would help
eligible professionals make a more informed decision with respect to
purchasing registries.
Response: We understand that it would benefit eligible
professionals to have the list of qualified 2012 Physician Quality
Reporting System registries available earlier. However, due to the time
it takes to vet registries for qualification for the Physician Quality
Reporting System, we anticipate that we will not be able to post the
list of qualified registries prior to the start of the respective
program year. However, we will make every effort to post the list of
qualified registries for each respective year as soon as possible. With
respect to posting registry cost information, upon further
consideration, we are not posting cost information with our list of
qualified registries.
Comment: Although several commenters supported our proposal to add
a the new EHR data submission vendor classification, several commenters
opposed our proposal to limit entities that may qualify as both a
registry and EHR data submission vendor to a single role such that the
entity would need to decide whether it wants to serve as a registry or
EHR data submission vendor but not both. These commenters stated that
these entities should be allowed to qualify as both qualified
registries and qualified EHR data submission vendors.
Response: We appreciate the commenters' feedback and understand
that some entities who believe they fulfill the qualification
requirements for both registries and EHR data submission vendors desire
to be qualified for reporting under the Physician Quality Reporting
System as both. However, we believe this requirement is necessary to
separate vendors qualifying as registries and EHR data submission
vendors, and therefore, we are finalizing this requirement.
Comment: One commenter supported the idea of disqualifying
registries that submit inaccurate data in future program years.
Although one commenter was not opposed to disqualifying registries that
submit inaccurate information in future program years, the commenter
noted that we should allow for reporting errors that are outside a
registry's control.
Response: We are aware of many of the issues registries encounter
during the collection of data they receive from the eligible
professionals for whom they provide services. However, we do, as part
of its vetting process, require registries to attest to the accuracy of
their data and have a validation process in place to ensure the data is
complete and accurate. As we move towards implementing the Value-Based
Modifier, the collection of accurate data will become increasingly
important. We anticipate adopting in future rulemaking the option of
disqualifying a registry from future Physician Quality Reporting System
reporting if their data is inaccurate for future years of the program.
Details about this option, including the basis for disqualifying a
registry for submission of inaccurate data, will be addressed in future
rulemaking.
Based on the comments received and for the reasons explained
previously, we are finalizing the proposed requirements that registries
must complete in order to be ``qualified'' for 2012. Although we
proposed the use of a web-based tool, but it has not yet been developed
to handle self-nomination requests; therefore, we are finalizing
submission of this self-nomination statement via a letter to CMS.
As we indicated, we anticipate finalizing the list of 2012
Physician

[[Page 73323]]

Quality Reporting System registries by Summer 2012. We understand that
it would benefit eligible professionals to have the list of qualified
2012 Physician Quality Reporting System registries available earlier.
However, due to the time it takes to vet these registries, we may not
be able to finalize and post the list of 2012 Physician Quality
Reporting System registries until Summer 2012.
(3) EHR-Based Reporting
For 2012 and beyond, we proposed (76 FR 42846) that eligible
professionals who choose to participate in the Physician Quality
Reporting System via the EHR-based reporting mechanism have the option
of submitting quality measure data obtained from their Physician
Quality Reporting System qualified EHR to CMS either: (1) Directly from
his or her qualified EHR, in the CMS-specified manner, or (2)
indirectly from a qualified EHR data submission vendor (on the eligible
professional's behalf), in the CMS-specified manner. We invited but
received no public comments on our proposal to allow for EHR-based
reporting for 2012 and beyond via a qualified direct EHR-based
reporting or qualified EHR data submission vendor. Therefore, we are
finalizing our proposal to allow eligible professionals to submit
quality measure data obtained from their Physician Quality Reporting
System qualified EHR to CMS either: (1) Directly from his or her
qualified EHR, in the CMS-specified manner or (2) indirectly from a
qualified EHR data submission vendor (on the eligible professional's
behalf), in the CMS-specified manner.
(A) Direct EHR-Based Reporting
(i) Requirements for the Direct EHR-Based-Reporting Mechanism--
Individual Eligible Professionals
For 2012 and beyond, we proposed to retain the EHR-based reporting
mechanism via a qualified EHR (as defined in section VI.F.1.d.(3).(b))
for the purpose of satisfactorily reporting Physician Quality Reporting
System quality measures. We proposed the following requirements for
individual eligible professionals associated with EHR-based reporting:
(1) Selection of a Physician Quality Reporting System qualified EHR
product and (2) submission of Medicare clinical quality data extracted
from the EHR directly to CMS, in the CMS-specified manner.
We proposed (76 FR 42846) that, in addition to meeting the
appropriate criteria for satisfactory reporting of individual measures
for the 2012 Physician Quality Reporting System EHR reporting option,
eligible professionals who choose the EHR-based reporting mechanism for
the 2012 Physician Quality Reporting System would be required to have a
Physician Quality Reporting System qualified EHR product. We understand
that eligible professionals may have purchased Certified EHR Technology
for purposes of reporting under the Medicare and Medicaid EHR Incentive
Programs. Such Certified EHR Technology may or may not be qualified for
purposes of the 2012 Physician Quality Reporting System. Eligible
professionals would need to ensure that their Certified EHR Technology
is also qualified for purposes of the 2012 Physician Quality Reporting
System to participate in the Physician Quality Reporting System via the
EHR-based reporting mechanism for 2012.
For 2012, we proposed to modify the current list of EHR vendors
qualified under the Physician Quality Reporting System to indicate
which of the qualified vendors' products have also received a
certification for the purposes of the EHR Incentive Programs.
We invited public comment on the 2012 proposed qualifications for
direct EHR-based reporting. The following is a summary of the comments
we received regarding these proposals.
Comment: Some commenters were opposed to our requirement that
Certified EHR Technology must also be qualified for purposes of
reporting 2012 Physician Quality Measures. Therefore, one commenter
opposed all requirements for EHR qualification that did not align with
the requirements for Certified EHR Technology. One commenter stated
that eligible professionals should not have the added burden of having
to determine which Certified EHR Technology systems are also qualified
for purposes of reporting 2012 Physician Quality Reporting System
measures.
Response: We appreciate the commenters' feedback. However, at this
time, it is not technically feasible to automatically qualify Certified
EHR Technology to report 2012 Physician Quality Reporting System
measures. As we stated in the proposed rule (76 FR 42846), the
certification process for EHR technology does not test the EHR
product's ability to output a file that meets the Physician Quality
Reporting System measures file specifications. We are currently
exploring ways to further align these two programs' reporting
requirements for future years so that Certified EHR Technology may be
used to satisfy both the Medicare EHR Incentive Program and the
Physician Quality Reporting System without any additional testing.
For the reasons stated previously, we are finalizing these
requirements for individual eligible professionals choosing the direct
EHR-based reporting-based reporting mechanism. We anticipate that
testing for qualified direct EHR-based reporting products will occur in
late 2012, immediately followed by the submission of the eligible
professional's actual 2012 Physician Quality Reporting System data in
early 2013. This entire final test/production data submission timeframe
for 2012 is expected to be December 2012 through February 2013. We are
currently vetting newly self-nominated EHR vendor products for possible
qualification for the 2012 Physician Quality Reporting System program
year. Similar to prior years, we expect to list the 2012 Physician
Quality Reporting System qualified EHR products by January 2012.
(ii) 2012 Qualification Requirements for Direct EHR-Based Reporting
Products
For EHR-based reporting products to be qualified to be used to
directly report 2012 Physician Quality Reporting System quality
measures data on behalf of eligible professionals, we proposed (76 FR
42846) that a test of quality data submission from eligible
professionals who wish to report 2012 quality measure data directly
from their qualified EHR product would be required.
For EHR-based reporting vendors wishing to qualify EHR products for
participation in the 2012 Physician Quality Reporting System-Medicare
Incentive Pilot for the Medicare EHR Incentive Program (discussed in
section VI.H. of this final rule with comment period), we proposed (76
FR 42846) a separate, accelerated vetting process for EHR vendors and
their products. This vetting process would be the same process as the
vetting process for EHR vendor products for the 2012 Physician Quality
Reporting System that is currently underway. We will begin the vetting
process for these additional EHR vendors and their products in the
beginning of 2012 and anticipate that the vetting process be completed
by Summer/Fall 2012.
We further proposed that any EHR vendor interested in having one or
more of their products being ``qualified'' to submit quality data
extracted from an EHR to CMS on eligible professionals' behalf for the
2012 Physician Quality Reporting System would be required to self-
nominate. We anticipate that the self-nomination deadline will occur no
later than December 31, 2011. We

[[Page 73324]]

expect to post instructions for self-nomination by the 4th quarter of
CY 2011 on the Physician Quality Reporting System section of CMS Web
site.
We invited public comment on the proposed 2012 qualification
requirements for EHR products capable of directly reporting. The
following is a summary of the comments we received regarding this
proposal.
Comment: One commenter was opposed to our proposed vetting
timelines to qualify EHRs for the 2012 Physician Quality Reporting
System. The commenter urged us to accelerate the process to qualify EHR
systems.
Response: We appreciate the commenter's feedback. However, we must
allow sufficient time after the publication of the qualification
requirements in this final rule with comment period for vendors to
decide if they wish to participate in the Physician Quality Reporting
System and become qualified. After self-nomination, we attempt to allow
ample time for vendors to submit test files and resubmit them if their
first submission is unacceptable. We would like to give every
interested vendor as much time to qualify as is possible without
delaying the dissemination of this information (who is a qualified
vendor) to eligible professionals who may wish to use one of these
systems or vendors to participate in the Physician Quality Reporting
System.
Comment: Some commenters urged us to align our EHR qualification
requirements with the requirements needed to become Certified EHR
Technology under the EHR Incentive Program.
Response: We agree with the recommendation to align the EHR
Incentive Program with the Physician Quality Reporting System,
particularly with respect to reporting clinical quality measure results
under the Physician Quality Reporting System-Medicare EHR Incentive
Pilot discussed in the following section VI.H. of this final rule with
comment period. We are also exploring ways to align the format for
receiving the measures data used by both programs.
Comment: One commenter was opposed to all qualification
requirements for EHRs (including both direct EHR-based reporting and
EHR data submission vendors) that exceed the requirements to become
Certified EHR Technology (which is the EHR technology used in the EHR
Incentive Program).
Response: We are unsure of the specific objection the commenter is
expressing with respect to EHR requirements. CMS only requires EHR
vendors who desire to have their products directly submit quality
measure data to CMS for the Physician Quality Reporting System to
undergo a vetting and testing process in order to determine if the
product(s) can properly directly submit data to CMS. This testing
process will help to provide more certainty for an eligible
professional who is relying on their software to participate in the
Physician Quality Reporting System. Without this testing, we believe
there would be a risk of a given product not being able to export the
quality data in the format that CMS can receive and process it.
Based on the comments received and for the reasons stated above, we
are finalizing the qualification requirements as proposed for direct
EHR products.
(B) EHR Data Submission Vendors
(i) Requirements for the EHR Data Submission Vendor-Based Reporting
Mechanism--Individual Eligible Professionals
For 2012 and beyond, we proposed (76 FR 42846) a second EHR-based
reporting mechanism via a qualified EHR data submission vendor (as
defined in 42 CFR 414.90(b)) for the purpose of satisfactorily
reporting Physician Quality Reporting System quality measures. We
proposed the following requirements for individual eligible
professionals associated with indirect EHR-based reporting-based
reporting: (1) Selection of a Physician Quality Reporting System
qualified EHR data submission vendor and (2) submission of Medicare
clinical quality data extracted from the EHR to a qualified ``EHR data
submission vendor'' (which may include some current registries, EHR
vendors, and other entities that are able to receive and transmit
clinical quality data extracted from an EHR) to CMS, in the CMS-
specified manner. For eligible professionals who choose to
electronically submit Medicare clinical quality data extracted from
their EHR to a qualified EHR data submission vendor, the EHR data
submission vendor would then submit the Physician Quality Reporting
System measures data to CMS in a CMS-specified manner on the eligible
professional's behalf for the respective program year.
For 2012, we proposed that in order for an eligible professional to
submit Medicare clinical quality data extracted from his or her EHR to
CMS via an EHR data submission vender, the eligible professional must
enter into and maintain an appropriate legal arrangement with a
qualified 2012 EHR data submission vendor that is capable of receiving
and transmitting Medicare clinical quality data extracted from an EHR.
Such arrangements would provide for the EHR data submission vendor's
receipt of beneficiary-specific data from the eligible professional and
the EHR data submission vendor's disclosure of the beneficiary-specific
data on behalf of the eligible professional to CMS. Thus, the EHR data
submission vendor would act as a Health Insurance Portability and
Accountability Act of 1996 (Pub. L. 104-191) (HIPAA) Business Associate
and agent of the eligible professional. Such agents are referred to as
``EHR data submission vendors.'' The ``EHR data submission vendors''
would have the requisite legal authority to provide beneficiary-
specific data on the 2012 Physician Quality Reporting System EHR
measures on behalf of the eligible professional to CMS for the
Physician Quality Reporting System.
We also proposed that eligible professionals choosing to
participate in the 2012 Physician Quality Reporting System through the
EHR-based reporting mechanism via an EHR data submission vendor for
2012 must select a qualified Physician Quality Reporting System EHR
data submission vendor and submit information on Physician Quality
Reporting System EHR measures to the selected EHR data submission
vendor in the form and manner, and by the deadline specified by the EHR
data submission vendor.
We invited but received no public comments on the proposed
requirements for individual eligible professionals using EHR data
submission vendors to submit Physician Quality Reporting System quality
measures data. Therefore, we are finalizing the 2012 qualification
requirements as proposed for individual eligible professionals using
EHR data submission vendors to submit Physician Quality Reporting
System quality measures data.
We will also be vetting those self-nominated EHR data submission
vendors for possible qualification to submit 2012 Physician Quality
Reporting System measures on eligible professionals' behalf under the
EHR-based reporting mechanism. We expect to list the entities that are
EHR data submission vendors qualified to submit 2012 Physician Quality
Reporting System EHR measures on eligible professionals' behalf by mid-
2012.
Please note that we cannot assume responsibility for the successful
submission of data from eligible professionals' EHRs. In addition,
eligible professionals who decide to submit the Physician Quality
Reporting System measures directly from his or

[[Page 73325]]

her EHR should begin attempting submission soon after the opening of
the clinical data warehouse in order to assure the eligible
professional has a reasonable period of time to work with his or her
EHR and/or its vendors to correct any problems that may complicate or
preclude successful quality measures data submission through that EHR.
(ii) 2012 Qualification Requirements for EHR Data Submission Vendors
Similar to our 2012 qualification requirements for vendors that
provide EHR products that are qualified as being capable of directly
reporting, we proposed that qualified EHR data submission vendors that
wish to submit 2012 quality measures data obtained from an eligible
professional's qualified EHR product to CMS on the eligible
professional's behalf would have to meet certain 2012 qualification
requirements, explained in detail the proposed rule (76 FR 42847).
We invited public comment on the proposed qualification
requirements on the 2012 for EHR data submission vendors who wish to
submit Physician Quality Reporting System quality measures data. Please
note that some of the issues raised by commenters regarding the 2012
qualification requirements for registries, which were addressed
previously, were similar or the same as those raised about the
qualification requirements for EHR data submission vendors. Therefore,
we addressed many of those issues previously. The following is a
summary of the comments we received regarding these ERH data submission
vendor proposals.
Comment: One commenter was opposed to our proposed timelines to
qualify EHRs for the 2012 Physician Quality Reporting System. The
commenter urged that we accelerate the process to qualify EHRs for the
2012 Physician Quality Reporting System to provide earlier notice to
eligible professionals as to which EHR vendors have been qualified.
Response: We appreciate the commenter's feedback. However, we must
allow sufficient time after the publication of the qualification
requirements in this final rule with comment period for vendors to
decide if they wish to participate in the Physician Quality Reporting
System and become qualified. After self-nomination, we attempt to allow
ample time for vendors to submit test files and resubmit them if their
first submission is unacceptable. We would like to give every
interested vendor as much time to qualify as is possible without
delaying the dissemination of this information (who is a qualified
vendor) to eligible professionals who may wish to use one of these
systems or vendors to participate in the Physician Quality Reporting
System.
Comment: Some commenters urged us to align our EHR qualification
requirements (for both direct EHR-based reportingand EHR data
submission vendors) with the requirements needed to become Certified
EHR Technology under the EHR Incentive Program.
Response: We agree with the recommendation to align the EHR
Incentive Program with the Physician Quality Reporting System,
particularly with respect to reporting clinical quality measure results
under the Physician Quality Reporting System-Medicare EHR Incentive
Pilot discussed in section VI.F.4. of this final rule with comment
period. We are also exploring ways to align the format for receiving
the measures data used by both programs.
Based on the comments received and for the reasons stated above, we
are finalizing the 2012 qualification requirements as proposed for EHR
data submission vendors who wish to submit Physician Quality Reporting
System quality measures data.
EHR data submission vendors that wish to submit 2012 quality
measures data obtained from an eligible professional's EHR product to
CMS on the eligible professional's behalf must submit test data in late
2012 followed by the submission of the eligible professional's actual
2012 Physician Quality Reporting System data in early 2013.
For data submission vendors wishing to qualify for participation in
the 2012 Physician Quality Reporting System-Medicare Incentive Pilot
for the Medicare EHR Incentive Program (discussed in section VI.H. of
this final rule with comment period), these data submission vendors
must undergo a separate, accelerated vetting process for EHR data
submission vendors. Although the requirements for becoming a qualified
EHR data submission vendor are different than becoming a qualified EHR
product for direct EHR-based reporting, the vetting process will be the
same process as the vetting process for EHR vendor products for the
2012 Physician Quality Reporting System that is currently underway. We
will begin the vetting process for these EHR data submission vendors in
the beginning of 2012 and anticipate that the vetting process will be
completed by Summer/Fall 2012.
Any EHR data submission vendor interested in being ``qualified'' to
submit quality data extracted from an EHR to CMS on eligible
professionals' behalf for the 2012 Physician Quality Reporting System
is required to self-nominate. We anticipate that the self-nomination
deadline will occur no later than December 31, 2011. We expect to post
instructions for self-nomination by the 4th quarter of CY 2011 on the
Physician Quality Reporting System section of CMS Web site.
EHR data submission vendors who wish to submit 2012 Physician
Quality Reporting System quality measure data must also meet the
following qualification requirements:
Not be in a beta test form.
Be in existence as of January 1, 2012
Have at least 25 active users.
Participate in ongoing Physician Quality Reporting
mandatory support conference calls hosted by CMS (approximately one
call per month). Failure to attend more than one call per year would
result in the removal of the EHR data submission vendor from the 2012
EHR qualification process.
Have access to the identity management system specified by
CMS (such as, but not limited to, the Individuals Authorized Access to
CMS Computer Systems, or IACS) to submit clinical quality data
extracted to a CMS clinical data warehouse.
Submit a test file containing dummy Medicare clinical
quality data to a CMS clinical data warehouse via an identity
management system specified by CMS during a timeframe specified by CMS.
In 2011, the requirement to submit a test file could have contained
real or dummy data. However, for privacy reasons, we have decided to
only provide for the submission of test files containing dummy data. We
have finalized revisions to 42 CFR 414.90 to reflect this change.
Submit a file containing the eligible professional's 2012
Physician Quality Reporting System Medicare clinical quality data
extracted from the EHR for the entire 12-month reporting period via the
CMS-specified identify management system during the timeframe specified
by us in early 2013.
Provide at least 1 feedback report, based on the data
submitted to them for the 2012 Physician Quality Reporting System
incentive reporting period, but if technically feasible, provide at
least 2 feedback reports throughout the year to participating eligible
professionals.
Be able to collect all needed data elements and transmit
to CMS the data at the beneficiary level.
Be able to separate out and report on Medicare Part B FFS
patients.

[[Page 73326]]

Provide the measure numbers for the quality measures on
which the data submission vendor is reporting.
Be able to transmit this data in a CMS-approved XML format
utilizing a Clinical Document Architecture (CDA) standard such as
Quality Reporting Data Architecture (QRDA).
Comply with a CMS-specified secure method for data
submission, such as submitting the EHR data submission vendor's data in
an XML file through an identity management system specified by CMS or
another approved method, such as use of appropriate Nationwide Health
Information Network specifications, if technically feasible.
Enter into and maintain with its participating
professionals an appropriate Business Associate agreement that provides
for the data submission vendor's receipt of patient-specific data from
the eligible professionals, as well as the data submission vendor's
disclosure of patient-specific data on Medicare beneficiaries on behalf
of eligible professionals who wish to participate in the Physician
Quality Reporting System.
Obtain and keep on file signed documentation that each
holder of an NPI whose data are submitted to the data submission vendor
has authorized the data submission vendor to submit patient-specific
data on Medicare beneficiaries to CMS for the purpose of Physician
Quality Reporting System participation. This documentation must be
obtained at the time the eligible professional signs up with the data
submission vendor to submit Physician Quality Reporting System quality
measures data to the data submission vendor and must meet any
applicable laws, regulations, and contractual business associate
agreements.
Provide CMS access (upon request for health oversight
purposes like validation) to review the Medicare beneficiary data on
which 2012 Physician Quality Reporting System EHR-based submissions are
founded or provide to CMS a copy of the actual data (upon request).
Provide CMS a signed, written attestation statement via
mail or email which states that the quality measure results and any and
all data including numerator and denominator data provided to CMS are
accurate and complete.
Use Physician Quality Reporting System measure
specifications and the CMS provided measure calculation algorithm, or
logic, to calculate reporting rates or performance rates unless
otherwise stated. CMS will provide EHR data submission vendors a
standard set of logic to calculate each measure and/or measures group
they intend to report in 2012.
Provide a calculated result using the CMS supplied measure
calculation logic and XML file for each measure that the EHR data
submission vendor intends to calculate. The data submission vendors
will be required to show that they can calculate the proper measure
results (that is, reporting and performance rates) using the CMS-
supplied logic and send the calculated data back to CMS in the
specified format.
For EHR data submission vendors participating in the Physician
Quality Reporting System-Medicare EHR Incentive Pilot for 2012
(discussed in section VI.H. of this final rule with comment period) and
wish to also submit Medicare clinical quality data extracted from an
EHR for the purposes of the 2012 Physician Quality Reporting System
incentive, these EHR data submission vendors must meet the following
requirements in addition to the requirements stated previously:
Be able to collect all needed data elements and transmit
to CMS the data at the TIN/NPI level.
Be able to calculate and submit measure-level reporting
rates or, upon request, the data elements needed to calculate the
reporting rates by TIN/NPI.
Be able to calculate and submit, by TIN/NPI, a performance
rate (that is, the percentage of a defined population who receive a
particular process of care or achieve a particular outcome based on a
calculation of the measure's numerator and denominator specifications)
for each measure on which the TIN/NPI reports or, upon request the
Medicare beneficiary data elements needed to calculate the reporting
rates.
Report the number of eligible instances (reporting
denominator).
Report the number of instances a quality service is
performed (reporting numerator).
Report the number of performance exclusions, meaning the
quality action was not performed for a valid reason as defined by the
measure specification.
Report the number of reported instances, performance not
met (eligible professional receives credit for reporting, not for
performance), meaning the quality action was not performed for no valid
reason as defined by the measure specification.
Be able to transmit this data in a CMS-approved XML
format.
Submit an acceptable ``validation strategy'' to CMS by
March 31, 2012. A validation strategy ascertains whether eligible
professionals have submitted accurately and on at least the minimum
number (80 percent) of their eligible patients, visits, procedures, or
episodes for a given measure, which, as described in section
VI.F.1.e.2. of this final rule with comment period, is the minimum
percentage of patients on which an eligible professional must report on
any given measure. Acceptable validation strategies often include such
provisions as the EHR data submission vendor being able to conduct
random sampling of their participant's data, but may also be based on
other credible means of verifying the accuracy of data content and
completeness of reporting or adherence to a required sampling method.
Perform the validation outlined in the strategy and send
the results to CMS by June 30, 2013 for the 2012 reporting year's data.
Enter into and maintain with its participating
professionals an appropriate Business Associate agreement that provides
for the data submission vendor's receipt of patient-specific data from
the eligible professionals, as well as the data submission vendor's
disclosure of quality measure results and numerator and denominator
data on Medicare beneficiaries on behalf of eligible professionals who
wish to participate in the Physician Quality Reporting System.
Obtain and keep on file signed documentation that each
holder of an NPI whose data are submitted to the data submission vendor
has authorized the data submission vendor to submit quality measure
results and numerator and denominator data on Medicare beneficiaries to
CMS for the purpose of Physician Quality Reporting System
participation. This documentation must be obtained at the time the
eligible professional signs up with the data submission vendor to
submit Physician Quality Reporting System quality measures data to the
data submission vendor and must meet any applicable laws, regulations,
and contractual business associate agreements.
Use Physician Quality Reporting System measure
specifications and the CMS provided measure calculation algorithm, or
logic, to calculate reporting rates or performance rates unless
otherwise stated.
Provide a calculated result using the CMS supplied measure
calculation logic and XML file for each measure that the EHR data
submission vendor intends to calculate. The data submission vendors are
required to show that they can calculate the proper measure results
(that is, reporting and performance rates) using the CMS-supplied logic
and send the calculated data back to CMS in the specified format.

[[Page 73327]]

For 2012, the EHR data submission vendor must submit clinical
quality data on Medicare beneficiaries extracted from eligible
professionals' EHRs to our designated database for the Physician
Quality Reporting System using a CMS-specified record layout, which
will be provided to the EHR data submission vendor by CMS. In addition,
for purposes of also reporting 2012 Physician Quality Reporting System
quality measures, the EHR data submission vendor must to submit patient
level Medicare clinical quality data extracted from the eligible
professional's EHR using the same CMS-specified record layout that
qualified EHR products must be able to produce for purposes of an
eligible professional directly submitting the 2012 Physician Quality
Reporting System EHR measures to CMS.
(C) Qualification Requirements for Direct EHR-Based Reporting Data
Submission Vendors and Their Products for the 2013 Physician Quality
Reporting System
As in prior years, unlike the qualification process for registries,
EHR vendors, which include vendors that provide EHR products that
qualify for direct EHR-based reporting and EHR data submission vendors,
are tested for qualification a year ahead of the program year in which
the EHR vendor intends to submit Physician Quality Reporting System
quality measures on behalf of individual eligible professionals or
where its product(s) are available for use by eligible professionals to
submit Physician Quality Reporting System measures directly to CMS.
We proposed EHR vendor testing for the 2013 Physician Quality
Reporting System program year to qualify new EHR vendors and EHR data
submission vendors and their EHR products for submission of Medicare
beneficiary quality data extracted from EHR products to the CMS
Medicare clinical quality data warehouse for the 2013 Physician Quality
Reporting System.
In order for EHR vendors to be qualified to report 2013 Physician
Quality Reporting System data to CMS, we proposed that EHR vendors
would be required to meet the following requirements:
Not be in a beta test form.
Be in existence as of January 1, 2012.
Have at least 25 active users.
Participate in ongoing Physician Quality Reporting
mandatory support conference calls hosted by CMS (approximately one
call per month). Failure to attend more than one call per year would
result in the removal of the EHR data submission vendor from the 2012
EHR qualification process.
Indicate the reporting option the vendor seeks to qualify
for its users to submit in addition to individual measures.
Have access to the identity management system specified by
CMS (such as, but not limited to, the Individuals Authorized Access to
CMS Computer Systems, or IACS) to submit Medicare clinical quality data
extracted to a CMS clinical data warehouse.
Submit a test file containing dummy Medicare clinical
quality data to a CMS clinical data warehouse via an identity
management system specified by CMS during a timeframe specified by CMS.
In 2011, the requirement to submit a test file could have contained
real or dummy data. However, for privacy reasons, we have decided to
only provide for the submission of test files containing dummy data. We
proposed revisions to 42 CFR 414.90 to reflect this change.
Submit a file containing the eligible professional's 2012
Physician Quality Reporting System Medicare clinical quality data
extracted from the EHR for the entire 12-month reporting period via the
CMS-specified identify management system during the timeframe specified
by us in early 2013.
Provide at least 1 feedback report, based on the data
submitted to them for the 2012 Physician Quality Reporting System
incentive reporting period, and if technically feasible, provide at
least two feedback reports throughout the year to participating
eligible professionals.
Be able to collect all needed data elements and transmit
to CMS the data at the beneficiary level.
Be able to separate out and report on Medicare Part B FFS
patients.
Provide the measure numbers for the quality measures on
which the data submission vendor is reporting.
Be able to transmit this data in a CMS-approved XML format
utilizing a Clinical Document Architecture (CDA) standard such as
Quality Reporting Data Architecture (QRDA).
Comply with a CMS-specified secure method for data
submission, such as submitting the EHR vendor's data in an XML file
through an identity management system specified by CMS or another
approved method, such as use of appropriate Nationwide Health
Information Network specifications, if technically feasible.
Enter into and maintain with its participating
professionals an appropriate Business Associate agreement that provides
for the data submission vendor's receipt of patient-specific data from
the eligible professionals, as well as the data submission vendor's
disclosure of patient-specific data on Medicare beneficiaries on behalf
of eligible professionals who wish to participate in the Physician
Quality Reporting System.
Obtain and keep on file signed documentation that each
holder of an NPI whose data are submitted to the data submission vendor
has authorized the data submission vendor to submit patient-specific
data on Medicare beneficiaries to CMS for the purpose of Physician
Quality Reporting System participation. This documentation must be
obtained at the time the eligible professional signs up with the data
submission vendor to submit Physician Quality Reporting System quality
measures data to the data submission vendor and must meet any
applicable laws, regulations, and contractual business associate
agreements.
Provide CMS access (upon request for health oversight
purposes like validation) to review the Medicare beneficiary data on
which 2012 Physician Quality Reporting System EHR-based submissions are
founded or provide to CMS a copy of the actual data (upon request).
Provide CMS a signed, written attestation statement via
mail or email which states that the quality measure results and any and
all data including numerator and denominator data provided to CMS are
accurate and complete.
Use Physician Quality Reporting System measure
specifications and the CMS provided measure calculation algorithm, or
logic, to calculate reporting rates or performance rates unless
otherwise stated. CMS would provide EHR vendors a standard set of logic
to calculate each measure and/or measures group they intend to report
in 2012.
Provide a calculated result using the CMS supplied measure
calculation logic and XML file for each measure that the EHR vendor
intends to calculate. The data submission vendors would be required to
show that they can calculate the proper measure results (that is,
reporting and performance rates) using the CMS-supplied logic and send
the calculated data back to CMS in the specified format.
This is the same self-nomination process described in the
``Requirements for Electronic Health Record (EHR) Vendors to
Participate in the 2012 Physician Quality Reporting System EHR
Program,'' posted on the Physician Quality Reporting System section of
the CMS Web site at http://www.cms.gov/

[[Page 73328]]

PQRS/20--AlternativeReportingMechanisms.aspTopOfPage. For
2013, we proposed that these requirements would apply not only for the
purpose of a vendor's EHR product being qualified so that the product's
users may submit 2013 Medicare beneficiary data extracted from the EHR
for the 2013 Physician Quality Reporting System in 2014, but also for
the purpose of a vendor's EHR product being qualified to electronically
submit Medicare beneficiary data extracted from the EHR for reporting
the electronic prescribing measure for the eRx Incentive Program 2013
incentive and 2014 payment adjustment. Similarly, we proposed that
these requirements would apply not only for the purposes of an EHR data
submission vendor being qualified to submit 2013 Medicare beneficiary
data from eligible professionals' EHRs for the 2013 Physician Quality
Reporting System in 2014 but also for the purpose of an EHR data
submission vendor being qualified to electronically submit Medicare
beneficiary data extracted from the EHR for reporting the electronic
prescribing measure for the eRx Incentive Program 2013 incentive and
2014 payment adjustment.
We also proposed that if an EHR vendor misses more than one
mandatory support call or meeting, the vendor and their product and/or
EHR data submission vendor would be disqualified for the Physician
Quality Reporting System reporting year, which is covered by the call.
For the 2013 Physician Quality Reporting System, we proposed that
previously qualified and new vendors and/or EHR data submission vendors
would need to incorporate any new EHR measures (that is,
electronically-specified measures), as well as update their electronic
measure specifications and data transmission schema should either or
both change, finalized for the Physician Quality Reporting System for
2013 if they wish to maintain their Physician Quality Reporting System
qualification.
We invited public comment related to our proposed qualification
requirements for EHR direct and data submission vendors and their
products for the 2013 Physician Quality Reporting System. The comments
received regarding this proposal have been addressed previously.
Based on the comments received and for the reasons previously
stated, we are finalizing the qualification requirements for EHR direct
and data submission vendors and their products for the 2013 Physician
Quality Reporting System.
Any EHR vendor interested in having one or more of their EHR
products ``qualified'' to submit quality data extracted from their EHR
products to the CMS Medicare clinical quality data warehouse for the
2013 Physician Quality Reporting System must submit their self-
nomination statement by January 31, 2012. Whereas, in prior program
years, EHR vendors have submitted self-nomination statements via mail,
we proposed to have EHR vendors submit self-nomination statements via a
web-based tool, if technically feasible for us to develop such a tool.
However, at this time, it is not technically feasible to collect self-
nomination statements via a web-based tool. Therefore, as we proposed
as an alternative, we will accept self-nomination statements from EHR
vendors that wish to be qualified for the 2013 Physician Quality
Reporting System via email. We expect to post instructions for
submitting the self-nomination statement and the 2013 EHR vendor
requirements in the 4th quarter of CY 2011. Specifically, for the 2013
Physician Quality Reporting System, in order to ensure EHR vendors'
interest in participating in the 2013 Physician Quality Reporting
System, only EHR vendors that self-nominate by January 31, 2012 to
participate in the EHR Program testing during calendar year 2012 will
be considered qualified EHR vendors for the 2013 Physician Quality
Reporting System.
e. Incentive Payments for the 2012 Physician Quality Reporting System
In accordance with 42 CFR 414.90(c)(3), eligible professionals that
satisfactorily report 2012 Physician Quality Reporting System measures
can qualify for an incentive equal to 0.5 percent of the total
estimated part B allowed charges for all covered professional services
furnished by the eligible professional (or, in the case of a group
practice participating in the GPRO, the group practice) during the
applicable reporting period. We proposed (76 FR 42850) modifying the
incentive payment language in 42 CFR 414.90(c) so that the language is
more consistent with section 1848 of the Act. We are finalizing this
proposal. We are also making technical changes to renumber the clauses
under 42 CFR 414.90(c).
(1) Criteria for Satisfactory Reporting of Individual Quality Measures
for Individual Eligible Professionals via Claims
Section 1848(m)(3)(A) of the Act established the criteria for
satisfactorily submitting data on individual quality measures as
submitting data on at least three measures in at least 80 percent of
the cases in which the measure is applicable. For claims-based
reporting, if fewer than three measures are applicable to the services
of the professional, the professional may meet the criteria by
submitting data on one or two measures for at least 80 percent of
applicable cases where the measures are reportable. For years after
2009, section 1848(m)(3)(D) of the Act authorizes the Secretary, in
consultation with stakeholders and experts, to revise the criteria for
satisfactorily reporting data on quality measures.
Accordingly, we proposed (76 FR 42850) the following criteria for
satisfactory reporting via the claims-based reporting mechanism for
individual eligible professionals specializing in internal medicine,
family practice, general practice, or cardiology:
Report on at least one Physician Quality Reporting System
core measure as identified in Table 46 of this proposed rule.
Report on at least two additional measures that apply to
the services furnished by the professional.
Report each measure for at least 50 percent of the
eligible professional's Medicare Part B FFS patients for whom services
were furnished during the reporting period to which the measure
applies.
We proposed the requirement of the reporting of Physician Quality
Reporting System core measures for certain specialties to introduce
measures reporting according to specialty for eligible professionals
specializing in internal medicine, family practice, general practice,
or cardiology. However, we did not propose this core measure
requirement for all other specialties. Therefore, for all other
specialties, we proposed (76 FR 42851) to retain similar reporting
criteria as finalized for the in the 2011 MPFS final rule.
Specifically, we proposed the following criteria for satisfactory
reporting via the claims-based reporting mechanism:
Report on at least three measures that apply to the
services furnished by the professional; and
Report each measure for at least 50 percent of the
eligible professional's Medicare Part B FFS patients for whom services
were furnished during the reporting period to which the measure
applies.
To the extent that an eligible professional has fewer than three
Physician Quality Reporting System measures that apply to the eligible
professional's services and the eligible professional is reporting via
the claims-based reporting mechanism, we proposed (76 FR 42851) that
the eligible

[[Page 73329]]

professional would be able to meet the criteria for satisfactorily
reporting data on individual quality measures by meeting the following
two criteria--
Report on all measures that apply to the services
furnished by the professional (that is one to two measures); and
Report each measure for at least 50 percent of the
eligible professional's Medicare Part B FFS patients for whom services
were furnished during the reporting period to which the measure
applies.
As in prior years, we also proposed (76 FR 42851) that, for 2012,
an eligible professional who reports on fewer than three measures
through the claims-based reporting mechanism may be subject to the
Measure Applicability Validation (MAV) process, which would allow us to
determine whether an eligible professional should have reported quality
data codes for additional measures. This process was applied in prior
years, including the 2011 Physician Quality Reporting System. We
proposed that these criteria for satisfactorily reporting data on fewer
than three individual quality measures would apply for the claims-based
reporting mechanism only because, unlike registry and EHR-based
reporting, the reporting of Physician Quality Reporting System quality
measures via claims is not handled by an intermediary but rather
directly by the eligible professional.
For 2012, in order to encourage reporting on measures that are
applicable to the eligible professional's practice as well as encourage
eligible professionals to perform the clinical quality actions
specified in the measures, we proposed (76 FR 42851) not to count
measures that are reported through claims that have a zero percent
performance rate. That is, if the recommended clinical quality action,
as indicated in the numerator of the quality measure, is not performed
on at least one patient for a particular measure or measures group
reported by the eligible professional via claims, we will not count the
measure (or measures group) as a measure (or measures group) reported
by an eligible professional. This requirement is also consistent with
the registry and EHR-based reporting criteria for satisfactory
reporting in section VI.F.1.e of this final rule with comment period.
We invited and received public comments on our proposed 2012
criteria for satisfactory reporting of data on individual Physician
Quality Reporting System quality measures for individual eligible
professionals via claims. We also sought public comment as to whether
geriatricians should be included as a specialty required to report on
2012 Physician Quality Reporting System core measures. In addition, we
sought public comment on whether other specialties should be included
in the 2012 Physician Quality Reporting System core measure reporting
requirement. The following is a summary of the comments we received
regarding these proposals.
Comment: Some commenters supported our proposal to require the
reporting of the 2012 Physician Quality Reporting System core measures.
One commenter asked whether nurse practitioners and physician
assistants working in family practice, internal medicine, general
practice, and cardiology would be required to report on at least 1
Physician Quality Reporting System core measure. Other commenters
suggested that we include geriatricians as a specialty required to
report on at least 1 Physician Quality Reporting System core measure,
whereas others did not. One commenter suggested that hospitalists also
be required to report on the 2012 Physician Quality Reporting System
core measures, whereas one commenter stated that hospitalists cannot
report on the 2012 Physician Quality Reporting System core measures.
Response: We appreciate the commenters' feedback and question. We
continue to recognize the importance of and encourage reporting on
these Physician Quality Reporting System core measures, which are aimed
at promoting cardiovascular care. However, due to some operational
limitations, such as having insufficient time to properly update our
analysis systems to check for an eligible professional's specialty, we
are not finalizing our proposed requirement that physicians practicing
in internal medicine, family practice, general practice, and cardiology
report on at least 1 Physician Quality Reporting System core measure.
Therefore, eligible professionals specializing in these specialties may
still report on these measures under the program, but are not required
to meet the proposed reporting criterion regarding the core measures.
For purposes of earning a 2012 incentive, we are only finalizing the
claims based reporting criteria for satisfactory reporting that we
proposed for all other individual eligible professionals. Therefore,
individual eligible professionals practicing in internal medicine,
family practice, general practice and cardiology must meet that
criterion for satisfactory reporting for the claims-based mechanism.
Comment: Some commenters opposed our proposal to require eligible
professionals practicing in internal medicine, family practice, general
practice, and cardiology to report on the 2012 Physician Quality
Reporting System core measures as it posed an additional reporting
burden on these eligible professionals.
Response: We appreciate the commenters' feedback but respectfully
disagree. As these measures are those that we expect eligible
professionals practicing in internal medicine, family practice, general
practice, and cardiology to report as they address high priority care
areas for eligible professionals practicing in these specialties, we do
not believe requiring these eligible professionals to report on at
least 1 2012 Physician Quality Reporting System core measure would have
posed an additional reporting burden on these eligible professionals.
However, as described previously, due to operational limitations, we
are not finalizing this criterion for satisfactory reporting and
therefore, we are not requiring these specialties to report on the 2012
Physician Quality Reporting System core measures. However, we still
encourage these specialties to report on these Physician Quality
Reporting System core measures when appropriate.
Comment: A few commenters supported our proposal to lower the
reporting threshold from 80 to 50 percent of the eligible
professional's Medicare Part B PFS patients seen during the reporting
period to which the measure applies.
Response: We appreciate the commenter's feedback and are finalizing
this reporting threshold of 50 percent of the eligible professional's
Medicare Part B PFS patients seen during the reporting period to which
the measure applies for claims-based reporting.
Comment: One commenter opposed our proposal to not count measures
reported via claims with a zero percent performance rate, because it is
sufficient that eligible professionals make the effort to report
Physician Quality Reporting System measures.
Response: We appreciate the commenter's feedback. However, we are
interested in moving away from pro forma reporting. We are interested
in concentrating on the collection of meaningful data. Therefore, for
the reasons we stated previously, we are finalizing our proposal to not
count measures reported via claims with a zero percent performance
rate.
Comment: One commenter opposed our proposal to require eligible
professionals that report on less than 3

[[Page 73330]]

measures to undergo the MAV process, particularly since the program has
not specifically identified which measures may be applicable to
eligible professionals' respective practices.
Response: We provided this process as a way for eligible
professionals to participate in the Physician Quality Reporting System
when they may not have 3 measures applicable to their practice (which
is the minimum number of measures eligible professionals must otherwise
report). We believe it is important to have a process to check
instances where eligible professionals report on less than 3 measures
to ensure the that the minimum reporting requirement of reporting at
least 3 measures is, in fact, impracticable.
Based on the comments received and for the reasons stated
previously, we are finalizing the 2012 criteria for satisfactory
reporting of data on individual Physician Quality Reporting System
quality measures via claims, described in Table 40. As we indicate
above, Table 40 reflects the criteria for satisfactory reporting of
data on Physician Quality Reporting System quality measures via claims
for all eligible professionals.
[GRAPHIC] [TIFF OMITTED] TR28NO11.148

In addition, an eligible professional who reports on fewer than
three measures through the claims-based reporting mechanism may be
subject to the Measure Applicability Validation (MAV) process, which
will allow us to determine whether an eligible professional should have
reported quality data codes for additional measures. Under the MAV
process, when an eligible professional reports on fewer than 3
measures, we will perform a review to determine whether there are other
closely related measures (such as those that share a common diagnosis
or those that are representative of services typically provided by a
particular type of eligible professional). If an eligible professional
who reports on fewer than 3 measures in 2012 reports on a measure that
is part of an identified cluster of closely related measures and does
not report on any other measure that is part of that identified cluster
of closely related measures, then the eligible professional will not
qualify as a satisfactory reporter in the 2012 Physician Quality
Reporting System or earn an incentive payment.
(2) 2012 Criteria for Satisfactory Reporting of Individual Quality
Measures for Individual Eligible Professionals via Registry
Under our authority of section 1848(m)(3)(D) of the Act to revise
the reporting criteria for the satisfactory reporting of measures, we
proposed (76 FR 42852) the following criteria for satisfactory
reporting via the registry-based reporting mechanism: (1) criteria for
individual eligible professionals practicing in internal medicine,
family practice, general practice, or cardiology and (2) criteria for
all other eligible professionals. For the reasons stated previously, we
distinguished eligible professionals in internal medicine, family
practice, general practice, or cardiology from all other eligible
professionals for the purposes of establishing criteria for
satisfactory reporting. Therefore, for eligible professionals
specializing in internal medicine, family practice, general practice,
or cardiology, we proposed (76 FR 42852) the following criteria for
satisfactory reporting--
Report on at least one Physician Quality Reporting System
core measure as identified in Table 28 of the proposed rule (76 FR
42863);
Report on at least two additional measures that apply to
the services furnished by the professional; AND
Report each measure for at least 80 percent of the
eligible professional's Medicare Part B FFS patients for whom services
were furnished during the reporting period to which the measure
applies.
For the same reasons stated for establishing different reporting
criteria for all other eligible professionals under the claims-based
reporting mechanism, we proposed the following criteria for
satisfactory reporting via the registry-based reporting mechanism--
Report on at least three measures that apply to the
services furnished by the professional; AND
Report each measure for at least 80 percent of the
eligible professional's Medicare Part B FFS patients for whom services
were furnished during the reporting period to which the measure
applies.
In addition, as in prior years, for 2012, we proposed not to count
measures that are reported through registries that have a zero percent
performance rate, calculated by dividing the measure's numerator by the
measure's denominator. That is, if the recommended clinical quality
action, that is the action denoted in the quality measure's numerator,
is not performed on at least one patient for a particular measure or
measures group reported by the eligible professional via registry, we
will not count the measure (or measures group) as a measure (or
measures group) reported by an eligible professional. We proposed to
disregard measures (or measures groups) that are reported through a
registry that have a zero percent performance rate in the 2012
Physician Quality Reporting System, because we are assuming that the
measure was not applicable to the eligible professional and was likely
reported from EHR-derived data (or from data mining) and was
unintentionally submitted from the registry to us. We also sought to
avoid the possibility of intentional submission of spurious data solely
for the purpose

[[Page 73331]]

of receiving an incentive payment for reporting.
We invited public comment on the proposed criteria for satisfactory
reporting of individual quality measures for individual eligible
professionals via registry. The following is a summary of the comments
we received. We also sought public comment as to whether geriatricians
should be included as a specialty required to report all 2012 Physician
Quality Reporting System core measures. In addition, we sought public
comment on whether other specialties should be included in the 2012
Physician Quality Reporting System core measure reporting requirement.
The following is a summary of the comments we received.
Comment: One commenter stated that eligible professionals reporting
via registry should report on quality scores on a sample drawn from all
the eligible professional's patients.
Response: We appreciate the commenter's feedback. However, as we
may collect information on Medicare Part B FFS patients via claims, we
are only requiring that eligible professionals who report on Physician
Quality Reporting System quality measure via registry report on their
Medicare Part B FFS patients.
Based on the comments received and for the reasons stated
previously, we are finalizing the 2012 criteria for satisfactory
reporting of data on individual Physician Quality Reporting System
quality measures for individual eligible professionals via registry
described in Table 41. However, for the same operational reasons we
discussed previously regarding claims-based reporting, we are not
finalizing the criteria for satisfactory reporting that we proposed for
eligible professionals practicing in internal medicine, family
practice, general practice, and cardiology. Therefore, Table 41
reflects the criteria for satisfactory reporting of data on Physician
Quality Reporting System quality measures via registry for all eligible
professionals.
[GRAPHIC] [TIFF OMITTED] TR28NO11.149

(3) Criteria for Satisfactory Reporting of Individual Quality
Measures for Individual Eligible Professionals via EHR
Section 1848(m)(3)(A) of the Act established the criteria for
satisfactorily submitting data on individual quality measures as at
least three measures in at least 80 percent of the cases in which the
measure is applicable. For years after 2009, section 1848(m)(3)(D) of
the Act authorizes the Secretary, in consultation with stakeholders and
experts, to revise the criteria for satisfactorily reporting data on
quality measures. Accordingly, we proposed the following options for
satisfactory reporting of individual quality measures by individual
eligible professionals participating in the 2012 Physician Quality
Reporting System via the EHR-based reporting mechanism:
First, we proposed (76 FR 42854) that an eligible professional
would meet the criteria for satisfactory reporting under the Physician
Quality Reporting System if the eligible professional, using a
Physician Quality Reporting System ``qualified'' EHR product (if the
eligible professional is also participating in the EHR Incentive
Program via the Physician Quality Reporting System-EHR Incentive Pilot
discussed in section VI.H. of this final rule with comment period, the
eligible professional's EHR product must also be Certified EHR
Technology), reports on three core measures for 80 percent of the
eligible professional's Medicare Part B FFS patients seen during the
reporting period to which each measure applies as identified in Table
28 of the proposed rule (76 FR 42863), which are identical to the
Medicare EHR Incentive Program core measures included in Table 7 of the
Medicare and Medicaid EHR Incentive Program final rule (75 FR 44410).
For all core measures identified in Table 28 of the proposed rule
except for the measures titled ``Preventive Care and Screening: Body
Mass Index (BMI) Screening and Follow-up'' and ``Measure pair: a.
Tobacco Use Assessment, b. Tobacco Cessation Intervention'', insofar as
the denominator for one or more of the core measures is 0, implying
that the eligible professional's patient population is not addressed by
these measures, we proposed (76 FR 42854) that eligible professionals
would be required to report up to three alternate core measures as
identified in Table 28 of the proposed rule and which are identical to
the Medicare EHR Incentive Program alternate core measures included in
Table 7 of the Medicare and Medicaid EHR Incentive Program final rule,
(75 FR 44410). In addition, we proposed that the eligible professional
would be required to report on three additional measures of their
choosing that are available for the Medicare EHR Incentive Program in
Table 6 of the Medicare and Medicaid EHR Incentive Program final rule
(75 FR 44398 through 44408) (as identified in 29 of the proposed rule).
Section 1848(m)(7) of the Act (``Integration of Physician Quality
Reporting and EHR Reporting''), as added by section 3002(d) of the
Affordable Care Act, requires us to move towards the integration of EHR
measures with respect to the Physician Quality Reporting System.
Section 1848(m)(7) of the Act specifies that by

[[Page 73332]]

no later than January 1, 2012, the Secretary shall develop a plan to
integrate reporting on quality measures under the Physician Quality
Reporting System with reporting requirements under subsection (o) of
section 1848 of the Act relating to the meaningful use of EHRs. Such
integration shall consist of the following:
(A) The selection of measures, the reporting of which both would
demonstrate--
(i) Meaningful use of an EHR for purposes of the Medicare EHR
Incentive Program; and
(ii) Quality of care furnished to an individual; and
(B) Such other activities as specified by the Secretary.
We proposed the aforementioned criteria for satisfactory reporting
via an EHR, which is identical to the criteria for achieving meaningful
use for reporting clinical quality measures under the EHR Incentive
Program as finalized in the Medicare and Medicaid Electronic Health
Record Incentive Program final rule (75 FR 44409 through 44411), in an
effort to align the Physician Quality Reporting System with the
Medicare EHR Incentive Program.
In addition to the reporting criteria proposed (76 FR 42854)
previously, we proposed alternative reporting criteria for satisfactory
reporting using the EHR-based reporting mechanism that is similar to
the criteria finalized in the CY 2011 MPFS Final Rule with comment
period (75 FR 73497 through 73500). For the reasons set forth for
establishing different criteria for satisfactory reporting via claims
and registry, we proposed to adopt two different criteria for
satisfactory reporting, depending on an eligible professional's
specialty. For eligible professionals specializing in internal
medicine, family practice, general practice, and cardiology, we
proposed the following criteria:
Report on ALL Physician Quality Reporting System core
measure as identified in Table 28 of the proposed rule (76 FR 42863)
AND
Report each measure for at least 80 percent of the
eligible professional's Medicare Part B FFS patients for whom services
were furnished during the reporting period to which the measure
applies.
We understood that by requiring eligible professionals specializing
in internal medicine, family practice, general practice, and cardiology
to report all Physician Quality Reporting System core measures, we
would be requiring such professionals to report more measures than
eligible professionals who do not practice within those specialties. We
believe, however, that requiring these specialists to report on all
Physician Quality Reporting System core measures would not add an
additional burden to these eligible professionals because the reporting
of measures is done entirely through the EHR. Furthermore, because we
are proposing to require these specialties to report on all Physician
Quality Reporting System core measures and recognize that some of the
Physician Quality Reporting System core measures may not be applicable
to all of these eligible professionals' specialties, we proposed to
allow the reporting of these Physician Quality Reporting System core
measures with a zero percent performance rate. That is, the reporting
of a Physician Quality Reporting System core measure that is not
applicable to the eligible professional's practice in this instance
will not preclude an eligible professional from meeting the criteria
for satisfactory reporting.
For the reasons we stated previously for creating separate
reporting criteria for all other eligible professionals for claims and
registry reporting, we proposed (76 FR 42854) the following criteria
for satisfactory reporting using the EHR-based reporting mechanism--
Report on at least three Physician Quality Reporting
System EHR measures of the eligible professional's choosing; AND
Report each measure for at least 80 percent of the
eligible professional's Medicare Part B FFS patients for whom services
were furnished during the reporting period to which the measure
applies.
We invited public comment on the proposed criteria for satisfactory
reporting of individual quality measures by individual eligible
professionals via an EHR-based reporting mechanism in the 2012
Physician Quality Reporting System. We also sought public comment as to
whether geriatricians should be included as a specialty required to
report all 2012 Physician Quality Reporting System core measures. In
addition, we sought public comment on whether other specialties should
be included in the 2012 Physician Quality Reporting System core measure
reporting requirement. In addition to the comments summarized and
addressed previously regarding our proposal to require certain
specialties to report on core measures, the following is a summary of
the remaining comments we received regarding these proposals.
Comment: Several commenters supported the proposed criteria for
EHR-based reporting for the 2012 Physician Quality Reporting System
that aligns with the EHR Incentive Program. In general, the commenters
supported our efforts to align the Physician Quality Reporting System
and EHR Incentive Program.
Response: Aligning the Physician Quality Reporting System and EHR
Incentive Program is a top priority, as we seek to minimize the
reporting burden that the various CMS quality reporting programs may
pose on eligible professionals who choose to participate in more than
one program.
After considering the comments and for the reasons we stated
previously, we are only finalizing the criteria for satisfactory
reporting via EHR for the 2012 Physician Quality Reporting System
described in Table 42. For the operational reasons discussed
previously, we are not finalizing the criteria for satisfactory
reporting via EHR that we proposed for eligible professionals
practicing in internal medicine, family practice, general practice, and
cardiology. Therefore, Table 42 reflects the criteria for satisfactory
reporting of data on Physician Quality Reporting System quality
measures via EHR for all eligible professionals.
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BILLING CODE 4120-01-C
(4) Criteria for Satisfactory Reporting of Measures Groups via Claims--
Individual Eligible Professionals
Under Sec. 414.90(b), ``measures group'' is defined as ``a subset
of four or more Physician Quality Reporting System measures that have a
particular clinical condition or focus in common.'' For 2012 and
beyond, we proposed that individual eligible professionals have the
option to report measures groups in addition to individual quality
measures to qualify for the Physician Quality Reporting System
incentive, using claims or registries.
For the reasons we proposed (76 FR 42855) different criteria for
satisfactorily reporting individual quality measures depending on
specialty, specifically our desire to introduce core measures
applicable to certain specialties and promote cardiovascular care, we
proposed two different criteria for

[[Page 73334]]

satisfactorily reporting measures groups. We proposed the following
criteria for satisfactory reporting of 2012 Physician Quality Reporting
System measures groups:
We proposed that eligible professionals specializing in internal
medicine, family practice, general practice, and cardiology may meet
the criteria for satisfactory reporting of Physician Quality Reporting
System measures groups via claims by reporting in the following manner:
Report at least one Physician Quality Reporting System
measures group; AND
If the measures group does not contain at least one
Physician Quality Reporting System core measure, then one Physician
Quality Reporting System core measure; AND
For each measures group and, if applicable, Physician
Quality Reporting System core measure reported, report on at least 30
Medicare Part B FFS patients for each measures group that is reported.
Measures groups containing a measure with a zero percent
performance rate will not be counted.
We also proposed that eligible professionals specializing in
internal medicine, family practice, general practice, and cardiology
may meet the criteria for satisfactorily reporting Physician Quality
Reporting System measures groups via claims by reporting in the
following manner:
Report at least one Physician Quality Reporting System
measures group; BUT
If the measures group does not contain at least one
Physician Quality Reporting System core measure, then one Physician
Quality core measure.
For each measures group and, if applicable, Physician
Quality Reporting System core measure reported, report on at least 50
percent of the eligible professional's Medicare Part B FFS patients
seen during the reporting period to whom the measures group applies;
but report no less than 15 Medicare Part B PFS patients for each
measures group reported.
Measures groups containing a measure with a zero percent
performance rate will not be counted.
For all other eligible professionals, in order to meet the criteria
for satisfactory reporting of Physician Quality Reporting measures
groups via claims, we proposed that the eligible professional must:
Report at least one Physician Quality Reporting System
measures group; AND
Report on at least 30 Medicare Part B FFS patients for
each measures group that is reported.
Measures groups containing a measure with a zero percent
performance rate will not be counted.
Alternatively, eligible professionals not specializing in internal
medicine, family practice, general practice, and cardiology may meet
the criteria for satisfactorily reporting Physician Quality Reporting
System measures groups via claims by reporting in the following manner:
Report at least one Physician Quality Reporting System
measures group; AND
For each measures group reported, report each on at least
50 percent of the eligible professional's Medicare Part B FFS patients
seen during the reporting period to whom the measures group applies;
BUT
Report no less than 15 Medicare Part B PFS patients for
each measures group reported.
Measures groups containing a measure with a zero percent
performance rate will not be counted.
Aside from the Physician Quality Reporting System core measure
reporting requirement for eligible professionals specializing in
internal medicine, family practice, general practice, or cardiology, we
proposed to retain the same criteria for satisfactory reporting of
measures groups via claims as the 2011 criteria for satisfactory
reporting of measures groups via claims for the 12-month reporting
period that was finalized in the 2011 MPFS Final Rule with comment
period, because we believe consistent reporting criteria will in turn
lead to a greater chance that eligible professionals meet the criteria
for satisfactory reporting (76 FR 42854). Therefore, as in 2011, we
proposed that an eligible professional must satisfactorily report on
all individual measures within the measures group in order to meet the
criteria for satisfactory reporting via measures groups.
For 2012, in order to ensure that the Physician Quality Reporting
System measures on which eligible professionals report are applicable
to their respective practices, we proposed (76 FR 42854) not to count
measures within measures groups that are reported through claims or
registry that have a zero percent performance rate. That is, if the
recommended clinical quality action is not performed on at least one
patient for a particular measure reported by the eligible professional
via claims or registry, we will not count the measures group as a
measures group reported by an eligible professional. Furthermore, this
proposed requirement is consistent with the reporting options for
individual quality measures, which are discussed previously. Since we
proposed to retain the requirement that an eligible professional must
satisfactorily report on all individual measures contained within a
measures group in order to meet the criteria for satisfactory reporting
via measures groups, if an eligible professional reports a measure
contained within a measures group with a zero percent performance rate,
the eligible professional will fail to meet the criteria for the
satisfactory reporting of measures groups.
We invited public comment on the 2012 criteria for satisfactory
reporting on measures groups via claims for individual eligible
professionals. We also sought public comment as to whether
geriatricians should be included as a specialty required to report at
least 1 proposed 2012 Physician Quality Reporting System core measure
for measures group reporting. In addition, we sought public comment on
whether other specialties should be included in the 2012 Physician
Quality Reporting System core measure reporting requirement for
measures groups. The following is a summary of the comments we
received.
Comment: One commenter was opposed to the proposed criterion that
measures with a zero percent performance rate will not be counted.
Response: We appreciate the commenter's feedback. However, as we
stated previously, we are interested in moving away from pro forma
reporting. We are interested in concentrating on the collection of
meaningful data. Therefore, for the reasons we stated previously, we
are finalizing our proposal to only count measures reported via claims,
registry, and EHR with a zero percent performance rate.
Based on the comments received and for the reasons stated
previously, we are finalizing the 2012 criteria for satisfactory
reporting of measures groups via claims for individual eligible
professionals described in Table 43. For the operational reasons
discussed previously, however, we are not finalizing our proposals for
eligible professionals practicing in internal medicine, family
practice, general practice, and cardiology. Therefore, Table 43
reflects the final criteria for satisfactory reporting of data on
Physician Quality Reporting System quality measures groups via claims
for all eligible professionals.

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An eligible professional could also potentially qualify for the
Physician Quality Reporting System incentive payment by satisfactorily
reporting both individual measures and measures groups. However, only
one incentive payment will be made to the eligible professional.
(5) 2012 Criteria for Satisfactory Reporting of Measures Groups via
Registry--Individual Eligible Professionals
As with the reporting of measures groups via claims, we proposed
(76 FR 42857) different criteria for the satisfactory reporting of
Physician Quality Reporting System measures groups via registry
depending on the eligible professional's specialty. For eligible
professionals specializing in internal medicine, family practice,
general practice, or cardiology, in order to meet the criteria for the
satisfactory reporting of Physician Quality Reporting measures groups
via registry, during the 12-month reporting period, we proposed that
the eligible professional must--
Report at least 1 Physician Quality Reporting System
measures group; AND
If the measures group does not contain at least 1
Physician Quality Reporting System core measure, then 1 Physician
Quality Reporting System core measure; AND
Report on at least 30 Medicare Part B FFS patients for
each measures group and, if applicable, Physician Quality Reporting
System core measure reported.
Measures groups containing a measure with a zero percent
performance rate will not be counted.
Alternatively, we proposed that the eligible professional
specializing in internal medicine, family practice, general practice,
or cardiology may meet the criteria for the satisfactory reporting of
Physician Quality measures groups via registry by doing the following
during the 12-month reporting period:
Report at least one Physician Quality Reporting System
measures group; AND
If the measures group does not contain at least 1
Physician Quality Reporting System core measure, then 1 Physician
Quality Reporting System core measure; AND
Report each measures group and, if applicable, Physician
Quality Reporting System core measure for at least 80 percent of the
eligible professional's Medicare Part B FFS patients seen during the
reporting period to whom the measures group applies; BUT
Report each measures group on no less than 15 Medicare
Part B FFS patients seen during the reporting period to which the
measures group applies.
Measures groups containing a measure with a zero percent
performance rate will not be counted.
In order to meet the criteria for the satisfactory reporting of
Physician Quality Reporting measures groups via registry, during the 6-
month reporting period, we proposed that the eligible professional
must--
Report at least one Physician Quality Reporting System
measures group; AND
If the measures group does not contain at least 1
Physician Quality core measure, then 1 Physician Quality core measure;
AND
Report each measures group and, if applicable, Physician
Quality Reporting System core measure for at least 80 percent of the
eligible professional's Medicare Part B FFS patients seen during the
reporting period to whom the measures group applies; BUT
Report each measures group on no less than 8 Medicare Part
B FFS patients seen during the reporting period to which the measures
group applies.
Measures groups containing a measure with a zero percent
performance rate will not be counted.
For all other eligible professionals, in order to meet the criteria
for the satisfactory reporting of Physician Quality Reporting System
measures groups via registry, we proposed that, during the 12-month
reporting period, the eligible professional must--
Report at least 1 Physician Quality Reporting System
measures group; AND
Report each measures group for at least 30 Medicare Part B
FFS patients.
Measures groups containing a measure with a zero percent
performance rate will not be counted.
Alternatively, we proposed that an eligible professional not
specializing in internal medicine, family practice, general practice,
or cardiology may meet the criteria for the satisfactory reporting of
Physician Quality Reporting System measures groups via registry by
doing the following during the 12-month reporting period:

[[Page 73336]]

Report at least one Physician Quality Reporting System
measures group; AND
For each measures group reported, report on at least 80
percent of the eligible professional's Medicare Part B FFS patients
seen during the reporting period to whom the measures group applies;
BUT
Report no less than 15 patients for each measures group
reported.
Measures groups containing a measure with a zero percent
performance rate will not be counted.
For all other eligible professionals, in order to meet the criteria
for the satisfactory reporting of Physician Quality Reporting System
measures groups via registry during the 6-month reporting period, we
proposed that, during the proposed 6-month reporting period, the
eligible professional must--
Report at least 1 Physician Quality Reporting System
measures group; AND
For each measures group reported, report on at least 80
percent of the eligible professional's Medicare Part B FFS patients
seen during the reporting period to whom the measures group applies;
BUT
Report each measures group on no less than least 8
Medicare Part B FFS patients for each measures group reported.
Measures groups containing a measure with a zero percent
performance rate will not be counted.
Aside from the Physician Quality Reporting System core measure
reporting requirement for eligible professionals specializing in
internal medicine, family practice, general practice, or cardiology, we
proposed to retain the same criteria for satisfactory reporting of
measures groups via registry as the 2011 criteria for satisfactory
reporting of measures groups via registry finalized in the 2011 MPFS
Final Rule with comment period. Therefore, as in 2011, an eligible
professional must satisfactorily report on all individual measures
within the measures group in order to meet the criteria for
satisfactory reporting via measures groups. We proposed to retain the
same criteria, because, since eligible professionals are already
familiar with this reporting criteria, we believe having consistent
reporting criteria will in turn lead to a greater chance that eligible
professionals meet the criteria for satisfactory reporting.
For 2012, in order to ensure that the Physician Quality Reporting
System measures on which eligible professionals report are applicable
to their respective practices, we proposed not to count measures within
measures groups that are reported through claims or registry that have
a zero percent performance rate. That is, if the recommended clinical
quality action is not performed on at least one patient for a
particular measure reported by the eligible professional via claims or
registry, we will not count the measures groups as a measures group
reported by an eligible professional. Furthermore, this requirement is
consistent with the reporting options for individual quality measures,
which were discussed previously. Since we proposed to retain the
requirement that an eligible professional must satisfactorily report on
all individual measures contained within a measures group in order to
meet the criteria for satisfactory reporting via measures groups, if an
eligible professional reports a measure contained within a measures
group with a zero percent performance rate, the eligible professional
will fail to meet the criteria for the satisfactory reporting of
measures groups.
We also sought public comment as to whether geriatricians should be
included as a specialty required to report at least 1 proposed 2012
Physician Quality Reporting System core measure for measures group
reporting. In addition, we sought public comment on whether other
specialties should be included in the 2012 Physician Quality Reporting
System core measure reporting requirement for measures groups. The
summary of these comments and our responses was discussed previously in
this final rule with comment period.
We invited but received no public comment on the proposed 2012
criteria for satisfactory reporting on measures groups via registry for
individual eligible professionals. Therefore, for the reasons stated
previously, we are finalizing the 2012 criteria for satisfactory
reporting of data on measures groups via registry described in Table
44. However, for the operational reasons discussed previously, we are
not finalizing our proposals regarding eligible professionals
practicing in internal medicine, family practice, general practice, and
cardiology. Therefore, Table 42 reflects the final criteria for
satisfactory reporting of data on Physician Quality Reporting System
quality measures via EHR for all eligible professionals.
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BILING CODE 4120-01-C
An eligible professional could also potentially qualify for the
Physician Quality Reporting System incentive payment by satisfactorily
reporting both individual measures and measures groups. However, only
one incentive payment will be made to the eligible professional.
(6) 2012 Criteria for Satisfactory Reporting on Physician Quality
Reporting System Measures by Group Practices Under the Group Practice
Reporting Option (GPRO)
Instead of participating as an individual eligible professional, an
eligible professional in a group practice may participate in the
Physician Quality Reporting System under the Physician Quality
Reporting System GPRO. However, an individual eligible professional who
is affiliated with a group practice participating in the Physician
Quality Reporting System GPRO that satisfactorily submits Physician
Quality Reporting System quality measures will only be able to earn an
incentive as part of the group practice and not as an individual
eligible professional.
We proposed (76 FR 42859) that group practices interested in
participating in GPRO must self-nominate. As stated in section
VI.F.1.e.6. of this final rule with comment period, for group practices
selected to participate in the Physician Quality Reporting System GPRO
for 2012, we finalized a 12-month reporting period beginning January 1,
2012. For 2012, we proposed (76 FR 32859) to use the same GPRO
reporting methods that we have used in prior years. Specifically, we
proposed that group practices participating in GPRO submit information
on measures within a common set of 30 NQF-endorsed quality measures
using a web interface based on the GPRO web interface used in the 2011
Physician Quality Reporting System GPRO. As part of the data submission
process for 2012 GPRO, we proposed that during 2012, each group
practice would be required to report quality measures with respect to
services furnished during the 2012 reporting period (that is, January
1, 2012, through December 31, 2012) on an

[[Page 73338]]

assigned sample of Medicare beneficiaries. Once the beneficiary
assignment has been made for each group practice, which we anticipated
would be done during the fourth quarter of 2012, we proposed to provide
each group practice selected to participate in the Physician Quality
Reporting System GPRO with access to a web interface that would include
the group's assigned beneficiary samples and the final GPRO quality
measures. We proposed to pre-populate the web interface with the
assigned beneficiaries' demographic and utilization information based
on all of their Medicare claims data. The group practice would be
required to populate the remaining data fields necessary for capturing
quality measure information on each of the assigned beneficiaries.
In 2011, to distinguish the criteria in GPRO I and II for
satisfactory reporting between small vs. large groups, we established
different reporting criteria dependent on the group's size. Although we
are consolidating the GPRO for 2012, we still recognize the need to
equalize the reporting burden by establishing different reporting
criteria for small vs. large groups. Therefore, we proposed to
establish the following two criteria for the satisfactory reporting of
Physician Quality Reporting System quality measures under the 2012
GPRO, based on the size of the group practice:
For group practices comprised of 25-99 eligible
professionals participating in the GPRO, we proposed that the group
practice must report on all GPRO measures included in the web interface
(listed in Table 55 of the proposed rule (76 FR 42880)). During the
submission period, the group practice will need to access the web
interface and populate the data fields necessary for capturing quality
measure information on each of the assigned beneficiaries up to 218
beneficiaries (with an over-sample of 327 beneficiaries) for each
disease module and preventive care measure. We further proposed that if
the pool of eligible assigned beneficiaries for any disease module or
preventive care measure is less than 218, then the group practice would
need to populate the remaining data files for 100 percent of eligible
assigned beneficiaries for that disease module or preventive care
measure. For each disease module or preventive care measure, we
proposed that the group practice must report information on the
assigned patients in the order in which they appear in the group's
sample (that is, consecutively).
For group practices comprised of 100 or more eligible
professionals, we proposed that the group practices must report on all
Physician Quality Reporting System GPRO quality measures. During the
submission period, the group practice would need to populate the
remaining data fields in the web interface necessary for capturing
quality measure information on each of the assigned beneficiaries up to
411 beneficiaries (with an over-sample of 616 beneficiaries) for each
disease module and preventive care measure. We further proposed that if
the pool of eligible assigned beneficiaries for any disease module or
preventive care measure is less than 411, then the group practice must
populate the remaining data fields for 100 percent of eligible assigned
beneficiaries for that disease module or preventive care measure. For
each disease module or preventive care measure, we proposed that the
group practice must report information on the assigned patients in the
order in which they appear in the group's sample (that is,
consecutively). In determining the appropriate reporting criteria for
group practices comprised of 100 or more eligible professionals, we
sought to use the same criteria we finalized in the 2011 MPFS Final
Rule with comment period for GPRO I (75 FR 73506) because group
practices are already familiar with this reporting process. We hope
that establishing the same process for reporting under the GPRO as used
in prior years will provide a likelier chance for meeting the criteria
for satisfactory reporting under the GPRO. In addition, we sought to
align the criteria for satisfactory reporting under the Physician
Quality Reporting System with CMS' PGP demonstration, which collects
data from large group practices in an effort to coordinate the overall
care delivered to Medicare patients.
As we discussed previously with our definition of group practice,
we allow for fluctuation of the group practice's size throughout the
reporting period, provided that the group size contains at least 25
eligible professionals, which is the minimum group practice size for
participation in the Physician Quality Reporting System GPRO. However,
as we established in 2011, for purposes of determining which reporting
criteria the group must satisfy, a group practice's size will be the
size of the group at the time the group's participation is approved by
CMS (75 FR 73504). For example, if a group practice is comprised of 100
eligible professionals at the time it self-nominates for participation
as a GPRO in 2012, and the group practice's size then drops to 99
eligible professionals at the time the group practice's participation
is approved by CMS, the group practice would need to meet the reporting
criteria for a group size of 99.
We invited public comment on the proposed requirements for
satisfactory reporting via the Physician Quality Reporting System GPRO
reporting option. The following is a summary of the comments we
received that were related to the proposed 2012 criteria for
satisfactory reporting for group practices in the Physician Quality
Reporting System GPRO.
Comment: Some commenters urged us to modify the GPRO web interface
to minimize burden of use of the web interface, particularly by
minimizing the manual processes required to populate the remaining
fields.
Response: The patient data can be extracted from an EHR and
uploaded into the web interface, which eliminates the need for manual
abstraction. CMS will continue development efforts to enhance tool so
that there is decreased burden on group practices reporting via the web
interface.
After considering the comments and for the reasons stated
previously, we are finalizing all of the proposed 2012 criteria for
satisfactory reporting for group practices participating in the
Physician Quality GPRO. Table 45 summarizes the criteria for the
satisfactory reporting of data on quality measures by group practice
under the 2012 Physician Quality Reporting GPRO. Group practices
participating in the 2012 Physician Quality Reporting System GPRO,
regardless of size, are required to report on all of the measures
listed in Table 71 of this final rule with comment period. These
quality measures are grouped into preventive care measures and five
disease modules: heart failure, diabetes, coronary artery disease,
hypertension, and chronic obstructive pulmonary disease (COPD).

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Furthermore, although we are requiring that the group practices
participating in the GPRO to report on a certain number of consecutive
patients, such as either 218 or 411 beneficiaries depending on the
group's size, we will allow the ``skipping'' of patients for valid
reasons, such as a beneficiary's medical records not being found or not
being able to confirm a diagnosis. However, excessive skipping of
patients may cause us to question the accuracy or validity of the data
being reported to us by the group practices. Due to the variance in
group patterns, measures, and disease modules, however, it is difficult
to establish a ``skip threshold'' for the satisfactory reporting of
GPRO measures. Therefore, it is our intent to examine each group
practice's skip patterns. We may request the group to provide
additional information to help explain or support the skips to help
better inform us on what levels of skipping could potentially be
considered excessive skipping in a future year.
We intend to post the final 2012 Physician Quality Reporting System
GPRO participation requirements for group practices, including
instructions for submitting the self-nomination statement and other
requested information, on the Physician Quality Reporting System
section of the CMS Web site at http://www.cms.gov/PQRS by November 15,
2011 or shortly thereafter.
The Physician Quality Reporting System GPRO web interface will be
updated as needed to include the 2012 Physician Quality Reporting
System GPRO measures (that is, to eliminate measures that have been
retired as well as add additional measures that will be finalized for
2012). We intend to provide the selected physician groups with access
to this pre-populated database by no later than the first quarter of
2012. For purposes of pre-populating this GPRO web interface, we will
assign beneficiaries to each group practice using a patient assignment
methodology modeled after the patient assignment methodology used in
the PGP & MCMP demonstrations. We will use Medicare Part B claims data
for dates of service on or after January 1, 2011, and submitted and
processed by approximately October 31, 2011, to assign Medicare
beneficiaries to each group practice. Assigned beneficiaries will be
limited to those Medicare Part B FFS beneficiaries with Medicare Parts
A and B claims for whom Medicare is the primary payer. Assigned
beneficiaries will not include Medicare Advantage enrollees. A
beneficiary will be assigned to the group practice that provides the
plurality of a beneficiary's office or other outpatient office
evaluation and management allowed charges. Beneficiaries with only one
office visit to the group practice will be eliminated from the group
practice's assigned patient sample for purposes of the 2012 Physician
Quality Reporting System GPRO. We will pre-populate the GPRO web
interface with the assigned beneficiaries' demographic and utilization
information based on their Medicare claims data.
f. 2012 Physician Quality Reporting System Measures
(1) Statutory Requirements for the Selection of the Final 2012
Physician Quality Reporting System Measures
Under section 1848(k)(2)(C)(i) of the Act, the Physician Quality
Reporting System quality measures shall be such measures selected by
the Secretary from measures that have been endorsed by the entity with
a contract with the Secretary under subsection 1890(a) of

[[Page 73340]]

the Act (currently, that is the National Quality Forum, or NQF).
However, in the case of a specified area or medical topic determined
appropriate by the Secretary for which a feasible and practical measure
has not been endorsed by the NQF, section 1848(k)(2)(C)(ii) of the Act
authorizes the Secretary to specify a measure that is not so endorsed
as long as due consideration is given to measures that have been
endorsed or adopted by a consensus organization identified by the
Secretary, such as the AQA alliance. In light of these statutory
requirements, we believe that, except in the circumstances specified in
the statute, each 2012 Physician Quality Reporting System quality
measure must be endorsed by the NQF. Additionally, section
1848(k)(2)(D) of the Act requires that for each 2012 Physician Quality
Reporting System quality measure, ``the Secretary shall ensure that
eligible professionals have the opportunity to provide input during the
development, endorsement, or selection of measures applicable to
services they furnish.''
The statutory requirements under section 1848(k)(2)(C) of the Act,
subject to the exception noted previously, require only that the
measures be selected from measures that have been endorsed by the
entity with a contract with the Secretary under section 1890(a) (that
is, the NQF) and are silent with respect to how the measures that are
submitted to the NQF for endorsement were developed. The basic steps
for developing measures applicable to physicians and other eligible
professionals prior to submission of the measures for endorsement may
be carried out by a variety of different organizations. We do not
believe there needs to be any special restrictions on the type or make-
up of the organizations carrying out this basic process of development
of physician measures, such as restricting the initial development to
physician-controlled organizations. Any such restriction would unduly
limit the basic development of quality measures and the scope and
utility of measures that may be considered for endorsement as voluntary
consensus standards for purposes of the Physician Quality Reporting
System.
The following is a summary of comments we received.
Comment: Several commenters suggested that we only include NQF-
endorsed measures for reporting for the 2012 Physician Quality
Reporting System. Some of these commenters strongly urged that all new
measures finalized for inclusion in the 2012 Physician Quality
Reporting System be submitted to the NQF for endorsement. Other
commenters stated that, should we include quality measures for
reporting under the 2012 Physician Quality Reporting System that are
not NQF-endorsed, we ensure that these quality measures undergo a
review process similar to NQF's endorsement procedures.
Response: We agree that endorsement of measures by the NQF is an
important criterion for inclusion in the 2012 Physician Quality
Reporting System. However, section 1848(k)(2)(C)(ii) of the Act
provides an exception to the requirement that measures be endorsed by
the NQF. We may exercise this exception authority in a specified area
or medical topic for which a feasible and practical measure has not
been endorsed by the NQF, so long as due consideration is given to
measures that have been endorsed by the NQF. For this reason, we retain
the ability to include non-NQF endorsed measures in the Physician
Quality Reporting System. We encourage the measure owners to submit all
non-NQF measures that are included in the 2012 Physician Quality
Reporting System for endorsement by the NQF, if the measures have not
already been submitted for endorsement. In future years, we may
consider removing a measure from the program if the measure owner has
opportunities to submit the measure to the NQF for review but does not
do so.
(2) Other Considerations for the Selection of 2012 Physician Quality
Reporting System Measures
In addition to reviewing the 2011 Physician Quality Reporting
System measures for purposes of developing the 2012 Physician Quality
Reporting System measures, we reviewed and considered measure
suggestions for the 2012 Physician Quality Reporting System.
With respect to the selection of new measures, we applied the
following considerations, which include many of the same considerations
applied to the selection of 2009, 2010 and 2011 Physician Quality
Reporting System quality measures proposed (76 FR 42864) for inclusion
in the 2012 Physician Quality Reporting System quality measure set
previously described:
High Impact on Healthcare.
++ Measures that are high impact and support CMS and HHS priorities
for improved quality and efficiency of care for Medicare beneficiaries.
These current and long term priority topics include the following:
prevention; chronic conditions; high cost and high volume conditions;
elimination of health disparities; healthcare-associated infections and
other conditions; improved care coordination; improved outcomes;
improved efficiency; improved patient and family experience of care;
effective management of acute and chronic episodes of care; reduced
unwarranted geographic variation in quality and efficiency; and
adoption and use of interoperable HIT.
++ Measures that are included in, or facilitate alignment with,
other Medicare, Medicaid, and CHIP programs in furtherance of
overarching healthcare goals.
++ NQF Endorsement.
++ Measures must be NQF-endorsed by August 15, 2011, in order to be
considered for inclusion in the 2012 Physician Quality Reporting System
quality measure set except, as provided under section 1848(k)(2)(C)(ii)
of the Act.
++ Section 1848(k)(2)(C)(ii) of the Act provides an exception to
the requirement that the Secretary select measures that have been
endorsed by the entity with a contract under section 1890(a) of the Act
(that is, the NQF).
Address Gaps in the Physician Quality Reporting System
Measure Set.
++ Measures that increase the scope of applicability of the
Physician Quality Reporting System measures to services furnished to
Medicare beneficiaries and expand opportunities for eligible
professionals to participate in the Physician Quality Reporting System.
Measures of various aspects of clinical quality including
outcome measures, where appropriate and feasible, process measures,
structural measures, efficiency measures, and measures of patient
experience of care.
Other considerations that we applied to the selection of proposed
measures for 2012, regardless of whether the measure was a 2011
Physician Quality Reporting System measure or not, were--
Measures that are functional, which is to say measures
that can be technically implemented within the capacity of the CMS
infrastructure for data collection, analysis, and calculation of
reporting and performance rates;
Measures that address gaps in the quality of care
delivered to Medicare beneficiaries;
Measures impacting chronic conditions (chronic kidney
disease, diabetes mellitus, heart failure, hypertension and
musculoskeletal);
Measures involving care coordination;
Measures applicable across care settings (such as,
outpatient, nursing facilities, domiciliary, etc.);

[[Page 73341]]

Measures conducive to leveraging capabilities of an
electronic health record (EHR);
Measures whose detailed specifications will be completed
and ready for implementation in the 2012 Physician Quality Reporting
System;
Broadly applicable measures that could be used to create a
core measure set required of all participating eligible professionals;
and
Measures groups that reflect the services furnished to
beneficiaries by a particular specialty.
In the 2012 Physician Quality Reporting System, as in the 2011
Physician Quality Reporting System, for some measures that are useful,
but where data submission is not feasible through all otherwise
available Physician Quality Reporting System reporting mechanisms, we
proposed that a measure may be included for reporting solely through
specific reporting mechanism(s) in which its submission is feasible.
However, we stress that inclusion of measures that are not NQF
endorsed or AQA adopted is an exception to the requirement under
section 1848(k)(2)(C)(i) of the Act that measures be endorsed by the
NQF. We may exercise this exception authority in a specified area or
medical topic for which a feasible and practical measure has not been
endorsed by NQF, so long as due consideration is given to measures that
have been endorsed by the NQF.
We invited comments on our proposed approach in selecting measures.
The following is a summary of the comments we received regarding other
considerations we have taken into account with regard to selecting 2012
Physician Quality Reporting System measures.
Comment: Several commenters supported the inclusion of proposed
2012 Physician Quality Reporting System measures that are either not
endorsed by NQF or pending NQF-endorsement. However, some commenters
suggested that we properly vet these non-NQF-endorsed measures prior to
including them for reporting under the 2012 Physician Quality Reporting
System.
Response: For measures that we finalize that are not currently NQF-
endorsed, we are exercising our authority under section
1848(k)(2)(C)(i) of the Act to, among other reasons, address gaps in a
specified area or medical topic. We note that, prior to rulemaking, we
review these submitted measures with the measure owners prior to
including these measures for reporting under the 2012 Physician Quality
Reporting System. Among other factors, we examine the utility of each
quality measure that was submitted, the feasibility of reporting the
measure, as well as our ability to analyze the data provided by the
reporting of the measure.
Comment: One commenter stated that the following measures should be
retired from reporting in the 2012 Physician Quality Reporting System,
because they have been retired by the measure owner or are no longer
applicable for quality reporting purposes:
135: Chronic Kidney Disease (CKD): Influenza
Immunization.
79: End Stage Renal Disease (ESRD): Influenza
immunization in Patients with ESRD.
175: Pediatric Stage Renal Disease (ESRD):
Influenza Immunization.
The commenter stated that Physician Quality Reporting System
measure no. 110 titled ``Preventive Care and Screening: Influenza
Immunization for Patients >= 50 Years Old'' has been updated to
incorporate the influenza immunization measures. Therefore, the
commenter encouraged reporting of Physician Quality Reporting System
measure no. 110 in lieu of these retired measures. Another commenter
also supported retiring Physician Quality Reporting System measure
79.
Response: We agree and are not finalizing those measures for
reporting under the 2012 Physician Quality Reporting System.
Comment: One commenter suggested that we retire Physician Quality
Reporting System measure 199 titled ``Heart Failure: Patient
Education'' because this measure is no longer available for quality
reporting.
Response: We agree and are not finalizing this measure for
reporting under the 2012 Physician Quality Reporting System.
Comment: One commenter suggested that we implement a ``test
measure'' process, whereby a measure would be tested for validity,
feasibility, and reliability prior to being included for reporting
under the Physician Quality Reporting System.
Response: Although we do not currently employ such a ``test
measure'' process, we note that we review all quality measures
submitted for inclusion for reporting under the Physician Quality
Reporting System prior to proposing these measures for inclusion. We
also note that we view implementation of a measure in the Physician
Quality Reporting System as a vehicle for testing measures.
Comment: One commenter stated that, as the number of measures and
available reporting options have grown substantially since the
implantation of the Physician Quality Reporting System in 2007, we
should look at the long-term value of the measures we finalize for
inclusion as 2012 Physician Quality Reporting System measures.
Response: We appreciate and agree with the commenter's feedback.
For example, when selecting measures for inclusion in the 2012
Physician Quality Reporting System, we took into consideration medical
topics or areas not addressed in the 2011 Physician Quality Reporting
System quality measures set, as well as which measures would encourage
reporting by a broader scope of eligible professionals.
Comment: Some commenters stated that the process of submitting,
reviewing, proposing, and finalizing measures for inclusion in the 2012
Physician Quality Reporting System is too slow. One commenter urged us
to work with the NQF and measure developers to make the measure
selection process more efficient.
Response: We understand that there is a need for measures to be
reviewed, tested, and endorsed by the NQF in a timely fashion. We are
committed to working with the NQF and measure owners to ultimately meet
this goal. We welcome suggestions on how to improve the process for
selecting measures for inclusion under the Physician Quality Reporting
System.
Comment: One commenter suggested that we collaborate more with
medical specialty boards when developing measures.
Response: We note that we typically do not develop measures.
Rather, we solicit measures that have been developed by other measure
developers for possible inclusion for reporting in the Physician
Quality Reporting System through an annual Call for Measures. The Call
for Measures for the 2013 program year has passed. However, information
about our annual Call for Measures is typically posted on our Web site
at http://www.cms.gov/PQRS/15_MeasuresCodes.asp#TopOfPage. We
encourage all medical specialty boards to submit measure suggestions
during our future Call for Measures sessions.
Comment: Some commenters were opposed to including quality measures
for reporting under the 2012 Physician Quality Reporting System that
were not developed by physicians.
Response: We appreciate the commenters' feedback but respectfully
disagree. Although we welcome measures developed by physicians, we do
not believe there needs to be any restrictions on the type of
professional or organizations carrying out the basic

[[Page 73342]]

development of measures for physicians and other eligible
professionals, such as restricting the initial development to
physician-controlled organizations. While we agree that expertise in
measure development is important in the measure development and
consensus processes, any such restriction would unduly limit the basic
development of quality measures and the scope and utility of measures
that may be considered for endorsement as voluntary consensus
standards. To ensure that all measures may be appropriately reported
under the Physician Quality Reporting System, we review all measures
prior to proposing these measures for reporting. In addition, we note
that physicians are not the only types of professionals eligible to
participate in the Physician Quality Reporting System.
Comment: One commenter supported the inclusion of NQF-endorsed
measures related to influenza, pneumococcal, Hepatitis A, and Hepatitis
B vaccinations as we have recognized the importance of collection care
information related to these diseases.
Response: We appreciate the commenter's support and are finalizing
measures that are related to influenza, pneumococcal disease, Hepatitis
A, and Hepatitis B vaccinations for the 2012 Physician Quality
Reporting System. As described in the following further detail,
measures involving these diseases are available for reporting as
individual measures under the claims, registry, and EHR-based reporting
mechanism.
Comment: One commenter supported the inclusion of Hepatitis C
measures available for reporting under the 2012 Physician Quality
Reporting System. However, the commenter notes that only a subset of
eligible professionals is able to report on these measures.
Response: We appreciate the commenter's support of the finalized
Hepatitis C measures. We encourage the commenter, as well as other
professional organizations and measure developers, to submit additional
Hepatitis C measures that cover a broader scope of eligible
professionals during the Physician Quality Reporting System Call for
Measures for future program years.
Comment: Several commenters suggested other considerations that we
should take into account when selecting Physician Quality Reporting
System measures, such as--
Focusing on including measures that are related to the
following medical topics: anesthesia, hematology, cardiology, abdominal
aortic aneurysm (AAA) screening, pelvic prolapsed, gynecologic cancer,
chronic obstructive pulmonary disease (COPD), elevated blood pressure,
and gastroenterology;
Whether measures test an eligible professional's basic
competencies, rather than providing meaningful data on patient care;
and
Whether measures focus on care coordination.
Response: We appreciate the commenters' suggestions and will take
these other considerations into account in future program years. We
note that we largely depend on the development of measures by
professional organizations and other measure developers and encourage
professional organizations and other measure developers to fund and
develop measures that address the priority areas identified by the
commenters. In addition, if there are specific measures that commenters
would like us to consider for future years to address these areas,
measure suggestions may be submitted during our annual Call for
Measures. Although the deadline to submit new measures via this year's
Call for Measures for suggesting possible measures for the 2012
Physician Quality Reporting System has passed, measure suggestions may
be submitted for consideration for possible inclusion under the 2014
Physician Quality Reporting System and beyond.
We typically host a Call for Measures each year and consider the
measures provided for the next program year. However, we note that next
year, we will not host a Call for Measures for measures to be included
in the 2013 program year. This is due our need to concentrate our
efforts to convert International Classification of Diseases (ICD) codes
(which classify all diagnoses, symptoms, and procedures recording in
conjunction with care in the United States) from ICD-9 to ICD-10. This
conversion affects quality measures included in the Physician Quality
Reporting System, as these measures currently contain ICD-9 codes. We
believe that the transition from ICD-9 to ICD-10 is necessary to update
care classifications. However, we urge these commenters to submit these
specific measure suggestions for consideration in a future Call for
Measures. Information on the Call for Measures will be available on the
Physician Quality Reporting System Web site at http://www.cms.gov/PQRS// when it becomes available.
Comment: One commenter suggested that we provide feedback in
instances where measures or measures groups that were submitted for
inclusion for reporting for the 2012 Physician Quality Reporting System
were not ultimately proposed as 2012 Physician Quality Reporting System
quality measures or measures groups.
Response: We agree and believe that such feedback will be
invaluable to measure developers and owners with regard to developing
and suggesting quality measures to be included in future program years.
We usually provide this feedback to measure developers for those
individual measures and measures groups that were submitted for
inclusion but ultimately not proposed as 2012 Physician Quality
Reporting System individual measures or measures groups.
Comment: Some commenters noted that, at times, although CMS has
allowed for certain measures to be reported under various CMS programs,
the description of some of these measures (for example, measure titles)
may vary across the various CMS programs. CMS suggested that we
synthesize the measure information we provide, such as measure title
and number, with other various CMS programs.
Response: We appreciate the commenters' feedback and agree with the
commenters. We understand that consistent displays of information on
reportable measures across various CMS programs will facilitate greater
ease of reporting for those eligible professionals who participate in
programs other than the Physician Quality Reporting System. However, we
note that we are faced with operational limitations that prevent us
from posting consistent measure information, such as varied rulemaking
and measure review timeframes. When possible, we provide measure
information that is consistent with other CMS programs.
Comment: Several commenters asked that the finalized 2012 Physician
Quality Reporting System individual measures be grouped according to
medical specialty applicability. Commenters believed that grouping
measures in this way would make it easier for eligible professionals to
decide on which measures to report. Commenters also noted the
importance of identifying clusters of measures prior to potentially
subjecting eligible professionals to the Measure Applicability
Validation (MAV) process.
Response: We understand the importance of providing guidance on
which measures to report. Although the measures that we are finalizing
in this final rule with comment period are not listed according to
medical specialty, we note that that we provide further guidance on
disease clusters in subregulatory guidance on our Web site

[[Page 73343]]

at http://www.cms.gov/PQRS//. For example, the Physician Quality
Reporting System 2009 Reporting Experience, which includes information
on some measures available for reporting in 2012, provides information
on top measures on which certain specialties have reported in past
program years. Information on the MAV process is available in our
``2011 Physician Quality Reporting System Measure-Applicability
Validation Process'' document available at http://www.cms.gov/PQRS/25_AnalysisAndPayment.asp#TopOfPage. Eligible professionals are also
encouraged to contact the QualityNet Help Desk for guidance on
satisfactory reporting. Furthermore, eligible professionals who are
participating in the Physician Quality Reporting System for the first
time may find it helpful to visit the ``How to Get Started'' section of
our Web site, available at http://www.cms.gov/PQRS/03_How_To_Get_Started.asp#TopOfPage, which provides detailed information on all
Physician Quality Reporting System quality measures available for
reporting.
Comment: Several commenters proposed new measures and measures
topics for inclusion in the 2012 Physician Quality Reporting System
that were not specifically proposed in the proposed rule.
Response: We appreciate the commenters' suggestions on new measures
and measure topics. However, as we stated in the proposed rule (76 FR
42862), section 1848(k)(2)(D) of the Act requires that the public have
the opportunity to provide input during the selection of measures. We
also are required to provide an opportunity for public comment on
provisions of policy or regulation that are established via notice and
comment rulemaking. Measures that are not included in this final rule
with comment period for inclusion in the 2012 Physician Quality
Reporting System that are recommended to us via comments on the
proposed rule have not been placed before the public to comment on the
selection of those measures within the rulemaking process. Even when
measures have been published in the Federal Register, but in other
contexts and not specifically proposed as Physician Quality Reporting
System measures, we do not believe that such publication provides the
best opportunity for public comment on those measures' potential
inclusion in the Physician Quality Reporting System. Thus, such
additional measures recommended for selection for the 2012 Physician
Quality Reporting System via comments on the CY 2012 PFS proposed rule
are not included in the 2012 measure set. As such, while we welcomed
all constructive comments and suggestions, and may consider such
recommended measures for inclusion in future measure sets for the
Physician Quality Reporting System and other programs to which such
measures may be relevant, we are not able to consider such additional
measures for inclusion in the final 2012 Physician Quality Reporting
System measure set.
In addition, as in prior years, we again note that we do not use
notice and comment rulemaking as a means to update or modify measure
specifications. Quality measures that have completed the consensus
process have a designated party (usually, the measure developer/owner)
who has accepted responsibility for maintaining the measure. In
general, it is the role of the measure owner, developer, or maintainer
to make changes to a measure. Therefore, comments requesting changes to
a specific Physician Quality Reporting System measure's title,
definition, and detailed specifications or coding should be directed to
the measure developer identified in Tables 52 through 55. Contact
information for the 2011 Physician Quality Reporting System measure
developers is listed in the ``2011 Physician Quality Reporting System
Quality Measures List,'' which is available on the CMS Web site at
http://www.cms.gov/PQRS/15_MeasuresCodes.asp#TopOfPage.
Based on the criteria previously discussed, we proposed (76 FR
42862 and 42863) to include the individual measures listed in Tables 29
through 31 in the 2012 Physician Quality Reporting System individual
quality measure set. We believe that each measure we proposed and are
finalizing for reporting under the 2012 Physician Quality Reporting
System meets at least one criterion for the selection of Physician
Quality Reporting System measures described previously. We are also
proposed (76 FR 42873) to include 24 measures groups in the 2012
Physician Quality Reporting System quality measure set, which were
listed in Tables 32 through 55 of the proposed rule. The proposed
individual measures selected for the 2012 Physician Quality Reporting
System were categorized as follows--
2012 Physician Quality Reporting System Core Measures
Available for Either Claims, Registry, and/or EHR-based Reporting;
2012 Physician Quality Reporting System Individual Quality
Measures Available for Either Claims-based Reporting and/or Registry-
based Reporting; and
2012 Physician Quality Reporting System Measures Available
for EHR-based Reporting.
Please note that some individual measures we proposed in Tables 32
through 55 of the proposed rule for reporting for the 2012 Physician
Quality Reporting System may be available for reporting in other CMS
programs, such as the Medicare and Medicaid EHR Incentive Program as
well as the Medicare Shared Savings Program. Please note that, in some
instances, we have made technical changes in measure titles because the
respective measure owners have updated these measure titles. We note
that measure titles, in some instances, may vary from program to
program. If an eligible professional intends to report the same
measures for multiple CMS programs, it is important to check the full
measure specifications, NQF measure number (if applicable), as well as
any other identifying measure features to determine whether the
measures are the same.
(3) 2012 Physician Quality Reporting System Individual Measures
This section focuses on the 2012 Physician Quality Reporting System
Individual Measures available for reporting via claims, registry, and/
or EHR-based reporting. For the proposed 2012 Physician Quality
Reporting System measures that were selected for reporting in 2011,
please note that detailed measure specifications, including the
measure's title, for the 2012 individual Physician Quality Reporting
System quality measures may have been updated or modified during the
NQF endorsement process or for other reasons prior to 2012. The 2012
Physician Quality Reporting System quality measure specifications for
any given individual quality measure may, therefore, be different from
specifications for the same quality measure used in prior years.
Specifications for all 2012 individual Physician Quality Reporting
System quality measures, whether or not included in the 2011 Physician
Quality Reporting System program, must be obtained from the
specifications document for 2012 individual Physician Quality Reporting
System quality measures, which will be available on the Physician
Quality Reporting System section of the CMS Web site on or before
December 31, 2011.
The following is a summary of general comments received that were
related to the proposed 2012 Physician Quality Reporting System
individual quality measures.

[[Page 73344]]

Comment: Some commenters were pleased to note that the proposed
2012 Physician Quality Reporting System individual measures include
ample measures from which certain specialties may report, such as
vascular surgeons, and audiologists.
Response: We appreciate the commenter's feedback and are pleased
that the 2012 Physician Quality Reporting System provides many measures
on which these eligible professionals can report.
Comment: Some commenters suggested that measures that have been
updated or retired by the respective measure owners be excluded from
the 2012 Physician Quality Reporting System.
Response: We update and retire measures that have been either
updated or retired by the respective measure owners.
Comment: Several commenters suggested specific quality measures
and/or measure topics be included in the 2012 Physician Quality
Reporting System that we did not propose in the proposed rule, such
as--
NQF 492: Participation in a practice-based or
individual quality database registry with a standard measure set (NQF
492);
NEQ 493: Participation by a physician or other
clinician in systematic clinical database registry that includes
consensus endorsed quality measures;
Measures related to fluid management; and
Measures related to oncology.
Response: We appreciate the commenters' feedback. However, we are
obligated by section 1848(k)(2)(D) of the Act to give eligible
professionals an opportunity to provide input on measures recommended
for selection, which we do via the proposed rule. Since the specific
measures suggested previously were not proposed for inclusion, these
additional measures and/or measure topics cannot be included for
reporting under the 2012 Physician Quality Reporting System. However,
we will take these measure suggestions into consideration for future
program years.
We describe the individual quality measures we are finalizing for
the 2012 Physician Quality Reporting System as follows: (The measures
specifications for all finalized 2012 Physician Quality Reporting
System measures will be available at http://www.cms.gov/PQRS/15_MeasuresCodes.asp#TopOfPage.)
(A) 2012 Physician Quality Reporting System Core Measures Available for
Claims, Registry, and/or EHR-Based Reporting
The prevention of cardiovascular conditions is a top priority for
CMS and HHS. In fact, in 2011, HHS launched the Million Hearts
campaign, which is aimed at preventing 1 million heart attacks and
strokes across the next 5-years through clinical- and community-based
prevention strategies. Therefore, in conjunction with the Million
Hearts campaign and in an effort to encourage eligible professionals to
monitor their performance with respect to the prevention of
cardiovascular conditions, we proposed (76 FR 42863) to adopt a 2012
Physician Quality Reporting System set of core measures, identified in
Table 28 of the proposed rule, aimed at promoting cardiovascular care.
We invited public comment on the proposed 2012 Physician Quality
Reporting System core measures available for claims, registry, and/or
EHR-based reporting. The following is a summary of those comments.
Comment: Several commenters supported the proposed set of 2012
Physician Quality Reporting System core measures. While commenters
generally supported the development of a set of Physician Quality
Reporting System core measures, some of these commenters urge us to
create additional core measure sets related to other disease modules
(such as diabetes) for future program years.
Response: We appreciate the commenters' feedback and are finalizing
all proposed 2012 Physician Quality Reporting System core measures. We
will explore the development of additional Physician Quality Reporting
System core measure sets for future program years.
Comment: Some commenters opposed the inclusion of the following two
measures as 2012 Physician Quality Reporting System core measures,
because they are not NQF-endorsed--
Preventive Care and Screening: Blood Pressure Measurement;
and
Preventive Care: Cholesterol-LDL test performed.
Response: We appreciate the commenters' feedback. However, as
stated previously, we believe these measures address important gaps in
the Physician Quality Reporting System quality measure set and are
integral to the Million Hearts campaign goal of preventing heart
attacks and strokes.
Comment: Several commenters provided suggestions for other measures
that should be included as a 2012 Physician Quality Reporting System
core measure, such as--
Coronary Artery Disease (CAD): Oral Antiplatelet Therapy
Prescribed for Patients with CAD
Diabetes Mellitus: High Blood Pressure Control in Diabetes
Mellitus
Coronary Artery Disease (CAD): Lipid Control
Preventive Care and Screening: Body Mass Index (BMI) Screening and
Follow-Up
A lipid profile measure
Response: We appreciate the commenters' feedback. However, we did
not propose these measures for inclusion in the 2012 Physician Quality
Reporting System as core measures. We are obligated by section
1848(k)(2)(D) of the Act to give eligible professionals an opportunity
to provide input on measures recommended for selection, which we do via
the proposed rule. Therefore, we are not finalizing these additional
measures that commenters suggested for reporting under the 2012
Physician Quality Reporting System as core measures. However, since
these measures are otherwise still generally reportable under the
Physician Quality Reporting System via the claims, registry, and/or
EHR-based reporting mechanisms, we encourage eligible professionals to
report on these measures.
Comment: Some commenters suggested we establish a Physician Quality
Reporting System core measure set addressing other medical topics, such
as heart failure, ophthalmology, gastroenterology, and coronary artery
disease.
Response: We appreciate the commenters' feedback and we are
interested in developing measure sets that focus on other medical
areas. We will take these core measures suggestions into consideration
for future program years.
Based on the comments received and for the reasons stated
previously, we are finalizing the 2012 Physician Quality Reporting
System core measures listed in the following Table 46. Please note that
the measure titled ``Proportion of adults 18-years and older who have
had their BP measured within the preceding 2-years'' has been updated
to ``Preventive Care and Screening: Blood Pressure Measurement.''
Therefore, this new measure title, when listed, will be used in Tables
47 through 72.
As stated previously, we are not requiring that eligible
professionals report on these core measures. However, we view the
reporting of these measures as a top priority to report and strongly
encourage all eligible professionals to report on these measures. We
are also listing these finalized Physician Quality

[[Page 73345]]

Reporting System core measures in Tables 48 and 49.
[GRAPHIC] [TIFF OMITTED] TR28NO11.154

(B) 2012 Physician Quality Reporting System Individual Measures for
Claims and Registry Reporting
For 2012, we proposed (76 FR 42863) to retain all measures
currently used in the 2011 Physician Quality Reporting System. We
believe these 2011 Physician Quality Reporting System measures meet the
statutory considerations as well as other factors we used in
determining which measures to include for reporting under the 2012
Physician Quality Reporting System. The retention of these measures
also promotes program consistency. These proposed measures included 55
registry-only measures currently used in the 2011 Physician Quality
Reporting System, and 144 individual quality measures for either
claims-based reporting or registry-based reporting (75 FR 40186 through
40190, and 52489 through 52490). These proposed measures do not include
any measures that were proposed to be included as part of the following
measures groups: Back Pain, COPD, IBD, Sleep Apnea, Epilepsy, Dementia,
Parkinson's, Elevated Blood Pressure, and Cataracts.
As we stated in the proposed rule (76 FR 42864), in 2011, Physician
Quality Reporting System measure 197 was titled ``Coronary
Artery Disease (CAD): Drug Therapy for Lowering LDL-Cholesterol.'' For
2012, we are changing the title of measure 197 to ``Coronary
Artery Disease: Lipid Control'', because the measure owner, AMA-PCPI,
has changed the title of the measure. Aside from the title change,
measure 197's NQF number as well as its NQF-endorsement status
has not changed. However, as noted previously, eligible professionals
should check the measure specifications for measure 197, as
the specifications on how to report on measure 197 for the
2012 Physician Quality Reporting System may change from 2011.
In addition, we proposed (76 FR 42864) the 26 new individual
measures for inclusion in the 2012 Physician Quality Reporting System
in order to provide eligible professionals with more Physician Quality
Reporting System quality measures on which they can select from to
report. The following 2 proposed measures are NQF-endorsed:
Anticoagulation for Acute Pulmonary Embolus Patients.
Pregnancy Test for Female Abdominal Pain Patients.
The remaining 24 measures we proposed (76 FR 42864) were either
pending NQF endorsement or would have to be adopted under the exception
to NQF endorsement provided under section 1848(k)(2)(C)(ii) of the Act.
In selecting these proposed measures, we took into account other
considerations listed in section VI.F.1.f.2.. of the proposed rule.
Specifically, fwe proposed to include the following measures for
reporting under the 2012 Physician Quality Reporting System because the
measures impact chronic conditions:
Chronic Wound Care: Use of Wound Surface Culture Technique
in Patients with Chronic Skin Ulcers.
Chronic Wound Care: Use of Wet to Dry Dressings in
Patients with Chronic Skin Ulcers.
Hypertension: Blood Pressure Control.
We proposed the following measures because these measures involve
care coordination:

[[Page 73346]]

Coronary Artery Disease (CAD): Symptom Management.
We proposed the following measures for reporting under the
Physician Quality Reporting System because these measures are
applicable across care settings:
Substance Use Disorders: Counseling Regarding Psychosocial
and Pharmacologic Treatment Options for Alcohol Dependence.
Substance Use Disorders: Screening for Depression Among
Patients with Substance Abuse or Dependence.
Cardiac Rehabilitation Patient Referral From an Outpatient
Setting.
We proposed (76 FR 42864) the following measures because we believe
the measures address gaps in the Physician Quality Reporting System
measure set:
Barrett's Esophagus.
Ultrasound Determination of Pregnancy Location for
Pregnant Patients with Abdominal Pain.
Rh Immunoglobulin (Rhogam) for Rh Negative Pregnant Women
at Risk of Fetal Blood Exposure.
Surveillance after Endovascular Abdominal Aortic Aneurysm
Repair (EVAR).
Referral for Otology Evaluation for Patients with Acute or
Chronic Dizziness.
Image Confirmation of Successful Excision of Image-
Localized Breast Lesion.
Improvement in Patient's Visual Function within 90-Days
Following Cataract Surgery.
Patient Satisfaction within 90-Days Following Cataract
Surgery.
We proposed the following measures because we believe the measures
increase the scope of applicability of the Physician Quality Reporting
System measures to services furnished to Medicare beneficiaries and
expand opportunities for eligible professionals to participate in the
Physician Quality Reporting System:
Radical Prostatectomy Pathology Reporting.
Immunohistochemical (IHC) Evaluation of HER2 for Breast
Cancer Patients .
We proposed the following measures because the measures are high
impact and support CMS and HHS priorities for improved quality and
efficiency of care for Medicare beneficiaries.
Statin Therapy at Discharge after Lower Extremity Bypass
(LEB).
Rate of Open AAA Repair without Major Complications
(discharged to home no later than post-operative day 7).
Rate of EVAR without Major Complications (discharged to
home no later than POD 2).
Rate of Carotid Endarterectomy for Asymptomatic Patients,
without Major Complications (discharged to home no later than post-
operative day 2).
We proposed the following measures because the measures have a high
impact on health care:
Preoperative Diagnosis of Breast Cancer.
Sentinel Lymph Node Biopsy for Invasive Breast Cancer.
Biopsy Follow-up.
Of these newly proposed 26 measures, 13 would be reportable via
registry-only. The remaining 13 measures would be available for claims
and registry reporting. Although we proposed to designate certain
measures as registry-only measures, we indicated we could not guarantee
that there would be a registry qualified to submit each registry-only
measure for 2012. We rely on registries to self-nominate and identify
the measures for which they would like to be qualified to submit
quality measures results and numerator and denominator data on quality
measures. If no registry self-nominates to submit measure results and
numerator and denominator data on a particular measure for 2012, then
an eligible professional would not be able to report that particular
measure.
We believe that the addition of Physician Quality Reporting System
quality measures will encourage eligible professionals to participate
in the Physician Quality Reporting System, as there are more measures
that may be applicable to eligible professionals.
We invited public comment on the proposed 2012 Physician Quality
Reporting System individual quality measures that are available for
claims and/or registry-based reporting identified in Table 30 of the
proposed rule (76 FR 42865). The following is a summary of the comments
we received.
Comment: One commenter supported the inclusion of all 2011
Physician Quality Reporting System individual quality measures
available for claims and registry-based reporting. Several commenters
supported the following proposed 2012 Physician Quality Reporting
System individual measures available for claims and/or registry-based
reporting that were available for reporting in 2011:
End Stage Renal Disease (ESRD): Influenza Immunization in
Patients with ESRD.
End Stage Renal Disease (ESRD): Plan of Care for
Inadequate Hemodialysis in ESRD Patients.
End Stage Renal Disease (ESRD): Plan of Care for
Inadequate Peritoneal Dialysis.
Functional Deficit: Change in Risk-Adjusted Functional
Status for Patients with Hip Impairments.
Functional Deficit: Change in Risk-Adjusted Functional
Status for Patients with Lower Leg, Foot or Ankle Impairments.
Functional Deficit: Change in Risk-Adjusted Functional
Status for Patients with Lumbar Spine Impairments.
Functional Deficit: Change in Risk-Adjusted Functional
Status for Patients with Shoulder Impairments.
Functional Deficit: Change in Risk-Adjusted Functional
Status for Patients with Elbow, Wrist or Hand Impairments.
Functional Deficit: Change in Risk-Adjusted Functional
Status for Patients with Neck, Cranium, Mandible, Thoracic Spine, Ribs,
or Other General Orthopedic Impairments.
Diabetes Mellitus: Urine Screening for Microalbumin or
Medical Attention for Nephropathy in Diabetic Patients.
Hemodialysis Vascular Access Decision-Making by Surgeon to
Maximize Placement of Autogenous Arterial Venous (AV) Fistula.
Referral for Otologic Evaluation for Patients with
Congenital or Traumatic Deformity of the Ear.
Measure pair: a. Tobacco Use Assessment, b. Tobacco
Cessation Intervention.
Preventive Care and Screening: Influenza Immunization for
Patients >= 50 Years Old.
Diabetes Mellitus: Hemoglobin A1c Poor Control in Diabetes
Mellitus.
Diabetes Mellitus: Low Density Lipoprotein (LDL-C) Control
in Diabetes Mellitus.
Diabetes Mellitus: High Blood Pressure Control in Diabetes
Mellitus.
Heart Failure: Angiotensin-Converting Enzyme (ACE)
Inhibitor or Angiotensin Receptor Blocker (ARB) Therapy for Left
Ventricular Systolic Dysfunction (LVSD).
Coronary Artery Disease (CAD): Beta-Blocker Therapy for
CAD Patients with Prior Myocardial Infarction (MI).
Preventive Care and Screening: Pneumonia Vaccination for
Patients 65 Years and Older.
Coronary Artery Disease (CAD): Oral Antiplatelet Therapy
Prescribed for Patients with CAD.
Heart Failure: Beta-Blocker Therapy for Left Ventricular
Systolic Dysfunction (LVSD).
Coronary Artery Disease (CAD): Lipid Control.
Heart Failure: Warfarin Therapy for Patients with Atrial
Fibrillation.
Ischemic Vascular Disease (IVD): Blood Pressure
Management.

[[Page 73347]]

Ischemic Vascular Disease (IVD): Use of Aspirin or Another
Antithrombotic.
Endoscopy & Polyp Surveillance: Colonoscopy Interval for
Patients with a History of Adenomatous Polyps--Avoidance of
Inappropriate Use.
One commenter was opposed to the measure titled ``End Stage Renal
Disease (ESRD): Influenza Immunization in Patients with ESRD'' because
the commenter believes reporting of this measure will create a higher
burden for dialysis facility staff.
Response: We are finalizing all of the measures commenters
supported, except for the following measure, because, as stated
previously, the measure is being retired by the respective measure
owner:
End Stage Renal Disease (ESRD): Influenza Immunization in
Patients with ESRD
Comment: Several commenters supported the inclusion of all 26 newly
introduced individual measures for reporting under the 2012 Physician
Quality Reporting System via the claims and/or registry-based reporting
mechanisms. Some commenters supported specific newly proposed 2012
Physician Quality Reporting System individual quality measures
available for claims and/or registry-based reporting, such as--
Substance Use Disorders: Counseling Regarding Psychosocial
and Pharmacologic Treatment Options for Alcohol Dependence;
Substance Use Disorders: Screening for Depression Among
Patients with Substance Abuse or Dependence;
Cardiac Rehabilitation Patient Referral From an Outpatient
Setting;
Immunohistochemical (IHC) Evaluation of HER2 for Breast
Cancer Patients;
Image Confirmation of Successful Excision of Image-
Localized Breast Lesion;
Preoperative Diagnosis of Breast Cancer;
Sentinel Lymph Node Biopsy for Invasive Breast Cancer;
Biopsy Follow-up;
Barrett's Esophagus;
Radical Prostatectomy Pathology Reporting;
Immunohistochemical (IHC) Evaluation of HER2 for Breast
Cancer Patients;
Substance Use Disorders: Counseling Regarding Psychosocial
and Pharmacologic Treatment Options for Alcohol Dependence; and
Substance Use Disorders: Screening for Depression Among
Patients with Substance Abuse or Dependence.
Response: We appreciate the commenters' support and are finalizing
these newly-proposed 26 measures specified previously as 2012 Physician
Quality Reporting System quality measures available for claims and/or
registry-based reporting.
Comment: A few commenters noted that the following measures that we
indicated were not NQF-endorsed in the proposed rule (76 FR 42864), in
fact, received NQF endorsement:
Cardiac Rehabilitation Patient Referral From an Outpatient
Setting.
Ultrasound Determination of Pregnancy Location for
Pregnant Patients with Abdominal Pain.
Rh Immunoglobulin (Rhogam) for Rh Negative Pregnant Women
at Risk of Fetal Blood Exposure.
One commenter also requested that the measure titled ``Rh
Immunoglobulin (Rhogam) for Rh Negative Pregnant Women at Risk of Fetal
Blood Exposure'' be also be reported via claims, rather than only via
the registry-based reporting mechanism.
Response: We appreciate the commenters' comment and note that these
measures are endorsed by the NQF. Therefore, we are finalizing these
measures for reporting via the claims and/or registry-based reporting
mechanism for the 2012 Physician Quality Reporting System. The
corresponding NQF numbers for these measures are indicated in the
following Table 47. Furthermore, 'since we agree with the commenter, we
are allowing the reporting of the measure titled ``Rh Immunoglobulin
(Rhogam) for Rh Negative Pregnant Women at Risk of Fetal Blood
Exposure'' to also be reported via claims as well as registry.
Comment: With respect to the measure titled ``Patient Satisfaction
within 90 Days Following Cataract Surgery'', one commenter wondered
whether there was an alternative NQF-endorsed measure that may be
reported to indicate patient satisfaction.
Response: An alternative NQF-endorsed measure addressing patient
satisfaction was not submitted for possible inclusion in the 2012
Physician Quality Reporting System. We also note that the measure is to
be reported whether or not the patient was satisfied with their care.
Rather, the measure analytics will calculate the percentage of patients
who were satisfied or not satisfied with their care.
Comment: Some commenters suggested that all measures be reportable
via claims, at least for the first year in which the measure is
introduced for reporting in the Physician Quality Reporting System. One
commenter suggested that we reconsider the inclusion of measures that
are only reportable via a registry that is only open to certain
eligible professionals.
Response: We appreciate the commenters' feedback. However, some
measures are not conducive to collection via claims because they may
require data that is not available at the time a claim form is
submitted. For example, some outcome measures that look at
complications which may occur within a specific post-operative period
would be difficult to collect from claims. In bundled or global
payments, there may not be additional claims coming to CMS with charges
in which the eligible professional could report a complication. Other
measures can be difficult to collect via claims due to their
complexity. Additionally, each year one or more registries request
being vetted (qualified) to report on any and all Physician Quality
Reporting System measures which would give a specific specialty an
opportunity to report any new measures.
In addition, we understand the concern that certain eligible
professionals may not be able to report on registry-only measures.
However, we believe it is beneficial that we provide as many measures
as possible on which eligible professionals may report so as to
increase participation and eligible professionals' reporting success
rates. We believe the inclusion of registry-only measures provides a
greater set of measures on which to satisfactorily report.
Comment: One commenter suggested that we update the following 2011
Physician Quality Reporting System measure titles to reflect their new
measure titles:
Measure 7: Coronary Artery Disease (CAD): Beta-
Blocker Therapy- Prior Myocardial Infarction (MI) or Left Ventricular
Systolic Dysfunction (LVEF < 40 percent).
Measure 53: Asthma: Pharmacologic Therapy for
Persistent Asthma.
Measure 64: Asthma: Assessment of Asthma Control.
Measure 81: Adult Kidney Disease: Hemodialysis
Adequacy: Solute.
Measure 82: Adult Kidney Disease: Peritoneal
Dialysis Adequacy: Solute.
Measure 32: Stroke and Stroke Rehabilitation:
Discharged on Antithrombotic Therapy.
Measure 36: Stroke and Stroke Rehabilitation:
Rehabilitation Services Ordered.
Measure 224: Melanoma: Overutilization of Imaging
Studies in Melanoma.
Measure 121: Adult Kidney Disease: Laboratory
Testing (Lipid Profile).

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Measure 122: Adult Kidney Disease: Blood Pressure
Management.
Measure 123: Adult Kidney Disease: Patients on
Erythropoiesis-Stimulating Agent (ESA) Hemoglobin Level > 12.0 g/dL.
Measure 197: Coronary Artery Disease (CAD): Lipid
Control.
Measure 110: Preventive Care and Screening:
Influenza Immunization.
Response: We appreciate the commenter's feedback and are finalizing
these measures for reporting under the Physician Quality Reporting
System. The updated measure titles for Physician Quality Reporting
System measure s 7, 53, 64, 81, 82, 32, 36, 224, and 121 are
provided in our final list of measures identified in Tables 48 and 49
as well as in Tables 50 through 71, which contain our final 2012
Physician Quality Reporting System measures groups.
Comment: One commenter expressed concern that we are retiring the
measure titled ``End Stage Renal Disease (ESRD): Plan of Care for
Inadequate Hemodialysis in ESRD Patients'' due to its lack of
endorsement by the NQF.
Response: We are not retiring this measure, which is Physician
Quality Reporting System measure 81. As we stated previously,
however, we are updating the title of this measure to ``Adult Kidney
Disease: Hemodialysis Adequacy: Solute.''
Comment: One commenter suggested that we correct the title to
Physician Quality Reporting System measure 186 as the measure
is titled ``Chronic Wound Care: Use of Compression System in Patients
with Venous Ulcers.''
Response: We appreciate the commenter's feedback and are updating
this measure title in our list of finalized measures in the following
Table 47.
Comment: One commenter suggested that we update Physician Quality
Reporting System measures 5, 8, and 198 to reflect new joint
copyright between the AMA-PCPI and ACC. Another commenter suggested
that we update Physician Quality Reporting System measures
53, 64, 224, and 231 to reflect new joint copyright ownership between
the AMA-PCPI and NCQA. Another commenter suggested that we update
Physician Quality Reporting System measures 6, 7, 118, 196,
and 197 to reflect new joint copyright ownership between the AMA-PCPI
and AHA.
Response: We appreciate the commenter's' feedback will reflect
these changes in copyright ownership in all of these measures, which
are listed in Tables 48 and 49.
Comment: One commenter suggested that we update the description of
Physician Quality Reporting System measure 108 and
117 to reflect the correct measure developers, who are AMA-PCPI/NCQA
and NCQ respectively.
Response: We appreciate the commenter's feedback and are updating
the measure descriptions of Physician Quality Reporting System measures
108 and 117 accordingly.
Comment: One commenter stated that Physician Quality Reporting
System measures 67, 68, 69, and 70 state the measures'
clinical topic, hematology.
Response: We appreciate the commenter's feedback and will include
the measures' clinical topic, hematology, in the measure titles for
Physician Quality Reporting System measures 108 and 117 in
the finalized measures listed in the following Tables 48 and 49.
Comment: One commenter suggested that we retire the following
measure that we proposed for reporting via claims, registry, and/or
EHR-based reporting under the 2012 Physician Quality Reporting System:
Physician Quality Reporting System 200: Heart Failure:
Warfarin Therapy for Patients with Atrial Fibrillation because the
commenter claims the use of warfarin therapy to treat Atrial
Fibrillation is no longer consistent with evidence-based clinical
guidelines.
Response: We agree that the Physician Quality Reporting System
quality measure 200 is no longer consistent with the evidence-
based clinical guidelines. However, we believe it is important to
retain this measure for the EHR-based reporting mechanism for the 2012
Physician Quality Reporting System in order to align with the EHR
Incentive Program. Therefore, as specified in the following Table 48,
we are only finalizing this measure for reporting under the EHR-based
reporting mechanism only. We note that the measure owner has modified
the measure specifications of Physician Quality Reporting System
quality measure 200 to allow for the use of additional
therapies that are more consistent with the updated guidelines. We note
that, for future program years, we will revisit the inclusion of this
measure in the Physician Quality Reporting System and EHR Incentive
Program. We emphasize our belief that eligible professionals should
follow standard clinical guidelines related to the treatment of Atrial
Fibrillation.
Comment: One commenter suggested that we retire the following
measure that we proposed for reporting via claims and/or registry under
the 2012 Physician Quality Reporting System: Measure 6, which
the commenter described as ''Use of High Risk-Medications in the
Elderly,'' because the commenter believes that the measure may not
represent the most up-to-date evidence-based clinical guidelines.
Response: We appreciate the commenter's feedback. However,
Physician Quality Reporting System measure 6 is ``Coronary
Artery Disease (CAD): Antiplatelet Therapy,'' not ``Use of High Risk-
Medications in the Elderly.'' ``Use of High Risk-Medications in the
Elderly'' is not a measure that we proposed for inclusion in the 2012
Physician Quality Reporting System. For 2012, we are finalizing
Physician Quality Reporting System measure 6 for reporting via
claims and/or registry.
Comment: One commenter opposed the inclusion of the following newly
proposed 2012 Physician Quality Reporting System individual measures:
Chronic Wound Care: Use of Wound Surface Culture Technique
in Patients with Chronic Skin Ulcers.
Chronic Wound Care: Use of Wet to Dry Dressings in
Patients with Chronic Skin Ulcers.
The commenter believes that these measures will encourage eligible
professionals to use more expensive dressings without improving quality
of care.
Response: We appreciate the commenter's feedback. However, we
believe these measures will create a positive impact to on providing
care to patients with chronic wounds. We encourage the commenter to
review the revised measure specifications within the Physician Quality
Reporting System. These measures are calculated as ``inverse''
measures. Therefore, a lower rate indicates a better performance/
control or quality indicator.
For the reasons stated previously, we proposed to include, but are
not finalizing, the following measures for claims and/or registry-based
reporting in the 2012 Physician Quality Reporting System:
135: Chronic Kidney Disease (CKD): Influenza
Immunization.
79: End Stage Renal Disease (ESRD): Influenza
immunization in Patients with ESRD.
175: Pediatric Stage Renal Disease (ESRD):
Influenza Immunization.
Furthermore, as shown in the following Table 47, we are not
finalizing the following measures for the following reasons:
Physician Quality Reporting System measure 94
titled ``Otitis Media with Effusion (OME): Diagnostic Evaluation--
Assessment of Tympanic Membrane Mobility'': this measure underwent NQF
review, but did not receive endorsement from the NQF.

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Physician Quality Reporting System measure 153
titled ``Chronic Kidney Disease (CKD): Referral for Arteriovenous (AV)
Fistula'': this measure owner has removed this measure for purposes of
quality reporting.
Physician Quality Reporting System measure 202
titled ``Ischemic Vascular Disease (IVD): Complete Lipid Profile'' and
Physician Quality Reporting System measure 203 titled
``Ischemic Vascular Disease (IVD): Low Density Lipoprotein (LDL-C)
Control'': these measures have been combined into a single measure
titled ``Ischemic Vascular Disease (IVD): Complete Lipid Profile and
LDL Control < 100.'' This combined measure was listed in Table 55 of
the proposed rule. This new individual measure (see Table 47) titled
``Ischemic Vascular Disease (IVD): Complete Lipid Profile and LDL
Control < 100'' will be available for claims and registry-based
reporting.
Based on the comments received and for the reasons stated
previously, we are finalizing all measures in Table 47 for claims and/
or registry-based reporting in the 2012 Physician Quality Reporting
System. We proposed (76 FR 42877) an Epilepsy measures group for
inclusion in the 2012 Physician Quality Reporting System. As described
in further detail later in this section, we are not finalizing the
proposed Epilepsy measures group. However, we are still finalizing
three of the measures from this measures group for reporting as
individual measures. Table 47 lists a total of 240 individual measures
available for claims and/or registry-based reporting under the 2012
Physician Quality Reporting System.
We note that the final measures available for claims and/or
registry-based reporting listed in Table 47 that do not have NQF
measure numbers (as indicated by ``N/A'') are not currently endorsed by
the NQF. These measures are awaiting review and endorsement by the NQF.
Therefore, for these measures, for reasons previously explained, we are
exercising our authority under section 1848(k)(2)(C)(i) of the Act to
include these measures for reporting via the claims and/or registry-
based reporting mechanisms.
The 2012 Physician Quality Reporting System individual measures for
either claims-based reporting or registry-based reporting are listed in
Table 47 by their Physician Quality Reporting System Measure Number (to
the extent the measure is part of the 2011 Physician Quality Reporting
System measure set) and Title, along with the name of the measure's
developer/owner and NQF measure number, if applicable. The Physician
Quality Reporting System Measure Number is a unique identifier assigned
by CMS to all measures in the Physician Quality Reporting System
measure set. Once a Physician Quality Reporting System Measure Number
is assigned to a measure, it will not be used again to identify a
different measure, even if the original measure to which the number was
assigned is subsequently retired from the Physician Quality Reporting
System measure set. A description of the measures listed in Table 47
can be found in the ``2011 Physician Quality Reporting System Quality
Measures List,'' which is available on the Measures and Codes page of
the Physician Quality Reporting System section of the CMS Web site at
http://www.cms.hhs.gov/PQRS to the extent the measure is part of the
2011 Physician Quality Reporting System measure set. New measures that
we are adding to the Physician Quality Reporting System measure set for
2012 are designated with a Physician Quality Reporting System Measure
Number of ``TBD.'' As we stated previously, the final 2012 Physician
Quality Reporting System core measures are also listed in Table 47.
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(C) 2012 Measures Available for EHR-Based Reporting
For 2012, we proposed (76 FR 42871) to again accept Physician
Quality Reporting System data from EHRs for a limited subset of 2012
Physician Quality Reporting System quality measures.
Section 1848(m)(7) of the Act (``Integration of Physician Quality
Reporting and EHR Reporting''), as added by section 3002(d) of the
Affordable Care Act, requires that by no later than January 1, 2012,
the Secretary shall develop a plan to integrate reporting on quality
measures under the Physician Quality Reporting System with reporting
requirements under the EHR Incentive Program under section 1848(o) of
the Act relating to the meaningful use of EHRs. Such integration shall
consist of the following:
(A) The selection of measures, the reporting of which would both
demonstrate--
(i) Meaningful use of an EHR for purposes of the Medicare EHR
Incentive Program; and
(ii) Quality of care furnished to an individual; and
(B) Such other activities as specified by the Secretary.
To align the Physician Quality Reporting System with the Medicare
EHR Incentive Program, we proposed (76 FR 42871) to include all
clinical quality measures available for reporting under the Medicare
EHR Incentive Program (75 FR 44398 through 44408) -in the 2012
Physician Quality Reporting System for purposes of reporting data on
quality measures under the EHR-based reporting option. In 2011, we
included 14 of the 44 EHR Incentive Program measures under the 2011
Physician Quality Reporting System EHR reporting mechanism. In order to
better align Physician Quality Reporting System measures with those
under the EHR Incentive Program, for 2012, we proposed to have the rest
of the 44 clinical quality measures in the Medicare EHR Incentive
Program available for EHR-based reporting under the 2012 Physician
Quality Reporting System.
Furthermore, for 2012, we proposed to retain the following 6
additional measures that were available for reporting under the EHR-
based reporting mechanism under the 2011 Physician Quality Reporting
System:
Measure 39: Screening or Therapy for
Osteoporosis for Women Aged 65 Years and Older.
Measure 47: Advance Care Plan.
Measure 48: Urinary Incontinence: Assessment of
Presence or Absence of Urinary Incontinence in Women Aged 65 Years and
Older.

[[Page 73363]]

Measure 124: Health Information Technology
(HIT): Adoption/Use of Electronic Health Records (EHR).
Measure 173: Preventive Care and Screening:
Unhealthy Alcohol Use--Screening.
Measure 238: Drugs to be Avoided in the Elderly.
We believe these measures meet the criteria listed previously for
inclusion for reporting under the Physician Quality Reporting System.
We invited public comment on the proposed EHR-based individual
quality measures available for reporting under the 2012 Physician
Quality Reporting System. The following is a summary of the comments we
received.
Comment: Several commenters support the inclusion of all 44 EHR
measures that are also available for reporting under the EHR Incentive
Program in order to align reporting requirements and options for the
Physician Quality Reporting System and EHR Incentive Program.
Response: We appreciate the commenters' support and are finalizing
the inclusion of all 44 EHR measures that are also available for
reporting under the EHR Incentive Program as 2012 Physician Quality
Reporting System measures available for EHR-based reporting.
Comment: Some commenters supported the following specific proposed
2012 Physician Quality Reporting System measures available for EHR-
based reporting as they address important medical topics:
Preventive Care and Screening: Body Mass Index (BMI)
Screening and Follow-up
Hypertension (HTN): Blood Pressure Measurement
Measure pair: a. Tobacco Use Assessment, b. Tobacco
Cessation Intervention
Preventive Care and Screening: Influenza Immunization for
Patients >= 50 Years Old
Diabetes Mellitus: Low Density Lipoprotein (LDL-C) Control
in Diabetes Mellitus
Heart Failure: Angiotensin-Converting Enzyme (ACE)
Inhibitor or Angiotensin Receptor Blocker (ARB) Therapy for Left
Ventricular Systolic Dysfunction (LVSD)
Coronary Artery Disease (CAD): Oral Antiplatelet Therapy
Prescribed for Patients with CAD
Heart Failure: Warfarin Therapy for Patients with Atrial
Fibrillation
Ischemic Vascular Disease (IVD): Blood Pressure Management
Ischemic Vascular Disease (IVD): Use of Aspirin or Another
Antithrombotic
Response: We appreciate the commenters' feedback and are finalizing
all of the measures commenters supported for EHR-based reporting for
the 2012 Physician Quality Reporting System.
Comment: One commenter suggested that we collaborate with NQF to
develop health information technology-based quality measures.
Response: With respect to EHR measures that we have adopted from
the EHR Incentive Program, we note that we are collaborating with NQF
to develop these quality measures.
Comment: One commenter suggested that all commonly reported
Physician Quality Reporting System measures be available for EHR-based
reporting.
Response: We appreciate the commenter's feedback. However, each
measure's method of reporting is determined by the measure owners and
developers. Therefore, we cannot affect the method in which measures
may be reported.
We proposed to include but are not finalizing the following measure
for EHR-based reporting in the 2012 Physician Quality Reporting System,
because we believe that use of electronic health records is already
addressed in most of the measures we are finalizing:
``Health Information Technology: Adoption/Use of
Electronic Health Records''
Based on the comments received and for the reasons stated
previously, we are finalizing the 70 measures identified in Table 48
for EHR-based reporting under the 2012 Physician Quality Reporting
System. As we stated previously, the final 2012 Physician Quality
Reporting System core measures are also listed in Table 48.
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(4) 2012 Physician Quality Reporting System Measures Groups
We proposed (76 FR 42873) to retain the following 14 2011 Physician
Quality Reporting System measures groups for the 2012 Physician Quality
Reporting System: (1) Diabetes Mellitus; (2) Adult Kidney Disease
(formerly CKD); (3) Preventive Care; (4) CABG; (5) Rheumatoid
Arthritis; (6) Perioperative Care; (7) Back Pain; (8) CAD; (9) Heart
Failure; (10) IVD; (11) Hepatitis C; (12) HIV/AIDS; (13) CAP, and (14)
Asthma. For 2012, we proposed that the CABG, CAD, Heart Failure, and
HIV/AIDS measures groups would continue to be reportable through the
registry-based reporting mechanism only, while the remaining Diabetes
Mellitus, CKD, Preventive Care, Rheumatoid Arthritis, Perioperative
Care, Back Pain, IVD, Hepatitis C, CAP, and Asthma measures groups
would continue to be reportable through either claims-based reporting
or registry-based reporting. We proposed to retain these measures
groups for the 2012 Physician Quality Reporting System particularly
because we believe the measures groups reflect the services furnished
to beneficiaries by a particular specialty. We also believe that
retaining these measures groups would provide consistency from program
year to program year.
In addition to the 14 measures groups previously discussed, we
proposed (76 FR 42873 through 42879) the following 10 new measures
groups for 2012 to provide eligible professionals with more measures
groups on which to report:
Chronic Obstructive Pulmonary Disease (COPD).
Inflammatory Bowel Disease.
Sleep Apnea.
Epilepsy.
Dementia.
Parkinson's.
Elevated Blood Pressure.
Radiology.
Cardiovascular Prevention, which contains individual
measures from the Physician Quality Reporting System core measure set
previously discussed.
Cataracts.
These are the measures groups that were presented to us by measure
owners and developers for inclusion for reporting under the 2012
Physician Quality Reporting System. Section 1848(k)(2)(C)(ii) of the
Act provides an exception to the requirement that measures be endorsed
by the NQF. We may exercise this exception authority in a specified
area or medical topic for which a feasible and practical measure has
not been endorsed by NQF, so long as due consideration is given to
measures that have been endorsed by the NQF. For the measures contained
within these measures groups that are not currently NQF-endorsed, we
proposed to exercise this authority due to our interest in all of the
proposed 10 measures group's topics. We believe that each of these
additional measures groups address gaps in the Physician Quality
Reporting System measures groups and will also allow for greater
reporting options for individual eligible professionals, thereby
increasing participation in the Physician Quality Reporting System.
Finally, as in previous program years, for 2012, we proposed (76 FR
42873) that the measures included in any proposed 2012 measures group
be reportable either as individual measures or as part of a measures
group, except for the Back Pain measures group, which would continue to
be reportable only as part of a measures group and not as individual
measures in 2012.
As with measures group reporting in prior program years, we
proposed that each eligible professional electing to report a group of
measures for 2012 must report all measures in the group that are
applicable to each patient or encounter to which the measures group
applies at least up to the minimum number of patients required by the
applicable reporting criteria.
We invited public comment on our proposed retention of all 2011
Physician Quality Reporting System measures groups, as well as our
newly proposed measures groups for the 2012 Physician Quality Reporting
System. The following is a summary of the comments received that were
related to the proposed 2012 Physician Quality Reporting System
measures groups.
Comment: Some commenters supported our proposal to continue the
measures group method of reporting.
Response: We believe that reporting measures in this manner will
allow us to collect information on patient experience and care that
related to a particular disease.
Comment: Some commenters supported the following measures groups
for inclusion as a 2012 Physician Quality Reporting System measures
group because they address important medical topics: Coronary Artery
Disease; Heart Failure; Sleep Apnea; Hepatitis C; Elevated Blood
Pressure; Epilepsy; Hypertension; Cardiovascular Prevention; Cataracts;
Parkinson's; Diabetes; Dementia; and Radiology.
Response: We appreciate the commenters' feedback and are finalizing
all of the proposed measures groups for the 2012 Physician Quality
Reporting System, except for the Epilepsy measures group and Radiology
measures group. With respect to the Epilepsy measures group, 2 of the
proposed 5 measures under this measures group did not receive NQF-
endorsement. Since these measures have undergone review by the NQF but
did not receive endorsement, we are not finalizing these measures for
the 2012 Physician Quality Reporting System. Because a measures group
must contain at least 4 measures, we are not finalizing the Epilepsy
measures group. However, we are retaining the remaining 3 measures in
the proposed Epilepsy measures group for reporting as individual
measures via the claims and/or registry-based reporting mechanisms.
With respect to the Radiology measures group, the measure owner
withdrew the measure group for consideration as a 2012

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Physician Quality Reporting System measures group.
Furthermore, we note that, although we are finalizing the
Parkinson's measures group, we are not finalizing the following measure
contained within this measures group because the measure was reviewed
by NQF but not endorsed: Parkinson's Disease Medical and Surgical
Treatment Options.
Although we are finalizing the Elevated Blood Pressure measures
group, we are not finalizing the following measures contained within
this measures group because, because these measures differ from other
Physician Quality Reporting System measures in that they are survey-
based; therefore, it is not operationally feasible for us to analyze
data collected under these measures:
Overall Hypertension Care Satisfaction
Patient Self-care Support
Comment: Some commenters made specific suggestions to the proposed
2012 Radiology measures group, such as renaming the Radiology measures
group, reducing the number of measures contained within the Radiology
measures group, reconsidering the measures contained with the Radiology
measures group so that the measures contained in this measures group
have similar denominators, and splitting the Radiology measures group
into two Radiology measures groups.
Response: We appreciate the commenters' feedback. However, as we
noted previously, we are not finalizing the Radiology measures group
for 2012, because the Radiology measures group was withdrawn by the
measure owner for consideration as a 2012 Physician Quality Reporting
System measures group.
Comment: One commenter suggested that the Pulmonary Rehabilitation
measures group that was submitted for possible inclusion as a 2012
Physician Quality Reporting System measures group be included as a 2012
Physician Quality Reporting System measures group.
Response: We reviewed all measures groups that were submitted for
possible inclusion as a 2012 Physician Quality Reporting System
measures group, including the Pulmonary Rehabilitation measures group.
Upon review of the measures and feedback received from the NQF, 2 of
the 5 proposed measures contained within the Pulmonary Rehabilitation
measures group did not pass review, thereby leaving only 3 measures
available for reporting under the Pulmonary Rehabilitation measures
group. Since a Physician Quality Reporting System measures group must
consist of at least 4 measures, the Pulmonary Rehabilitation measures
group no longer contained enough measures to be classified as a
Physician Quality Reporting System measures group. However, we are
interested in including a pulmonary rehabilitation measures group and
encourage professional organizations and measure developers to submit
such a measures group for inclusion as a Physician Quality Reporting
System in future program years.
Comment: One commenter suggested that the measure titled
``Counseling for Women'' be included in the Epilepsy measures group.
Response: We appreciate the commenter's feedback. However, as we
stated previously, we are not finalizing the Epilepsy measures group
inclusion under the 2012 Physician Quality Reporting System.
Comment: Several commenters urged us to have all measures contained
within these measures groups also available for reporting as individual
measures. Some commenters requested that all measures contained within
specific measures groups, such as Radiology and IBD, be reportable as
individual Physician Quality Reporting System measures.
Response: We proposed (76 FR 42873) that measures included in the
Back Pain measures group will not be available for reporting as
individual measures. Although we proposed that measures contained
within the proposed 2012 Physician Quality Reporting System measures
groups also be available for individual reporting, except for the COPD
measures group (which contains 2011 Physician Quality Reporting System
measures that were previously available for reporting as individual
measures), we are not allowing any measures contained in either the
back pain measures group or any of the newly finalized 2012 Physician
Quality Reporting System measures groups to be reportable as individual
measures, unless a measure contained in a measures group has been
identified as a 2012 Physician Quality Reporting System individual
measure in Table 47. Some of the measures contained in the finalized
measures groups do not lend themselves to reporting as individual
measures. Therefore, for 2012, only measures contained in the following
measures groups will be available for reporting as individual measures:
Diabetes Mellitus; Adult Kidney Disease; Preventive Care; CABG;
Rheumatoid Arthritis; Perioperative Care; CAD; Heart Failure; IVD;
Hepatitis C; HIV/AIDS; CAP, Asthma; Cardiovascular Prevention; and
COPD.
Comment: Some commenters suggested that all measures groups be
reported via claims and registry, such as the Dementia measures group.
One commenter suggested that the Parkinson's and Dementia measures
groups be reportable via claims as well as registry, since there are
currently no registries which report on these measures groups, at least
until registries for these conditions become available.
Response: Reporting methods are chosen based on the most effective
way to accurately collect data needed to calculate the measure. Due to
the limitations of claims-based reporting, some measures are reportable
only through a registry. Due to the way the measures within these
measures groups are analyzed, the Dementia and Parkinson's measures
groups fall within this category of measures groups that cannot be
reported via claims. With respect to the Parkinson's and Dementia
measures groups, although no registries are currently qualified to
report on these measures groups, we anticipate that qualified
registries will be available to report on these measures for the 2012
Physician Quality Reporting System. Therefore, the Dementia and
Parkinson's measures groups may only be reportable via registry.
Comment: Some commenters suggested that we ensure that there is an
analytically sound method to grouping measures within measures groups,
particularly when measure denominators differ.
Response: We appreciate the commenters' feedback and agree that
ensuring accurate reporting analysis is essential. As in prior years,
the reporting rate calculations for the 2012 Physician Quality
Reporting System will only include instances that qualify for the
denominator of the respective measure. When denominators differ for
measures within a measures group, eligible professionals will not be
held accountable for reporting on measures that are not applicable for
purposes of the requiring that eligible professionals report on
measures with a performance rate other than zero. However, eligible
professionals are still required to report on these measures. The
performance rate calculation only includes denominator eligible and
successfully reported instances, so the requirement to have each
measure within the group have a performance rate above zero percent
will not be adversely affected by instances that are not denominator
eligible.
Comment: One commenter suggested that we remove the following
measure from the Radiology measures group: Cumulative Count of
Potential High

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Dose Radiation Imaging Studies: CT Scans and Cardiac Nuclear Medicine
Scans. The commenter believes that removing this measure will allow for
the measure denominators of the measures contained within the Radiology
measures group to consistent with the use of CT scans alone.
Response: We appreciate the commenter's feedback and interest in
aligning the measure denominators contained within the Radiology
measures group. However, because the measure owner has withdrawn this
measures group for consideration for reporting under the 2012 Physician
Quality Reporting System, we are not finalizing the proposed Radiology
measures group.
Comment: Several commenters suggested that we include or develop
other measures groups that were not proposed as a 2012 Physician
Quality Reporting System measures group, such as: Oncology, Stroke,
Cardiac Imaging, Colorectal Cancer, Thyroid Disease, Pain Management,
Physical Therapy, Colorectal Cancer Screening, and Cancer Care.
Response: We appreciate the commenter's feedback. However, because
we did not propose these measures groups for inclusion in the 2012
Physician Quality Reporting System and there was not opportunity for
the public to comment on these measures, we are not finalizing any of
these suggestions. However, we will take these measures group's
suggestions into consideration for future program years.
Based on the comments received and for the reasons stated in our
responses, we are finalizing the measures groups that are identified in
Tables 50 through 71. As we explained previously, we are finalizing all
proposed 2012 Physician Quality Reporting System measures groups,
except for the Epilepsy and Radiology measures groups.
We also note that, although we are finalizing these measures
groups, we have made the following changes to these final 2012
Physician Quality Reporting System measures groups:
Adult Kidney Disease measures group: As indicated in Table
50, we are not finalizing Physician Quality Reporting System
153 titled ``Chronic Kidney Disease (CKD): Referral for
Arteriovenous (AV) Fistula'' for reporting in this measures group
because, as we stated previously, the measure owner has removed this
measure for reporting in 2012. Instead, we are adding Physician Quality
Reporting System measure 110 titled ``Preventive Care and
Screening: Influenza Immunization'' for reporting within the Adult
Kidney Disease measures group.
IVD measures group: As indicated in Table 58, we are not
finalizing Physician Quality Reporting System measures 202
titled ``Ischemic Vascular Disease (IVD): Complete Lipid Profile'' and
203 titled ``Ischemic Vascular Disease (IVD): Low Density
Lipoprotein (LDL-C)'' for reporting in the IVD measures group. As
stated previously, these two measures have been combined into a single
measure titled ``Ischemic Vascular Disease (IVD): Complete Lipid
Profile and LDL Control < 100.'' Therefore, instead of reporting
measures 202 and 203, we are requiring that eligible
professionals report on this new measure in the IVD measures group.
IBD Measures Group: As indicated in Table 64, we are
updating measure title ``Inflammatory Bowel Disease (IBD): Assessment
of Inflammatory Bowel Disease Activity and Severity'' to ``Inflammatory
Bowel Disease: Type Anatomic Location and Activity All Documented'' as
the measure owner has updated the title of this measure.
Parkinson's Measures Group: As indicated in Table 67, we
are not finalizing the measure titled ``Parkinson's Disease Related
Safety Issues Counseling'' for reporting within the Parkinson's
measures group.
Elevated Blood Pressure: As indicated in Table 68, we are
not finalizing the measures titled ``Overall Hypertension Care
Satisfaction'' and ``Patient Self-care Support'' for reporting within
this measures group.
Some measures in the 2012 measures groups are also 2011 individual
Physician Quality Reporting System measures. Specifically, measures
contained in the following measures groups will be available for
reporting as individual measures: Diabetes Mellitus; Adult Kidney
Disease; Preventive Care; CABG; Rheumatoid Arthritis; Perioperative
Care; CAD; Heart Failure; IVD; Hepatitis C; HIV/AIDS; CAP, and Asthma.
The title of each such measure is preceded with its Physician
Quality Reporting System Measure Number in Tables 50 through 71. As
stated previously, the Physician Quality Reporting System Measure
Number is a unique identifier assigned by us to all measures in the
Physician Quality Reporting System measure set. Once a Physician
Quality Reporting System Measure Number is assigned to a measure, it
will not be used again, even if the measure is subsequently retired
from the Physician Quality Reporting System measure set. Measures that
are not preceded by a number (in other words, those preceded by
``TBD'') in Tables 50 through 71 were never part of a Physician Quality
Reporting System measure set prior to 2012. A number will be assigned
to such measures for 2012. Furthermore, please note that, in some
instances, the measure titles have been updated to reflect measure
title updates by the respective measure owners.
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As with measures group reporting in prior years of the Physician
Quality Reporting System, each eligible professional electing to report
a group of measures for 2012 must report all measures in the group that
are applicable to each patient or encounter to which the measures group
applies at least up to the minimum number of patients required by the
applicable reporting criteria. We note that the specifications for
measures groups do not necessarily contain all the specification
elements of each individual measure making up the measures group. This
is based on the need for a common set of denominator specifications for
all the measures making up a measures group in order to define the
applicability of the measures group. Therefore, the specifications and
instructions for measures groups will be provided separately from the
specifications and instructions for the individual 2012 Physician
Quality Reporting System measures. We will post the detailed
specifications and specific instructions for reporting measures groups
on the Physician Quality Reporting System section of the CMS Web site
at http://www.cms.hhs.gov/PQRS by no later than December 31, 2011.
Additionally, the detailed measure specifications and instructions
for submitting data on these 2012 measures groups that were also
included as 2011 Physician Quality Reporting System measures groups may
be updated or modified by the measure developer prior to 2012.
Therefore, the 2012 Physician Quality Reporting System measure
specifications for any given measures group could be different from
specifications and submission instructions for the same measures group
used for 2011. For example, the measure developer may change the codes
contained in the measure's denominator. These measure specification
changes do not materially impact the intended meaning of the measures
or the strength of the measures.
(5) 2012 Physician Quality Reporting System Quality Measures for Group
Practices Selected To Participate in the GPRO (GPRO)
For 2012, we proposed (76 FR 42879) that group practices selected
to participate in the 2012 Physician Quality Reporting System GPRO
would be required to report on 41 proposed measures listed in Table 55
of the proposed rule. Specifically, for the 2012 Physician Quality
Reporting System, we proposed to retain most of the measures available
for reporting under the 2011 Physician Quality Reporting System GPRO
because of our continued interest in the reporting of those measures,
as well as to maintain program consistency from year to year. However,
for 2012, we proposed to retire the following measures that were
required under the 2010 and 2011 GPRO (that is, GPRO I for 2011):
Diabetes Mellitus: Hemoglobin A1c Testing.
Diabetes Mellitus: Lipid Profile
Hypertension (HTN): Blood Pressure Measurement.
Furthermore, we proposed to add the following Physician Quality
core measures that were not available for reporting via the GPRO for
the 2011 Physician Quality Reporting System:
Ischemic Vascular Disease (IVD): Use of Aspirin or another
Antithrombotic.
Measure pair: a. Tobacco Use Assessment, b. Tobacco
Cessation Intervention.
Ischemic Vascular Disease (IVD): Complete Lipid Profile
and LDL Control < 100
Proportion of adults 18 years and older who have had their
blood pressure measured within the preceding 2-years.
In addition to adding the Physician Quality Reporting System core
measures that were not available for reporting under the GPRO for the
2011 Physician Quality Reporting System, we proposed to add the
following measures for reporting under the 2012 Physician Quality
Reporting System GPRO:
Chronic Obstructive Pulmonary Disease (COPD):
Bronchodilator Therapy.
Adult Weight Screening and Follow-up.
Ischemic Vascular Disease (IVD): Blood Pressure Management
Control.

[[Page 73382]]

Chronic Obstructive Pulmonary Disease (COPD): Spirometry
Evaluation.
30 Day Post Discharge Physician Visit.
Medication Reconciliation: Reconciliation After Discharge
from an Inpatient Facility.
Diabetes: Aspirin Use.
Falls: Screening for Fall Risk.
Osteoporosis: Management Following Fracture of Hip, Spine
or Distal Radius for Men and Women Aged 50 Years and Older.
Diabetes Mellitus: Tobacco Non Use.
Coronary Artery Disease (CAD): LDL-level < 100 mg/dl.
Diabetes Mellitus: Hemoglobin A1c Poor Control in Diabetes
Mellitus (less than 8 percent).
Chronic Obstructive Pulmonary Disease (COPD): Smoking
Cessation Counseling Received.
Monthly International Normalized Ratio (INR) for
Beneficiaries on Warfarin.
We proposed (76 FR 42879) these new measures because they are NQF-
endorsed measures that are consistent with other CMS quality reporting
initiatives. We believe it is in the stakeholders' interest to align
measures in different initiatives. We proposed that group practices
selected to participate in the Physician Quality Reporting System GPRO
would be required to report on all measures listed in Table 55.
We invited public comment on the proposed 2012 Physician Quality
Reporting System measures for group practices selected to participate
in the 2012 Physician Quality Reporting System GPRO. The following is a
summary of the comments we received.
Comment: Some commenters suggested we retain the following 3
measures that we proposed to retire for the 2012 Physician Quality
Reporting System GPRO because they address important medical topics
relevant to the commenters' respective specialties:
Diabetes Mellitus: Hemoglobin A1c Testing;
Diabetes Mellitus: Lipid Profile; and
Hypertension (HTN): Blood Pressure Measurement.
Response: We appreciate the commenters' feedback. However, as
stated previously, due to our desire to align these 2012 Physician
Quality Reporting System GPRO measures with other CMS programs, we are
retiring these measures.
Comments: Several commenters supported inclusion of the following
measures as reportable measures for physician groups participating in
the 2012 Physician Quality Reporting System GPRO because they either
addressed important medical topics relevant to the commenters'
respective specialties and/or they are measures included in other CMS
programs:
Measure pair: a. Tobacco Use Assessment, b. Tobacco
Cessation Intervention.
Ischemic Vascular Disease (IVD): Blood Pressure Management
Control.
Adult Weigh Screening and Follow-up.
Medication Reconciliation: Reconciliation After Discharge
from an Inpatient Facility.
Diabetes: Aspirin Use.
Diabetes Mellitus: Tobacco Non-Use.
Coronary Artery Disease (CAD): LDL-level < 100 mg/dl.
Diabetes Mellitus: Hemoglobin A1c Poor Control in Diabetes
Mellitus (<8%).
Monthly INR for Beneficiaries on Warfarin.
Diabetes Mellitus: Dilated Eye Exam in Diabetic Patient.
Coronary Artery Disease (CAD): Beta-Blocker Therapy for
CAD Patients with Prior Myocardial Infarction (MI).
Ischemic Vascular Disease (IVD): Blood Pressure
Management.
Response: `In an effort to reduce the number of measures group
practices report under the GPRO we proposed so that the number of
measures required for reporting are closer to 26, which is the number
of measures available for reporting under the Physician Quality
Reporting System GPRO I in 2011 (76 FR 73537), we are finalizing all of
the measures for inclusion in the 2012 Physician Quality Reporting
System GPRO measure set, except for the following measures:
Ischemic Vascular Disease (IVD): Blood Pressure Management
Control.
Coronary Artery Disease (CAD): LDL-level < 100 mg/dl.
Coronary Artery Disease (CAD): Beta-Blocker Therapy for
CAD Patients with Prior Myocardial Infarction (MI).
We are not retaining these measures because we seek to align the
Physician Quality Reporting System GPRO with the Medicare Shared
Savings Program. These measures were not included for reporting under
the Medicare Shared Savings Program (``Medicare Program; Medicare
Shared Savings Program: Accountable Care Organizations'' displayed in
the October 20, 2011 Federal Register at http://www.ofr.gov/OFRUpload/OFRData/2011-27461_PI.pdf.
Also due to our desire to align the measures available for
reporting under the 2012 Physician Quality Reporting System GPRO with
the measures available for reporting under the Medicare Shared Savings
Program, we are not finalizing the following measures in the 2012
Physician Quality Reporting System GPRO measure set:
Diabetes Mellitus: Urine Screening for Microalbumin for
Medical Attention for Nephropathy in Diabetic Patients.
Heart Failure: Weight Measurement.
Heart Failure: Patient Education.
Hypertension (HTN): Plan of Care.
Chronic Obstructive Pulmonary Disease (COPD): Spirometry
Evaluation.
Ischemic Vascular Disease (IVD): Use of Aspirin of another
Antithrombotic.
30-Day Post Discharge Physician Visit.
Osteoporosis: Management Following Fracture of Hip, Spine
or Distal Radius for Men and Women Aged 50 Years and Older.
Coronary Artery Disease (CAD): LDL-level < 100 mg/dl.
Chronic Obstructive Pulmonary Disease (COPD): Smoking
Cessation Counseling Received.
We believe our effort to align various CMS programs will encourage
participation in the Physician Quality Reporting System. Since
increasing participation in the Physician Quality Reporting System is a
top priority, we believe our desire to align various CMS programs
outweighs our interest in maintaining measures that were previously
available for reporting under the Physician Quality Reporting System.
We further believe that the measures that we finalize for reporting
under the 2012 Physician Quality Reporting System GPRO, as identified
in Table 71, sufficiently address the conditions and care measured by
the measures we are not finalizing.
Comment: One commenter stated that, since group practices
participating in the Physician Quality Reporting System GPRO must
report on all measures listed in Table 71, only NQF-endorsed measures
should be included for reporting by physician groups participating in
the 2012 Physician Quality Reporting System GPRO.
Response: We appreciate the commenter's feedback. We note that,
unlike the criteria for satisfactory reporting for individual eligible
professionals, group practices may report measures with a zero percent
performance rate. Therefore, it does not harm group practices
participating under the GPRO to report on the measures we are
finalizing for the GPRO, regardless of whether the measures are NQF-
endorsed. We also note that we have authority under section
1848(k)(2)(C)(ii) of the Act to select measures that are not NQF-

[[Page 73383]]

endorsed. We believe the non-NQF endorsed measures we are finalizing
below address critical areas of health care.
Comment: One commenter urged us to minimize the reporting burden on
group practices by reducing the number of measures on which group
practices participating in the Physician Quality Reporting System may
report.
Response: As stated previously, we are only finalizing 30 of the 40
measures we proposed. We hope this will notably reduce the reporting
burden on group practices participating in the Physician Quality
Reporting System GPRO.
Comment: One commenter was concerned that the reporting of the
measure titled ``Monthly INR for Beneficiaries on Warfarin'' will have
the unintended consequence of having eligible professionals avoid
patients who are non-compliant with treatment recommendations.
Response: We agree that the personal preferences of beneficiaries
play an important role in their health behaviors. However, the lack of
patient adherence may also represent a legitimate dimension of care, as
it could be indicative of poor communication between providers and
their patients. As INR is important for patients on warfarin, we are
retaining this measure as proposed. In addition, as discussed in the
public reporting requirements in section VI.G. of this final rule with
comment period, we believe publicly reporting certain measures provides
greater incentive for providers to coordinate care and influence
patient behavior.
Comment: One commenter opposed our proposal to retire the measure
titled ``Plan of Care for Inadequate Hemodialysis'' because the
retirement of this measure will only leave nephrologists with only one
Physician Quality Reporting System measure on which to report.
Response: We understand the need to have adequate number of
measures available under which eligible professionals practicing in
many specialties report. In this instance, however, we do not believe
that retiring this measure for reporting under the GPRO will affect the
ability for eligible professionals to satisfactorily reporting. We note
that group practices participating in the GPRO must report on all
measures listed in Table 71, regardless of whether the measures are
applicable to the group practice.
Comment: One commenter suggested that the measures available for
reporting under the Physician Quality Reporting System GPRO include
more measures that pertain to otolaryngologists.
Response: We appreciate the commenter's feedback. However, we give
eligible professionals an opportunity to provide input on measures
recommended for selection via the proposed rule, and therefore,
additional measures and/or measure topics cannot be included for
reporting under the 2012 Physician Quality Reporting System. However,
we will take these GPRO measure suggestions into consideration for
future program years.
Comment: Some commenters requested that the measure specifications
for the proposed GPRO measures be available for review prior to its
inclusion as GPRO measures.
Response: As we stated previously, we do not use notice and comment
rulemaking as a means to update or modify measure specifications.
Questions regarding measure specifications should be directed to the
measure developers, who are all listed in Table 55 of the proposed rule
(76 FR 42880). Contact information for the 2011 Physician Quality
Reporting System measure developers is listed in the ``2011 Physician
Quality Reporting System Quality Measures List,'' which is available on
the CMS Web site at http://www.cms.gov/PQRS/15_MeasuresCodes.asp#TopOfPage.
Based on the comments received and for the reasons stated
previously, we are finalizing the 29 measures for physician groups
participating in the 2012 Physician Quality Reporting System GPRO
listed in Table 71. Table 71 also indicates which measures are also
available for reporting under the Medicare Shared Savings Program.
We also note that, in an effort to align the 2012 Physician Quality
Reporting System GPRO measures with the measures available for group
reporting under the Medicare Shared Savings Program, we are not
finalizing the following measures for the 2012 Physician Quality
Reporting System GPRO:
Coronary Artery Disease (CAD): Beta-Blocker Therapy for
CAD Patients with Prior Myocardial Infarction (MI)
Diabetes Mellitus: Urine Screening for Microalbumin or
Medical Attention for Nephropathy in Diabetic Patients
Heart Failure: Weight Measurement
Hypertension (HTN): Plan of Care
Ischemic Vascular Disease (IVD): Blood Pressure Management
Control
Chronic Obstructive Pulmonary Disease (COPD): Spirometry
Evaluation
30-Day Post Discharge Physician Visit
Osteoperosis: Management Following Fracture of Hip, Spine
or Distal Radius for Men and Women Aged 50 Years and Older
Coronary Artery Disease (CAD): LDL-level < 100 mg/dl
Chronic Obstructive Pulmonary Disease (COPD): Smoking
Cessation Counseling Received
Heart Failure: Warfarin Therapy for Patients with Atrial
Fibrillation
We are also not finalizing the measure titled ``Monthly INR for
Beneficiaries on Warfarin'' because, as we stated with Physician
Quality Reporting System measure 200, the use of Warfarin to
treat heart disease is no longer consistent with clinical guidelines.
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We intend to provide a separate measures specifications document
and other supporting documents for group practices participating in the
2012 Physician Quality Reporting System GPRO. We anticipate that the
group practice measures specifications document will be available by
November 15, 2011 or shortly thereafter on the Physician Quality
Reporting System section of the CMS Web site at http://www.cms.hhs.gov/PQRS.
g. Maintenance of Certification Program Incentive
Section 1848(k)(4) of the Act requires the Secretary to address a
mechanism whereby an eligible professional may provide data on quality
measures through a maintenance of certification program (Maintenance of
Certification Program) operated by a specialty body of the American
Board of Medical Specialties (ABMS). In addition, section 1848(m)(7) of
the Act (``Additional Incentive Payment'') authorizes an additional 0.5
percent incentive payment for years 2011 through 2014 if certain
requirements are met. In accordance with section 1848(m)(7)(B) of the
Act governing the ``Additional Incentive Payment,'' in order to qualify
for the additional incentive payment, an eligible professional must--
Satisfactorily submit data on quality measures under the
Physician Quality Reporting System for a year and have such data
submitted--
++ On their behalf through a Maintenance of Certification Program
that meets the criteria for a registry under the Physician Quality
Reporting System; or
++ In an alternative form and manner determined appropriate by the
Secretary; and
++ More frequently than is required to qualify for or maintain
board certification status:
++ Participate in such a Maintenance of Certification Program for a
year; and
++ Successfully completes a qualified Maintenance of Certification
Program practice assessment for such year.
Section 1848(m)(7)(C)(i) of the Act defines ``Maintenance of
Certification Program'' as a continuous assessment program, such as a
qualified ABMS Maintenance of Certification Program, or an equivalent
program (as determined by the Secretary), that advances quality and the
lifelong learning and self-assessment of board certified specialty
physicians by focusing on the competencies of patient care, medical
knowledge, practice-based learning,

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interpersonal and communications skills and professionalism. Such a
program shall require a physician to do the following:
Maintain a valid, unrestricted medical license in the
United States.
Participate in educational and self-assessment programs
that require an assessment of what was learned.
Demonstrate, through a formalized, secure examination,
that the physician has the fundamental diagnostic skills, medical
knowledge, and clinical judgment to provide quality care in their
respective specialty.
Successful completion of a qualified Maintenance of
Certification Program practice assessment.
As defined in section 1848(m)(7)(C)(ii) of the Act, a ``qualified
Maintenance of Certification Program practice assessment'' means an
assessment of a physician's practice that--
Includes an initial assessment of an eligible
professional's practice that is designed to demonstrate the physician's
use of evidence-based medicine;
Includes a survey of patient experience with care; and
Requires a physician to implement a quality improvement
intervention to address a practice weakness identified in the initial
assessment and then to remeasure to assess performance after such
intervention.
To qualify for the additional incentive payment, section
1848(m)(7)(B)(iii) of the Act also requires the Maintenance of
Certification Program to submit to CMS, on behalf of the eligible
professional, information:
In a form and manner specified by the Secretary, that the
eligible professional more frequently than is required to qualify for
or maintain board certification status, participates in the Maintenance
of Certification Program for a year and successfully completes a
qualified Maintenance of Certification Program practice assessment for
such year;
Upon request by the Secretary, information on the survey
of patient experience with care; and
As the Secretary may require, on the methods, measures,
and data used under the Maintenance of Certification Program and the
qualified Maintenance of Certification Program practice assessment.
In order to qualify for the additional 0.5 percent incentive
payment in 2011, eligible professionals were required to participate
more frequently in each of the following four parts of the Maintenance
of Certification Program:
Maintain a valid unrestricted license in the United
States. For 2011, physicians simply needed to maintain a valid
unrestricted license in the United States to meet the requirement for
``more frequent'' participation with respect to this part (75 FR 73541
through 73546).
Participate in educational and self-assessment programs
that require an assessment of what was learned.
Demonstrate, through a formalized secure examination, that
the physician has the fundamental diagnostic skills, medical knowledge,
and clinical judgment to provide quality care in their respective
specialty.
Successfully complete a qualified maintenance of
certification program practice assessment.
We received requests from the American Board of Medical
Specialties, as well as various specialty organizations, to revise the
criteria for satisfying the Maintenance of Certification Program
additional incentive, because these entities believe that more frequent
participation in all four parts of the Maintenance of Certification
Program is too narrow. In the proposed rule, we noted that we further
considered the language under section 1848(m)(7)(B)(ii)(I) of the Act
and we believe it can be interpreted more broadly. In particular, we
noted that the requirement that a professional ``more frequently than
is required to qualify for or maintain board certification status
participates in such a Maintenance of Certification Program'' could
refer to the program as a whole, such that any element performed more
frequently than is required satisfies the general requirement. The
nature of the various components of the Maintenance of Certification
Program also suggest that it is not necessary that each of the four
elements of the program be performed more frequently. We previously
stated we believe that the ``more frequently'' requirement does not
apply to the first part, which states that a physician maintain a valid
unrestricted license, as there is no way a physician may maintain a
valid unrestricted license ``more frequently.'' As such, we believe
that the more frequently requirement could be satisfied based on any of
the other elements of the program (that is, educational and self-
assessment program; secure examination; or practice assessment).
Specifically, we believe that if a professional more frequently than is
required satisfies one or more of those parts of a program, the more
frequently requirement would be met. Accordingly, we proposed (76 FR
42881-42882) that in order to earn an additional 0.5 percent incentive
for 2012 through 2014, for each respective year, an eligible
professional must participate more frequently than is required in at
least one of the following three parts of the Maintenance of
Certification Program, as well as ``more frequent'' participation in
the practice assessment component. With respect to how to assess
whether a professional completes one of the elements of a program
``more frequently,'' we believe that this would be tied to the specific
requirements of Board certification for the professional. Given that
different specialties have different certification requirements
(physician examination requirements to maintain Board certification
varies widely depending on specialty), we do not believe it is
appropriate to impose a uniform requirement for all professionals and
therefore, we believe that the board could determine for a particular
program element the more frequent requirement for the professional.
However, we believe that a minimum threshold would need to be met such
that the professional would have to do something more frequently or
more than what is ordinarily required for a particular part of the
program, as well as ``more frequent'' participation in the practice
assessment component.
Therefore, in order to earn an additional 0.5 percent incentive for
2012 through 2014, an eligible professional would be required to
participate more frequently than is required in at least one of the
following three parts of the Maintenance of Certification Program, as
well as ``more frequent'' successful completion of a qualified
maintenance of certification program practice assessment:
Maintain a valid unrestricted license in the United
States. For 2011, physicians simply needed to maintain a valid
unrestricted license in the United States to meet the requirement for
``more frequent'' participation with respect to this part (75 FR 73541
through 73546).
Participate in educational and self-assessment programs
that require an assessment of what was learned.
Demonstrate, through a formalized secure examination, that
the physician has the fundamental diagnostic skills, medical knowledge,
and clinical judgment to provide quality care in their respective
specialty.
Therefore, we proposed for 2012, 2013, and 2014 the following for
each year (76 FR 42882 and 42883):
An eligible professional wishing to be eligible for the
additional Physician Quality Reporting System incentive payment of 0.5
percent must meet the requirements for satisfactory reporting for the
Physician Quality Reporting

[[Page 73387]]

System, for the applicable program year (that is, to qualify for the
additional 0.5 percent incentive payment for 2012, meet the 2012
requirements for satisfactory reporting), based on the 12-month
reporting period (January 1 through December 31 of the respective
program year).
For purposes of satisfactory reporting under the Physician
Quality Reporting System, we proposed (76 FR 42882) that the eligible
professional may participate as an individual eligible professional
using either individual Physician Quality Reporting System measures or
measures groups and submitting the Physician Quality Reporting System
data via claims, a registry, or an EHR or participate under the GPRO
option. As an alternative to this reporting option, we proposed that
eligible professionals may satisfactorily report under the Physician
Quality Reporting System based on submission of Physician Quality
Reporting System data by a Maintenance of Certification Program,
provided that the Maintenance of Certification Program has qualified as
a Physician Quality Reporting System registry for 2012. As indicated
previously, an eligible professional would not necessarily have to
qualify for the Physician Quality Reporting System through a
Maintenance of Certification Program serving as a registry. Rather, we
proposed that an eligible professional may qualify for the additional
incentive, without regard to the method by which the eligible
professional has met the basic requirement of satisfactory reporting
under the Physician Quality Reporting System. We received no comments
regarding our proposal to allow eligible professionals to qualify for
the additional incentive without regard to the method by which the
eligible professional has met the basic requirement of satisfactory
reporting under the Physician Quality Reporting System and are
therefore, we are finalizing this proposal.
In addition to meeting the requirements for satisfactory
reporting for the Physician Quality Reporting System for a program
year, the eligible professional must have data with respect to the
eligible professional's participation in a Maintenance of Certification
Program submitted on his or her behalf by a qualified medical specialty
board or other entity sponsoring a Maintenance of Certification
Program. For each eligible professional that wishes to qualify for the
Maintenance of Certification Program Incentive, the qualified medical
specialty board or other entity sponsoring a Maintenance of
Certification Program must submit data to CMS with respect to the
following:
An eligible professional must, more frequently than is
required to qualify for or maintain board certification, participate in
a Maintenance of Certification Program for a year and successfully
complete a qualified Maintenance of Certification Program practice
assessment for such year. With regard to the ``more frequently''
requirement as it applies to the elements of a Maintenance of
Certification Program itself (other than completing a qualified
Maintenance of Certification Program practice assessment), the
Maintenance of Certification Program must certify that the eligible
professional has ``more frequently'' than is required to qualify for or
maintain board certification ``participated in a Maintenance of
Certification Program for a year''. The Maintenance of Certification
Program will determine what a physician must do to more frequently
participate in a Maintenance of Certification Program and so certify
that the eligible professional has met this requirement. While we do
not believe that the ``more frequently'' requirement is applicable to
the licensure requirement, given that one cannot be licensed ``more
frequently'' than is required, the Maintenance of Certification Program
has the discretion to determine which element(s) of a Maintenance of
Certification Program must be completed more frequently. We believe
that making this change will reduce burden on physicians and will
increase participation while being consistent with the requirement to
``more frequently'' participate in a Maintenance of Certification
Program.
With respect to the Maintenance of Certification Program
practice assessment, which is specifically delineated in section
1848(m)(7)(B)(ii) of the Act as being required more often than is
necessary to qualify for or maintain board certification, we believe we
need to be more specific regarding our interpretation of the phrase
``more frequently.'' Additionally, we are aware that some specialty
boards have varying Maintenance of Certification Program requirements
for physicians to maintain board certification, based on the date of
original certification. Some, we believe, may not be required to
participate in a Maintenance of Certification Program at all in order
to maintain board certification. Accordingly, we recognize that ``more
often'' may vary among physicians certified by the same specialty
board. We interpret the statutory provisions as requiring participation
in and successful completion of at least one Maintenance of
Certification Program practice assessment per year. Therefore, as a
basic requirement, the physician must participate and successfully
complete at least one Maintenance of Certification Program practice
assessment for each year the physician participates in the Maintenance
of Certification Program Incentive, regardless of whether or how often
the physician is required to participate in a Maintenance of
Certification Program to maintain board certification.
We are also aware that ABMS boards are at various stages in
implementing the practice assessment modules, and some may not have
such assessment modules in place. However, inasmuch as we interpret the
statute to require a Maintenance of Certification Program practice
assessment at least once per program year as part of the Maintenance of
Certification Program, eligible professionals who do not have
available, through their boards or otherwise, a Maintenance of
Certification Program practice assessment are not eligible for the 0.5
percent incentive.
We believe that the experience of care survey provides particularly
valuable information and proposed that a qualified Maintenance of
Certification Program practice assessment must include a survey of
patient experience with care. The Secretary may request information on
the survey of patient experience with care, under section
1848(m)(7)(B)(iii) of the Act. In view of the importance of this
information, and the lack of readily available alternative sources, we
proposed to require that Maintenance of Certification Programs submit
information about the patient experience of care survey(s) used by
physicians to fulfill the Maintenance of Certification Program practice
assessment. We are not, at this time, requesting the results of the
survey for the eligible professionals for whom information is being
submitted by the Maintenance of Certification Program. We may, however,
request such information for appropriate validation purposes and may
propose to request such data for future years of the Maintenance of
Certification Program Incentive.
Some Maintenance of Certification Programs underwent a self-
nomination process in 2011 to enable their members to be eligible for
this Physician Quality Reporting System Maintenance of Certification
Program Incentive for 2011 Physician Quality Reporting System. We
proposed (76 FR 42883) that a Maintenance of Certification Program that
was approved after undergoing the self-nomination process in 2011 must
submit a self-nomination statement for

[[Page 73388]]

each year the Maintenance of Certification Program intends to
participate in the Physician Quality Reporting System Maintenance of
Certification Program. In the self-nomination statement, we proposed
that the previously approved program must provide us with updates to
its program in its self-nomination statement. We proposed that this
self-nomination statement be submitted to CMS via a web-based tool. We
received no comments regarding the self-nomination process for those
Maintenance of Certification Programs that underwent a self-nomination
process in 2011. Therefore, we are finalizing the proposed
requirements.
For Maintenance of Certification Programs new for 2012, we proposed
(76 FR 42883) that Maintenance of Certification Programs wishing to
enable their diplomates to be eligible for an additional Physician
Quality Reporting System incentive payment for the 2012 Physician
Quality Reporting System would need to go through a self-nomination
process by January 31, 2012. We proposed that the board must include
all of the following information in their self-nomination statement to
us:
Provide detailed information regarding the Maintenance of
Certification Program with reference to the statutory requirements for
such program;
Indicate the organization sponsoring the Maintenance of
Certification Program, and whether the Maintenance of Certification
Program is sponsored by an ABMS board. If not an ABMS board, indicate
whether and how the program is substantially equivalent to the ABMS
Maintenance of Certification Program process;
Indicate that the program is in existence as of January 1,
2012;
Indicate that the program has at least 1 active
participant;
The frequency of a cycle of Maintenance of Certification
Program for the specific Maintenance of Certification Program of the
sponsoring organization; including what constitutes ``more frequently''
for the Maintenance of Certification Program itself and for the
practice assessment for the specific Maintenance of Certification
Program of the sponsoring organization;
Confirmation from the board that the practice assessment
will occur and be completed in the year the physician is participating
in the Maintenance of Certification Program Incentive;
What was, is, or will be the first year of availability of
the Maintenance of Certification Program practice assessment for
completion by an eligible professional;
What data is collected under the patient experience of
care survey and how this information would be provided to CMS;
Describe how the Maintenance of Certification Program
monitors that an eligible professional has implemented a quality
improvement process for their practice; and
Describe the methods, and data used under the Maintenance
of Certification Program, and provide a list of all measures used in
the Maintenance of Certification Program for 2011 and to be used for
2012, including the title and descriptions of each measure, the owner
of the measure, whether the measure is NQF endorsed, and a link to a
Web site containing the detailed specifications of the measures, or an
electronic file containing the detailed specifications of the measures.
We proposed (76 FR 42883) that sponsoring organizations who desire
to participate as a Maintenance of Certification Program must provide
CMS the following information below in a CMS-specified file format by
no later than the end of the first quarter of 2012:.
The name, NPI and applicable TIN(s) of the eligible
professional who would like to participate in this process;
Attestation from the board that the information provided
to CMS is accurate and complete.
The board has signed documentation from the eligible
professional that the eligible professional wishes to have the
information released to us;
Information from the patient experience of care survey;
Information certifying that the eligible professional has
participated in a Maintenance of Certification Program for a year, more
frequently than is required to qualify for or maintain board
certification status, including the year that the physician met the
board certification requirements for the Maintenance of Certification
Program, and the year the eligible professional participated in a
Maintenance of Certification Program ``more frequently'' than is
required to maintain or qualify for board certification; and
Information certifying that the eligible professional has
completed the Maintenance of Certification Program practice assessment
at least one time each year the eligible professional participates in
the Maintenance of Certification Program Incentive.
We proposed (76 FR 42883) that specialty boards that also desire to
send Physician Quality Reporting System information to us on behalf of
eligible professionals must meet the requirements for registry data
submission and should follow the directions for self-nomination to
become a qualified registry. Boards may also participate as registries
for Physician Quality Reporting System data provided that they meet the
registry requirements. As an alternative to requiring boards to either
operate a qualified Physician Quality Reporting System registry or to
self-nominate to submit Maintenance of Certification Program data to us
on behalf of their members, we proposed to continue to allow the
various boards to submit the Maintenance of Certification Program data
to the ABMS and having ABMS submit the information on behalf of the
various boards and their member eligible professionals to CMS. We
received no comments on our proposed requirements for specialty boards
that wish to send Physician Quality Reporting System information to us
on behalf of eligible professionals and therefore, we are finalizing
these requirements.
To the extent an eligible professional participates in multiple
Maintenance of Certification Programs and meets the requirements under
section 1848(m)(7) of the Act (Additional Incentive Payment) under
multiple programs, we note that the eligible professional can qualify
for only one additional 0.5 percent incentive per year.
We invited public comment on the requirements we proposed for
earning a 0.5 percent incentive for participation in the Maintenance of
Certification Program incentive. The following is a summary of the
comments we received related to the Maintenance of Certification
Program incentive.
Comment: Several commenters generally supported the Maintenance of
Certification Program incentive and the requirements for earning such
an incentive. One commenter asked whether or not CMS had a plan to
allow physicians who are not Board-certified to participate in the
Maintenance of Certification Program Incentive.
Response: We appreciate the commenters' support. Currently, we do
not have a plan to allow physicians who are not Board-certified to
participate in the Maintenance of Certification Program Incentive,
because we defer to the various specialty boards to specify the
particular actions a physician must complete to meet the ``more
frequently'' requirement.
Comment: Another commenter asked that American Osteopathic
Association and its Osteopathic Continuous Certification (OCC)
program(s) be recognized as equivalent to the American Board of Medical
Specialties (ABMS) Maintenance of Certification Programs for the
purpose of qualifying

[[Page 73389]]

for a Maintenance of Certification Program incentive.
Response: We cannot approve an organization's certification program
for participation in the Maintenance of Certification Program incentive
unless the organization meets all of the requirements we are
finalizing.
Comment: One commenter was opposed to having physicians report
Maintenance of Certification Program details that they must also report
to hospitals. The commenter suggested that we eliminate this
duplicative reporting.
Response: Our proposal calls for Maintenance of Certification data
to be submitted in one of two ways. First, the data can be submitted
directly from the qualified Maintenance of Certification Program
entity. Secondly, the data can be submitted by an ABMS Maintenance of
Certification registry, if the ABMS chooses to proceed down this path.
We do not believe that either of these mechanisms places additional
burden on the provider, hospitals or specialties societies.
Comment: Some commenters stated that the requirements to earn a
Maintenance of Certification Program incentive are generally too
burdensome for both physicians and medical specialty boards.
Response: We appreciate the commenter's feedback. However, the
general requirements for earning the Maintenance of Certification
Program incentive are specified in section 1848(m)(7) of the Act.
Therefore, physicians must meet all of the below requirements to be
eligible for a Maintenance of Certification Program incentive.
Comment: Several commenters supported our proposal to reinterpret
the definition of ``more frequently'' to apply to one of three parts,
in addition to requiring a practice assessment, instead of applying to
each of the four parts. Some of these commenters expressed support in
giving the respective medical specialty boards more deference in
applying the ``more frequently'' requirement for earning a Maintenance
of Certification Program incentive.
Response: Based on the comments we received and for the reasons we
explained previously, we are finalizing the ``more frequently''
requirement for the Maintenance of Certification Program incentive.
Comment: Some commenters supported our decision to refrain from
requiring the reporting of patient experience of care survey data at
this time.
Response: We appreciate the commenters' feedback and are not
requiring the reporting of patient experience of care survey data at
this time.
After considering the comments and for the reasons stated
previously, we are finalizing our proposals regarding the Maintenance
of Certification Program incentive. We are also finalizing the
requirements for the 2013 and 2014 Maintenance of Certification Program
additional incentive. With respect to dates specific to the Maintenance
of Certification Program additional incentive, we are finalizing dates
that correspond to the additional incentive year. Specifically, new
Maintenance of Certification that wish to enable their diplomats to be
eligible for the additional Physician Quality Reporting System 0.5
percent for 2013 and/or 2014 must go through the same nomination
process by January 31, 2013 and January 31, 2014, respectively.
In addition, with respect to its self-nomination statement, a
Maintenance of Certification Program wishing to enable its diplomats to
earn a 2013 and 2014 Maintenance of Certification Program additional
incentive must indicate that the program is in existence as of January
1, 2012 for the 2012 additional incentive, January 1, 2013 for the 2013
additional incentive, and January 1, 2014 for the 2014 additional
incentive. With respect to the information required in the self-
nomination statement, sponsoring organizations that desire to
participate as a Maintenance of Certification Program must provide this
information to CMS in a CMS-specified file format by no later than the
end of the first quarter of 2013 and 2014 for the 2014 and 2014
Maintenance of Certification additional incentive.
h. Feedback Reports
Section 1848(m)(5)(H) of the Act requires the Secretary to provide
timely feedback to eligible professionals on the performance of the
eligible professional with respect to satisfactorily submitting data on
quality measures. Since the inception of the program in 2007, the
Physician Quality Reporting System has provided eligible professionals
who have reported Physician Quality Reporting System data on quality
measures feedback reports at the TIN/NPI level detailing participation
in the Physician Quality Reporting System, including reporting rate and
performance rate information. For 2008, we improved the format and
content of feedback reports based on stakeholder input. We also
developed an alternate report distribution method whereby each eligible
professional can directly request and receive a feedback report.
Starting in 2011, we provided an opportunity for eligible professionals
to request their NPI-level feedback reports via the Communication
Support Page at https://www.qualitynet.org/portal/server.pt/community/communications_support_system/234.
In accordance with Section 1848(m)(5)(H) of the Act, we will
continue to provide feedback reports to individuals and group practices
that attempt to report on at least one Physician Quality Reporting
System quality measure. We proposed (76 FR 42884) to provide feedback
reports for 2012 and beyond, on or about the time of issuance of the
incentive payments, consistent with our current practice.
We received the following comment regarding this proposal.
Comment: One commenter questioned why annual feedback reports are
provided around the time Physician Quality Reporting System incentive
payments are distributed.
Response: We disseminate annual feedback reports at the same time
incentive payments are made so that the provider has adequate
information available to understand how the incentive payment was
calculated. Therefore, we will continue to distribute annual feedback
reports around the time Physician Quality Reporting System incentive
payments are distributed.
Comment: One commenter stated that we should improve the
accessibility of feedback reports, as eligible professionals in the
past have had trouble accessing these feedback reports. Another
commenter stated that annual feedback reports should be distributed
before the issuance of incentive payments.
Response: We believe that providing annual feedback reports on or
about the issuance of incentive payments is timely. However, we would
like to increase accessibility, speed, and ease of distributing
feedback reports to eligible professionals. Therefore, we are working
with finding other ways, aside from accessing feedback reports through
Carried/MACs or with the use of an IACS account. For example, in
addition to being able to access feedback reports through this
traditional method, eligible professionals may request 2010 Physician
Quality Reporting System NPI-level feedback reports via the
Communication Support Page. We believe that accessing feedback reports
through the Communication Support Page is a faster method of receiving
feedback reports. We welcome any suggestions on improving accessibility
to Physician Quality Reporting System feedback reports.

[[Page 73390]]

For the reasons stated previously, for 2012 and beyond, we are
finalizing our proposal to provide feedback reports to individuals and
group practices that attempt to report on at least one Physician
Quality Reporting System quality measure on or about the time of
issuance of the incentive payments.
In addition, we believe it would be beneficial for eligible
professionals to also receive interim feedback reports. Therefore, we
proposed (76 FR 42884) to provide interim feedback reports, which would
be simplified versions of the feedback reports we currently provide, to
eligible professionals reporting individual measures and measures
groups through the claims-based reporting mechanism for 2012 and
beyond, and issue them in the summer of the respective program year. We
believe interim feedback reports would be particularly valuable to
eligible professionals reporting measures groups, because it would let
an eligible professional know how many more cases he or she needs to
report to satisfy the criteria for satisfactory reporting for claims-
based reporting of measures groups.
We invited public comment on our proposal to provide interim
feedback reports related to reporting via the claims-based reporting
mechanism for 2012 and beyond. The following is a summary of comments
we received.
Comment: Several commenters supported our proposal to provide
interim feedback reports. However, some commenters suggested that we
allow stakeholders to comment on the form and content of these interim
feedback reports.
Response: We appreciate the commenters' support in our proposal to
provide interim feedback reports and are finalizing our proposal to
provide interim feedback reports for claims-based reporting for 2012
and beyond. However, as the form and content of these feedback reports
are already being developed, we cannot make changes related to the form
and content of these interim feedback reports for 2012. However, for
interim feedback reports that will be developed for future program
years, we expect to provide an opportunity for the public to provide
suggestions regarding the form and content of these interim feedback
reports.
Comment: Some commenters suggested that we provide interim feedback
reports that provide reporting information via other reporting
mechanisms aside from claims, such as registry and EHR.
Response: We appreciate the commenters' feedback. However, since we
do not receive data from the registry and EHR reporting mechanisms
until the following calendar year, it is not technically feasible for
us to develop interim feedback reports that provide reporting
performance related to registry and/or EHR-based reporting. However, as
stated in previously in section VI.F.1.d, we are finalizing our
proposal to require registries and EHR vendors to provide such feedback
reports, if technically feasible.
After considering the issues raised in the comments we received and
for the reasons stated previously, we are finalizing our proposal to
provide interim feedback reports for eligible professionals reporting
individual measures and measures groups through the claims-based
reporting mechanism for 2012 and beyond. These reports will be a
simplified version of annual feedback reports that we currently provide
for such eligible professionals and will be based on claims for dates
of service occurring on or after January 1 and processed by March 31 of
the respective program year (that is, January 1, 2012 and processed by
March 31, 2012 for the 2012 program year). We expect that we would be
able to make these interim feedback reports available to eligible
professionals in the summer of the respective program year (that is,
summer 2012 for the 2012 program year).
i. Informal Review
Under 42 CFR 414.90(i), eligible professionals or group practices
may seek an informal review of the determination that the eligible
professional or group practice did not satisfactorily submit data on
quality measures under the Physician Quality Reporting System.
To maintain program consistency until we have further experience
with the informal review process that we implemented for the 2011
Physician Quality Reporting System, we proposed (76 FR 42884) to
largely retain the same informal review process that was finalized in
the 2011 MPFS final rule with comment period (75 FR 73549 through
73551) for 2012 and beyond. Specifically, we proposed to base the
informal process on our current inquiry process whereby an eligible
professional can contact the Quality Net Help Desk (Help Desk) (via
phone or email) for general Physician Quality Reporting System and eRx
Incentive Program information, information on Physician Quality
Reporting System feedback report availability and access, and/or
information on Physician Quality Reporting System Portal password
issues.
For purposes of the informal process required under section
1848(m)(5)(E) of the Act, we proposed the following inquiry process:
An eligible professional electing to utilize the informal
process must request an informal review within 90 days of the release
of his or her feedback report, irrespective of when an eligible
professional actually accesses his/her feedback report.
An eligible professional may request an informal review
through use of a web-based tool, if technically feasible. We believe
use of the web-based tool will provide a more efficient way to record
informal review requests, as the web-based tool will guide the eligible
professional through the creation of an informal review requests. For
example, the web-based tool will prompt an eligible professional of any
necessary information s/he must provide. If not technically feasible,
we proposed that an eligible professional may request the informal
review by notifying the Quality Net Help Desk via email at
[email protected]. In the request for an informal review, the
eligible professional must summarize his or her concern(s) of the
eligible professional and the reason(s) for requesting an informal
review.
We further proposed (76 FR 42884) that CMS would provide
the eligible professional with a response to his or her request for an
informal review within 90 days of receiving the original request. In
2011, we proposed to provide the eligible professional with a response
to his or her request for an informal review within 60 days of
receiving the original request. However, we anticipate that the volume
of informal review requests will grow as participation in the Physician
Quality Reporting System grows, particularly as we move towards the
implementation of the 2015 payment adjustment. Furthermore, we believe
that the time it takes for CMS to calculate data on Physician Quality
Reporting System quality measures will be greater than in 2011, since
we are proposing additional individual measures and measures groups.
For these reasons, we proposed to amend 42 CFR 414.90(i)(2) to indicate
that CMS will provide a written response within 90 days of the receipt
of the original request for an informal review.
As this process is informal and the statute does not
require a formal appeals process, we will not include a hearing or
evidence submission process, although the eligible professional may
submit information to assist in the review.

[[Page 73391]]

Based on our informal review, we will provide a written
response. Where we find that the eligible professional did
satisfactorily report, we proposed to provide the applicable incentive
payment.
Given that this is an informal review process and given
the limitations on review under section 1848(m)(5)(E) of the Act,
decisions based on the informal review will be final, and there will be
no further review or appeal.
We invited public comment on the proposed informal review process
for 2012 and beyond. The following is a summary of the comments
regarding the informal review process.
Comment: Some commenters were opposed to our proposal to extend the
time CMS must provide a response to the eligible professional's request
for an informal review from 60 days to 90 days. One commenter
acknowledged CMS anticipating a higher volume of informal review
requests, but the commenter stated that 90 days was too long of a
waiting period for eligible professionals to receive a response to
their request for an informal review. Another commenter stated that
extending the time CMS must provide a response does not provide
eligible professionals with the opportunity to make a second request
for a review within the 90 day window that eligible professionals are
given to request an informal review.
Response: We appreciate the commenter's feedback. However, as we
stated previously, we anticipate a higher volume of requests for
informal review, particularly as we move towards the 2015 payment
adjustment and continue to align with various CMS programs to encourage
participation in the Physician Quality Reporting System. We believe
that the time it takes for CMS to calculate data on Physician Quality
Reporting System quality measures will be greater than in 2011, since
we are proposing additional individual measures and measures groups.
With respect to being able to request a second review, we note that all
informal review decisions are final. Eligible professionals will not
have the opportunity to request a second review. Therefore, for the
reasons we noted, we are finalizing our proposal to extend the time CMS
must provide a response to the eligible professional's request for an
informal review from 60 days to 90 days.
Comment: One commenter urged us to create a hearing of evidentiary
process to allow eligible professionals to submit additional evidence.
Response: As stated previously, we did not establish a hearing or
evidentiary process because this review is informal. We understand
that, in some instances, an eligible professional may need to provide
additional information. Therefore, should we need additional
information to process a request for an informal review, we will
request this additional information. We note, however, that the need
for additional information will not affect the deadline for CMS to
provide a decision to the eligible professional.
Comment: One commenter was concerned with our proposal to use the
Help Desk as the basis for our informal review process, because the
commenter stated that practices have had difficulties obtaining
reliable information from the Help Desk.
Response: We appreciate the commenter's feedback. However, the
webbased tool is the finalized method under which we are accepting
requests for informal review. The Help Desk, however, will perform
informal review functions related to analysis of the informal review.
We believe the informal review process, using the web-based tool in
conjunction with the Help Desk, is the most efficient and most
beneficial to the eligible professional. With respect to the
commenter's concern that the Help Desk may provide inaccurate
information, we will monitor the Help Desk for accuracy of the
information provided.
Based on the comments received and for the reasons stated
previously, for 2012 and beyond, we are finalizing the Physician
Quality Reporting System informal review process, as proposed. Eligible
professionals wishing to submit a request for an informal review are
required to do so via a web-based tool, the Communication Support Page.
Information on the Communication Support Page, including the link to
the Page, will be available at http://www.cms.gov/PQRS//. Eligible
professionals who have difficulty accessing the Communication Support
Page, such as those eligible professionals who do not have internet
access, may contact the Help Desk for assistance in submitting a
request for an informal review. We also note that, with respect to
informal reviews for the 2011 Physician Quality Reporting System, we
stated (75 FR 73550) that eligible professionals wishing to submit a
request for an informal review do so by submitting an email to the
QualityNet Help Desk at [email protected]. As we believe that
submitting the informal review request via a web-based tool is a more
efficient and secure method of receiving these informal review
requests, we are also allowing use of the web-based tool to submit
informal review requests for the 2011 Physician Quality Reporting
System. We are finalizing our proposal to modify 42 CFR 414.90 to
reflect these finalized proposals.
j. Future Payment Adjustments for the Physician Quality Reporting
System
Beginning in 2015, a payment adjustment will apply under the
Physician Quality Reporting System. Specifically, under section
1848(a)(8) of the Act, as added by section 3002(b) of the Affordable
Care Act, with respect to covered professional services furnished by an
eligible professional during 2015 or any subsequent year, if the
eligible professional does not satisfactorily submit data on quality
measures for covered professional services for the quality reporting
period for the year, the fee schedule amount for services furnished by
such professionals during the year shall be equal to the applicable
percent of the fee schedule amount that would otherwise apply to such
services. The applicable percent is--
98.5 percent for 2015; and
98.0 percent for 2016 and each subsequent year.
Under section 1848(a)(8)(C)(iii) of the Act provides that, for
purposes of the payment adjustment, the ``quality reporting period''
with the respect to a year, is a period specified by the Secretary. In
order to maintain consistency and program continuity, similar to the
12-month reporting period we are proposed for 2012, we proposed a 12-
month reporting period for the 2015 payment adjustment. Specifically,
in the proposed rule, we proposed (76 FR 42884-42885) that the
reporting period for purposes of the 2015 payment adjustment would be
the 2013 calendar year, that is, January 1, 2013 through December 31,
2013.
Comment: Several commenters opposed our proposal to establish CY
2013 as the reporting period for the 2015 payment adjustment, because
they felt the report period for the 2015 payment adjustment should
occur later in time. These commenters believed that the reporting
period for the 2015 payment adjustment should mirror the reporting
periods for the Physician Quality Reporting System incentives (i.e., a
CY 2012 reporting period for the 2012 incentive). Some commenters
suggested CY 2014 or CY 2015 as the reporting period for the 2015
payment adjustment. One commenter urged us to align the reporting
periods for Physician Quality Reporting System incentives as well as
payment adjustments as closely as possible.
Response: We considered using a CY 2014 and CY 2015 reporting
period for

[[Page 73392]]

the 2015 payment adjustment. However, it is not operationally feasible
to create a full calendar year reporting period for the 2015 payment
adjustment any later than CY 2013 and still avoid retroactive payments
or the reprocessing of claims.
Section 1848(a)(8) of the Act requires that a payment adjustment be
applied to covered professional services furnished by an eligible
professional in in the particular payment adjustment year. Therefore,
using 2015 as an example, we believe it is necessary to reduce the PFS
amount concurrently for PFS allowed charges for covered professional
services furnished in 2015. If we do not reduce the PFS amount
concurrently with claims submissions in 2015, we would need to
potentially recoup or provide added payments after the determination is
made about whether the payment adjustment applies, or alternatively,
hold claims until such a determination is made. In addition, we note
that if such retroactive adjustments were made it may require a
reconciliation of beneficiary co-payments. As a result, we need to
determine whether eligible professionals have satisfactorily reported
under the Physician Quality Reporting System based on a reporting
period that occurs prior to 2015.
As for the suggestion that we use CY 2014 as the reporting period,
we do not believe this would allow sufficient time for eligible
professionals to report the Physician Quality reporting System
measures, or allow us enough time to collect and analyze the data
submitted by eligible professionals in order to avoid retroactive
adjustments to payments in 2015, because we will not receive this data
until months after the reporting period. Once we have completed our
analysis, we also need time to make the necessary system changes to
begin applying the payment adjustments to the appropriate individuals.
All of this must occur prior to January 1, 2015, and so using a CY 2014
reporting period would not be feasible. We believe that the reporting
period we proposed will allow a full calendar year for eligible
professionals (which is consistent with the reporting periods finalized
for the 2012 incentive) to meet the criteria for satisfactory reporting
for purposes of the 2015 payment adjustment, while still providing us
with enough time to collect and analyze the data submitted by eligible
professionals for the 2015 payment adjustment without having to make
retroactive payment adjustments in 2015. With regard to using a shorter
reporting period (that is, less than 12 months), we may consider, in
future notice and comment rulemaking, additional reporting periods that
are less than 12 months for the 2015 payment adjustment, so that
eligible professionals have additional opportunities to meet the
requirements for the 2015 payment adjustment.
Therefore, for the reasons we've explained, we are finalizing our
proposal to establish CY 2013 (that is, January 1, 2013 through
December 31, 2013) as the reporting period for the 2015 payment
adjustment. At this time, we are not aware of any viable alternatives
that would allow us to address the issues we noted and still provide a
full-year reporting period that falls after 2013. We will, however,
continue to explore options for potentially using a reporting period
closer to the time in which the payment adjustment is applied for
future years of the payment adjustment.
Based on the reporting period we are finalizing in this final rule
with comment period, if we determine that an eligible professional or
group practice has not satisfactorily reported data on quality measures
for the January 1, 2013 through December 31, 2013 reporting period for
purposes of the 2015 payment adjustment, then the fee schedule amount
for services furnished by the eligible professional or group practice
during 2015 would be 98.5 percent of the fee schedule amount that would
otherwise apply to such services. We intend to address the remaining
requirements for the 2015 payment adjustment in future rulemaking.
2. Incentives and Payment Adjustments for Electronic Prescribing
(eRx)--The Electronic Prescribing Incentive Program
a. Program Background and Statutory Authority
Electronic prescribing is the transmission using electronic media,
of prescription or prescription-related information between the
prescriber, dispenser, pharmacy benefit manager (PBM), or health plan,
either directly or through an intermediary, including an electronic
prescribing network. To encourage the use of electronic prescribing
among eligible professionals, section 132 of the Medicare Improvements
for Patients and Providers Act of 2008 (MIPPA) amended section 1848(m)
of the Act to establish the eRx Incentive Program. The eRx Incentive
Program provides a combination of incentive payments and payment
adjustments through 2014 to eligible professionals who are successful
electronic prescribers. No eRx incentive payments or payment
adjustments are authorized beyond 2014.
From 2009 through 2013, the Secretary is authorized to provide
eligible professionals who are successful electronic prescribers an
incentive payment equal to a percentage of the eligible professional's
total estimated Medicare Part B PFS allowed charges (based on claims
submitted not later than 2 months after the end of the reporting
period) for all covered professional services furnished by the eligible
professional during the respective reporting period. However, section
1848(m)(2)(D) of the Act, as added by section 4101(f)(2)(B) of Title IV
of Division B of the American Recovery and Reinvestment Act of 2009
(Pub. L. 111-5) (ARRA), which also authorized the Medicare EHR
Incentive Program, specifies that the eRx incentive does not apply to
an eligible professional, if, for the EHR reporting period, the
eligible professional earns an incentive payment under the Medicare EHR
Incentive Program beginning in 2011.
The applicable electronic prescribing percent for incentive
payments under the eRx Incentive Program are as follows:
2.0 percent for 2009.
2.0 percent for 2010.
1.0 percent for 2011.
1.0 percent for 2012.
0.5 percent for 2013.
In addition, for years 2012 through 2014, under section
1848(a)(5)(A) of the Act, a PFS payment adjustment applies to eligible
professionals who are not successful electronic prescribers at an
increasing rate through 2014. Specifically, if the eligible
professional is not a successful electronic prescriber for the
respective reporting period for the year, the PFS amount for covered
professional services during the year shall be a percentage less than
the PFS amount that would otherwise apply. The applicable electronic
prescribing percent for payment adjustments under the eRx Incentive
Program are as follows:
1.0 percent in 2012.
1.5 percent in 2013.
2.0 percent in 2014.
We believe the purpose of the eRx Incentive Program for 2012 and
beyond is to continue to encourage significant expansion of electronic
prescribing by authorizing a combination of financial incentives and
payment adjustments. We proposed to modify the incentive and payment
adjustment language in 42 CFR 414.92 to provide language more
consistent with section 1848 of the Act (please note that in the
proposed rule we inadvertently listed ``section 1848(k)'' instead of
``section 1848'').

[[Page 73393]]

We believe that the criteria used to determine who is a successful
electronic prescriber for purposes of the eRx incentive are not
required to be identical to the criteria used to determine the
applicability of the eRx payment adjustment. In general, we believe
that an incentive should be broadly available to encourage the widest
possible adoption of electronic prescribing, even for low volume
prescribers. On the other hand, we believe that a payment adjustment
should be applied primarily to assure that those who have a large
volume of prescribing do so electronically, without penalizing those
for whom the adoption and use of an electronic prescribing system may
be impractical given the low volume of prescribing. We also believe
that eligible professionals who have met the requirements for receiving
an incentive payment under the eRx Incentive Program for a particular
year have sufficiently demonstrated their adoption and use of
electronic prescribing technology and thus should not be subject to the
payment adjustment in a future year.
Individual eligible professionals do not have to participate in the
Physician Quality Reporting System in order to participate in the eRx
Incentive Program (and vice versa). The provisions of the eRx Incentive
Program are codified at 42 CFR 414.92.
In prior years, we have proposed and finalized the details of the
eRx Incentive Program through an annual rulemaking process. Through
this annual rulemaking process, we have previously established the
criteria for avoiding the 2012 eRx payment adjustment in the 2011 PFS
Final Rule with comment period (75 FR 73562 through 73565), as well as
issued a final rule entitled ``Changes to the Electronic Prescribing
(eRx) Incentive Program'' (76 FR 54953 through 54969), in which we
proposed additional changes to the 2012 payment adjustment, as well as
the electronic prescribing quality measure for certain reporting
periods in 2011. We also established requirements for the 2013 eRx
payment adjustment in the 2011 PFS Final Rule with comment period (75
FR 7356).
In this final rule with comment period, we are finalizing our
comprehensive requirements for the 2012 and 2013 incentive payments,
additional requirements for the 2013 payment adjustment, and
requirements for the 2014 payment adjustment. We believe that
finalizing criteria for the eRx Incentive Program for 2012 and beyond
will provide eligible professionals with more time to familiarize
themselves with the details of the eRx Incentive Program. We hope this
will lead to increased, successful participation in the eRx Incentive
Program. Details regarding requirements for the eRx Incentive Program
for 2012 and 2013 incentive payments, additional requirements for the
2013 payment adjustment, and the requirements for the 2014 payment
adjustment, including our rationale for finalizing such requirements,
are described in the following section. We received comments that were
not related to our specific proposals for the 2012 through 2014 eRx
Incentive Program, and, while we appreciate the commenters' feedback,
these comments are outside the scope of the issues addressed in this
final rule with comment period and are not included.
b. Eligibility
For the 2012 and 2013 incentive payments and 2013 and 2014 payment
adjustments, we proposed the following two ways eligible professionals
may participate in the eRx Incentive Program: (1) as an individual
eligible professional; or (2) as part of a group practice participating
in the group practice reporting option (GPRO) for the eRx Incentive
Program (eRx GPRO) (76 FR 42886). Professionals eligible to participate
in the eRx Incentive Program are defined at 42 CFR 414.92(b) and more
information is available on the eRx Incentive Program section of the
CMS Web site at: http://www.cms.gov/ERxIncentive/05_Eligible%20Professionals.asp#TopOfPage.
(1) Individual Eligible Professionals
(A) Definition of Eligible Professional
As in the 2011 eRx Incentive Program, we proposed that, for
individual eligible professionals participating in the eRx Incentive
Program for purposes of the 2012 and 2013 incentive payments and 2013
and 2014 payment adjustments, the determination of whether an eligible
professional is a successful electronic prescriber will be made at the
individual professional level, based on the National Provider
Identifier (NPI) number (76 FR 42886). As some individuals (identified
by NPIs) may be associated with more than one practice or Tax
Identification Number (TIN), for the 2012 and 2013 incentive payments
and 2013 and 2014 payment adjustments, we proposed that the
determination of whether an eligible professional is a successful
electronic prescriber will continue to be made for each unique TIN/NPI
combination. Then, as in previous years, incentive payments would then
be made to the applicable holder of the TIN. We proposed continuing to
use the TIN/NPI combination as the unit of analysis to maintain program
continuity, as individual eligible professionals are already familiar
with this level of analysis and payment. We invited public comment on
our proposal to continue analyzing data using the TIN/NPI combination
while providing payment to the applicable holder of the TIN. We
received no comments on our proposal to continue analyzing data using
the TIN/NPI combination while providing payment to the applicable
holder of the TIN and are therefore, finalizing this proposal.
As in prior program years, we proposed that individual eligible
professionals who wish to participate in the eRx Incentive Program for
purposes of the 2012 and 2013 incentive payments and 2013 and 2014
payment adjustments may simply start participating (76 FR 42886).
Individual eligible professionals are not required to register or
notify CMS they intend to participate; rather, they may simply begin to
report the eRx measure. We invited public comment on the proposed
process for individual eligible professionals to participate in the eRx
Incentive Program. We received no comments regarding our proposal, and
therefore, we are finalizing our proposal that individual eligible
professionals who wish to participate in the eRx Incentive Program for
purposes of the 2012 and 2013 incentive payments and 2013 and 2014
payment adjustments may simply start participating.
(2) Group Practices
As required under section 1848(m)(3)(C) of the Act, we established
a process under which eligible professionals in a group practice (as
defined by the Secretary) would be treated as having met the
requirements for submitting data on electronic prescribing quality
measures for covered professional services for a reporting period (or,
for purposes of the payment adjustment under section 1848(a)(5) of the
Act, for a reporting period for a year) if, in lieu of reporting the
electronic prescribing measure, the group practice reports measures
determined appropriate by the Secretary, such as measures that target
high-cost chronic conditions and preventive care, in a form and manner,
and at a time specified by the Secretary. Specifically, we first
established the eRx group practice reporting option (eRx GPRO) in 2010,
which was further modified in the 2011 PFS Final Rule (75 FR 73502). In
addition to determining whether an eligible professional is a
successful electronic prescriber for incentive

[[Page 73394]]

payment and payment adjustment purposes based on separately analyzing
whether the individual eligible professionals are successful electronic
prescribers, we proposed to also make the determination that the group
practice, as a whole, is a successful electronic prescriber in
accordance with section 1848(m)(3)(C) of the Act for those group
practices that wish to participate in the eRx GPRO.
(A) Definition of ``Group Practice''
Section 1848(m)(3)(C)(i) of the Act authorizes the Secretary to
define ``group practice,'' which CMS defined by referencing our
regulation at Sec. 414.90 (b). For the 2011 eRx Incentive Program,
under Sec. 414.92(b), a group practice is--
(1) Defined at Sec. 414.90(b), that is participating in the
Physician Quality Reporting System; or
(2)(a) In a Medicare approved demonstration project that is deemed
to be participating in the Physician Quality Reporting System group
practice reporting option; and
(b) Has indicated its desire to participate in the electronic
prescribing group practice option.
However, for purposes of determining whether a group practice is a
successful electronic prescriber for CYs 2012 through 2014, we proposed
to modify the definition of the ``group practice'' at 42 CFR 414.92(b)
to be consistent with modifications we proposed for the definition of
``group practice'' at 42 CFR 414.90(b) for the 2012 Physician Quality
Reporting System (76 FR 42886).
In particular, we proposed to modify the definition of group
practice under the Physician Quality Reporting System definition at 42
CFR 414.90(b) by defining a group practice as a single TIN with at
least 25 or more eligible professionals, as identified by their
individual NPI, who have reassigned their Medicare billing rights to
the TIN. Given that the definition of ``group practice'' at 42 CFR
414.92(b) follows the Physician Quality Reporting System definition, we
proposed to apply the modification to the definition for group practice
under the eRx Incentive Program.
Although we noted this proposed change would eliminate group
practices comprised of 2 to 24 eligible professionals for the purpose
of the eRx GPRO, we believed changing the definition of ``group
practice'' would not pose a significant burden to these small group
practices, because they could still participate as individual eligible
professionals. For 2010, out of 107 group practices that self-nominated
to participate in GPRO II for the Physician Quality Reporting System,
68 of these group practices qualified to participate in the eRx
Incentive Program under GPRO II. However, during the opt-out period
which ended on May 12, 2011, 6 of these 68 group practices dropped out
of GPRO II participation, leaving only 62 group practices to
participate in GPRO II for 2010. Due to the low participation of only
62 groups, we believed that participation in the eRx GPRO should be
limited to only those group practices with 25 or more eligible
professionals. We noted that participating under GPRO II may be more
burdensome for very small group practices than participating as
eligible professionals. For example, with respect to the payment
adjustment, additional limitations may apply to eligible professionals
as individuals that are not applied to group practices, which present
an additional burden to the group practice.
We also proposed (76 FR 42866) to modify the language that
references Medicare demonstrations to more broadly recognize other
similar Medicare programs that group practices may be participating in
so that such practices may be eligible to participate in the eRx
Incentive Program. We received no comments related to our proposal to
more broadly recognize Medicare programs other than the PQRS GPRO where
group practices may be participating. Therefore, we are finalizing this
modification at 42 CFR 414.92(b). We are also modifying 42 CFR 414.92
to make clear that all group practices must indicate their desire to
participate in the eRx GPRO.
We invited public comment on our proposed definition of group
practice and below is a summary of the comments we received and our
responses.
Comment: One commenter was concerned with our proposal to change
the definition of group practice under the eRx Incentive Program to
groups comprised of 25 or more eligible professionals, consistent with
our proposal to change the definition of group practice under the
Physician Quality Reporting System. The commenter was concerned that
this definition change would preclude smaller groups from participating
in the eRx GPRO.
Response: As we stated previously, in 2011, we allowed groups of 2-
24 individual eligible professionals to participate as a group practice
under the eRx GPRO II. Unfortunately, the turnout for these smaller
group practices electing to participate under the eRx GPRO II was low.
Therefore, due to low participation last year in the eRx GPRO by groups
comprised of 2-24 eligible professionals, we are finalizing our
proposal to use the definition of group practice under the Physician
Quality Reporting System, which excludes groups comprised of 2-24
eligible professionals from participating in the eRx GPRO. We note that
these smaller group practices may continue to report the electronic
prescribing measure for purposes of the 2012 and 2013 incentives and
2013 and 2014 payment adjustments as individual eligible professionals.
Based on the comments received and for the reasons stated above, we
are finalizing our proposed definition of group practice at Sec.
414.92(b) for purposes of participating under the eRx GPRO. However, we
are making minor technical changes to the clause numbers under 42 CFR
414.92(b) to more accurately reflect this changed definition of group
practice.
(B) Process To Participate in the eRx Incentive Program--eRx GPRO
We proposed (76 FR 42881) that if a group practice wishes to
participate in the eRx Incentive Program under the eRx GPRO, the group
practice must self-nominate to do so. To self-nominate, we proposed
that the group practice follow the requirements for self-nomination
under the Physician Quality Reporting System, as well as specifically
indicate its intent to participate in the eRx Incentive Program as a
group practice.
If a group practice self-nominates to participate in the eRx GPRO
for a calendar year, then we proposed to consider that the group
practice is participating in the eRx GPRO for purposes of both the
incentive payment (with respect to any incentive payment reporting
period that occurs during the calendar year) and the payment adjustment
(with respect to any payment adjustment reporting period that occurs
during the calendar year). For example, the 2013 payment adjustment
reporting period occurs during calendar year 2012 (January 1, 2012
through June 30, 2012).
We invited public comment on the requirements for eligible
professionals to participate as an eRx GPRO for purposes of the eRx
Incentive Program. The following is a summary of the comments we
received regarding this proposal.
Comment: Some commenters opposed our proposal to require a group
practice wishing to participate as a group under the eRx GPRO to also
participate in the Physician Quality Reporting System, since some
practitioners, such as dermatologists, may not be able to participate
in the Physician Quality Reporting System GPRO due to a lack of

[[Page 73395]]

measures that are applicable to their respective specialties.
Response: We appreciate the commenters' feedback. However, as in
prior years and for operational reasons, we must require that all group
practices wishing to participate as a group under the eRx GPRO also
participate in the Physician Quality Reporting System. From an
operational standpoint, group practices participating in the eRx GPRO
must meet all the requirements of participating as a group practice
under the Physician Quality Reporting System GPRO to ensure that the
group practice is fully aware of requirements for participating as a
group practice under the eRx GPRO. All GPRO educational sessions we
hold focus on reporting under the GPRO for purposes of both programs.
Furthermore, it is easier to keep track of which group practices are
participating under the GPRO option for both the Physician Quality
Reporting System and the eRx Incentive Program by requiring that group
practices participating in the eRx GPRO also participate in the
Physician Quality Reporting System GPRO. Please note, however, that
this is not a requirement that group practices meet the requirements
for satisfactory reporting under the Physician Quality Reporting System
in order to participate in the eRx GPRO. We also note this does not
preclude individuals within group practices from participating in the
eRx Incentive Program as individuals.
Comment: We received one comment on the self-nomination process.
The commenter felt the process is overly burdensome.
Response: In determining what should be included in the self-
nomination process, we attempted to balance what we believed was
necessary to determine a group practice's intent to participate in the
eRx GPRO versus the burden to the group practice. For example, we
believe it is necessary to require group practices to indicate their
intent to participate in the eRx Incentive Program under the eRx GPRO
in writing to keep track of who is participating under the eRx
Incentive Program under the eRx GPRO so the eligible professionals
associated under the respective group practice may be analyzed at the
group level. We believe that the requirement to submit a self-
nomination statement is not an unduly burdensome task for a group
practice. With respect to the additional requirements we are
finalizing, such as requiring that group practices wishing to
participate in the eRx Incentive Program under the eRx GPRO attend
scheduled training sessions, we believe that these requirements provide
group practices with needed guidance on how to meet the requirements
for becoming a successful electronic prescribers as group practices.
This added guidance, in our opinion, will lead to a greater probability
that group practices participating under the eRx GPRO will qualify to
earn the 2012 and 2013 incentives as well as fulfill criteria for the
2013 and 2014 payment adjustments.
After considering the comments received and for the reasons stated
in our responses, we are finalizing our proposal that, in order for a
group practice to participate as a group under the eRx GPRO, the group
practice must self-nominate for each calendar year the group wishes to
participate in the eRx GPRO. If a group practice self-nominates to
participate in the eRx GPRO for a calendar year, then we will consider
that the group practice to be participating in the eRx GPRO as a group
practice for purposes of both the incentive payment and the payment
adjustment. Therefore, if an eligible professional is part of a group
practice participating in the eRx GPRO for a respective program year,
the eligible professional in the group practice is precluded from
participating as an individual eligible e professional for purposes of
both the 2012 and 2013 incentives and 2013 and 2014 payment
adjustments. For example, the 2013 payment adjustment reporting period
occurs during calendar year 2012 (January 1, 2012 through June 30,
2012). Therefore, any group practice participating in the eRx GPRO
during calendar year 2012 would be considered to be participating in
the eRx GPRO for both the 2012 incentive and 2013 payment adjustment.
Also, as we clarified in the proposed rule (76 FR 42887), a group
practice that is deemed to be participating in the Physician Quality
Reporting System, such as an ACO participating under the Medicare
Shared Savings Program, will not be deemed participating as a group
practice in the eRx Incentive Program. To participate in the eRx
Incentive Program under the eRx GPRO, such group practices must self-
nominate to do so. Instructions for submitting the self-nomination
statement are the same as the instructions for submitting a self-
nomination statement for the Physician Quality Reporting System. Each
year, we expect to notify a group practice of the selection decision
with respect to participation in the eRx GPRO during the first quarter
of the year.
c. Reporting Periods
(1) Reporting Periods for the 2012 and 2013 eRx Incentives
Section 1848(m)(6)(C)(i)(II) of the Act defines ``reporting
period'' under the eRx Incentive Program for years after 2008 to be the
entire year. We also have authority under section 1848(m)(6)(C)(ii) of
the Act to revise the reporting period if the Secretary determines such
revision is appropriate, produces valid results on measures reported,
and is consistent with the goals of maximizing scientific validity and
reducing administrative burden. We proposed (76 FR 42887), the entire
calendar year as the reporting period for purposes of the 2012 and 2013
incentive payment (January 1, 2012 through December 31, 2012 for the
2012 incentive and January 1, 2013 through December 31, 2013 for the
2013 incentive, respectively). Accordingly, we proposed to modify 42
CFR 414.92(d)(1).
We invited public comment on the proposed reporting periods for the
2012 and 2013 incentives. The following is a summary of the comment we
received regarding these proposals.
Comment: One commenter supported our proposals to base the 2012 and
2013 incentives off of 12-month reporting periods.
Response: We appreciate the commenter's feedback and are finalizing
our proposed reporting periods for the 2012 and 2013 incentives.
Based on the comment received and for the reasons stated above, we
are finalizing the reporting period for the 2012 incentive as the 12-
month period of January 1, 2012 through December 31, 2012, and
reporting period for the 2013 incentive as the 12-month period of
January 1, 2013 through December 31, 2013, and finalizing the changes
to the regulation at Sec. 414.92(d)(1).
(2) Reporting Periods for the 2013 and 2014 eRx Payment Adjustments
Under our authority under section 1848(m)(6)(C)(ii) of the Act, in
the 2011 PFS final rule with comment period, we finalized two different
reporting periods: A 6-month reporting period (between January 1, 2011
and June 30, 2011) for purposes of the 2012 payment adjustment for both
individual eligible professionals and group practices participating in
the eRx GPRO (75 FR 73562 through 73563) and a 12-month reporting
period (between January 1, 2011 and December 31, 2011) for purposes of
the 2013 payment adjustment for individual eligible professionals and
group practices

[[Page 73396]]

participating in the eRx GPRO (75 FR 73565).
In addition to the 12-month reporting period finalized in the 2011
PFS final rule with comment period, in the proposed rule we proposed
(76 FR 32887), for both individual eligible professionals and group
practices participating in the eRx GPRO, an additional 6-month
reporting period (between January 1, 2012 and June 30, 2012) for
purposes of the 2013 payment adjustment.
For similar reasons, for the 2014 payment adjustment, we proposed a
12-month reporting period (between January 1, 2012 and December 31, 2
012) that would apply to individual eligible professionals and a 6-
month reporting period (between January 1, 2013 and June 30, 2013) that
would apply to both individual eligible professionals and group
practices, so that two different reporting periods would provide
eligible professionals with two opportunities to be successful
electronic prescribers.
We invited public comment on the proposed reporting periods for the
2013 and 2014 payment adjustments. The following is a summary of the
comments we received regarding these proposals.
Comment: Several commenters supported our proposed reporting
periods for the 2013 and 2014 payment adjustment, including our
proposal to provide multiple reporting periods. A few commenters
opposed, however, our proposal to provide multiple reporting periods
for the 2013 and 2014 payment adjustments, stating that having multiple
reporting periods leads to greater program complexity. Rather, a few
commenters suggested that we should use a single, 12-month reporting
period that would provide us with 12 months of data.
Response: We appreciate the commenter's feedback. However, we
believe that, in this instance, our interest in providing eligible
professionals and group practices with additional opportunities to
become successful electronic prescribers outweighs our interest in
streamlining the program and collecting 12 months of data. Furthermore,
we note that eligible professionals are not required to qualify for the
2013 and 2014 payment adjustments under multiple reporting periods.
Eligible professionals may choose under which respective reporting
period the eligible professionals plan to satisfy the requirements for
the 2013 and 2014 payment adjustments. We note that the main purpose of
having eligible professionals report on the electronic prescribing
measure is to ensure electronic prescribing systems are being utilized,
not to collect data. Therefore, we are finalizing the proposed
reporting periods for the 2013 and 2014 payment adjustments.
Comment: Several commenters were opposed to our proposed reporting
periods for the 2013 and 2014 payment adjustments and suggested that we
instead finalize reporting periods for the 2013 and 2014 payment
adjustments that occur later in time. For example, some commenters
believed that the 2013 and 2014 payment adjustments should be based on
data reported in 2013 and 2014, respectively. Another commenter
suggested a 9-month reporting period (that is, January 1, 2012 through
September 1, 2012) for the 2013 payment adjustment.
Response: We appreciate the commenters' feedback. However, as we
stated in the 2011 PFS Final Rule (75 FR 73562), under section
1848(a)(5)(D) of the Act, we have the discretion to define the
''reporting period'' for purposes of the payment adjustment with
respect to a year. We interpreted the payment adjustment provision
under section 1848(a)(5) of the Act as having the 2012 payment
adjustment applied to reduce the PFS amount concurrently with claims
submissions in 2012. Accordingly, we believe that it is necessary to
apply the 2013 and 2014 payment adjustment concurrently with claim
submissions in 2013 and 2014, respectively.
With respect to the suggested 9-month reporting period, for
operational reasons, we cannot finalize a reporting period that ends
later than June 30, 2012 for the 2013 payment adjustment and June 30,
2013 for the 2014 payment adjustment. The process required to perform a
full analysis of eligible professionals' claims data can take more than
five months to complete. This is due to numerous factors, including the
allowance of a one month run-out for claims processing (for example,
through July 29, 2012, for claims with dates of service of January 1,
2012, through June 30, 2012). Additionally, the time required to
perform the data analyses to determine non-successful electronic
prescribers, and to update the systems to make the appropriate
reductions to Physician Fee Schedule payments for claims submitted on
or after January 1, 2012 and January 1, 2013 respectively can take up
to four months to complete. Taking into account these operational
issues, we believe that finalizing a reporting period ending on June
30, 2012 and June 30, 2013 for the 2013 and 2014 respective payment
adjustments will allow us to avoid having to recoup overpayments.
After considering the comments received and for the reasons
explained in our responses, we are finalizing the 6-month reporting
periods for the 2013 and 2014 payment adjustments. Specifically, in
addition to the 12-month reporting period finalized in the 2011 PFS
final rule with comment period, we are finalizing an additional 6-month
reporting period (that is, January 1, 2012 through June 30, 2012) for
purposes of the 2013 payment adjustment. For the 2014 payment
adjustment, we are finalizing a 6-month reporting period (between
January 1, 2013 and June 30, 2013) for both individual eligible
professionals and group practices participating in the eRx GPRO. We
also are finalizing a 12-month reporting period (between January 1,
2012 and December 31, 2012) for individual eligible professionals for
the 2014 payment adjustment. As for group practices, we note that there
was some ambiguity in the proposed rule (76 FR 42985), with regard to a
12-month reporting period for group practices participating in the eRx
GPRO for the 2014 payment adjustment. Although we proposed criteria for
being a successful electronic prescriber for group practices reporting
from January 1, 2012 through December 31, 2012, for the 2014 payment
adjustment (76 FR 42985 through 42986), we only proposed that the 12-
month reporting period for the 2014 payment adjustment (that is,
January 1, 2012 through December 31, 2012) would apply to individual
eligible professionals (76 FR 42887). Additionally, at 42 CFR
414.92(f)(1), we proposed regulatory changes that would provide for
this 12-month reporting period (76 FR 42946). Since, as discussed in
section VI.F.1.e.(6). of this final rule with comment period, we are
finalizing the proposed criteria for being a successful electronic
prescriber pertaining to a 12-month period for group practices for
purposes of the 2014 payment adjustment, we are also finalizing the 12-
month reporting period (that is, January 1, 2012 through December 31,
2012) for group practices participating under the eRx GPRO for the 2014
payment adjustment. We believe this will afford group practices
additional options for reporting for purposes of the 2014 payment
adjustment.
Therefore, we are finalizing the proposed changes to the regulation
at 42 CFR 414.92(f)(1).
d. Standard for Determining Successful Electronic Prescribers
Section 1848(m)(3)(B) of the Act governs the requirements for being
a ``successful electronic prescriber,'' for

[[Page 73397]]

purposes of the incentive payment under section 1848(m)(2) of the Act
and the payment adjustment under section 1848(a)(5) of the Act. The
Secretary is authorized to use one of two possible criteria for
determining whether an eligible professional is a successful electronic
prescriber. One criterion, under section 1848(m)(3)(B)(ii) of the Act,
is based on the eligible professional's reporting, in at least 50
percent of the reportable cases, on any electronic prescribing quality
measures that have been established under the Physician Quality
Reporting System, and are applicable to services furnished by the
eligible professional for the reporting period. However, for years
after 2009, section 1848(m)(3)(D) of the Act permits the Secretary in
consultation with stakeholders and experts to revise the criteria for
submitting data on electronic prescribing quality measures under
section 1848(m)(3)(B)(ii) of the Act.
The second criterion, under section 1848(m)(3)(B)(iii) of the Act,
is based on the electronic submission by the eligible professional of a
sufficient number (as determined by the Secretary) of prescriptions
under Part D during the reporting period. If the Secretary decides to
use this standard, then, in accordance with section 1848(m)(3)(B)(iv)
of the Act, the Secretary is authorized to use Part D data to assess
whether a sufficient number of prescriptions have been submitted by
eligible professionals. However, under section 1848(m)(3)(B)(i) of the
Act, if the Secretary decides the standard based on a sufficient number
of electronic Part D prescriptions applies for a particular reporting
period, then the standard based on the reporting on electronic
prescribing quality measures does not apply.
We considered use of the second criterion for determining
successful prescribing under the eRx Incentive Program. While we
recognize the benefits of using Part D data as the standard for
determining successful electronic prescribers, we believe use of Part D
prescriptions for analysis may be premature. For example, there is
uncertainty as to the accuracies of reporting electronic prescribing
activities using Part D data. For example, if an electronic
prescription is converted to a facsimile when reaching the pharmacy on
Part D data, the transmission is still reported as a pure, electronic
prescribing event. Furthermore, use of Part D data would require a
complete overhaul of the current requirements for the eRx Incentive
Program. For instance, if we choose to shift to the use of Part D data,
the program would have to adopt a new form of measurement, a new form
of analysis other than use of an eligible professionals' TIN/NPI (TIN
data is not available in Part D data sets), and new criteria for
eligible professionals and eRx GPROs to become successful electronic
prescribers. Therefore, we did not propose to use the second criterion.
For the reasons stated previously, we proposed (76 FR 42888) to
continue to require eligible professionals to report on the electronic
prescribing quality measure used in 2011 to determine whether an
eligible professional is a successful electronic prescriber for the
remainder of the eRx Incentive Program. We proposed, however, to modify
the electronic prescribing quality measure's specifications and use
modified reporting criteria based on the authority provided under
section 1848(m)(3)(D) of the Act (76 FR 42888). We invited public
comment on the continued use of reporting the electronic prescribing
quality measure for purposes of the ``successful electronic
prescriber'' determination under the program. We received no comments
regarding our proposal to continue use of the electronic prescribing
quality measure standard and therefore, we are finalizing our proposal
to use the electronic prescribing quality measure standard for purposes
of determining whether an eligible professional is a successful
electronic prescriber. Our proposals and final decisions with regard to
the criteria for being a successful electronic prescriber under this
standard for the 2012 and 2013 eRx Incentives and the 2013 and 2014 eRx
payment adjustments are discussed in the following sections
VI.F.2.g.(2)., VI.F.2.g.(3)., and VI.F.2.h.(2). of this final rule with
comment period.
(1) Reporting the Electronic Prescribing Quality Measure
The electronic prescribing quality measure, similar to the
Physician Quality Reporting System measures, has two basic elements,
which include: (1) A denominator that defines the patient population on
which the eligible professional's performance is being measured; and
(2) a reporting numerator, which identifies whether or not a clinical
quality action was performed. The final details of the electronic
prescribing measure specified later in this section apply to the
following eRx Incentive Program years: The 2012 eRx incentive payment;
the 2013 eRx incentive payment; the 2013 eRx payment adjustment; and
the 2014 eRx payment adjustment.
Under section 1848(k)(2)(C)(i) of the Act, the electronic
prescribing quality measure, which was initially introduced under the
Physician Quality Reporting System, shall be a measure selected by the
Secretary that has been endorsed by the entity with a contract with the
Secretary under section 1890(a) of the Act. Currently, that entity is
the National Quality Forum (NQF). The electronic prescribing measure we
proposed to retain, NQF Measure 0486: Adoption of Medication
e-Prescribing, was endorsed by the NQF in 2011. However, pursuant to
the changes finalized in the 2011 ``Changes to the Electronic
Prescribing (eRx) Incentive Program'' final rule, we modified the
description statement of the NQF-endorsed electronic prescribing
measure to allow for use of Certified EHR Technology to report the
electronic prescribing quality measure (76 FR 54954-54956). This
modification has not yet been reviewed by the NQF. In light of this, we
are not aware of any other NQF-endorsed measure related to electronic
prescribing by eligible professionals that would be appropriate for use
in the eRx Incentive Program. Therefore, we believe that the use of
this eRx measure falls within the exception under section
1848(k)(2)(C)(ii) of the Act.
(2) The Denominator for the Electronic Prescribing Measure
The denominator for the electronic prescribing quality measure
consists of specific billing codes for covered professional services.
As initially authorized under section 1848(k)(2)(A)(ii) of the Act,
and further established through rulemaking and under section
1848(m)(2)(B)(i) of the Act, we may modify the codes making up the
denominator of the electronic prescribing measure. For 2011, we
expanded the scope of the denominator codes for 2010 to covered
professional services outside the professional office and outpatient
setting, such as professional services furnished in skilled nursing
facilities or the home care setting (75 FR 73555). For purposes of
reporting periods during CYs 2012 and 2013 (for the 2012 and 2013
incentives and the 2013 and 2014 payment adjustments), we proposed (76
FR 42888) to retain these CPT and HCPCS codes in the denominator of the
electronic prescribing measure, because we believe that these codes
represent the types of services for which prescriptions are likely to
be generated. Therefore, if we were to measure an eligible
professional's performance on the electronic prescribing measure, we
would want to do so only for patients who saw the professional for such
services. Although in prior years we

[[Page 73398]]

only permitted eligible professionals to report the electronic
prescribing measure's numerator in connection with a service in the
measure's denominator, and proposed to continue this requirement for
purposes of the 2012 and 2013 incentives, in contrast, for the 2013 and
2014 payment adjustments, we proposed to depart from this requirement,
as discussed in section VI.F.2.i. of this final rule with comment
period.
We invited public and only received the following comment on our
proposal to retain the denominator codes contained in the 2011
electronic prescribing measure:
Comment: One commenter requested that codes 90804, 90806, 96151,
and 96152, which reflect psychotherapy services, be removed from the
denominator of the electronic prescribing measure, because the
commenter believed prescriptions should not be generated for these
types of services.
Response: We appreciate the commenter's feedback, but we disagree.
We believe these codes represent the types of services for which
prescriptions may be generated and therefore, are appropriate to
include in the denominator of the electronic prescribing measure. We
point out, however, that by finalizing these denominator codes, we are
not attempting to promote or discourage the generation of prescriptions
for these psychotherapy services.
Based on the comment received and for the reasons explained in our
responses, we are finalizing our proposal to retain the denominator
codes contained in the 2011 electronic prescribing measure.
Specifically, we are finalizing for the 2012 and 2013 eRx program years
the following denominator CPT and HCPCS codes in the denominator of the
electronic prescribing measure: 90801, 90802, 90804, 90805, 90806,
90807, 90808, 90809, 90862, 92002, 92004, 92012, 92014, 96150, 96151,
96152, 99201, 99202, 99203, 99204, 99205, 99211, 99212, 99213, 99214,
99215, 99304, 99305, 99306, 99307, 99308, 99309, 99310, 99315, 99316,
99324, 99325, 99326, 99327, 99328, 99334, 99335, 99336, 99337, 99341,
99342, 99343, 99344, 99345, 99347, 99348, 99349, 99350, G0101, G0108,
and G0109 (75 FR 73555).
(3) The Reporting Numerator for the Electronic Prescribing Measure
Currently, the electronic prescribing measure's numerator consists
of a single code, G8553, which indicates that the prescription was
generated and transmitted via a qualified electronic prescribing system
(and below, we discuss in greater detail what constitutes a ``qualified
system''). For purposes of reporting the electronic prescribing quality
measure for the 2012 and 2013 incentives and the 2013 and 2014 payment
adjustment, we proposed (76 FR 42888-42889) that an eligible
professional or group practice participating in the eRx GPRO can report
the code associated with the measure's numerator whenever a
prescription is generated and transmitted electronically. We invited
public comment on the proposed numerator for the electronic prescribing
measure for CYs 2012 through 2013 eRx Incentive Program, but, we did
not receive any comments related to the proposed electronic prescribing
measure's numerator G-code for CYs 2012 and 2013. Therefore, for CYs
2012 and 2013 of the eRx Incentive Program, we are finalizing G-8553
for electronic prescribing measure's numerator.
We intend to post the final electronic prescribing measure
specifications on the ``eRx Measure'' page of the eRx Incentive Program
section of the CMS Web site at http://www.cms.gov/ERXIncentive by no
later than--
December 31, 2011 for the reporting periods that occur
during calendar year 2012.
December 31, 2012 for the reporting periods that occur
during calendar year 2013.
In the event that additional changes are needed to the measure
specifications for years after 2012, we will do so via notice and
comment rulemaking prior to posting the final measure specifications
for that year.
e. Required Functionalities and Part D Electronic Prescribing Standards
As discussed in greater detail below, for purposes of the 2012 and
2013 incentive and 2013 and 2014 payment adjustment, we proposed (76 FR
42889) that when the eligible professional or group practice reports
the measure's numerator G-code, the eligible professional or group
practice must have and regularly use a ``qualified'' electronic
prescribing system, which we further proposed to define as either a
system with the four functionalities previously identified in the
electronic prescribing measure specifications, or Certified EHR
Technology, as defined at 42 CFR 495.4 and 45 CFR 170.102. We also made
proposals with regard to the Part D electronic prescribing standards
for the electronic prescribing measures. Our proposed technological
requirements of the electronic prescribing quality measure are
discussed below.
(1) ``Qualified'' Electronic Prescribing System
We are aware that there are significant numbers of eligible
professionals who are interested in participating in the eRx Incentive
Program but currently do not have an electronic prescribing system or
Certified EHR Technology. Generally, the electronic prescribing measure
does not require the use of any particular system or transmission
network; only that the system be a ``qualified'' system. If the
professional does not have general access to an electronic prescribing
system or Certified EHR Technology in the practice setting, the
eligible professional will not be able to report the electronic
prescribing measure. In addition to not being eligible for an incentive
payment, an eligible professional who does not report the electronic
prescribing measure for 2012 or 2013 will be subject to the 2013 or
2014 eRx payment adjustment, unless an exception applies.
We proposed (76 FR 4289) to continue to recognize as a
``qualified'' electronic prescribing system for purposes of the
electronic prescribing quality measure any system that can perform the
four functionalities that were identified and required under the
program in 2010 and 2011 (76 FR 42889). We invited public comment on
our proposal that the definition of a ``qualified electronic
prescribing system,'' include systems that have these four
functionalities. We did not receive any comments regarding our proposal
to retain the same functionalities. Therefore, for years 2012 through
2014 of the eRx Incentive Program, we are finalizing our decision to
recognize as a ``qualified'' electronic prescribing system, a system
that can do the following:
Generate a complete active medication list incorporating
electronic data received from applicable pharmacies and PBMs, if
available.
Enable eligible professionals to select medications, print
prescriptions, electronically transmit prescriptions, as well as
provide notifications (that is, signals to warn the prescriber of
possible undesirable or unsafe situations including potentially
inappropriate dose or route of administration of a drug, drug-drug
interactions, allergy concerns, or warnings and cautions). This
functionality must be enabled.
Provide information related to lower cost, therapeutically
appropriate alternatives (if any). The ability of an electronic
prescribing system to receive tiered formulary information, if

[[Page 73399]]

available, would again suffice for this requirement for reporting the
electronic prescribing measure during the reporting periods occurring
in CYs 2012 and 2013 until this function is more widely available in
the marketplace.
Provide information on formulary or tiered formulary
medications, patient eligibility, and authorization requirements
received electronically from the patient's drug plan (if available).
For reporting periods that occur in CYs 2012 and 2013, we also
proposed to expand the definition of a ``qualified'' electronic
prescribing system to include Certified EHR Technology, as defined at
42 CFR 495.4 and 45 CFR 170.102, because we believe the technological
requirements for electronic prescribing under the EHR Incentive Program
are similar to the technological requirements for the eRx Incentive
Program. We believe expanding the definition of a ``qualified''
electronic prescribing system in this way will align the requirements
of the eRx and the Medicare EHR Incentive Program and potentially
reduce unnecessary investment in multiple technologies for purposes of
meeting the requirements for each program. This proposal was consistent
with changes we finalized for certain reporting periods in CY 2011 for
the 2011 eRx incentive and the 2013 eRx payment adjustment in the
September 6, 2011 final rule entitled ``Medicare Program; Changes to
the Electronic Prescribing (eRx) Incentive Program'' (76 FR 54953,
54956).
We invited public comment on the proposed requirements of a
``qualified'' electronic prescribing system for purposes of reporting
the electronic prescribing measure. The following is a summary of the
comments we received regarding these proposals.
Comment: Several commenters supported our proposal to retain our
modification of the electronic prescribing measure to allow for use of
Certified EHR Technology. Commenters supported our efforts to align the
eRx Incentive Program and EHR Incentive Program in this manner.
Commenters also believed that allowing for use of Certified EHR
Technology reduces burden on eligible professionals.
Response: We appreciate the commenters' supportive feedback and are
finalizing our proposal to expand the definition of a ``qualified''
electronic prescribing system to include Certified EHR Technology for
the reasons we and commenters noted.
Therefore, in summary, for reporting periods that occur during CYs
2012 and 2013 of the eRx Incentive Program, we are finalizing our
proposal that a ``qualified'' electronic prescribing system for the
electronic prescribing quality measure is one that either meets the
four functionalities noted, or is Certified EHR Technology, as defined
at 42 CFR 495.4 and 45 CFR 170.102 (regardless of whether the Certified
EHR Technology has all four functionalities noted).
(2) Part D Electronic Prescribing Standards
Section 1848(m)(3)(B)(v) of the Act specifies that to the extent
practicable, in determining whether an eligible professional is a
successful electronic prescriber, ``the Secretary shall ensure that
eligible professionals utilize electronic prescribing systems in
compliance with standards established for such systems pursuant to the
Part D Electronic Prescribing Program under section 1860D-4(e) of the
Act''. The Part D standards for electronic prescribing systems
establish which electronic standards Part D sponsors, providers, and
dispensers must use when they electronically transmit prescriptions and
certain prescription related information for Part D covered drugs that
are prescribed for Part D eligible individuals.
To be a qualified electronic prescribing system under the eRx
Incentive Program, electronic systems must convey the information
listed previously using the standards currently in effect for the Part
D electronic prescribing program. The latest Part D electronic
prescribing standards, and those that had previously been adopted, can
be found on the CMS Web site at http://www.cms.gov/eprescribing.
To ensure that eligible professionals utilize electronic
prescribing systems that meet these requirements, the electronic
prescribing measure requires that those functionalities required for a
``qualified'' electronic prescribing system are equivalent to the
adopted Part D electronic prescribing standards. We proposed (76 FR
42889 and 42890) to modify the Part D electronic prescribing standards
required for a ``qualified'' electronic prescribing system under the
eRx Incentive Program to have these standards consistent with current,
CMS Part D electronic prescribing standards.
The Part D electronic prescribing standards currently in place that
are relevant to the four functionalities described previously are as
follows:
Generate medication list--Use the National Council for
Prescription Drug Programs (NCPDP) Prescriber/Pharmacist Interface
SCRIPT Standard, Implementation Guide, Version 8 Release 1 or 10.6,
October 2005 (hereinafter ``NCPDP SCRIPT 8.1 or 10.6'') Medication
History Standard. Use of NCPDP SCRIPT 10.6 is a new option for use in
the eRx Incentive Program.
Transmit prescriptions electronically--Use the NCPDP
SCRIPT 8.1or 10.6 for the transactions listed at Sec. 423.160(b)(2).
Provide information on lower cost alternatives--Use the
NCPDP Formulary and Benefits Standard, Implementation Guide, Version 1,
Release 0 (Version 1.0), October 2005 (hereinafter ``NCPDP Formulary
and Benefits 1.0'').
Provide information on formulary or tiered formulary
medications, patient eligibility, and authorization requirements
received electronically from the patient's drug plan use:
++ NCPDP Formulary and Benefits 1.0 for communicating formulary and
benefits information between prescribers and plans.
++ Accredited Standards Committee (ASC) X12N 270/271-Health Care
Eligibility Benefit Inquiry and Response, Version 4010, May 2000,
Washington Publishing Company, 004010X092 and Addenda to Health Care
Eligibility Benefit Inquiry and Response, Version 4010A1, October 2002,
Washington Publishing Company, 004010X092A1 for communicating
eligibility information between the plan and prescribers.
++ NCPDP Telecommunication Standard Specification, Version 5,
Release 1 (Version 5.1), September 1999, and equivalent NCPDP Batch
Standard Batch Implementation Guide, Version 1, Release 1 (Version
1.1), January 2000 for communicating eligibility information between
the plan and dispensers.
We did not receive any comments regarding our proposals related to
part D electronic prescribing standards and therefore, we are
finalizing our proposal that, for purposes of the 2012 and 2013 eRx
Incentive Program, ``qualified'' electronic prescribing systems must
meet all of the part D electronic prescribing standards specified.
Above, we specified the current Part D electronic prescribing
standards that are relevant to the four functionalities. Should these
Part D electronic prescribing standards subsequently change, we note
that the eligible professional's electronic prescribing system must, at
all times during the respective reporting period, comply with the
current Part D electronic prescribing standards. For example, on
October 24, 2011, CMS proposed to update some of the previously stated
Part D electronic prescribing standards to the four functionalities (76
FR 65916). Specifically, CMS proposed to update

[[Page 73400]]

Accredited Standards Committee (ASC) X12N 270/271-Health Care
Eligibility Benefit Inquiry and Response, Version 4010 to Version 5010.
If CMS finalizes its proposal, an eligible professional's electronic
prescribing system must comply with the Version 5010 update by the
effective date that would be specified in the final rule.
There are Part D electronic prescribing standards that are in
effect for functionalities that are not commonly utilized at this time.
One example is Rx Fill Notification, which is discussed in the Part D
electronic prescribing final rule (73 FR 18926). For purposes of the
eRx Incentive Program for CYs 2012 through 2014, we again are not
requiring that an electronic prescribing system contain all
functionalities for which there are available Part D electronic
prescribing standards since many of these functionalities are not
commonly available. For those ``qualified'' electronic prescribing
systems that have the four functionalities previously described, such
systems must use the adopted Part D electronic prescribing standards
listed previously for electronic messaging only.
There are other aspects of the functionalities for a ``qualified''
system that are not dependent on electronic messaging and are part of
the software of the electronic prescribing system, for which Part D
standards for electronic prescribing do not pertain and are not
required for purposes of the eRx Incentive Program. For example, the
requirements in the second functionality that require the system to
allow professionals to select medications, print prescriptions, and
conduct alerts are functions included in the particular software, for
which Part D standards for electronic messaging do not apply.
As stated previously, in this final rule with comment period, we
are finalizing our proposal to expand the definition of a ``qualified''
electronic prescribing system under the electronic prescribing quality
measure to also recognize Certified EHR Technology. Among other
requirements, Certified EHR Technology must be able to electronically
generate and transmit prescriptions and prescription-related
information in accordance with certain standards, some of which have
been adopted for purposes of electronic prescribing under Part D.
Similar to the electronic prescribing systems that have the four
functionalities previously noted, Certified EHR Technology also must be
able to check for drug-drug interactions and check whether drugs are in
a formulary or a preferred drug list, although the certification
criteria do not specify any standards for the performance of those
functions. We believe that it is acceptable that not all of the Part D
eRx standards are required for Certified EHR Technology in light of our
desire to better align the requirements of the eRx and the Medicare EHR
Incentive Programs, and potentially reduce unnecessary investment in
multiple technologies for purposes of meeting the requirements for each
program. Furthermore, to the extent that an eligible professional uses
Certified EHR Technology to electronically prescribe under Part D, he
or she would still be required to comply with the applicable Part D
standards to do so.
f. Reporting Mechanisms for the 2012 and 2013 Reporting Periods
For purposes of the January 1, 2011 through December 31, 2011
reporting period for the 2011 incentive payment and 2013 payment
adjustment, an eligible professional (and eRx GPRO, for purposes of the
2011 incentive) may report on the electronic prescribing measure to
meet the criteria for being a successful electronic prescriber via
three reporting mechanisms--claims, qualified registry, and qualified
EHR product. However, for purposes of the 2012 payment adjustment, due
to operational limitations, only the claims-based reporting mechanism
was available for purposes of reporting on the electronic prescribing
measure for the 2012 payment adjustment (75 FR 73563).
For reporting periods that occur during CY 2012 and 2013, to
provide eligible professionals and groups practices with multiple
mechanisms to report on the electronic prescribing measure for purposes
of reporting the electronic prescribing measure for the 2012 and 2013
incentive payments and 2013 and 2014 payment adjustments, we proposed
(76 FR 42890) the following three reporting mechanisms--claims,
qualified registry, and qualified EHR (including both direct EHR-based
reporting and EHR data submission vendors). However, as in the past, we
indicated we would not combine data on the electronic prescribing
measure submitted via multiple reporting mechanisms. Combining data
received via multiple reporting mechanisms would add significant
complexity to our analytics and potentially delay incentive payments.
Therefore, we proposed that an eligible professional or eRx GPRO would
need to meet the relevant reporting criteria for the incentive or
payment adjustment using a single reporting mechanism.
For reporting periods that occur during CYs 2012 and 2013, we also
proposed that a group practice that wishes to participate in the eRx
Incentive Program as an eRx GPRO for a particular calendar year would
have to indicate which reporting mechanism the group practice intends
to use to report the electronic prescribing measure. That is, the group
practice would need to indicate at the time it self-nominates which
reporting mechanism (claims, qualified registry, qualified direct EHR-
based reporting, or qualified EHR data submission vendor) the group
practice intends to use for purposes of participating in the eRx GPRO.
The following is a summary of the comments we received regarding
these proposals.
Comment: One commenter supported our proposal to allow multiple
reporting mechanisms to report the electronic prescribing measure for
purposes of the payment adjustment, particularly for those group
practices that are transitioning to the use of EHR systems.
Response: We appreciate the commenter's feedback. We are finalizing
the claims, registry, and EHR-based reporting mechanisms for the12-
month reporting periods that apply to the 2012 and 2013 incentives and
2014 payment adjustment. However, because the EHR and/or registry would
no longer need to search for the codes in the electronic prescribing
measure's denominator for purposes of the 6-month reporting periods
that apply to the 2013 and 2014 payment adjustments, CMS would need to
be able to release new file specifications to reflect this change in
time to reliably test the submission of the results from EHRs and
registries prior to the actual data submission occurring in July. We
will not be able to release the new file specifications in time to
conduct this additional testing, which raises the chances of an
eligible professional failing to successfully report through no fault
of their own. Therefore, we are not finalizing the registry and EHR-
based reporting mechanisms for the 6-month reporting periods pertaining
to the 2013 and 2014 payment adjustments. In addition, we note that if
we had allowed use of registry and EHR-based reporting for the 6-month
reporting periods for the 2013 and 2014 payment adjustments, this would
require registry and EHR vendors to submit electronic prescribing data
for an additional instance during 2012 and 2013 (that is, in addition
to the data submission for the 12-month reporting period). Since
providing an additional submission instance of electronic prescribing
data has not been a function of qualified registries and EHRs in past

[[Page 73401]]

program years, CMS would need to vet vendors to ensure their systems
allow for interim submissions. At this time, it is not operationally
feasible to vet these vendors to ensure their systems allow for a
submission instance.
We do not believe that the lack of registry and EHR-based reporting
mechanisms for the 6-month reporting periods for the 2013 and 2014
payment adjustments would substantially prevent eligible professionals
and group practices from meeting the criteria for being successful
electronic prescribers, because eligible professionals may still report
on the electronic prescribing measure during these reporting periods
via claims and via all three reporting mechanisms (claims, registry,
and EHR) for the 12-month 2014 payment adjustment reporting period. We
note that, according to the 2009 Reporting Experience available on our
Web site at www.cms.gov/eRxincentive/, the claims-based reporting
mechanism was the most widely used reporting mechanism in 2009.
Therefore, it follows that we anticipate that most eligible
professionals and group practices participating in the eRx Incentive
Program for the 2013 and 2014 payment adjustment would do so via the
claims-based reporting mechanism.
Comment: One commenter urged us to allow group practices
participating in the eRx GPRO to change their method of reporting
during the reporting period.
Response: We appreciate the commenter's feedback. However, because
it would be a substantial operational burden to analyze group practice
reporting via multiple reporting mechanisms, we must require that group
practices choose only one method of reporting during the reporting
period. Regardless, we note that all three reporting mechanisms--
claims, registry, and EHR--are available for reporting under the eRx
GPRO.
After considering the comments received and for the reasons stated
in our responses, we are finalizing the following reporting mechanisms
for the 12-month reporting periods for the 2012 and 2013 incentives,
and the 2014 payment adjustment: claims, registry, and EHR. The
requirements for each reporting mechanism with respect to the 2012 and
2013 incentives and 2013 and 2014 payment adjustments are described
below. In this final rule, we also are finalizing the claims-based
reporting mechanism for the 6-month reporting periods pertaining to the
2013 and 2014 payment adjustments; however, as we explained previously,
we are not finalizing registry or EHR-based reporting for these 6-month
reporting periods. We are therefore modifying 42 CFR 414.92 to reflect
that only the claims-based reporting mechanism may be used for purposes
of the 6-month 2013 and 2014 payment adjustment reporting periods.
(1) Claims-Based Reporting
For purposes of reporting the electronic prescribing quality
measure for the 2012 and 2013 incentives and the 2013 and 2014 payment
adjustments, we proposed (75 FR 42890 and 42891) to again retain the
claims-based reporting mechanism that has been used since the
implementation of the eRx Incentive Program in 2009. We did not propose
any prerequisites, such as registration, to begin reporting on the
electronic prescribing quality measure via claims. Retaining the
claims-based mechanism allows eligible professionals and group
practices to begin to report on the electronic prescribing quality
measure without the added cost of submitting data to a registry or
purchasing an EHR system (if the eligible professional is using a
standalone eRx system) as eligible professionals already report PFS
charges via claims.
The following is a summary of the only comment we received
regarding this proposal.
Comment: One commenter urged us to continue to offer the claims-
based reporting mechanism until the registry and EHR-based reporting
mechanisms are widely used.
Response: We agree and are finalizing the claims-based reporting
mechanism.
We are finalizing the claims-based reporting mechanism for purposes
of reporting the electronic prescribing quality measure for the 2012
and 2013 incentives and the 2013 and 2014 payment adjustments.
Accordingly, we are modifying 42 CFR 414.92 to reflect our decision to
finalize this proposal.
In the proposed rule, we also proposed that if an eligible
professional or group practice chooses the claims-based reporting
mechanism, the eligible professional or group practice must directly
submit data on the electronic prescribing quality measure (76 FR
42890). For eligible professionals and group practices participating in
the eRx GPRO using the claims-based reporting mechanism for purposes of
reporting the electronic prescribing measure during a 12-month
incentive or payment adjustment reporting period, we proposed that all
claims for services must be processed by us no later than two months
after the respective reporting period, for the claim to be included in
our data analysis. (For example, for an eligible professional using the
12-month, 2014 payment adjustment reporting period, all claims for
services between January 1, 2012 and December 31, 2012 must be
processed no later than February 22, 2013 to be included in our data
analysis.) For eligible professionals and group practices using the
claims-based reporting mechanism for purposes of reporting the
electronic prescribing measure during a 6-month payment adjustment
reporting period, we proposed that all claims for services must be
processed by us by no later than one month after the respective
reporting period, for the claim to be included in our data analysis.
(For example, for an eligible professional using the 6-month, 2013
payment adjustment reporting period, all claims for services between
January 1, 2012 and June 30, 2012 must be processed no later than July
27, 2012, for the claims to be included in our data analysis.) We
invited but did not receive any public comment regarding the processing
of claims. Therefore, for the reasons explained, we are finalizing
these requirements. We believe that these requirements for using the
claims-based reporting mechanism will allow sufficient time for
eligible professionals to report the electronic prescribing measure,
allow us to collect and analyze the data submitted by eligible
professionals, and avoid retroactive adjustments of payments.
(2) Registry-Based Reporting
For purposes of reporting for the 2012 and 2013 incentives and the
2013 and 2014 payment adjustments, we proposed (76 FR 42891) to
continue the registry-based reporting mechanism first introduced under
the 2010 eRx Incentive Program. We believed this would provide an
opportunity for individual eligible professionals and group practices
who choose to participate in the Physician Quality Reporting System via
registry to use the same reporting mechanism for reporting the
electronic prescribing measure, and this would provide eligible
professionals and group practices with another alternative reporting
mechanism. In addition, unlike claims-based reporting, although there
may be a cost associated with submitting data to a registry, reporting
of the electronic prescribing measure to CMS is done entirely by the
registry.
We also proposed that only registries qualified to submit quality
measure results and numerator and denominator data on quality measures
on behalf of eligible professionals for the Physician Quality Reporting
System for the applicable calendar year would be qualified to submit
measure results and numerator and denominator data on the

[[Page 73402]]

electronic prescribing measure on behalf of eligible professionals for
the eRx Incentive Program.
Some registries that self-nominate to become a qualified registry
for the Physician Quality Reporting System may not choose to self-
nominate to become a qualified registry for purposes for the eRx
Incentive Program. We proposed that registries that want to qualify
would need to submit measure results and numerator and denominator data
on the electronic prescribing measure for reporting periods that occur
during CYs 2012 and 2013 at the time that they submit their self-
nomination letter for the 2012 and 2013 Physician Quality Reporting
System, respectively. The self-nomination process and requirements for
registries for the Physician Quality Reporting System, which also will
apply to the registries for the eRx Incentive Program, are discussed in
the Physician Quality Reporting System section VI.F.1.(d).(2). of this
final rule with comment period. We will post a final list of qualified
registries for the eRx Incentive Program for CYs 2012 and 2013 on the
eRx Incentive Program section of the CMS Web site at http://www.cms.gov/ERXIncentive when we post the final list of qualified
registries for the Physician Quality Reporting System for 2012 and 2013
respectively on the Physician Quality Reporting System section of the
CMS Web site.
Since we proposed a 12-month reporting period for purposes of the
2012 and 2013 incentive and 6 and 12- month reporting periods for
purposes of the 2013 and 2014 payment adjustments (as described in the
section previously), we further proposed that qualified registries
would need to submit the electronic prescribing measure for the eRx
Incentive Program to us in two separate transmissions, based on the
proposed reporting periods for the 2012 and 2013 incentive payments and
2013 and 2014 payment adjustments. Specifically, we proposed that
qualified registries would need to submit 2012 and 2013 data on the
electronic prescribing measure in two separate submissions:
Following the end of the respective 6-month payment
adjustment reporting period (between July 1, 2012 and August 19, 2012,
for purposes of the 2013 eRx payment adjustment, and between July 1,
2013 and August 19, 2013, for purposes of the 2014 eRx payment
adjustment); and
Following the end of the 12-month reporting period for the
2012 and 2013 incentives and 2014 payment adjustment.
We invited public comment but received no comments on our proposed
requirements for registry-based reporting for purposes of reporting for
the 2012 and 2013 incentives, as well as for reporting during the 6-
month and 12-month reporting periods for the 2013 and 2014 payment
adjustments. We are modifying 42 CFR 414.92 to finalize the
requirements for registry-based reporting for purpose of the 12-month
reporting periods for the 2012 and 2013 incentives, and the 2014
payment adjustment. As stated previously, due to the operational issues
associated with ensuring that qualified registries are able to allow
for an additional submission instance, we are not finalizing registry-
based reporting for the 6-month reporting periods for the 2013 and 2014
payment adjustments, and therefore, are not finalizing the
corresponding registry requirements that we proposed. Therefore,
qualified registries must submit the electronic prescribing quality
measure for the eRx Incentive Program to us in one transmission, for
the 12-month reporting periods applicable for the 2012 and 2013
incentive payments and the 2013 and 2014 payment adjustments.
Specifically, qualified registries must submit 2012 and 2013 data on
the electronic prescribing quality measure following the end of the
respective 12-month reporting period for the 2012 and 2013 incentives
and the 2014 payment adjustment.
(3) EHR-Based Reporting
For purposes of reporting for the 2012 and 2013 incentives and the
2014 payment adjustment, we proposed (76 FR 42891-42892) to retain the
EHR-based reporting mechanism to encourage the use of EHR technology as
well as provide eligible professionals and group practices with a third
reporting option. We proposed this reporting mechanism to provide an
opportunity for eligible professionals and group practices who choose
to participate in the Physician Quality Reporting System via EHR, as
well as eligible professionals who participate in the Medicaid or
Medicare EHR Incentive Program, to use the same reporting mechanism for
reporting the electronic prescribing measure under the eRx Incentive
Program.
We proposed that EHR technology and EHR data submission vendors (as
described by the Physician Quality Reporting System) ``qualified'' to
submit extracted Medicare clinical quality data to us for the Physician
Quality Reporting System would be able to be used by an eligible
professional or group practice to submit data on the electronic
prescribing measure for the 2012 and 2013 incentives and 2014 payment
adjustment. The proposed self-nomination process and requirements for
direct EHR-based reporting products and EHR data submission vendors for
the Physician Quality Reporting System as discussed previously the
proposed rule (76 FR 42846) would apply to the EHR products and EHR
data submission vendors for the eRx Incentive Program. We hoped this
third reporting option for eligible professionals and group practices
would encourage the use of EHR technology.
We also proposed that direct EHR-based reporting vendors and EHR
data submission vendors must indicate their desire to have one or more
of their EHR products approved for use in the eRx Incentive Program for
the reporting periods that occur in CYs 2012 and 2013 at the same time
they self-nominate for the respective 2012 and 2013 Physician Quality
Reporting System. We further noted that a list of approved EHR
technology, their vendors (including the technology's version that is
approved) for the eRx Incentive Program would be posted on the eRx
Incentive Program section of the CMS Web site at http://www.cms.gov/ERXIncentive when we posted the list of approved EHR technology for the
Physician Quality Reporting System.
We also proposed that eligible professionals using their approved
EHR systems must submit the electronic prescribing measure for the eRx
Incentive Program to us in two separate submissions--
Following the end of the respective 6-month payment
adjustment reporting period (between July 1, 2012 and August 19, 2012,
for purposes of the 2013 eRx payment adjustment, and between July 1,
2013 and August 19, 2013, for purposes of the 2014 eRx payment
adjustment); and
Following the end of the 12-month reporting period for the
2012 and 2013 incentives and 2014 payment adjustment.
Similarly, we proposed that EHR data submission vendors must submit
the electronic prescribing measure to on behalf of eligible
professionals to us in two separate submissions:
Following the end of the respective 6-month payment
adjustment reporting period (between July 1, 2012 and August 19, 2012,
for purposes of the 2013 eRx payment adjustment, and between July 1,
2013 and August 19, 2013, for purposes of the 2014 eRx payment
adjustment); and
Following the end of the 12-month reporting period for the
2012 and 2013

[[Page 73403]]

incentives and 2014 payment adjustment.
We invited public comment but received no comments on our proposed
requirements for EHR-based reporting for purposes of reporting for the
2012 and 2013 incentives and the 2013 and 2014 payment adjustments. As
noted previously, however, we are not finalizing EHR-based reporting
for the 6-month reporting periods for the 2013 and 2014 payment
adjustments. Therefore, in this final rule with comment period, we are
only finalizing the requirements discussed previously for reporting the
electronic prescribing measure via the EHR-based reporting mechanism
for the 12-month reporting period for the 2012 and 2013 incentives and
the 2014 payment adjustment. We are modifying 42 CFR 414.92 to reflect
these final requirements for EHR-based reporting.
g. The 2012 and 2013 eRx Incentives
42 CFR 414.92(d) governs the requirements for individual eligible
professionals to qualify to receive an incentive payment. We proposed
(76 FR 42892) to modify 42 CFR 414.92(d) to add the words ``being a,''
so that the provision reads:

In order to be considered a successful electronic prescriber and
qualify to earn an electronic prescribing incentive payment (subject
to paragraph (c)(3) of this section), an individual eligible
professional, as identified by a unique TIN/NPI combination, must
meet the criteria for being a successful electronic prescriber under
section 1848(m)(3)(B) of the Act and as specified by CMS during the
reporting period specified in paragraph (d)(1) of this section and
using one of the reporting mechanisms specified in paragraph (d)(2)
of this section. Although an eligible professional may attempt to
qualify for the electronic prescribing incentive payment using more
than one reporting mechanism (as specified in paragraph (d)(2) of
this section), the eligible professional will receive only one
electronic prescribing incentive payment per TIN/NPI combination for
a program year.

We invited but did not receive any public comment on our proposal
to make the technical change to 42 CFR 414.92(d). Therefore, since we
believe this change provides more clarity to the provision, we are
finalizing this proposed change.
(1) Applicability of 2012 and 2013 eRx Incentives for Eligible
Professionals and Group Practices
Section 1848(m)(2)(B) of the Act imposes a limitation on the
applicability of the eRx incentive payment. The Secretary is authorized
to choose 1 of 2 possible criteria for determining whether or not the
limitation applies to an eligible professional (or group practice)--
Whether Medicare Part B allowed charges for covered
professional services furnished by the eligible professional (or group
practice) for the codes to which the electronic prescribing quality
measure applies are less than 10 percent of the total Medicare Part B
PFS allowed charges for all such covered professional services
furnished by the eligible professional during the reporting period; OR
Whether the eligible professional submits (both
electronically and non-electronically) a sufficient number (as
determined by the Secretary) of prescriptions under Part D (which can,
again, be assessed using Part D drug claims data). If the Secretary
decides to use this criterion, the criterion based on the reporting on
electronic prescribing measures would no longer apply.
Based on our proposal to make the determination of whether an
eligible professional or group practice is a ``successful electronic
prescriber'' based on submission of the electronic prescribing measure
(the first criterion), we proposed (76 FR 42892) to apply the criterion
under section 1848(m)(2)(B)(i) of the Act for the limitation for both
the 2012 and 2013 incentives. We invited but received no public comment
on our proposal. Therefore, the 2012 and/or 2013 incentive is not
applicable if the Medicare Part B allowed charges for covered
professional services furnished by the eligible professional (or group
practice) for the codes to which the electronic prescribing quality
measure applies are less than 10 percent of the total Medicare Part B
PFS allowed charges for all covered professional services furnished by
the eligible professional or group practice during the reporting
period.
For purposes of the 2012 and 2013 incentives, this analysis would
be performed during the first quarters of 2013 and 2014 respectively by
dividing the eligible professional's or participating group practice's
total 2012 and 2013 respective Medicare Part B PFS allowed charges for
all such covered professional services submitted for the measure's
denominator codes by the eligible professional's or group practices'
total Medicare Part B PFS allowed charges for all covered professional
services. If the result is 10 percent or more, then the statutory
limitation will not apply and a successful electronic prescriber would
qualify to earn the electronic prescribing incentive payment. If the
result is less than 10 percent, then the statutory limitation will
apply, and the eligible professional or group practice will not earn an
electronic prescribing incentive payment even if he or she meets the
reporting criteria for being a successful electronic prescriber.
Although an individual eligible professional or group practice may
decide to conduct his or her own assessment of how likely this
statutory limitation is expected to apply to him or her before deciding
whether or not to report the electronic prescribing measure, an
individual eligible professional or group practice may report the
electronic prescribing measure without regard to the statutory
limitation for the incentive payment.
(2) Reporting Criteria for Being a Successful Electronic for the 2012
and 2013 eRx Incentives--Individual Eligible Professionals
Section 1848(m)(3)(D) of the Act authorizes the Secretary to revise
the criteria for submitting data on the electronic prescribing measure
under section 1848(m)(3)(B)(ii) of the Act, which requires the measure
to be reported in at least 50 percent of the cases in which the measure
is reportable.
For the 2012 and 2013 incentives, to maintain program consistency
from year to year, we proposed (76 FR 42892) to make the determination
of whether an individual eligible professional is a successful
electronic prescriber for purposes of the incentive based on a count of
the number of times (minimum threshold of 25) an eligible professional
reports that at least one prescription created during the denominator-
eligible encounter is generated using a qualified electronic
prescribing system, which would include Certified EHR Technology (that
is, reports the G8553 code when the eligible professional bills for one
of the services included in the measure's denominator). We believe this
criterion adequately addresses the goal of the eRx Incentive Program,
specifically to promote the use of electronic prescribing systems.
We invited public comment on the proposed criteria for successful
electronic prescriber and the following is a summary of the comments we
received.
Comment: One commenter supported our proposed criteria for being a
successful electronic prescriber for purposes of the 2012 and 2013
incentives, further stating that reporting the electronic prescribing
measure for 25 unique visits is a reasonable and attainable threshold.
Response: We appreciate the commenter's feedback and are finalizing
our proposal to base the determination of whether or not an eligible
professional is a successful electronic

[[Page 73404]]

prescriber for the 2012 and 2013 incentives by reporting on the
electronic prescribing measure for at least 25 unique visits.
Comment: A few commenters suggested that we reduce the number of
times an eligible professional is required to report the electronic
prescribing measure for purposes of the 2012 and 2013 incentives to 10
unique visits, similar to the reporting requirements for the 2013 and
2014 payment adjustments.
Response: We appreciate the commenters' feedback. However, we
proposed this reporting criterion for the 2012 and 2013 incentives
because the criterion parallels the criterion established for the 2011
incentive. We believe that it is in the eligible professional's best
interest to provide uniform year-to-year reporting requirements for
purposes of earning an incentive. In addition, we note that whereas the
10 count criteria for reporting the electronic prescribing measure for
a payment adjustment applies to a 6-month reporting period, this 25
count criteria for earning an incentive applies to a 12-month reporting
period. Since the requirement to report 25 times is based on a longer
reporting period, we believe it is reasonable to require a higher
reporting threshold for purposes of the 2012 and 2013 incentives, than
what was required for the 2012 payment adjustment (which was based on a
shorter, 6-month reporting period).
Comment: Several commenters encouraged us to align the reporting
requirements for the 2012 and 2013 incentives with the reporting
requirements for the 2013 and 2014 payment adjustments by allowing the
reporting of the electronic prescribing measure's numerator for non-
denominator-eligible visits.
Response: We appreciate the commenters' feedback. However, as we
stated previously, we do not believe that the reporting criteria for
becoming a successful electronic prescriber for the incentives and
payment adjustments need to be identical. Rather, we believe that,
although the incentives and payment adjustments were both implemented
to encourage the use of electronic prescribing, the criteria to become
a successful electronic prescriber for purposes of the 2012 and 2013
incentives should be more stringent.
After considering the comments received and for the reasons stated
in our responses, for the 2012 and 2013 incentives, we are finalizing
the criteria for being a successful electronic prescriber as proposed
for individual eligible professionals . A summary of the finalized
criteria for being a successful electronic prescriber for purposes of
the 2012 and 2013 incentives are described in the following Tables 73
and 74.
BILLING CODE 4120-01-P

[[Page 73405]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.186

(3) Criteria for Being a Successful Electronic Prescriber 2012 and 2013
eRx Incentives--Group Practices
Under section 1848(m)(3)(B) of the Act, in order to qualify for the
incentive payment, an eligible professional or group practice must be a
``successful electronic prescriber.'' To simplify the reporting
criteria for group practices using the eRx GPRO used in prior years, we
proposed (76 FR 42893) that, for the 2012 and 2013 incentive payments,
to be a successful prescriber, a group practice using the eRx GPRO must
report the electronic prescribing measure's numerator for at least 625
unique visits (for group practices comprised of 25-99 eligible
professionals) or 2,500 unique visits (for group practices comprised of
100 or more eligible professionals) during the applicable reporting
period. To obtain these reporting criteria, we multiplied the smallest
group practice size for each respective threshold (that is, 25 for the
first threshold and 100 for the second threshold) by the number of
unique visits (25) an individual eligible professional must report on
the electronic prescribing measure in order to qualify for an incentive
payment. Although this may be a higher reporting threshold for group
practices using the eRx GPRO comprised of 25-50 eligible professionals
and group practices using the eRx GPRO comprised of 101-199 eligible
professionals than in 2011, we believe it is still quite feasible for
these group practices to meet the respective reporting threshold as
this would be the reporting threshold should the members of the group
practice choose to participate in the eRx Incentive Program as
individual eligible professionals.
We invited but received no public comments on the proposed criteria
for determining successful electronic prescribers for group practices
reporting under the eRx GPRO reporting option for purposes of earning
the 2012 and 2013 incentives. Therefore, we are finalizing the criteria
as proposed. The

[[Page 73406]]

criteria for being successful electronic prescribers for group
practices using the eRx GPRO reporting option for purposes of the
2012and 2013 incentive are summarized in the following Tables 75 and
76.
[GRAPHIC] [TIFF OMITTED] TR28NO11.187

[[Page 73407]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.188

BILLING CODE 4120-01-C
(4) No Double Payments
We are prohibited from making double payments under section
1848(m)(3)(C)(iii) of the Act, which requires that payments to a group
practice shall be in lieu of the payments that would otherwise be made
under the eRx Incentive Program to eligible professionals individually
in the group practice for being a successful electronic prescriber.
Accordingly, we proposed (76 FR 42893) to make incentive payments to
group practices based on the determination that the group practice, as
a whole, is a successful electronic prescriber for the respective
program year. An individual eligible professional who is affiliated
with a group practice participating in the eRx GPRO reporting option
that meets the requirements of being a successful electronic prescriber
under a group practice would not be eligible to earn a separate eRx
incentive payment on the basis of the individual eligible professional
meeting the criteria for successful electronic reporter at the
individual level.
We invited but received no public comment on our proposal to
prohibit double payments and are therefore finalizing this proposal. We
also proposed to make a technical change to 42 CFR 414.92(g)(5)(ii) to
modify ``another'' to ``a'' to clarify the provision. However, we
inadvertently listed the wrong provision. The provision that we
intended to modify was 42 CFR 414.92(e)(2)(ii). Since we believe this
technical change will not substantively affect the regulation and
believe this technical change will clarify this provision, we are
making a technical change to modify ``another'' to ``a'' under 42 CFR
414.92(e)(2)(ii).
h. The 2013 and 2014 Electronic Prescribing Payment Adjustments
As previously stated, for 2012, 2013, and 2014, if the eligible
professional is not a successful electronic prescriber for the
reporting period for the year, the PFS amount for covered professional
services furnished by such professionals during the year shall be less
than the PFS amount that would otherwise apply by--
1.0 percent for 2012;
1.5 percent for 2013; and
2.0 percent for 2014.
We proposed (76 FR 42893) to modify 42 CFR 414.92 to provide
further explanation of the requirements for individual eligible
professionals and group practices for the 2013 and 2014 payment
adjustment, as described later in this section. Paragraph 42 CFR
414.92(f) was designated to address ``public reporting of an eligible
professional's or group practice's Electronic Prescribing Incentive
Program data.'' However, we are redesignating this paragraph as 42 CFR
414.92(g). In its place, we are redesignating paragraph (f) so that
414.92(f) addresses the requirements for the 2013 and 2014 payment
adjustments.

[[Page 73408]]

(1) Limitations to the 2013 and 2014 eRx Payment Adjustments--
Individual Eligible Professionals
Whereas we believe that an incentive should be broadly available to
encourage the widest possible adoption of electronic prescribing, even
for low volume prescribers, we believe that a payment adjustment should
be applied primarily to assure that those who have a large volume of
prescribing do so electronically, without penalizing those for whom the
adoption and use of an electronic prescribing system may be impractical
given the low volume of prescribing. We proposed (76 FR 42893 through
42899) limitations on the applicability of the 2013 and 2014 payment
adjustments. Specifically, we proposed that the 2013 and 2014 payment
adjustments would not apply if:
An eligible professional is not an MD, DO, podiatrist,
nurse practitioner, or physician assistant as of June 30, 2012, for
purposes of the 2013 payment adjustment and June 30, 2013, for purposes
of the 2014 payment adjustment. Since these eligible professionals do
not generally prescribe, we have excluded these eligible professionals
from the eRx Incentive Program.
For purposes of determining whether an eligible professional is an
MD, DO, podiatrist, nurse practitioner, or physician assistant we would
use National Plan and Provider Enumeration System (NPPES) data. It is
an eligible professional's responsibility to ensure that his or her
primary taxonomy code in NPPES is accurate. However, in 2011, we also
established a G-code, (G8644) that eligible professionals can use to
report to us that they do not have prescribing privileges. We proposed
to retain the reporting of this G-code for purposes of the 2013 and
2014 payment adjustments. For purposes of the 2013 payment adjustment,
we proposed that eligible professionals who report this G-code must do
so on a claim with dates of services during the 6-month reporting
period (January 1, 2012 and June 30, 2012). For purposes of the 2014
payment adjustment, we proposed that eligible professionals who report
this G-code must do so on a claim with dates of services during the 6-
month reporting period (January 1, 2013 and June 30, 2013) so that we
are able to distinguish whether a professional is reporting this G-code
for the 2013 payment adjustment or the 2014 payment adjustment.
The eligible professional's Medicare Part B allowed
charges for covered professional services to which the electronic
prescribing quality measure applies are less than 10 percent of the
total Medicare Part B PFS allowed charges for all covered professional
services furnished by the eligible professional during the respective
payment adjustment reporting period. This is a required limitation
under section 1848(m)(2)(B) of the Act. This calculation will be
performed by dividing the eligible professional's total 2011 Medicare
Part B PFS allowed charges for all such covered professional services
submitted for the measure's denominator codes by the eligible
professional's total Medicare Part B PFS allowed charges for all
covered professional services (as assessed at the TIN/NPI level). If
the result is 10 percent or more, then the statutory limitation will
not apply. If the result is less than 10 percent, then the statutory
limitation will apply. For the 12-month incentive and payment
adjustment reporting periods, this calculation is expected to take
place in the first quarter of the year following the reporting period
(for example, in the first quarter of 2013 for the 12-month reporting
period for the 2012 incentive). For the 6-month payment adjustment
reporting period, this calculation is expected to take place within the
calendar year for the respective 6-month reporting period (for example,
within 2012 for the 6-month reporting period for the 2013 payment
adjustment).
An eligible professional does not have at least 100 cases
(that is, claims for patient services) containing an encounter code
that falls within the denominator of the electronic prescribing measure
for dates of service during: the 6-month reporting period (January 1,
2012 through June 30, 2012) for the 2013 payment adjustment or the 6-
month reporting period (January 1, 2013 through June 30, 2013) for the
2014 payment adjustment. If an eligible professional has less than 100
denominator-eligible instances in a 6-month period, this will be an
indicator to us that the professional likely has a small Medicare
patient population.
We invited but received no public comment on our proposed
limitations to the 2013 and 2014 eRx payment adjustments for individual
eligible professionals. Therefore, we are finalizing all of the above
limitations to the 2013 and 2014 eRx payment adjustments for individual
eligible professionals as proposed, as set forth at 42 CFR 414.92.
(2) Requirements for the 2013 and 2014 eRx Payment Adjustments--
Individual Eligible Professionals
Section 1848(a)(5) of the Act requires a payment adjustment to be
applied with respect to covered professional services furnished by an
eligible professional in 2013 and 2014, if the eligible professional is
not a successful electronic prescriber, as set forth in section
1848(m)(3)(B) of the Act, for the reporting period for the year.
Section 1848(m)(3)(D) of the Act authorizes the Secretary to revise the
criteria for submitting data on the electronic prescribing quality
measure. In the 2011 PFS Final Rule with comment period, we established
the same reporting criteria for being a successful electronic
prescriber for purposes of the 2011 incentive and the 2013 payment
adjustment, based on a 12-month reporting period in 2011 (75 FR 73565).
In order to create another opportunity for an eligible professional to
become a successful electronic prescriber for purposes of the 2013
payment adjustment, we proposed (76 FR 42894) that, based on the
proposed 6-month reporting period, an eligible professional would be a
successful electronic prescriber if he/she reports the electronic
prescribing measure's numerator, that is, at least 1 prescription for
Medicare Part B PFS patients was created during an encounter was
generated and transmitted electronically using a qualified electronic
prescribing system at least 10 times during the 6-month payment
adjustment reporting period (that is, January 1, 2012 through June 30,
2012). Unlike the reporting criteria for the incentive payments where
the numerator must be reported in connection with a denominator-
eligible visit, for purposes of the 2013 and 2014 payment adjustments,
we proposed that an eligible professional would be able to report the
measure's numerator for any Medicare Part B PFS service provided during
the reporting period, regardless of whether the code for such service
appears in the denominator, because we recognize that eligible
professionals may generate prescriptions during encounters that are not
necessarily included in the measure's denominator.
We also sought to provide more than one opportunity for eligible
professionals to avoid the 2014 payment adjustment by becoming a
successful electronic prescriber. Therefore, consistent with the final
criteria for successful electronic prescribing for purposes of the 2013
payment adjustment, we proposed (76 FR 42894 and 42895) the following
criteria for an

[[Page 73409]]

eligible professional to be a successful electronic prescriber for
purposes of the 2014 payment adjustment: (1) An eligible professional
meets the criteria for the 2013 incentive, that is, reports that at
least one prescription for a Medicare Part B PFS patient created during
an encounter was generated and transmitted electronically using a
qualified electronic prescribing system for at least 25 denominator-
eligible encounters during the 12-month payment adjustment reporting
period (that is, January 1, 2012 through December 31, 2012), or (2) An
eligible professional reports the electronic prescribing measure's
numerator (that is, that at least 1 prescription for a Medicare Part B
PFS patient created during an encounter was generated and transmitted
electronically using a qualified electronic prescribing system) at
least 10 times during the 6-month payment adjustment reporting period
(that is, January 1, 2013 through June 30, 2013).
As with the 2012 and 2013 incentive payments, we proposed that the
determination of whether an eligible professional is subject to the
payment adjustment would be made at the individual professional level,
based on the NPI and for each unique TIN/NPI combination.
We proposed the previous criteria for being a successful electronic
prescriber for purposes of the 2013 and 2014 payment adjustments
because, aside from not requiring the reporting of the electronic
prescribing measure's numerator for denominator-eligible encounters
(which only applies to the 6-month, 2013 and 2014 payment adjustment
reporting periods), they are consistent with the criteria for being a
successful electronic prescriber for purposes of the 2012 and 2013
payment adjustments that were finalized in the CY 2011 PFS final rule
with comment period (75 FR 73562 through 73565).
We invited public comment on the proposed criteria for being a
successful electronic prescriber for the 2013 and 2014 payment
adjustments for individual eligible professionals. The following is a
summary of the comments received regarding these proposals.
Comment: Some commenters supported our proposal to simplify the
payment adjustment reporting criteria by proposing criteria for the
2013 and 2014 payment adjustments (to report on the electronic
prescribing measure's numerator for at least 10 unique visits during
the respective 6-month reporting periods for the 2013 and 2014 payment
adjustments) that are parallel to criteria established for the 2011
payment adjustment, aside from not requiring the reporting of the
electronic prescribing measure's numerator for denominator-eligible
encounters.
Response: We appreciate the commenters' support. For the 2013 and
2014 payment adjustments, we are finalizing the proposed reporting
criteria for being a successful electronic prescriber for individual
eligible professionals. Note that, for the 6-month reporting periods
alone for 2013 and 2014 payment adjustments, eligible professionals are
not required to report on an electronic prescribing event tied to a
denominator-eligible encounter. Rather, eligible professionals may
report on an electronic prescribing event for any unique visit.
Comment: Several commenters supported our proposal to allow
reporting of the electronic prescribing measure for visits not
associated with the electronic prescribing measure's denominator for
purposes of the 2013 and 2014 payment adjustments.
Response: We appreciate the commenters' support of our proposal and
are finalizing our proposal to allow for reporting of the electronic
prescribing measure for visits not associated with the electronic
prescribing measure's denominator for purposes of the 2013 and 2014
payment adjustments.
Comment: One commenter stated that the criteria we proposed for
individual eligible professionals to become successful electronic
prescribers for purposes of the 2013 and 2014 payment adjustment is too
low. The commenter stated that, similar to the criteria required for
achieving meaningful use under the EHR Incentive Program, we should
require eligible professionals to report on at least 40 percent of all
electronic prescriptions. At a minimum, the commenter believed the
eligible professionals should use the 2012 and 2013 incentive criteria
for purposes of the 2013 and 2014 payment adjustment.
Response: We appreciate the commenters' feedback. However, we
proposed these criteria for being a successful electronic prescriber
for the 2013 and 2014 payment adjustments because we believe these
criteria achieve our goal of encouraging eligible professionals to
utilize electronic prescribing systems. Furthermore, as we noted, we
previously finalized criteria for being a successful electronic
prescriber for the 2013 payment adjustment that are identical to the
criteria finalized for the 2011 incentive. Likewise, we proposed and
are finalizing criteria for becoming a successful electronic prescriber
for the 2014 payment adjustment that are identical to the criteria we
finalized for the 2012 incentive.
After considering the comments received and for the reasons stated
above, we are finalizing the proposed criteria for individual eligible
professionals to be successful electronic prescribers for purposes of
the 2013 and 2014 payment adjustments. Specifically, for purposes of
the 2013 payment adjustment, an individual eligible professional is a
successful electronic prescriber if an eligible professional reports
the electronic prescribing measure's numerator at least 10 times during
the 6-month 2013 payment adjustment reporting period (that is, January
1, 2012 through June 30, 2012, regardless of whether the encounter is
associated with at least one denominator code of the electronic
prescribing measure). For purposes of the 2014 payment adjustment, an
eligible professional is a successful electronic prescriber if: (1) An
eligible professional reports that at least one prescription for
Medicare Part B PFS patients created during an encounter was generated
and transmitted electronically using a qualified electronic prescribing
system for at least 25 denominator-eligible visits during the 12-month
payment adjustment reporting period (that is, January 1, 2012 through
December 31, 2012) (note that this is the same criteria for the 2013
incentive); or (2) an eligible professional reports the electronic
prescribing measure's numerator at least 10 times during the 6-month
payment adjustment reporting period (that is, January 1, 2013 through
June 30, 2013). Tables 77 and 78 reflect the final criteria we are
adopting in this final rule with comment period for being a successful
electronic prescriber for an individual eligible professional for
purposes of the 2013 and 2014 payment adjustments, respectively.

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[[Page 73411]]

(3) Requirements for the 2013 and 2014 eRx Payment Adjustments--Group
Practices
Under section 1848(m)(3)(C) of the Act, we are also required to
establish and have in place a process under which eligible
professionals in a group practice shall be treated as a successful
electronic prescriber for purposes of the payment adjustment. For
purposes of the 2013 and 2014 payment adjustments, we proposed (76 FR
42895) that if a group practice chooses to participate in the eRx GPRO
during CYs 2012 and 2013, respectively, then the group practice would
be evaluated for applicability of the 2013 and 2014 payment adjustment
as a group practice.
We proposed (76 FR 42895) an eRx GPRO would be a successful
electronic prescriber for purposes of the 2013 payment adjustment if,
during the 6-month reporting period (January 1, 2012 through June 30,
2012), a group practice reports the electronic prescribing measure's
numerator (that is, that at least 1 prescription for Medicare Part B
PFS patients created during an encounter was generated and transmitted
electronically using a qualified electronic prescribing system) at
least 625 times (for group practices comprised of 25 to 99 eligible
professionals) or 2,500 times (for group practices comprised of 100+
eligible professionals).
Similarly, for the 2014 payment adjustment, we proposed (76 FR
42895) the following: A group practice would be a successful electronic
prescriber if the group practice meets the 2012 criteria for being a
successful electronic prescriber for purposes of the 2012 incentive
payment. In other words, the group practice would need to report the
electronic prescribing measure's numerator for at least 625 (for group
practices comprised of 25 to 99 eligible professionals) or 2,500 (for
group practices comprised of 100 or more eligible professionals) times
for encounters associated with at least 1 of the denominator code that
occurs between January 1, 2012 and December 31, 2012. In addition, we
proposed that a group practice would also be a successful electronic
prescriber for purposes of the 2014 payment adjustment if, during the
6-month reporting period (January 1, 2013 through June 30, 2013), a
group practice reports the electronic prescribing measure's numerator
(that is, that at least 1 prescription for Medicare Part B PFS patients
created during an encounter was generated and transmitted
electronically using a qualified electronic prescribing system) at
least 625 times (for group practices with 25 to 99 eligible
professionals) or 2,500 times (for group practices with 100+ eligible
professionals).
We invited but received no public comments on the proposed criteria
for being a successful electronic prescriber for group practices under
the eRx GPROs for the 2013 and 2014 electronic prescribing payment
adjustments. Therefore, we are finalizing our proposed criteria for the
2013 and 2014 payment adjustment as proposed. 79 and 80 summarize the
criteria for being a successful electronic prescriber for a group
practice for purposes of the 2013 and 2014 payment adjustments,
respectively.
BILLING CODE 4120-01-P
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[[Page 73413]]

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BILLING CODE 4120-01-C
In addition, in accordance with the limitation under section
1848(m)(2)(B)(i) of the Act, the 2013 or 2014 payment adjustment does
not apply to a group practice in which less than 10 percent of the
group practice's estimated total allowed charges for the respective 6-
month or 12-month payment adjustment reporting period are comprised of
services which appear in the denominator of the 2012 or 2013 electronic
prescribing measure. To be consistent with how this limitation is
applied to group practices for purposes of the incentive, we proposed
to determine whether this limitation applies to a group practice for
the payment adjustment at the TIN level. Because we received no public
comment on this proposal, we are finalizing this proposal as proposed.
(4) Significant Hardship Exemptions
Section 1848(a)(5)(B) of the Act provides that the Secretary may,
on a case-by-case basis, exempt an eligible professional from the
application of the payment adjustment, if the Secretary determines,
subject to annual renewal, that compliance with the requirement for
being a successful electronic prescriber would result in a significant
hardship.
(A) Significant Hardship Exemptions
In the CY 2011 PFS final rule with comment period (75 FR 73564
through 75 FR 73565), we finalized two circumstances under which an
eligible professional or eRx GPRO can request consideration for a
significant hardship exemption for the 2012 eRx payment adjustment:
The eligible professional or group practice practices in a
rural area with limited high speed internet access.
The eligible professional or group practice practices in
an area with limited available pharmacies for electronic prescribing.
For the 2013 and 2014 payment adjustments, we proposed (76 FR
42896) to retain these two significant hardship exemption categories.
After publication of the CY 2011 PFS Final Rule with comment
period, we received numerous requests to expand the categories under
the significant hardship exemption for the payment adjustment. Some
stakeholders recommended specific circumstances of significant hardship
for our consideration (for example, eligible professionals who have
prescribing privileges but do not prescribe under their NPI, eligible
professionals who prescribe a high volume of narcotics, and eligible
professionals who electronically prescribe but typically do not do so
for any of the services included in the electronic prescribing
measure's denominator), while others strongly suggested we consider
increasing the number of specific hardship exemption categories. We
believe that many of the circumstances raised by stakeholders may pose
a significant hardship and limit eligible professionals and group
practices in their ability to meet the requirements for being
successful electronic prescribers either because of the nature of their
practice or because of the limitations of the electronic prescribing
measure itself, and as a result, such professionals might be unfairly
penalized. Therefore, in the final rule entitled ``Medicare Program;
Changes to the Electronic Prescribing (eRx) Incentive Program'' that
was published in the September 6, 2011 Federal Register, (76 FR 54963),
we expanded the categories under the significant hardship exemption for
the 2012 payment adjustment. Because we believe the reasons why we
expanded the categories under the significant hardship exemption for
the 2012 payment adjustment also apply to the 2013 and 2014 payment
adjustments, we proposed (76 FR 42896) to retain the following
significant hardship exemptions for the 2013 and 2014 payment
adjustments:
Inability to electronically prescribe due to local, state,
or Federal law or regulation
Eligible professionals who prescribe fewer than 100
prescriptions during a 6-month, payment adjustment reporting period
(i) Inability to Electronically Prescribe Due to Local, State, or
Federal Law or Regulation
We proposed (76 FR 42896-42897) that, to the extent that local,
State, or Federal law or regulation limits or prevents an eligible
professional or group practice that otherwise has general prescribing
authority from electronically prescribing (for example, eligible
professionals who prescribe a large volume of narcotics, which may not
be electronically prescribed in some states, or eligible professionals
who practice in a State that prohibits or limits the transmission of
electronic prescriptions via a third party network such as
Surescripts), the eligible professional or group practice would be able
to request consideration for an exemption from application of the 2013
and/or 2014 payment adjustments, which would be reviewed on a case-by-
case basis. We believe eligible professionals in this situation face a
significant hardship with regard to the requirements for being
successful electronic prescribers because while they may meet the 10
percent threshold for applicability of the payment adjustment, or the
100 denominator-eligible cases limit in a 6-month payment adjustment
reporting period, they may not have sufficient opportunities to meet
the requirements for being a successful electronic prescriber because
Federal, State, or local law or regulation limit the number of
opportunities that an eligible professional or group practice has to
electronically prescribe.
(ii) Eligible Professionals Who Prescribe Fewer Than 100 Prescriptions
During a 6-Month, Payment Adjustment Reporting Period
We proposed (76 FR 42897) that an eligible professional who has
prescribing privileges, but prescribes fewer than 100 prescriptions
during a 6-month, payment adjustment reporting period (for example, a
nurse practitioner who may not write prescriptions under his or her own
NPI, a physician who decides to let his Drug Enforcement Administration
registration expire during the reporting period without renewing it,
or, for purposes of the 2013 payment adjustment, an eligible
professional who prescribed fewer than 100 prescriptions between
January 1, 2012 and June 30, 2012 regardless of whether the
prescriptions were electronically prescribed or not), yet

[[Page 73414]]

still meets the 10 percent threshold for applicability of the payment
adjustment, would be able to request consideration for a significant
hardship exemption from application of the 2013 and/or 2014 payment
adjustment, which would be reviewed on a case-by-case basis. We believe
that it is a significant hardship for eligible professionals who have
prescribing privileges, but infrequently prescribe, to become
successful electronic prescribers because the nature of their practice
may limit the number of opportunities an eligible professional or group
practice to prescribe, much less electronically prescribe.
We invited public comments on our proposal to modify 42 CFR 414.92
to include the significant hardship exemption categories we proposed
for the 2013 and 2014 payment adjustments. The following is a summary
of the comments we received.
Comment: Several commenters supported our proposed significant
hardship exemption categories. Some commenters sought clarification on
who may apply for significant hardship exemptions.
Response: We appreciate the commenters' feedback and are finalizing
the proposed significant hardship exemption categories for the 2013 and
2014 payment adjustments. We have provided examples of who may
potentially qualify for an exemption under each finalized significant
hardship exemption category. However, we note that the examples
provided are not exhaustive. Any eligible professional who believes he
or she qualifies for an exemption under any of the significant hardship
exemption categories may request consideration for an exemption.
Comment: Some commenters supported our specific proposal to adopt
the significant hardship exemption category for eligible professionals
who are unable to electronically prescribe due to local, State, or
Federal law or regulation for the 2013 and 2014 payment adjustments.
Response: We appreciate the commenters' support. Based on the
comments received and for the reasons explained in our responses, we
are finalizing this significant hardship exemption category.
Comment: One commenter asked whether the significant hardship
exemption category for eligible professionals who are unable to
electronically prescribe due to local, State, or Federal law or
regulation applies to physicians who cannot submit electronic
prescriptions of controlled substances because their vendor software is
not yet compliant with Federal and/or state requirement.
Response: We appreciate the commenter's question. Such a scenario
may or may not fall under this particular significant hardship
exemption category. As we indicated, this significant hardship
exemption is aimed at addressing instances where an eligible
professional would find it a significant hardship to submit a
substantial portion of their prescriptions electronically because
local, State, or Federal law or regulation limits or prevents an
eligible professional or group practice that otherwise has general
prescribing authority from electronically prescribing. Our analysis,
however, is fact-specific, so we would need to look at the particular
law, the details about why the professional's vendor software is in
``non-compliance'', and the professional's particular circumstances to
determine whether a significant hardship exists and an exemption can be
granted under this category. For example, we understand that the Drug
Enforcement Agency (DEA) has proposed (75 FR 16236) but not yet
finalized requirements for the transmission of electronic prescriptions
of controlled substances, and that system vendors are awaiting these
finalizing requirements so that its electronic prescribing systems may
allow for the transmission of electronic prescriptions of controlled
substances in a manner that is compliant with current Federal law.
However, whether or not we would grant a exemption under this
significant hardship exemption category would depend on the amount of
controlled substances an eligible professional prescribes relative to
other prescriptions. We also note that this significant hardship
exemption category is not intended for eligible professionals to
refrain from updating their respective electronic prescribing systems
in order to qualify for and exemption under this significant hardship
exemption category.
Comment: Some commenters specifically supported the proposed
significant hardship exemption category for eligible professionals who
prescribe fewer than 100 prescriptions during a 6-month, payment
adjustment reporting period.
Response: We appreciate the commenters' support and are finalizing
this significant hardship exemption category for purposes of the 2013
and 2014 payment adjustment.
Comment: One commenter suggested that we ensure that all physicians
who cannot or do not write prescriptions be sufficiently accounted for
in our proposed significant hardship exemption categories.
Response: We respectfully disagree. We believe the significant
hardship exemptions, as well as the limitations we are finalizing for
the 2013 and 2014 payment adjustments, adequately encompass the
scenarios in which it would be a significant hardship to comply with
the criteria for being successful electronic prescribers for the 2013
and/or 2014 payment adjustments.
Comment: Some commenters recommended additional significant
hardship exemption categories to the 2013 and 2014 payment adjustments.
Specifically, commenters requested the following be added as
significant hardship exemption categories for the 2013 and 2014 payment
adjustments: (1) Eligible professionals who are eligible for Social
Security benefits or nearing retirement; (2) eligible professionals who
work solely within skilled nursing facilities or hospital settings; (3)
eligible professionals who attempted to report the electronic
prescribing measure for purposes of the 2013 and 2014 payment
adjustments but encountered problems when reporting the electronic
prescribing measure; (4) eligible professionals who elect not to
purchase an electronic prescribing system; and (5) eligible
professionals whose patients prefer paper prescriptions.
Response: We appreciate the commenters' feedback but respectfully
disagree. With respect to eligible professionals who are over 60,
eligible for social security benefits, or nearing retirement; eligible
professionals who work solely in skilled nursing homes or hospital
settings; eligible professionals who experienced system problems when
attempting to report the electronic prescribing measure; eligible
professionals simply electing not to purchase an electronic prescribing
system; or eligible professionals whose patients prefer paper
prescriptions, most of these scenarios were raised by commenters during
the comment period and addressed in the CY 2011 PFS final rule, as well
as the 2011 ``Medicare Program; Changes to the Electronic Prescribing
(eRx) Incentive Program'' final rule. As we stated in the CY 2011 PFS
final rule (75 FR 73564) and the 2011 eRx final rule (76 FR 54962), we
believe these instances do not constitute significant hardships in the
manner that these significant hardship exemption categories that we are
finalizing do. We believe that encouraging the use of electronic
prescribing outweighs the cost of purchasing an electronic prescribing
system, because we believe use of these systems will readily provide
patient prescription history

[[Page 73415]]

leading to better management of patient prescriptions and greater
patient safety and care.
Specifically, with respect to eligible professionals who are over
60, eligible for social security benefits, or nearing retirement, we
believe that these eligible professionals still have the ability to use
electronic prescribing systems. With respect to eligible professionals
who practice off-site, such as those practicing in nursing homes, we
note that although these eligible professionals may not readily have an
electronic prescribing system available, these eligible professionals
still have the ability to provide an electronic prescription. With
respect to system errors, in general, we understand that problems may
occur with regard to successful reporting of the eRx measure. However,
we do not believe that such errors constitute a significant hardship
under section 1848(a)(5)(B) of the Act. Rather, these are reporting
errors that may have prevented an eligible professional from
successfully reporting the eRx measure.
Comment: Commenters requested the following as additional
significant hardship exemption categories for the 2013 and 2014 payment
adjustments: Eligible professionals who plan to adopt EHR technology
for purposes of participating in the EHR Incentive Program.
Response: With respect to providing a significant hardship
exemption for eligible professionals planning to adopt Certified EHR
Technology to participate in the EHR Incentive Program, we note that we
finalized such a significant hardship exemption category for the 2012
payment adjustment because the certification and listing of certified
EHR technologies (certified Complete EHRs and certified EHR Modules) on
the ONC Certified HIT Products List (CHPL) did not begin until
September 2010 (76 FR 54957). As such, eligible professionals may have
delayed purchasing an EHR system. This is no longer the case. The list
of Certified EHR Technology has been available for over a year, and the
EHR Incentive Program has been implemented. Therefore, we believe that
this significant hardship exemption category is no longer applicable to
the 2013 and 2014 payment adjustments.
Comment: Commenters requested the following additional significant
hardship exemption categories for the 2013 and 2014 payment
adjustments: Eligible professionals who report the electronic
prescribing measure at least 10 times during CYs 2012 and 2013 for the
2013 and 2014 respective payment adjustments, but did not do so during
the first 6-months of 2012 and 2013.
Response: We disagree with commenters suggestion for this
significant exemption hardship category, because it would be contrary
to the reporting periods we are finalizing for the 2013 and 2014
payment adjustments.
Based on the comments received and for the reasons stated in our
responses, we are finalizing the following significant hardship
exemption categories for the 2013 and 2014 payment adjustments, which
will be reflected under 42 CFR 414.92:
The eligible professional or group practice practices in a
rural area with limited high speed internet access.
The eligible professional or group practice practices in
an area with limited available pharmacies for electronic prescribing.
Inability to electronically prescribe due to local, state,
or Federal law or regulation.
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
To request a significant hardship exemption for any of the proposed
categories, we proposed (76 FR 42897) that an eligible professional
provide to us by the end of the 2013 and/or 2014 payment adjustment
reporting periods (that is June 30, 2012 for the 2013 payment
adjustment and June 30, 2013 for the 2014 payment adjustment), the
following:
The name of the practice and other identifying information
(for example: TIN, NPI, mailing address, and email address of all
affected eligible professionals.
The significant hardship exemption category(ies) that
apply.
A justification statement describing how compliance with
the requirement for being a successful electronic prescriber for the
respective 2013 and/or 2014 payment adjustment during the reporting
period would result in a significant hardship to the eligible
professional. And that the justification statement be specific as to
the category under which the eligible professional or group practice is
submitting its request and include an explanation how the exemption
applies.
An attestation of the accuracy of the information
provided.

We also proposed that eligible professionals or group practices would
be required, upon request, to provide additional supporting
documentation if there is insufficient information to justify the
request or make the determination whether a significant hardship
exists.
We also proposed that eligible professionals or group practices
would be able to submit significant hardship exemption requests using
the web-based tool or interface (that we are also using for requests
for exemptions due to significant hardships for the 2012 payment
adjustment). We proposed that the following two hardships also be
reportable by G-code on claims in addition to using the web-based tool
or interface:
The eligible professional or group practice practices in a
rural area with limited high speed internet access (report G-code
G9642).
The eligible professional or group practice practices in
an area with limited available pharmacies for electronic prescribing
(report G-code G8643).
We also proposed that once we have completed our review of the
eligible professional's or group practice's request and made a
decision, we will notify the eligible professional or group practice of
our decision and all such decisions would be final. Eligible
professionals or group practices will not have the opportunity to
request reconsiderations of their requests for significant hardship
exemption. We invited public comment on the proposed process for
individual eligible professionals and group practices for submitting
these requests for significant hardship exemptions to us (including
comments on the type of information we proposed eligible professionals
must submit, the proposed options for how the information could be
submitted, and the proposed timeframes for submission). The following
is a summary of the comments received related to our proposed process
for submitting requests for significant hardship exemptions.
Comment: Some commenters support the use of a web-based tool
whereby eligible professionals and group practices may submit requests
for significant hardship exemptions.
Response: We appreciate the commenter's feedback and are finalizing
our proposal to allow for use of a web-based tool to submit requests
for significant hardship exemption requests. Eligible professionals
wishing to request a significant hardship exemption to the 2013 and
2014 payment adjustments may do so through the Communications Support
Page, available at https://www.qualitynet.org/portal/server.pt/community/communications_support_system/234.

[[Page 73416]]

Comment: One commenter urged us to allow for the submission of
significant hardship requests via other methods aside from a web-based
tool, such as via telephone, because eligible professionals requesting
significant hardship exemptions may not have access to the internet.
Response: We appreciate the commenter's feedback. However, we
believe that the web-based tool provides the most efficient method of
submitting a significant hardship request. In limited instances where
eligible professionals may not be able to submit a significant hardship
request via the web-based tool due to lack of internet access, eligible
professionals may call the QualityNet Help Desk for assistance on
requesting a hardship.
Comment: One commenter suggested that, although eligible
professionals need only request one significant hardship exemption,
eligible professionals may apply for more than one significant hardship
exemption request if more than one category applies.
Response: If an eligible professional believes that more than one
significant hardship exemption category applies to his/her practice, s/
he must request a significant hardship exemption under at least one
significant hardship exemption category. However, the eligible
professional may indicate that more than one significant hardship
exemption category applies to his or her practice in the eligible
professional's justification statement.
Comment: A few commenters suggested that we extend the deadline to
submit significant hardship exemptions for purposes of the 2013 and
2014 payment adjustment, noting that we provided an extended deadline
to submit significant hardship exemption requests for purposes of the
2012 payment adjustment.
Response: We did finalize an extended deadline of November 1, 2011
to submit requests for significant hardship exemptions for the 2012
payment adjustment (76 FR 54964). We note, however, that the extension
of the deadline for submitting requests for significant hardship
exemptions for the 2012 payment adjustment was a unique situation, as
new significant hardship exemption categories were finalized after the
publication of the 2011 PFS Final Rule. However, we also noted that,
due to the deadline extension, we may have to reprocess claims in
instances where significant hardship requests were not reviewed in
time. We believe that the deadlines we proposed for submitting requests
for significant hardship exemptions for the 2013 and 2014 payment
adjustments (that is, June 30, 2012 and June 30, 2013 respectively)
provide eligible professionals with ample time to submit requests for
significant hardship exemptions. Therefore, we are finalizing our
proposed deadlines for submitting requests for significant hardship
exemptions from the 2013 and 2014 payment adjustments. We note that,
although we are making every attempt to do so, there is a possibility
we may not have the Communications Support Page available for
submitting requests for significant hardship exemptions by January 1,
2012. We do not expect that such a delay would adversely affect
eligible professionals because, although eligible professionals may
need time to prepare and develop its request (and that time remains
unchanged), the time needed to actually submit the request through the
Web page should not take a substantial amount of time (that is, we
would not expect that it would take an eligible professional 6 months
to do a single web-based submission). We recognize, however, that
eligible professionals may not want to be limited with regard to the
particular day(s) it submits its request before the deadline.
Therefore, in the event there is a delay in making the Communication
Support Page available for submitting requests for significant hardship
exemptions, we may extend the deadline for submitting requests for
significant hardship exemptions for the 2013 payment adjustment.
Based on the comments received and for the reasons stated
previously, we are finalizing the following process for submitting a
request for a significant hardship exemption under the significant
hardship exemption categories we are finalizing for the 2013 and 2014
payment adjustments.
Eligible professionals and group practices may report the following
G-codes for the following significant hardship exemption categories on
claims for services rendered during the respective 2013 and 2014 6-
month reporting periods.
The eligible professional or group practice practices in a
rural area with limited high speed internet access (report G-code
G9642).
The eligible professional or group practice practices in
an area with limited available pharmacies for electronic prescribing
(report G-code G8643).
Eligible professionals may submit requests for a significant
hardship exemption category with respect to any of the finalized
significant hardship exemption categories via a web-based tool, the
Communication Support Page, which is available at https://www.qualitynet.org/portal/server.pt/community/communications_support_system/234. More information on this web-based tool is available on our
Web site at http://www.cms.gov/ERXincentive/. To request a significant
hardship exemption via the web-based tool for any of the categories we
are finalizing, including a request under the two significant hardship
exemptions categories that are also reportable via G-code, an eligible
professional must provide to us by June 30, 2012 for the 2013 payment
adjustment and June 30, 2013 for the 2014 payment adjustment, the
following--
The name of the practice and other identifying information
(for example: TIN, individual NPI, mailing address, and email address
of all affected eligible professionals;
The significant hardship exemption category(ies) that
apply;
A justification statement describing how compliance with
the requirement for being a successful electronic prescriber for the
respective 2013 and/or 2014 payment adjustment during the reporting
period would result in a significant hardship to the eligible
professional; and
An attestation of the accuracy of the information
provided--
++ The justification statement should be specific to the category
under which the eligible professional or group practice is submitting
its request and must explain how the exemption applies to the
professional. For example, if the eligible professional is requesting a
significant hardship exemption due to Federal, State, or local law or
regulation, he or she must cite the applicable law and how the law
restricts the eligible professional's ability to electronically
prescribe. We will review the information submitted by each eligible
professional on a case-by-case basis. In addition, an eligible
professional or group practice must, upon request, provide additional
supporting documentation if there is insufficient information (such as,
but not limited to, a TIN or NPI that we cannot match to the Medicare
claims, a certification number for the Certified EHR Technology that
does not appear on the list of Certified EHR Technology, or an
incomplete justification for the significant hardship exemption
request) to justify the request or make the determination of whether a
significant hardship exists.

[[Page 73417]]

G. Physician Compare Web Site

1. Background and Statutory Authority
Section 10331(a)(1) of the Affordable Care Act (42 U.S.C. 1395w-5
note) requires that, by no later than January 1, 2011, we develop a
Physician Compare Internet Web site with information on physicians
enrolled in the Medicare program under section 1866(j) of the Act as
well as information on other eligible professionals who participate in
the Physician Quality Reporting System under section 1848 of the Act
(42 U.S.C. 1395w-4). Public reporting of performance results on
standardized quality measures currently exists on http://www.medicare.gov for the following:
Hospitals (Hospital Compare).
Dialysis facilities (Dialysis Facility Compare).
Nursing homes (Nursing Home Compare).
Home health facilities (Home Health Compare).
As an initial step towards providing information on the quality of
care for services furnished by physicians and other professionals to
Medicare beneficiaries, we have enhanced the existing Physician and
Other Health Care Professionals directory at http://www.medicare.gov to
develop a similar Compare Web site specific to physicians and other
professionals. In accordance with section 10331 of the Affordable Care
Act, we launched the first phase of the Physician Compare Internet Web
site on December 30, 2010. This initial phase included the posting of
the names of eligible professionals that satisfactorily submitted
quality data for the 2009 Physician Quality Reporting System.
2. Final Plans
Section 10331(a)(2) of the Affordable Care Act also requires that,
no later than January 1, 2013, and with respect to reporting periods
that begin no earlier than January 1, 2012, we implement a plan for
making information on physician performance publicly available through
the Physician Compare Web site. To the extent that scientifically sound
measures are developed and are available, we are required to include,
to the extent practicable, the following types of measures for public
reporting:
Measures collected under the Physician Quality Reporting
System.
An assessment of patient health outcomes and functional
status of patients.
An assessment of the continuity and coordination of care
and care transitions, including episodes of care and risk-adjusted
resource use.
An assessment of efficiency.
An assessment of patient experience and patient,
caregiver, and family engagement.
An assessment of the safety, effectiveness, and timeliness
of care.
Other information as determined appropriate by the
Secretary.

As required under section 10331(b) of the Affordable Care Act, in
developing and implementing the plan, we must include, to the extent
practicable, the following:
Processes to ensure that data made public are
statistically valid, reliable, and accurate, including risk adjustment
mechanisms used by the Secretary.
Processes for physicians and eligible professionals whose
information is being publically reported to have a reasonable
opportunity, as determined by the Secretary, to review their results
before posting to Physician Compare.
Processes to ensure the data published on Physician
Compare provides a robust and accurate portrayal of a physician's
performance.
Data that reflects the care provided to all patients seen
by physicians, under both the Medicare program and, to the extent
applicable, other payers, to the extent such information would provide
a more accurate portrayal of physician performance.
Processes to ensure appropriate attribution of care when
multiple and other providers are involved in the care of the patient.
Processes to ensure timely statistical performance
feedback is provided to physicians concerning the data published on
Physician Compare.
Implementation of computer and data infrastructure and
systems used to support valid, reliable, and accurate reporting
activities.
Section 10331(d) of the Affordable Care Act requires us to consider
input from multi-stakeholder groups in selecting quality measures for
Physician Compare. In developing the plan for making information on
physician performance publicly available through the Physician Compare
Web site, section 10331(e) of the Affordable Care Act requires the
Secretary, as the Secretary deems appropriate, to consider the plan to
transition to value-based purchasing for physicians and other
practitioners that was developed under section 131(d) of the Medicare
Improvements for Patients and Providers Act of 2008.
We are required, under section 10331(f) of the Affordable Care Act,
to submit a report to the Congress by January 1, 2015 on the Physician
Compare Web site developed, and include information on the efforts and
plans to collect and publish data on physician quality and efficiency
and on patient experience of care in support of value-based purchasing
and consumer choice. Section 10331(g) of the Affordable Care Act
provides that any time before that date, we may continue to expand the
information made available on Physician Compare.
We believe section 10331 of the Affordable Care Act supports our
overarching goals to foster transparency and public reporting by
providing consumers with quality of care information to make informed
decisions about their health care, while encouraging clinicians to
improve on the quality of care they provide to their patients. In
accordance with section 10331 of the Affordable Care Act, we intend to
utilize the Physician Compare Web site to publicly report physician
performance results.
For purposes of implementing a plan to publicly report physician
performance, we plan to use data reported under the existing Physician
Quality Reporting System as an initial step for making public physician
``measure performance'' information on Physician Compare. By ``measure
performance,'' we mean the percent of times that a particular clinical
quality action was reported as being performed, or a particular outcome
was attained, for the applicable persons to whom a measure applies as
described in the denominator for the measure.
The Physician Quality Reporting System is a readily available
source of measures performance data. First implemented in 2007, the
program has grown to include over 200 measures (see tables 47 through
72 in section VI.F.1.f. of this final rule with comment period for a
list of the measures available for reporting in 2012). The measures
used in the Physician Quality Reporting System cover a wide range of
health conditions and topics and include measures applicable to most
physician specialties and other clinicians. Work is underway to ensure
consistency of quality measures reported under the Physician Quality
Reporting System and the EHR Incentive Program.
The first phase of the plan to make information on physicians and
other eligible professionals who participate in the Physician Quality
Reporting System publically available was completed through the launch
of the Physician Compare Web site and the posting of the names of those
eligible professionals who satisfactorily participated in the Physician
Quality Reporting System.

[[Page 73418]]

During the second phase of the plan, occurring in 2011 through
2012, we will continue to work towards the development and improvement
of the Web site. Our plans for Physician Compare Web site development
during this second phase include monthly data refreshes and a
semiannual Web site release to incorporate updates and improvements to
the Web site. Updates will include the addition of the names of
eligible professionals who are successful electronic prescribers, as
required by section 1848(m)(5)(G) of the Act, as well as the names of
those eligible professionals who participate in the EHR Incentive
Program, as required by section 1848(o)(3)(D) of the Act. Additional
enhancements planned include the addition of links to specialty board
Web sites that can provide more information on an eligible
professional's board certification status and improved Web site
functionality and layout.
Moving towards the reporting of physician performance information,
we proposed to take an initial step by making public the performance
rates of the quality measures that group practices submit under the
2012 Physician Quality Reporting System group practice reporting option
(GPRO) (76 FR 42899). We also proposed to publicly report the
performance rates of the quality measures that the group practices
participating in the Physician Group Practice demonstration report on
the Physician Compare Web site as early as 2013 for performance
information collected in CY 2012. We would make public the measure
performance for each of the measures included in the 2012 Physician
Quality Reporting System GPRO. Since the quality measures in GPRO are
reported for the group as a whole, the information on measure
performance would also apply to the group as a whole, rather than to
individual physicians within a group.
Public reporting of the group practices' 2012 measure performance
results at the group practice level would begin public reporting at the
earliest time specified by the statute. We believe the design of the
GPRO (see section VI.F.b.2. of this final rule with comment pe)
facilitates making public groups' performance results. All groups
participating in the GPRO would be reporting on the same set of
clinical quality measures, which allows for comparison of the results
across groups.
To eliminate the risk of calculating performance rates based on a
small denominator, we proposed to set a minimum patient sample size
threshold (76 FR 42899). A minimum threshold of 25 patients would have
to be met in order for the group practice's measure performance rate to
be reported on the Physician Compare Web site. If the threshold of 25
patients is not met for a particular measure, the group's performance
rate for that measure would be suppressed and not publicly reported. In
determining the minimum patient sample size, we took into consideration
the minimum patient sample size used by other Compare Web sites that
publicly report measure performance data. We wanted to ensure that we
used a number large enough to accurately reflect measure performance,
but not so large that it would limit the number of groups for which
measure performance could be reported. In taking into consideration the
minimum patient sample size used by other Compare Web sites that
publicly report measure performance data, we also considered a minimum
patient sample size of 10 patients, 20 patients and 30 patients. As we
are proposing to report measure performance at a group level and a
majority of the other Compare Web sites use minimum sample sizes of
between 20 and 30 patients, we concluded that a minimum patient sample
size of 25 would meet our criteria (76 FR 42899).
We also proposed that group practices participating in the 2012
Physician Quality Reporting System GPRO would agree in advance to have
their reporting performance results publicly reported as part of their
self-nomination to participate in the 2012 Physician Quality Reporting
System GPRO. Finally, we proposed to modify the GPRO web interface for
2012 to calculate the numerator, denominator, and measure performance
rate for each measure from the data that the group practices use to
populate the tool and provide each group practice this information at
the time of data submission. This feature would allow the group
practice the opportunity to review their measure performance results
before they are made public in accordance with section 10331(b) of the
Affordable Care Act. For groups reporting using GPRO information that
is made public in 2013, we did not propose to post information with
respect to the measure performance of individual physicians or eligible
professionals associated with the group. However, we proposed to
identify the individual eligible professionals who were associated with
the group during the reporting period.
We believe a staged approach to public reporting of physician
information allows for the use of information currently available while
we develop the infrastructure necessary to support the collection of
additional types of measures and public reporting of individual
physicians' quality measure performance results. Implementation of
subsequent phases of the plan will need to be developed and addressed
in future notice and comment rulemaking, as needed. We invited comments
regarding our proposals to: (1) To publicly report group practices'
measure performance results in 2013 based on group practices' 2012
Physician Quality Reporting System performance results under GPRO; and
(2) utilize a minimum patient sample size of 25 for reporting and
displaying measure performance on the Physician Compare Web site.
We received several comments from the public on the CY 2012 PFS
proposed rule related to the Physician Compare Web site. General
comments about the Physician Compare Web site are addressed as follows.
Comment: CMS received positive feedback supporting our staged
approach to developing the Physician Compare Web site, including
improvements planned for our second phase development and public
reporting of physician information and performance.
Response: We appreciate the commenters' positive feedback. We
believe a staged approach to the Web site development and public
reporting of physician information and performance will allow us to use
the information currently available while we continue to work towards
improvement of the Web site and develop the infrastructure necessary to
support the collection of additional types of information and measures.
Comment: CMS received several comments expressing concerns over the
accuracy of the physician information currently being displayed on the
Physician Compare Web site. Specifically, the comments mentioned
inaccuracies around basic physician information, specialties,
licensure, and practice location/affiliation. Commenters urged CMS to
validate the accuracy of successful participation in the various CMS
quality measure reporting programs.
Response: We appreciate the commenters' feedback. We are committed
to including accurate and up-to-date provider information on the
Physician Compare Web site and continue to work towards the necessary
steps to make improvements. We look forward to engaging the provider
community toward that end. The provider information used to populate
the Physician Compare Web site comes from the Provider Enrollment,
Chain, and Ownership System (PECOS) and an

[[Page 73419]]

external data source. In order for a physician or other health care
professional's information to appear on the Physician Compare Web site,
their enrollment record in PECOS must be current and in ``approved''
status, a valid physical location or address must be identified and the
provider must have a valid State license and NPI. There is a 45-60 day
lag for new enrollment, updates, and changes to take place in PECOS.
Currently, physicians and eligible professionals can find instructions
on how to update and correct their information on the Physician Compare
Web site under the ``Note to Provider'' section located on the ``About
the Data'' page. In general, most updates or corrections to provider
information can be made through PECOS, either via Internet-based PECOS
or a paper process. Corrections can also be requested through the Web
site's feedback tool function.
Comment: CMS also received several comments expressing concern
around the eventual reporting of measures performance on the Physician
Compare Web site. These comments included general concerns about the
accuracy of the data to be reported, as well as specific concerns
regarding the lack of measures available to assess safety,
effectiveness and timeliness of care, and continuity and coordination
of care. Several comments stated that CMS must ensure that measure
performance data is properly attributed to the correct provider or
practice and that data is risk adjusted.
Response: We appreciate the commenters' feedback. As required under
section 10331(b) of the Affordable Care Act, in developing and
implementing the plan to include performance data on Physician Compare,
we must include, to the extent practicable, processes to ensure that
data made public are statistically valid, reliable, and accurate,
including risk adjustment mechanisms used by the Secretary, as well as
processes to ensure appropriate attribution of care when multiple and
other providers are involved in the care of the patient. We are
committed to working towards reported measures that are accurate and
complete.
Comment: Several commenters urged CMS to provide a specific
mechanism whereby providers can report and correct data errors. Many
commenters suggested that a 30-day timeframe to correct errors should
be implemented by CMS.
Response: We appreciate the commenters' feedback. Through regular
data refreshes, CMS is working toward more accurate and up-to-date
information on Physician Compare. We intend to conduct monthly
refreshes and semi-annual updates as technically feasible. We look
forward to engaging with providers and stakeholders to further address
these concerns.
Comment: CMS received comments urging CMS to develop appropriate
disclaimer language to note potential issues with accuracy and to avoid
any misinterpretation of data. Many of the comments requested that CMS
work with the provider community to develop disclaimers and one comment
suggested the use of a ``splash page'' whereby Web site users would
have to read the disclaimer and ``accept'' before seeing the data.
Response: We appreciate the commenters' feedback. We look forward
to the opportunity to work with providers and external stakeholders and
discuss options for presenting performance information in a way that is
accurate and understood by consumers. CMS will take the idea of
creating a disclaimer ``splash page'' into consideration. Currently,
the Physician Compare Web site has disclaimer language to explain that
the Physician Quality Reporting System is a voluntary program. The
disclaimer includes some of the numerous reasons why physicians or
other healthcare professionals, who are committed to providing high
quality care to their patients, may have chosen not to report quality
information under the Physician Quality Reporting System.
Comment: One commenter expressed concern over whether a
psychiatrist's performance can ever be accurately reflected on
Physician Compare because many of the measure categories prescribed by
the Affordable Care Act (i.e., patient health outcomes and functional
status, continuity and coordination of care and care transitions,
patient experience and patient, caregiver, and family engagement, etc.)
fail to account for environmental factors affecting patient outcomes.
Response: We appreciate the commenter's feedback. CMS is committed
to working with providers and external stakeholders toward the aim of
presenting accurate performance data on Physician Compare, and the
various specialties represented therein. CMS recognizes that measures
around patient outcomes, patient experience, etc. are inherently
dependent on patient factors and this is not unique to psychiatry. As
required under section 10331(b) of the Affordable Care Act, in
developing and implementing the plan to include performance data on
Physician Compare, we must include, to the extent practicable,
processes to ensure that data made public are statistically valid,
reliable, and accurate, including risk adjustment mechanisms used by
the Secretary. As such, CMS will need to account for patient factors
affecting patient outcomes through risk-adjustment, exclusions, and/or
appropriate disclaimer language to explain how patient factors beyond
the control of the physician or other eligible professional can affect
patient outcomes.
Comment: One commenter urged CMS to assure that the physician
information provided to the public on the Physician Compare Web site is
based on quality data and not cost and claims data.
Response: We appreciate the commenters' feedback. As we proposed in
the proposed rule (76 FR 42899) and are finalizing below, CMS will only
publicly report group practices' measure performance results in 2013
based on group practices' 2012 Physician Quality Reporting System
performance results under GPRO at this time. We did not propose to make
cost and claims data public.
Comment: One commenter stated that implementation of the Physician
Compare Web site is intertwined with Section 3003 of the Affordable
Care Act, which requires Medicare to confidentially report both quality
and cost data to individual physicians and groups. The commenter
expressed concerns over the public reporting of ``confidential'' data
and urged CMS to clarify what, if any, ``confidential'' information it
plans to make available to the public.
Response: We appreciate the commenters' feedback. The Physician
Compare Web site is mandated by section 10331 of the Affordable Care
Act, which authorizes CMS to publicly report information on physician
performance. Section 3003 of the Affordable Care Act amends a separate
program, the Physician Feedback Program. While these two sections both
address quality data, section 10331 does not classify the quality data
as ``confidential.'' In this final rule, we are finalizing our proposal
to publicly report group practices' measure performance results in 2013
based on group practices' 2012 Physician Quality Reporting System
performance results under GPRO. Section 10331 of the Affordable Care
Act also requires CMS to include, to the extent practicable, measures
collected under the Physician Quality Reporting System. Based on
established CMS data security procedures and as otherwise required by
law, all patient data will be confidential

[[Page 73420]]

and protected. Therefore, on the Physician Compare Web site, patient
data will be aggregated and no patient identifiers will be made public.
Comment: One commenter urged CMS to develop public reporting
formats that are consistent with established public reporting formats
(that is, Consumer Union).
Response: We appreciate the commenters' feedback. We will take into
consideration the idea of using a data report format for Physician
Compare consistent with established formats, as feasible. We look
forward to engaging providers, stakeholders, and consumers in further
considering this issue.
Comment: One commenter expressed that they would like to review how
CMS intends to integrate data from other payers.
Response: We appreciate the commenters' feedback. In this final
rule, we are finalizing our proposal to only publicly report group
practices' measure performance results in 2013 based on group
practices' 2012 Physician Quality Reporting System performance results
under GPRO. The Physician Quality Reporting System only utilizes
Medicare Part B data. Implementation of subsequent plans for reporting
quality data, including any plan to utilize data from other payers,
will need to be developed and addressed in future notice and comment
rulemaking, as needed.
Comment: We received comments suggesting that National Committee
for Quality Assurance recognition information and participation
information in other established, medical society-driven educational
and voluntary quality of care initiatives be included on the Physician
Compare Web site.
Response: We appreciate the commenter's feedback. We will take into
consideration incorporating recognition and participation in other
established, medical society-driven educational and voluntary quality
of care initiatives information on Physician Compare. Currently, the
Physician Compare Web site includes on the names of those physicians
and other eligible professionals who satisfactorily report data under
the Physician Quality Reporting System, as well as the names of those
professionals who are successful electronic prescribers under the
Electronic Prescribing (eRx) Incentive Program. Section 1848(o)(3)(D)
of the HITECH Act requires the Secretary to list in an easily
understandable format the names, business addresses, and business phone
numbers of the Medicare EPs and, as determined appropriate by the
Secretary, of group practices receiving incentive payments for being
meaningful EHR users under the Medicare FFS program on our Internet Web
site. As such, we plan to add information for Medicare eligible
professionals who received incentive payments for being meaningful EHR
users under the Medicare FFS program in 2012.
Comment: CMS received a number of comments expressing concern over
how hospital related data will be incorporated on the Physician Compare
Web site. Specifically, commenters were concerned about reporting
performance for physicians who treat hospital inpatients and the lack
of performance measures within the Physician Quality Reporting System
appropriate for the hospital setting. Commenters urged CMS to make
hospital affiliation information available on Physician Compare.
Response: We appreciate the commenters' feedback. We agree that
illustrating hospital and physician integration and alignment is
important. We will take into consideration the potential option of
incorporating hospital affiliation information on Physician Compare.
Comment: CMS received comments requesting us to clarify how the
group practice data displayed on Physician Compare will reflect the
performance of eligible professionals who are employed in hospitals and
health systems, how physician-to-group attribution will be managed and
how both provider-level and group-level will reside on the same Web
site.
Response: We appreciate the commenter's feedback. In this final
rule, we are finalizing our proposal to publicly report group
practices' measure performance results in 2013 based on group
practices' 2012 Physician Quality Reporting System performance results
under GPRO as an initial step towards public reporting of physician
performance. We believe that reporting at the group practice level will
reflect the performance of the group practice or health system as a
whole. We believe reporting at the group level encourages the group's
shared responsibility for patient health outcomes and care
coordination. While we intend to identify those eligible professionals
who have assigned their Medicare Part B billing rights to the group
practice's tax identification number, performance rates will not be
displayed on the individual eligible professionals' profile on
Physician Compare in 2013. Implementation of subsequent plans for
reporting physician performance will need to be developed and addressed
in future notice and comment rulemaking, as needed.
Comment: CMS received several comments urging CMS to ensure that
the Physician Compare Web site is user-friendly and that the public can
understand the data being reporting. Specifically, commenters stressed
the importance of provider input on the design and content of the Web
site and that CMS implement a public education program to help users
understand the data and use information properly.
Response: We appreciate the commenters' feedback. We will consider
engaging providers and external stakeholders, as well as consumers, to
provide input into the design and content of Physician Compare.
Comment: We received several comments about the data review period
and appeal process for performance measures reported on the Physician
Compare Web site. Specifically, one commenter urged CMS to clarify the
review process for group practices and one requested that group
practices should have the opportunity to review comparative benchmark
data, before data is publicly reported. Other commenters urged CMS to
provide physicians with an opportunity to review their data and allow
physicians to request corrections to the data. Commenters recommended
at least a 60-day to 6-month time period be provided for physicians to
review the data before it is made public on Physician Compare.
Response: We appreciate the commenters' feedback. Section 10331(b)
of the Affordable Care Act requires CMS to establish processes for
physicians and eligible professionals whose information is being
publically reported to have a reasonable opportunity, as determined by
the Secretary, to review their results before posting to Physician
Compare. In this final rule, we are finalizing our proposal to publicly
report group practices' measure performance results in 2013 based on
group practices' 2012 Physician Quality Reporting System performance
results under GPRO as an initial step towards public reporting of
physician performance. We are also finalizing our proposal to modify
the group practice data collection tool or ``GPRO Web Interface''. The
GPRO web interface will calculate and display the denominator,
numerator and measure performance rate for each measure from the data
that the group practice uses to populate the GPRO web interface. This
feature will allow the group practice to review its measure performance
prior to posting on the Physician Compare Web site. Group practices
participating in GPRO currently receive comparative benchmark data in
their feedback

[[Page 73421]]

reports and they will continue to receive comparative benchmark data.
CMS will take into consideration the suggested time period for
reviewing data and will address in future rulemaking.
Comment: Commenters expressed concern that the specialty list on
Physician Compare is inaccurate or incomplete.
Response: We appreciate the commenters' feedback. We are committed
to including accurate and complete information for all specialties on
the Physician Compare web site. We look forward to engaging the
provider community toward that end.
Comment: CMS received comments supporting the inclusion of
physician board certification information on Physician Compare.
Commenters stressed the importance of distinguishing between credible
certification bodies and other organizations, as well as including
accurate information that is not reliant on self-reported data.
Commenters support a link from the Physician Compare site to other Web
sites with board certification information until a data sharing
agreement that would allow board certification information directly on
the Physician Compare Web site can be finalized.
Response: We appreciate the commenters' feedback and support. We
agree that board certification is valuable information for consumers
and therefore, we are exploring the possibility of, and our options
for, including board certification information on the Physician Compare
web site (e.g., through links to other Web sites; through data sharing,
which would allow the information to be integrated with the Physician
Compare Web site and displayed directly on the provider's profile
page).
Comment: One commenter advocated that CMS customize the Physician
Compare Web site content to educate users on the growing specialty of
hospital medicine. The commenter suggested a link to the Hospital
Compare Web site for those physicians in the hospital medicine
specialty as quality in this specialty is tied to hospital quality.
Response: We appreciate the commenters' feedback. We are committed
to working with providers and external stakeholders so that
beneficiaries have the information necessary to be informed users of
the Physician Compare web site. We will consider linking from Physician
Compare to Hospital Compare as appropriate.
Comment: CMS received one comment supporting the reporting of group
level performance on Physician Compare. The commenter believes that
group practices will have a sufficient volume of patients to facilitate
comparisons and it would be easier for groups to report on a core set
of measures.
Response: We appreciate the commenters' feedback and support. As we
indicated, in this final rule we are finalizing our proposal to
publicly report Physician Compare group practices' measure performance
results in 2013 based on group practices' 2012 Physician Quality
Reporting System performance results under GPRO.
Comment: Multiple commenters expressed concern about the
feasibility of reporting individual level performance on Physician
Compare. Specifically, commenters mentioned inadequate sample size to
make valid comparisons across eligible professionals, problems with
attribution and the risk for patient de-selection by providers seeking
to improve their measure performance.
Response: We appreciate the commenters' feedback. In this final
rule with comment period, we are only taking the initial step of
reporting physician performance data by publicly reporting group
practices' measure performance results in 2013 based on group
practices' 2012 Physician Quality Reporting System performance results
under GPRO. We believe that additional time is needed to develop the
infrastructure necessary to support the collection of additional types
of measures and public reporting of individual physicians' quality
measure performance results.
Comment: CMS received multiple comments urging CMS to take the
necessary steps to enable reporting reliable comparative information at
the individual provider level as soon as possible.
Response: We appreciate the commenters' feedback. As stated
previously, we believe that additional time is needed to develop the
infrastructure necessary to support the collection of additional types
of measures and public reporting of individual physicians' quality
measure performance results. We will continue to assess the feasibility
of individual level reporting. The implementation of subsequent plans
for reporting physician performance will need to be developed and
addressed in future notice and comment rulemaking, as needed.
Comment: CMS received one comment urging CMS to populate Physician
Compare with a core set of measures that are meaningful to patients.
The commenter stated that the core set should include cross-cutting
measures applicable to any physician as well as measures that apply to
specific subsets of physicians. It was emphasized that patient
experience, care coordination, functional status and other outcome
measures should be the basis for the initial set of core measures.
Response: We appreciate the commenters' feedback. With regard to
our final decision to publicly report group practices' measure
performance results in 2013 based on group practices' 2012 Physician
Quality Reporting System performance results under GPRO, all groups
participating in GPRO would be reporting on the same set of clinical
quality measures. The implementation of subsequent plans for reporting
physician performance will need to be developed and addressed in future
notice and comment rulemaking, as needed.
Comment: One commenter supported our proposal to use a minimum
sample size of 25 patients for a measure to be reported on Physician
Compare. Another commenter expressed concern over the minimum sample
size of 25 patients. The commenter stated that 25 patients within a
group practice for any specific measure is not an adequate
representation of the practice's performance and is too small to enable
consumers to see meaningful differences in provider performance.
Response: We appreciate the commenters' feedback. A majority of the
other Compare Web sites use minimum sample sizes of between 20 and 30
patients and we concluded that a minimum patient sample size of 25
would meet our need for a number large enough to reflect measure
performance, but not so large as to limit the number of groups for
which measure performance can be reported.
Upon consideration of the comments and for the reasons we
previously explained, we are finalizing our proposal to publicly report
group practices' measure performance results in 2013 based on group
practices' 2012 Physician Quality Reporting System performance results
under GPRO. We are finalizing our proposal to use a minimum sample size
of 25 patients for reporting and displaying measure performance on the
Physician Compare Web site. Group practices participating in 2012
Physician Quality Reporting System GPRO must agree in advance to have
their reporting performance results publicly reported as part of their
self-nomination to participate in the 2012 Physician Quality Reporting
System GPRO. We are also finalizing our proposal to modify the GPRO web

[[Page 73422]]

interface for 2012 to calculate the numerator, denominator and measure
performance rate for each measure from the data that the group
practices use to populate the web interface. This modification will
allow the group practice the opportunity to preview their measure
performance results before they are made public in 2013. In addition,
as we discussed in the Medicare Shared Savings Program (MSSP) final
rule, which displayed at the Federal Register on October 20, 2011,
http://www.ofr.gov/OFRUpload/OFRData/2011-27461_PI.pdf, because
Accountable Care Organizations (ACO) will be considered to be group
practices under the Physician Quality Reporting System GPRO under the
Shared Savings Program, we believe ACO performance on the quality
measures reported using the GPRO web interface should be reported on
Physician Compare in the same way that we are reporting on the
performance of other group practices that participate in the Physician
Quality Reporting System GPRO. Therefore, performance data on quality
measures reported on by ACOs on behalf of its eligible professionals in
group practices using the GPRO web interface will also be reported on
the Physician Compare Web site in the same way as for the group
practices that report under the Physician Quality Reporting System as
discussed in this section.

H. Medicare EHR Incentive Program for Eligible Professionals for the
2012 Payment Year

1. Background
We proposed (76 FR 42899) changes to the method by which eligible
professionals (EPs) would report clinical quality measures (CQMs) for
the 2012 payment year for the Medicare EHR Incentive Program.
Specifically, we proposed (76 FR 42900) that eligible professionals may
satisfy the meaningful use objective to report CQMs to CMS by reporting
them through: (1) Attestation; or (2)participation in the Physician
Quality Reporting System-Medicare EHR Incentive Pilot. We received some
comments that were not related to our proposals for the Medicare EHR
Incentive Program for payment year 2012. While we appreciate the
commenters' feedback, these comments are outside the scope of the
issues addressed in this final rule.
2. Attestation
We proposed (76 FR 42900) that for the 2012 payment year, EPs may
continue to report CQM results as calculated by Certified EHR
Technology by attestation, as for the 2011 payment year.
Comment: Several commenters supported our proposal to continue
reporting CQM results as calculated by Certified EHR Technology by
attestation for the 2012 payment year.
Response: We appreciate the commenters' support and are finalizing
our proposal to allow EPs to continue to report CQM results as
calculated by Certified EHR Technology by attestation for the 2012
payment year.
Comment: One commenter was disappointed in our proposal to continue
attestation due to our inability to receive electronically the
information necessary for CQM reporting based solely on the use of PQRI
2009 Registry XML Specification content exchange standards as is
required for Certified EHR Technology. The commenter urged us to
rectify this situation.
Response: We appreciate the commenters' feedback. We are working to
have the capability to receive CQM data reported electronically via
Certified EHR Techology for the 2013 payment year. However, we note
that attestation is only one method by which EPs may report the CQMs.
In fact, EPs may submit CQM data through participation in the Physician
Quality Reporting System-Medicare EHR Incentive Pilot that is described
in the following section.
Based on the comments received and for the reasons stated in our
responses, we are finalizing our proposal to allow EPs to continue to
report CQM results as calculated by Certified EHR Technology by
attestation for the 2012 payment year as proposed. We are revising 42
CFR 495.8(a)(2)(ii) as proposed.
3. The Physician Quality Reporting System-Medicare EHR Incentive Pilot
In addition to attestation, we proposed (76 FR 42900) to establish
a Pilot mechanism through which EPs participating in the Medicare EHR
Incentive Program may report CQM information electronically using
Certified EHR Technology for the 2012 payment year.
We proposed to modify 42 CFR 495.8(a)(2) by adding a new paragraph
to allow for the reporting of CQMs for the Medicare EHR Incentive
Program via the Physician Quality Reporting System-Medicare EHR
Incentive Pilot. Section 1848(o)(2)(B)(ii) of the Act provides
authority for the Secretary to accept information on CQMs
electronically on a Pilot basis. We proposed that EPs may participate
in the Pilot on a voluntary basis, and that those EPs who choose not to
participate may instead continue to attest to the results of the CQMs
as calculated by Certified EHR Technology, consistent with the CQM
reporting method for the 2011 payment year. However, we encourage
participation in the Pilot based on our desire to adequately pilot
electronic submission of CQMs and to move to a system of reporting
where EPs can satisfy both the CQM reporting requirements for the EHR
Incentive Program and the reporting requirements for the Physician
Quality Reporting System EHR-based reporting mechanism with a single
submission to their respective EHR systems, who will then provide
calculated results to CMS in the form and manner specified for each
respective program. To participate in the Physician Quality Reporting
System-Medicare EHR Incentive Pilot, we proposed that EPs would be
required to electronically report the CQMs using Certified EHR
Technology via one of two options that are based on the existing
reporting platforms of the Physician Quality Reporting System. As
described later in this section, one option would be based on the
infrastructure used for the Physician Quality Reporting System EHR data
submission vendor reporting mechanism as described in section
VI.F.1.d.3.B of this final rule with comment period. The second option
would be based on the infrastructure used for the Physician Quality
Reporting System EHR reporting mechanism as described in section
VI.F.1.d.3.A of this final rule with comment period. EPs who seek to
participate in the Physician Quality Reporting System-Medicare EHR
Incentive Pilot must also participate in the Physician Quality
Reporting System itself, because the Pilot will rely on the
infrastructure used for the Physician Quality Reporting System.
To move towards the integration of reporting on quality measures
under the Physician Quality Reporting System with the reporting
requirements of the Medicare EHR Incentive Program, as required by
section 1848(m)(7) of the Act (``Integration of Physician Quality
Reporting and EHR Reporting''), we proposed that participation in the
Physician Quality Reporting System-Medicare EHR Incentive Pilot would
require EPs to submit information on the same CQMs that were adopted
for EPs for the Medicare EHR Incentive Program and included in Tables 6
and 7 of the July 28, 2010 final rule (75 FR 44398 through 44410). We
proposed that EPs participating in this Pilot must submit information
on the three core measures included in Table 7, up to

[[Page 73423]]

three of the alternate core measures included in Table 7 insofar as the
denominator for one or more of the core measures is zero, and three
additional measures from the measures included in Table 6, as is
otherwise required by the final rule to successfully demonstrate
meaningful use (75 FR 44409 through 44411). EPs who elect to
participate in this Physician Quality Reporting System-Medicare EHR
Incentive Pilot would still be required to report information on the
CQMs as required under the Stage 1 criteria established for the
Medicare EHR Incentive Program regardless of which option they select
as described later in this section. As the reporting of CQMs is only
one of the 15 core meaningful use objectives for EPs for the Medicare
EHR Incentive Program, an EP who elects to participate in the Physician
Quality Reporting System-Medicare EHR Incentive Pilot would still be
required to meet and attest to the remaining 14 core objectives and
required menu set objectives using the attestation module on the CMS
Web site for the program. Consequently, participation in this Pilot
only applies to the method of reporting for meeting the meaningful use
CQM objective in the EHR Incentive Program (42 CFR 495.6(d)(10)).
To participate in the Physician Quality Reporting System-Medicare
EHR Incentive Pilot, we proposed EPs would be required to
electronically report the CQMs by choosing one of the options described
later in this section. By submitting the required information through
the Pilot, we proposed that an EP could submit data on the same sample
of beneficiaries to his/her EHR system to meet the core objective for
reporting CQMs for the Medicare EHR Incentive Program for the 2012
payment year and the requirements for satisfactory reporting under the
Physician Quality Reporting System. After attesting to all other
meaningful use objectives, the EP's attestation file would be placed in
a holding status with respect to the CQM objective only, until the EP
reports the CQMs via one of the Physician Quality Reporting System-
Medicare EHR Incentive Pilot options. Thus, the EP would not know if
he/she successfully met the requirements for the Medicare EHR Incentive
Program with respect to the CQM objective until the CQMs are received
at the end of the submission period for measures for the Physician
Quality Reporting System (we expect this would be 2 months after the
close of the reporting period, which is the CY 2012, and no later than
February 28, 2013). As explained later in this section, any EP
participating in this Pilot would be required to report CQMs based on a
full calendar year, regardless of the EP's year of participation in the
Medicare EHR Incentive Program.
We also proposed (76 FR 42901) that an EP who selects one of the
Pilot options and subsequently determines that completion of the Pilot
is unfeasible may go back into the Medicare EHR Incentive Program
attestation module on the CMS Web site and complete attestation for the
CQMs assuming it is within the reporting timeframes established under
the EHR Incentive Program. Although it is possible that an EP may find
completion of the Pilot unfeasible, we note that participating in the
Pilot provides the following advantage to EPs: participation in this
Physician Quality Reporting System-Medicare EHR Incentive Pilot would
allow for the receipt of EHR Incentive Program and Physician Quality
Reporting System incentives, provided an EP meets the provisions
described later in this section. We noted that although the EHR
Incentive Program requires EPs to use Certified EHR Technology, for
purposes of participating in the Physician Quality Reporting System-
Medicare EHR Incentive Pilot, an EP's Certified EHR Technology must
also conform to the qualifications for an EHR under the Physician
Quality Reporting System.
Comment: Several commenters supported our proposal to establish the
Physician Quality Reporting System-Medicare EHR Incentive Pilot. These
commenters lauded our efforts to align the Physician Quality Reporting
System and EHR Incentive Program.
Response: We appreciate the commenters' feedback and are finalizing
our proposal to allow EPs to report CQMs for the EHR Incentive Program
through the Physician Quality Reporting System-Medicare EHR Incentive
Pilot for the 2012 payment year.
Comment: Although one commenter supported our proposal to establish
the Physician Quality Reporting System-Medicare EHR Incentive Pilot,
the commenter urged that we defer implementation of the Physician
Quality Reporting System-Medicare EHR Incentive Pilot for an additional
year.
Response: We appreciate the commenters' feedback. However, we note
that participation in the Physician Quality Reporting System-Medicare
EHR Incentive Pilot is voluntary. An EP may continue to use attestation
as a method of reporting CQMs for the 2012 payment year to satisfy this
meaningful use objective under the EHR Incentive Program. In fact, an
EP may report the CQMs by attestation even if the EP also chooses to
participate in the Physician Quality Reporting System-Medicare EHR
Incentive Pilot.
Comment: Some commenters opposed our proposal to require a CQM
reporting period of 1 calendar year regardless of the EP's year of
participation in the Medicare EHR Incentive Program.
Response: We appreciate the commenters' feedback. While the EHR
Incentive Program only requires a 90-day EHR reporting period for EPs
for their first payment year, EPs participating in the Physician
Quality Reporting System-Medicare EHR Incentive Pilot must report
clinical quality measures based on a full calendar year of data for two
main reasons. First, as described in section VI.F.1, the Physician
Quality Reporting System has established a 12-month reporting period
with respect to the EHR reporting mechanism. Since the Physician
Quality Reporting System-Medicare EHR Incentive Pilot is intended to
allow reporting under both the Physician Quality Reporting System and
the EHR Incentive Program, it is essential that, for purposes of
participating in this Pilot, the reporting periods be identical.
Second, unlike Certified EHR Technology that submits data submitted by
EPs at any point throughout the year, qualified direct EHRs and EHR
data submission vendors are only required to submit data to CMS once,
following the end of the 12-month calendar year reporting period.
Comment: Some commenters opposed our proposal that the Physician
Quality Reporting System-Medicare EHR Incentive Pilot would only
collect data about Medicare patients.
Response: We appreciate the commenters' feedback. However, as
described in section VI.F.1, the Physician Quality Reporting System
only collects data related to Medicare patients. Since the Physician
Quality Reporting System-Medicare EHR Incentive Pilot is intended to
allow reporting under both the Physician Quality Reporting System and
EHR Incentive Program, the type of data collected must only be from
Medicare patients.
Comment: One commenter stated that the Physician Quality Reporting
System-Medicare EHR Incentive Pilot is unlikely to attract volunteers,
unless EHR vendors encourage participation in this Pilot.
Response: We appreciate the commenter's feedback. We encourage EPs
to participate in the Physician Quality Reporting System-Medicare EHR
Incentive Pilot. We believe that the Physician Quality Reporting
System-

[[Page 73424]]

Medicare EHR Incentive Pilot provides a way for EPs to submit data on a
single sample set of beneficiaries to satisfy the requirements for two
programs: the Physician Quality Reporting System and the EHR Incentive
Program.
Comment: Several commenters did not believe that EPs would be
willing to have their EHR Incentive Program incentive payments delayed
in order to participate in the Physician Quality Reporting System-
Medicare EHR Incentive Pilot. These commenters urged us to find a
solution to provide timely payments.
Response: We appreciate the commenters' feedback. Once the data
from an EP participating in the Physician Quality Reporting System-
Medicare EHR Incentive Pilot is received and CMS determines that the EP
has successfully reported the CQMs under the Pilot, the EP would
receive his/her incentive payment under the EHR Incentive Program if
the EP has successfully demonstrated meaningful use. We also note that
if, for some reason, an EP finds that he or she cannot successfully
participate in the Pilot, the EP may also report on CQMs through
attestation within the established timeframes of the EHR Incentive
Program.
Please note that if an EP chooses to report CQMs through
attestation and also participate in the Physician Quality Reporting
System-Medicare EHR Incentive Pilot, for purposes of receiving an EHR
Incentive Program incentive, an EP's attestation file would not need to
be placed in a holding status for the CQM objective. However, as stated
previously, the analysis of data for purposes of the Physician Quality
Reporting System incentive will not be made until after the submission
period for measures for the Physician Quality Reporting System.
Based on the comments received and for the reasons stated in our
responses, we are finalizing our proposal to allow EPs to report CQMs
for the EHR Incentive Program through the Physician Quality Reporting
System-Medicare EHR Incentive Pilot for the 2012 payment year as
proposed.
a. EHR Data Submission Vendor-Based Reporting Option
As discussed further in the Physician Quality Reporting System
section VI.F.1(d).(3).(b). of this final rule with comment period, we
proposed (76 FR 42901) that EPs participating in the Physician Quality
Reporting System may choose to report the Physician Quality Reporting
System measures to CMS via a Physician Quality Reporting System
qualified EHR data submission vendor. For purposes of the Physician
Quality Reporting System, a Physician Quality Reporting System
qualified EHR data submission vendor will receive data from an EP's EHR
and subsequently reformat and transmit the data in aggregate form on
behalf of the EP to CMS. We noted that we expect to post a list of the
2012 Physician Quality Reporting System EHR data submission vendors
that are qualified to submit data from an EP's Certified EHR Technology
to CMS on the EP's behalf on the Physician Quality Reporting System
section of the CMS Web site (http://www.cms.gov/pqrs) by summer 2012.
Under this option, the Physician Quality Reporting System qualified
EHR data submission vendor would calculate the CQMs from the EP's
Certified EHR Technology and then submit the calculated results to CMS
on the EP's behalf via a secure portal for purposes of this Pilot. We
explained that under this option, the calculated results would be
different from what is required by the July 28, 2010 final rule in that
the data would be: (1) Limited to Medicare patients rather than all
patients; and (2) based on a CQM reporting period of 1 calendar year
regardless of the EP's year of participation in the Medicare EHR
Incentive Program.
The following is a summary of the comments we received on the
proposed EHR data submission vendor-based reporting option under the
Physician Quality Reporting System-Medicare EHR Incentive Pilot.
Comment: Some commenters supported the proposed EHR data submission
vendor-based reporting option of the Physician Quality Reporting
System-Medicare EHR Incentive Pilot.
Response: We appreciate the commenters' feedback and are finalizing
the EHR data submission vendor-based reporting option under the
Physician Quality Reporting System-Medicare EHR Incentive Pilot as
proposed.
Comment: Some commenters believed that, in order to earn a
Physician Quality Reporting System incentive through participation in
the Physician Quality Reporting System-Medicare EHR Incentive Pilot, an
EP's data submission vendor was required to submit patient-level data
from which we would calculate CQM results using a uniform calculation
process. One commenter asked why providing aggregate-level data would
not suffice for meeting the CQM reporting objective through
participation in the Physician Quality Reporting System-Medicare EHR
Incentive Pilot.
Response: We appreciate the commenters' feedback. We note that
incentives for either the Physician Quality Reporting System or the
Medicare EHR Incentive Program, are earned under each respective
program. For purposes of the Pilot, a qualified EHR data submission
vendor would submit individual-level data as well as the calculated
results of the CQMs to us. While the submission of calculated results
is required for an eligible professional using this EHR data submission
vendorbased reporting option to qualify for an incentive under the EHR
Incentive Program, the Physician Quality Reporting System, as described
previously in section VI.F.1 of this final rule, receives individual-
level data from claims and EHR-based reporting to analyze whether an
eligible professional has met the requirements for satisfactory
reporting under the Physician Quality Reporting System. Therefore, in
order for us to be able to calculate measure data for purposes of
earning a Physician Quality Reporting System incentive, we are
requiring CQM data elements to be submitted by an EP's qualified EHR
data submission vendor at an individual level. Further, the Physician
Quality Reporting System requires this individual-level data to be
submitted in the QRDA format. We believe it is useful to utilize a
standard (such as CDA of which QRDA is a subset) where one exists in
our quality reporting initiatives.
Based on the comments received and for the reasons stated in our
responses, we are finalizing the EHR data submission vendor-based
reporting option for the Physician Quality Reporting System-Medicare
EHR Incentive Pilot as proposed.
b. Direct EHR-Based Reporting Option
As discussed further in the Physician Quality Reporting System
section VI.F.1.(d).(3).(a). of this final rule with comment period, we
proposed (76 FR 42901) that EPs participating in the Physician Quality
Reporting System via the direct EHR-based reporting mechanism can
choose to report the Physician Quality Reporting System measures to CMS
directly from the EP's EHR. Therefore, under this direct EHR-based
reporting option, we proposed (76 FR 42901) that an EP participating in
the Physician Quality Reporting System-Medicare EHR Incentive Pilot
would submit CQM data directly from his or her Certified EHR Technology
to CMS via a secure portal using the infrastructure of the Physician
Quality Reporting System EHR reporting mechanism. We proposed that in
order to participate in the Physician Quality Reporting System-Medicare
EHR Incentive Pilot under this option, the

[[Page 73425]]

EP's Certified EHR Technology must also be a 2012 Physician Quality
Reporting System qualified EHR. We expect to post a list of the 2012
Physician Quality Reporting System qualified EHRs on the Physician
Quality Reporting System section of the CMS Web site prior to January
1, 2012. Due to this Physician Quality Reporting System-Medicare EHR
Incentive Pilot, we proposed to have an additional vetting process for
EHR vendors wishing to participate in the Pilot. We expect to post a
list of these additional 2012 qualified EHR vendors, if applicable, and
their products in the summer of 2012.
Under this direct EHR-based reporting option, the data would be
different from what is required by the July 28, 2010 final rule in that
it would be: (1) limited to Medicare patients rather than all patients;
(2) patient-level data from which we may calculate CQM results using a
uniform calculation process, rather than aggregate results calculated
by the EP's Certified EHR Technology; and (3) based on a CQM reporting
period of 1 calendar year regardless of the EP's year of participation
in the Medicare EHR Incentive Program.
In addition, we proposed (76 FR 42901) that if an EP successfully
submits all required CQM data from Certified EHR Technology, which also
must be a Physician Quality Reporting System qualified EHR product,
directly to CMS, then the EP would also meet the criteria for
satisfactory reporting under the 2012 Physician Quality Reporting
System, which would also qualify the EP for an incentive under the 2012
Physician Quality Reporting System.
The following is a summary of the comments we received related to
the direct EHR-based reporting option under the Physician Quality
Reporting System-Medicare EHR Incentive Pilot.
Comment: Several commenters supported the proposed direct EHR-based
reporting option of the Physician Quality Reporting System-Medicare EHR
Incentive Pilot.
Response: We appreciate the commenters' feedback and are finalizing
the direct EHR-based reporting option under the Physician Quality
Reporting System-Medicare EHR Incentive Pilot.
Comment: Several commenters urged CMS to align the Physician
Quality Reporting System qualification requirements for EHRs with the
certification requirements for Certified EHR Technology so that a
single EHR system could serve reporting requirements for both programs.
Response: We appreciate the comementers' feedback. We are working
to align the EHR system requirements for the Physician Quality
Reporting System and the EHR Incentive Program. However, for purposes
of participating in the Physician Quality Reporting System-Medicare EHR
Incentive Pilot under the direct EHR-based reporting option, Certified
EHR Technology must also meet the qualification requirements stated
under section VI.F.1.d.3 of this final rule with comment period. There
are currently distinct differences between Certified EHR Technology and
EHR systems that are qualified under the Physician Quality Reporting
System. For example, as required by ONC's regulations (see 45 CFR part
170), Certified EHR Technology must include certain functionalities,
such as the ability to create a summary of care record for transitions
of care, the ability to calculate and submit clinical quality measures
specified for the EHR Incentive Program, and must also have certain
structured data elements that use specific language (for example,
SNOMED, LOINC). On the other hand, an EHR that is ``qualified'' under
the Physician Quality Reporting System is one that can capture all
Physician Quality Reporting System measures, extract the data elements
needed to calculate the measures, place the data elements in a QRDA
format, and successfully transmit that data into the CMS portal.
Therefore, it is necessary that an EHR system be qualified so as to
ensure the system has the capability to report on Physician Quality
Reporting System measures.
We note that there are EHR systems that are both ``qualified'' to
report Physician Quality Reporting System quality measures and
classified as Certified EHR Technology for purposes of reporting under
the EHR Incentive Program. A list of EHR products that are both
``qualified'' and Certified EHR Technology will be made available on
the Physician Quality Reporting System Web site, available at https://www.cms.gov/PQRS/.
Based on the comments received and for the reasons stated in our
responses, we are finalizing the EHR-based reporting option under the
Physician Quality Reporting System-Medicare EHR Incentive Pilot as
proposed.
The Medicare EHR Incentive Program clinical quality measures,
including the core and alternate core measures, and the 38 additional
measures, are found in the Physician Quality Reporting System's Table
48 of this final rule with comment period.
4. Method for EPs to Indicate Election To Participate in the Physician
Quality Reporting System-Medicare EHR Incentive Pilot for Payment Year
2012
We proposed (76 FR 42902) that EPs who wish to participate in the
Physician Quality Reporting System-Medicare EHR Incentive Pilot would
be able to indicate within the EHR Incentive Program attestation module
their intent to fulfill the meaningful use objective of reporting CQMs
by participating in the Physician Quality Reporting System-Medicare EHR
Incentive Pilot. The EHR Incentive Program attestation module is
available on the CMS Web site at https://www.cms.gov/EHRIncentivePrograms/32_Attestation.asp#TopOfPage. The following is a
summary of the comments we received that were related to this proposal.
Comment: Several commenters sought further clarification on how EPs
may participate in the Physician Quality Reporting System-Medicare EHR
Incentive Pilot.
Response: We appreciate the commenters' feedback. We will provide
additional guidance on the process for participating in the Pilot,
which will be available on the EHR Incentive Program Web site,
available at http://www.cms.gov/ehrincentiveprograms/, as well as the
Physician Quality Reporting System Web site, available at https://www.cms.gov/PQRS/.
Based on the comments received and for the reasons stated
previously, we are finalizing our method to indicate election to
participate in the Physician Quality Reporting System-Medicare EHR
Incentive Pilot as proposed.

I. Establishment of the Value-Based Payment Modifier and Improvements
to the Physician Feedback Program

1. Overview
In the proposed rule, we described the statutory requirements
governing the Physician Feedback Program and the Physician Value-Based
Payment Modifier (``value modifier''), which will be applied to the
Physician Fee Schedule starting in 2015 for certain physicians and
groups of physicians and, starting in 2017 for all physicians and other
eligible professionals as the Secretary determines appropriate (76 FR
42908). In particular, we proposed that certain of the quality of care
measures in the Physician Quality Reporting System and the Electronic
Health Records (EHR) Incentive Program be used to evaluate the quality
of care in the value modifier (76 FR 42909 through 42912). In addition,
we described how the quality of care measures that

[[Page 73426]]

physicians report in the Physician Quality Reporting System will be
used in the confidential feedback reports we provide to physicians
under the Physician Feedback Program (76 FR 42903 through 42907). We
explained that we are using the Physician Feedback Program reports to
help develop and test different methodologies that we could use to
calculate the value modifier.
In this final rule with comment period, we emphasize the connection
between our physician quality programs--the Physician Quality Reporting
System, the EHR Incentive Program, the value modifier, and the
Physician Feedback Program. Our primary interests in aligning these
programs are to increase the quality of care for Medicare
beneficiaries, to provide a common basis to do so that does not
increase physician reporting burden, and to provide fair and meaningful
information to physicians on ways to improve the quality of care they
furnish.
We also emphasized in the proposed rule that given the complexity
of measuring physician performance and calculating the value modifier,
we are proceeding cautiously with transparency and outreach in a
variety of ways to obtain stakeholder input. We discuss in this final
rule with comment period several ways we plan to engage stakeholders to
obtain input as we move forward to implement the value modifier over
the coming years.
2. The Value-Based Payment Modifier
Section 1848(p) of the Act requires the Secretary to ``establish a
payment modifier that provides for differential payment to a physician
or a group of physicians'' under the physician fee schedule ``based
upon the quality of care furnished compared to cost * * * during a
performance period.'' The provision requires that ``such payment
modifier be separate from the geographic adjustment factors''
established for the physician fee schedule. In addition, section
1848(p)(4)(C) of the Act requires that the value modifier be
implemented in a budget-neutral manner. Budget neutrality means that
payments will increase for some physicians but decrease for others, but
the aggregate amount of Medicare spending in any given year for
physicians' services will not change as a result of application of the
value modifier.
Section 1848(p)(4)(B)(iii) of the Act requires the Secretary to
apply the value modifier beginning January 1, 2015 to specific
physicians and groups of physicians the Secretary determines
appropriate. This section also requires the Secretary to apply the
value modifier with respect to all physicians and groups of physicians
(and may apply to eligible professionals as defined in subsection
(k)(3)(B) of the Act as the Secretary determines appropriate) beginning
not later than January 1, 2017.
We view the value modifier as an important component in revamping
how care and services are paid for under the physician fee schedule.
Currently, payments under the physician fee schedule are generally
based on the relative resources involved with furnishing each service,
and are adjusted for differences in resource inputs among geographic
areas. Thus, all physicians in a geographic area are paid the same
amount for individual services regardless of the quality of care or
outcomes of services they furnish.
Although the fee schedule payments will soon be adjusted depending
upon whether eligible professionals are satisfactory reporters of
Physician Quality Reporting System quality measures, successful
electronic prescribers and meaningful users of electronic health
records (EHRs), these adjustments do not currently take into account
performance on the quality measures collected under these programs. In
addition, the fee schedule does not take into account the overall costs
of services furnished or ordered by physicians for individual Medicare
beneficiaries. These limitations mean that the physician fee schedule
does not contain incentives for physicians to focus on: (1) The quality
and outcomes of all the care furnished to beneficiaries; (2) the
relative value of each service they furnish or order; or (3) the
cumulative costs of their own services and the services that their
beneficiaries receive from other providers.
We noted in the proposed rule that Medicare is beginning to
implement value-based payment adjustments for other types of services,
including hospital services, skilled nursing facilities, home health
agencies, and ambulatory surgical centers (76 FR 42908). In
implementing value-based purchasing initiatives generally, we seek to
meet the following goals:
Improving quality.
++ Value-based payment systems and public reporting should rely on
a mix of standards, processes, outcomes, and patient experience
measures, including measures of care transitions and changes in patient
functional status. Across all programs, we seek to move as quickly as
possible to the use of outcome and patient experience measures. To the
extent practicable and appropriate, we believe these outcome and
patient experience measures should be adjusted for risk or other
appropriate patient population or provider characteristics.
++ To the extent possible, and recognizing differences in payment
system readiness and statutory requirements and authorities, measures
should be aligned across Medicare and Medicaid's public reporting and
payment systems. We seek to evolve a focused core set of measures
appropriate to each specific provider category that reflects the level
of care and the most important areas of service and measures for a
particular provider.
++ The collection of information should minimize the burden on
providers to the extent possible. As part of that effort, we will
continuously seek to align our measures with the adoption of meaningful
use standards for health information technology (HIT), so the
collection of performance information is part of care delivery.
++ To the extent practicable, measures used by us should be
nationally endorsed by a multi-stakeholder organization. Measures
should be aligned with best practices among other payers and the needs
of the end users of the measures.
Lowering per-capita growth in expenditures.
++ Providers should be accountable for the costs of care, and be
rewarded for reducing unnecessary expenditures and be responsible for
excess expenditures.
++ In reducing excess expenditures, reductions should not
compromise patient care and providers should continually improve the
quality of care they deliver.
++ To the extent possible, and recognizing differences in payers'
value based purchasing initiatives, providers should apply -quality-
improving and cost-reducing redesigned care processes to their entire
patient population.
Section 1848(p)(4)(A) of the Act requires us to publish, not later
than January 1, 2012, three items related to the establishment of the
value modifier: (a) the quality of care and cost measures established
by the Secretary for purposes of the modifier; (b) the dates for
implementation of the value modifier; and (c) the initial performance
period for application of the value modifier in 2015. In the proposed
rule we made proposals for each of these requirements and we discuss
each below.
a. Measures of Quality of Care and Costs
(1). Quality of Care Measures
Section 1848(p)(2) of the Act requires that physician quality of
care be

[[Page 73427]]

evaluated, to the extent practicable, based on a composite of measures
of the quality of care furnished. Section 1848(p)(2)(B) of the Act
requires that the Secretary establish appropriate measures of the
quality of care furnished by a physician or a group of physicians to
Medicare beneficiaries such as measures that reflect health outcomes.
The statute requires the measures to be risk adjusted as determined
appropriate by the Secretary. Section 1848(p)(2)(B)(ii) of the Act
requires the Secretary to seek endorsement of the quality of care
measures by the entity with a contract under section 1890(a) of the
Act, which is the National Quality Forum.
(A) Quality of Care Measures for the Value-Modifier
For purposes of section 1848(p)(4)(A)(i) of the Act, we proposed to
use performance on: (1) The measures in the core set of the Physician
Quality Reporting System for 2012; (2) all measures in the Group
Practice Reporting Option of the Physician Quality Reporting System for
2012; and (3) the core measures, alternate core, and 38 additional
measures in the EHR Incentive Program measures for 2012 (76 FR 42909).
We requested comment on the proposed measures, on our interest to
establish a core measure set for the value modifier, and whether to
include additional (or exclude) measures from the Physician Quality
Reporting System in the quality of care measures for the value
modifier.
We also proposed that, to the extent that the 2013 measures adopted
for the Physician Quality Reporting System and EHR Incentive Program
are different than those used in 2012, we would consider, through
rulemaking next year, revising the value modifier quality measures
applicable to 2013 to be consistent with the revisions made to the
measures for those programs.
Comment: Most commenters appreciated CMS' proposal to use a
consistent set of quality of care measures across various quality
programs. Despite this support, some commenters recommended using
either one core set of measures or multiple sets of core measures for
different types of physicians or conditions. For example, one commenter
recommended requiring physicians to report on only a ``small set of
core measures that would be applicable to all physicians plus some
limited number of applicable measures chosen by the physician or group
practice.'' Other commenters suggested that we start with a small core
set of measures initially and then transition to a larger set over
time. By contrast, many commenters urged CMS to use a different core
set of measures for different physician specialties (rather than the
same measures for all physicians) in the value modifier.
MedPAC suggested that ``the use of a large number of [quality]
measures in the value modifier could increase the year-to-year
statistical variability, and therefore uncertainty, into the annual
calculation of each physician's or physician group's value modifier.''
MedPAC recommended that we concentrate on a few key population-based
outcomes, patient experience, and clinical process measures. A few
commenters supported including outcome measures that assess the rate of
potentially preventable hospital admissions for six ambulatory care
sensitive conditions at the group practice level: diabetes, bacterial
pneumonia, dehydration, COPD, urinary tract infection, and heart
failure.
Many physician specialty societies indicated that the proposed
quality measures did not have measures relevant to the practice of
their physicians or to the conditions they treat and, therefore, it
would not be possible to calculate a quality composite for them. Most
prominently in this category were surgeons and surgical specialties,
hospital-based physicians, and medical subspecialists. Some medical
specialists, for example cardiologists and endocrinologists, commented
that proposed measures which seemed applicable to them did not measure
the quality of care provided by subspecialists. These commenters stated
that they would work with us to develop relevant clinical measures and
to assist in obtaining National Quality Forum endorsement of new
measures.
Of the proposed measures in the EHR Incentive program set for 2012,
several commenters opposed including PQRS measure 200 (Heart
Failure: Warfarin Therapy for Patients with Atrial Fibrillation)
because clinical guidelines have been updated and those changes are not
currently reflected in the PQRS measure.
A number of commenters suggested that the value modifier's quality
of care measures should directly correspond to the proposed condition-
specific cost measures. One commenter suggested that for hospital-based
physicians, CMS align the quality measures in the hospital value-based
purchasing program with the physician value modifier.
Response: We appreciate commenters' support for our proposals to
use a consistent set of measures across quality improvement programs
and to use of a core set of measures for the value modifier. We
recognize that the proposed core sets of quality measures for
individual physicians--the Physician Quality Reporting System core set
(which focuses on cardiovascular conditions) and the core, alternative
core, and additional EHR Incentive Program measures (which focus on
several chronic conditions and preventive measures)--and the core set
for physicians in groups--the Group Practice Reporting Option measures
(which also focus on chronic conditions and preventive measures)--do
not cover the full range of conditions prevalent in the Medicare
population or varied physician specialties. We have focused on these
quality of care measures for the value modifier because they assess
highly prevalent and high-cost conditions in the Medicare population
and we encourage physicians to take these conditions into account when
treating their patients. We further believe that the proposed measures
are an appropriate starting point for the value modifier because they
also include preventive services and thus, are important measures of
the quality of care that these beneficiaries receive.
We agree with commenters' concerns about PQRS measure 200
and we will not include it in the value modifier for the initial
performance period because its specifications have not been updated.
We anticipate assessing physician performance for more conditions
and/or by specialty in subsequent years after the methodological issues
surrounding the value modifier are finalized. We believe that we will
ultimately need to include quality of care measures applicable to most
physicians and highly prevalent conditions, as well as measures for
specific types of physicians, in order to calculate a value modifier
for every physician by 2017. We agree with commenters that we should
concentrate on outcome, patient experience, and clinical process
measures in the value modifier. As a first step in that direction, we
will include outcome measures that assess the rate of potentially
preventable hospital admissions for two of the six ambulatory care
sensitive conditions at the group practice level that we have used in
the Physician Feedback Program reports: heart failure and chronic
obstructive pulmonary disease. We have chosen these two measures
because they are important conditions among Medicare FFS beneficiaries
and, based on our 2010 Physician Feedback Program group reports,
contain sample sizes sufficient for reliable measurement.

[[Page 73428]]

In addition, we also clarify that we do not seek to evaluate
individual physicians on each measure we proposed or include in a
future set of measures, but rather to assess physician performance
using quality of care measures for the types of care they provide and
the measures they report.
Nonetheless, we agree with commenters that we should match our
quality of care measures with the cost measures that we have proposed
for specific conditions. In the discussion below, we proposed per
capita cost measures for beneficiaries with four chronic conditions
(chronic obstructive pulmonary disease; heart failure; coronary artery
disease; and diabetes) in the value modifier. To match these cost
measures with the quality of care measures, we anticipate that we will
propose in next year's rulemaking to include the additional measures
for each of these conditions from the Physician Quality Reporting
System measure groups that are not already included in the measure set
we are finalizing in this final rule with comment period.
We agree that we should use NQF-endorsed measures of quality where
appropriate. In addition, we will reach out to physician specialty
organizations for conditions where we lack measures or for conditions
where we have cost measures but insufficient quality measures in order
to develop a robust value modifier.
We are finalizing our proposal, for individual physicians to whom
the value modifier will apply, to include the core set of the Physician
Quality Reporting System for 2012 and the core measures, alternate
core, and additional measures in the EHR incentive program for 2012
(except for PQRS measure 200 as discussed previously). These
measures are listed in Table 80.
BILLING CODE 4120-01-P

[[Page 73429]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.194

[[Page 73430]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.195

For physicians practicing in groups, the measures we are finalizing
for the value modifier include all measures in the Group Practice
Reporting Option of the Physician Quality Reporting System for 2012 and
the rates of potentially preventable hospital admissions for two
ambulatory care sensitive conditions at the group practice level: heart
failure and chronic obstructive pulmonary disease. These measures are
listed in Table 81.

[[Page 73431]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.196

[[Page 73432]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.197

BILLING CODE 4120-01-C
We expect to update these quality of care measures based on the
measures finalized in subsequent rulemaking under the Physician Quality
Reporting System and the EHR Incentive Program for the initial
performance year. By doing so, we anticipate the value modifier would
use the same quality of care measures that are included in the
Physician Quality Reporting System and/or the EHR Incentive Program for
the initial performance year. To the extent physicians are already
reporting the quality of care measures under the Physician Quality
Reporting System and/or the EHR Incentive Program, this step would
reduce program inconsistencies and reduce the reporting burden on
physicians.
(B) Potential Quality of Care Measures for Additional Dimensions of
Care in the Value Modifier
We explained in the proposed rule that one of the goals of this
notice and comment rulemaking is to identify potential measures that
could provide a richer picture of the quality of care furnished by a
physician (76 FR 42911). For example, we indicated that we are
interested in quality measures that assess the care provided by
specialists. We specifically requested comment from specialists about
measures that were not included in the list of proposed measures. In
addition, we also requested comment on outcome, care coordination/
transition, patient safety, patient experience, and functional status
measures (which are discussed below) as well as the 28 administrative
claims measures (described below with respect to the 2010 Physician
Feedback reports disseminated in 2011) and whether we should include
them in the value modifier. We especially urged the physician community
and private payers that have been engaged in pay-for-performance
programs to identify other quality measures that they have used and to
describe their experience with these measures. We requested comment on
how these measures align with current private sector quality
measurement initiatives.
Comment: As previously noted commenters supported CMS' efforts to
develop quality measures applicable to specialists. The commenters
urged CMS to add measures that provide an accurate and comprehensive
view of how physicians perform in practice. Commenters, including the
surgical community, suggested measures related to vascular surgery
lower extremity bypass, surgical site infection, urinary tract
infection, colon surgery, and surgery in the elderly. The
anesthesiology community suggested perioperative and pain management
measures. Pathologists suggested very specific measures related to
Barrett's esophagus and radical prostatectomy reporting as well as
immunohistochemical evaluation for breast cancer. Other commenters
suggested adding measures for adult immunization (including Hepatitis A
and B), stroke, rheumatoid arthritis, pelvic prolapse, infection
prevention as well as measures to prevent unnecessary emergency room
visits and decrease hospital readmissions. The commenters recommended
CMS develop a process to address outdated elements among proposed
measures. Several commenters opposed use of administrative claims-based
measures because of their inability to capture information that may
influence a physician's care. Several commenters questioned the use of
the proposed cardiac and diabetes measures, because they believed these
measures do not reflect the specialized care given. Additionally,
commenters opposed the claims-based measure ``Use of high risk
medication in the Elderly'' because the list of medications has not
been updated regularly.
Response: We thank commenters for sharing their views. We will be
working internally and reaching out to stakeholders to consider these
comments and to make proposals in future rulemakings to refine the
quality measures included in the value modifier. We do not plan at this
time to include the 28 administrative claims-based measures we used in
the individual 2010 Physician Feedback

[[Page 73433]]

Program reports in the value modifier: thus the ``Use of High Risk
medications in the Elderly'' measure will not be included in the value
modifier. A substantial number of these 28 administrative claims-based
measures rely on drug-related data that we cannot obtain for all
Medicare beneficiaries because not all Medicare beneficiaries are
enrolled in a Medicare Part D plan. In addition, some of the
administrative claims-based measures overlap with the Physician Quality
Reporting System measures we are adopting for the value modifier, and
thus are duplicative.
(i) Outcome Measures
As discussed previously, we sought comment on the use of measures
in the future that assess the rate of potentially preventable hospital
admissions for six ambulatory care-sensitive conditions at the practice
group level: diabetes, bacterial pneumonia, dehydration, chronic
obstructive pulmonary disease (COPD), urinary tract infection, and
heart failure (76 FR 42912). We also sought comment on an all-cause
hospital readmission measure.
We also sought suggestions on other outcome measures that would be
appropriate measures of the quality of care furnished for purposes of
the value modifier, such as measures that examine emergency room use
for ambulatory care sensitive conditions. We indicated we were
interested in outcome measures that can be calculated from existing
Medicare claims data and do not require additional reporting by
physicians. In addition, we stated we were particularly interested in
comments on potential measures of complications that would be
appropriate to include in the value modifier (76 FR 42912).
Comment: The majority of commenters supported CMS' interest in
moving to a system that focuses on outcome measures. They strongly
emphasized such measures should be indicative of physician performance
and control. Many commenters suggested that all outcome measures must
be risk-adjusted appropriately to account for the complexity and
severity of the patient's condition(s). Commenters urged us to ensure
that the risk adjustment methodology would be sufficient such that
physicians are not discouraged from caring for the highly complex
patients. The commenters noted that physicians should not be held
accountable for patient factors outside of their control that may
influence outcomes such as patient adherence or other patient
attributes (such as education, literacy, socioeconomic status). Two
commenters expressed concern with an all-cause hospital readmission
measure that had not yet been developed and which would assess
physicians on an event over which physicians do not have complete
control.
Response: We thank commenters for their support for outcome
measures. We agree with commenters that we should move toward including
in the value modifier quality of care measures that assess patient
outcomes. As discussed previously, as a first step in that direction we
are finalizing outcome measures that assess the rate of potentially
preventable hospital admission at the group practice level for heart
failure and chronic obstructive pulmonary disease. We anticipate
proposing in next year's rulemaking to include outcome measures that
assess the rate of potentially preventable hospital admissions for
other ambulatory care sensitive conditions at the group practice level.
As we move forward, we will take concerns about risk adjustment of
these measures into consideration as we incorporate them into the value
modifier.
(ii) Care Coordination/Transition Measures
We also noted in the proposed rule that care transitions such as
transition of a beneficiary from an inpatient setting to the community
or to a post-acute setting are important aspects of quality of care
furnished (76 FR 42912). We requested input about these and other
potential aspects of care coordination/transitions for which measures
could be developed and/or used for purposes of the value modifier.
Comment: Many commenters generally supported the use of care
coordination and transition measures but cited the need for a robust
risk-adjustment methodology with these measures. Conversely, several
commenters opposed the use of care coordination/transition measures,
citing that use of these measures ``requires a level of coordination
which may only be found in highly integrated care systems such as an
accountable care organization (ACO) or comprehensive medical homes.''
Indeed, many commenters recommended that we focus on integrated groups
and systems of care where care coordination was implemented and could
be measured. The commenters also voiced concern over creating care
coordination measures when providers are not presently reimbursed for
this type of care. Many commenters, especially hospital-based
providers, also pointed out that data was often simply not available to
them or did not exist (that is, the patient had no primary care
physician with whom to communicate).
Response: We thank the commenters for their suggestions. As we
noted in the proposed rule, to the extent that we develop care
coordination/transition measures, we will propose them in future
rulemaking for inclusion in the value modifier. We continue to believe
that care coordination/transitions are important aspects of quality of
care furnished and we will be working with stakeholders to develop
appropriate measures.
(iii) Patient Safety, Patient Experience, and Functional Status
We explained in the proposed rule that measures of patient safety,
patient experience, and functional status were important dimensions of
care for the value modifier (76 FR 42912). We sought comment about
potential patient safety measures that could be developed and/or used
for purposes of the value modifier. To the extent commenters were aware
of potential measures of patient safety, patient experience, or
functional status that we could use, we welcomed such suggestions.
Comment: Many commenters favored the inclusion of patient safety,
experience of care, and functional status measures in the value
modifier and offered general suggestions for inclusion of such
measures. Many commenters supported patient experience measures for
general and specialty physicians and there were also recommendations
for the use of standard assessment tools and patient experience tools
which could be used.
Response: We thank commenters for their suggestions and agree that
this is an important area for development of measures and the
infrastructure to support them. We will consider them in the future as
we focus on additional areas where physician value can be improved.
(2) Cost Measures
Section 1848(p)(3) of the Act requires that cost measures used in
the value modifier be evaluated, to the extent practicable, based on a
composite of appropriate measures of costs established by the
Secretary. This composite would eliminate the effect of geographic
adjustments in payment rates and account for risk factors and other
factors so that physicians and groups of physicians would be compared
on an equal basis. In other words, comparisons of the quality of care
furnished compared to cost would be on an ``apples-to-apples'' basis so
that physicians in high cost areas would not be penalized unfairly and

[[Page 73434]]

physicians in low-cost areas would not be rewarded unjustly.
(A) Cost Measures for the Value Modifier
We proposed to use total per capita cost measures and per capita
cost measures for beneficiaries with four chronic conditions (COPD;
heart failure; coronary artery disease; and diabetes) in the value
modifier (76 FR 42913). Our 2010 Physician Feedback Program reports use
a total per capita cost measure and per capita cost measures for the
overall costs for beneficiaries with these four chronic conditions.
These per capita cost measures are adjusted for geographic differences
and they are risk adjusted to ensure geographic and clinical
comparability, as required by section 1848(p)(3) of the Act.
We explained that these cost measures would be compared to the
quality of care furnished for use in determining the value modifier.
Comment: Most commenters agreed with our proposal to use in the
initial years of the value modifier both total per capita cost measures
and per capita cost measures for COPD; heart failure; coronary artery
disease; and diabetes. Commenters urged CMS to clarify which
beneficiaries will be included for assessing costs in each of these
four chronic conditions. Many commenters suggested CMS move quickly to
the use of episode-based cost measures. Commenters also requested that
CMS move forward with the episode grouper in a transparent fashion and
suggested that CMS have public sessions through an appropriate venue to
apprise the public of our progress.
Several commenters questioned CMS' methodology to eliminate
geographic differences in Medicare's payment and, in particular, how
the Geographic Price Cost Indices (GPCIs) would be handled. In
addition, commenters stated that the risk adjustment methodology we
currently use for the cost measures in the Physician Feedback Program
was not sufficiently robust to adequately account for the differences
among patient populations especially those that cared for high acuity
populations. Many commenters said that until a risk adjustment
methodology could adequately adjust for patient factors outside of the
physician's control like severity of disease or patient adherence, it
would not be possible to calculate a meaningful composite of cost for
the value modifier. Many commenters expressed the desire for increased
communication and transparency about the methodology for the composites
that will comprise the value modifier.
Response: We believe that total per capita cost measures are useful
overall measures of the volume of healthcare services furnished to
beneficiaries. In addition, the total per capita costs for patients
with diabetes, coronary artery disease, COPD, and heart failure can
provide information on the volume of care provided to these patients.
We also agree that episode-specific costs of care are valuable measures
and we intend to evaluate how to include them in the value modifier in
future years, as further discussed below.
We believe that the current risk adjustment methodology, the
hierarchal condition categories model (HCC), reasonably predicts high-
and low-cost beneficiaries.\1\ In addition, the model's explanatory
power has increased over recent years and it is recalibrated regularly
for more recent diagnoses and expenditure data. We are unaware of
generally used risk adjustment models that can adjust broadly for
patient factors cited by the commenters; nor did commenters present
evidence that the HCC model was inadequate or disadvantages physicians
that care for certain types of patients.
---------------------------------------------------------------------------

\1\ RTI, ``Evaluation of the CMS-HCC Risk Adjustment
Methodology,'' (March 2011), available at: https://www.cms.gov/MedicareAdvtgSpecRateStats/downloads/Evaluation_Risk_Adj_Model_2011.pdf (recent overview of the HCC model and the development of
the methodology over the past several years).
---------------------------------------------------------------------------

The methodology we currently use in the Physician Feedback Program
reports to ensure we compare Medicare payments on an ``apples-to-
apples'' basis equalizes the differences in payment rates due to
geography among the same class of providers.\2\ Thus, the effects of
the GPCIs are removed from our payments. In other words, actual
Medicare payments are adjusted such that a given service is priced at
the same level across all providers within the same facility type or
setting, regardless of geographic area or differences in Medicare
payment rates among facilities.
---------------------------------------------------------------------------

\2\ For additional information about price standardization, see
``Methodology and Process Specifications for the Physician Quality
Reporting System Group Practice Reporting Option Quality and
Resource Use Reports'' (September 2011) available at: http://www.cms.gov/PhysicianFeedbackProgram/Downloads/2010_GPRO_QRUR_Detailed_Methodology.pdf.
---------------------------------------------------------------------------

We agree with commenters that our risk adjustment and price
standardization methodologies must be transparent. In the next several
months, we will host public events to further gather input on the value
modifier and explain the price standardization and risk adjustment
methodologies so that physicians and other stakeholders have a full
understanding of our efforts to ensure fair and accurate calculation of
per capita costs.
After consideration of the public comments we received, we are
finalizing our proposal to use total per capita cost measures and per
capita cost measures for beneficiaries with four specific chronic
conditions (chronic obstructive pulmonary disease, heart failure,
coronary artery disease, and diabetes) in the value modifier.
(B) Potential Cost Measures for Future Use in the Value Modifier
Section 1848(n)(9)(A) of the Act requires us to develop by January
1, 2012, an episode grouper that combines separate, but clinically
related items and services into an episode of care for an individual,
as appropriate. We explained that during 2012 we will test and plan how
to use an ``episode grouper'' (76 FR 42913).
As a transition to implementing the episode grouper, we explained
that we could use cost measures based on the inpatient hospital
Medicare Severity Diagnosis Related Groups (MS-DRG) classification
system. We requested comment on whether we should pursue the MS-DRG
approach in the near term while we develop episode-based cost measures
for a significant number of high-cost and high-volume conditions in the
Medicare program. In addition, we specifically sought comment on the
resource and cost measures used in private sector initiatives and how
they are used to profile physicians compared to the quality of care
provided.
Comment: Commenters indicated that CMS should rapidly transition to
episode-based cost measures and also communicate with stakeholders
frequently about the status of the episode grouper and the methodology
as it evolves. A number of commenters did not think that the use of an
MS-DRG approach in the short run was useful.
Response: We agree with commenters that the use of episode-based
costs can be a valuable input into the value modifier. Prior to
incorporating episode-based costs into the value modifier, we will hold
stakeholder events to share our progress on the episode grouper to
ensure transparency of the methodology underlying any grouping of the
costs of various items and services.
b. Implementation of the Value Modifier
We explained in the proposed rule that there a number of issues
related to the implementation of the value modifier including steps for
both measurement of performance and application of payment adjustments
(76 FR 42913). Although we did not make

[[Page 73435]]

proposals, we stated that our plan is to begin implementing the value
modifier through the rulemaking process during 2013 as required by
section 1848(p)(4)(B)(i) of the Act. We requested input from
stakeholders as we work on these issues.
Comment: Many commenters doubted whether meaningful composites of
quality and cost that capture physician ``value'' could be developed in
time for 2017, if ever. Many commenters cited the challenges of how to
assign patients to physicians and the adequacy of risk adjustment
methods to ensure that physicians are not discouraged from caring for
patients with highly complex conditions. Others cited the lack of
meaningful quality measures for many types of physicians as a challenge
to the calculation of the value modifier. Many commenters suggested
that we appeal to the Congress for a substantial delay in the timeline
for implementation of the physician value modifier.
Response: We appreciate commenters' concerns and recognize the
challenges before us as we move to a payment system that begins to
encourage physicians to focus on the relative value of each service
they furnish or order, the cumulative cost of their own services and
services that their beneficiaries receive, and the quality and outcomes
of the care furnished to beneficiaries.
We realize that for some physicians, the transition to a focus on
value will require a new way of thinking about the practice of
medicine. And, it is important that value is being assessed in a manner
which acknowledges and takes into account the diversity of patient
conditions and physician practices. Given this backdrop, we stated that
we intend to move deliberately and carefully because we recognize the
complexities of calculating a reliable and valid measure of value that
could be used to differentiate payment.
Notwithstanding this caution, we have used the 2010 Physician
Feedback Program reports to help develop attribution methodologies for
physicians and physician groups and to use them as a mechanism to gain
feedback into the value modifier and its methodologies. In addition, we
have standardized Medicare costs and applied the HCC risk adjustment
model to physician per capita costs in these reports. As discussed
previously, we will be convening public events to further explore these
issues and to gather stakeholder input based on these reports and the
methodologies we have applied.
We also will use the next several months, before the 2013 physician
fee schedule rulemaking process begins, to explore various ways to
develop composites of cost and quality that could be used in the value
modifier and to hold listening sessions and engage in other activities
with stakeholders to gain input into the value modifier. We will
continue our work to implement the statutory directives and plan to
propose in next year's physician fee schedule rulemaking a methodology
for the value modifier.
Comment: Many commenters stated that CMS should focus the value
modifier in 2015 and 2016 on large integrated group practices. Some
commenters supported that CMS focus initially on cost and quality
outliers. Other commenters recommended that we focus on physicians who
treat patients with the most prevalent and costly conditions. Other
commenters suggested that because the proposed quality of care measures
focused on chronic conditions, we should apply the value modifier
starting in 2015 to physicians treating these conditions.
Response: We thank these commenters for their comments and will
address these issues in future rulemaking.
c. Initial Performance Period
Section 1848(p)(4)(B)(ii)(I) of the Act requires the Secretary to
specify an initial performance period for the application of the value
modifier with respect to 2015. We proposed that the initial performance
period be the full calendar year 2013, that is, January 1, 2013 through
December 31, 2013 (76 FR 42913). The value modifier that would apply to
items and services furnished by specific physicians and groups of
physicians under the 2015 physician fee schedule would be based on
performance during 2013. We proposed this performance period because
some claims for 2013 (which could be used in cost or quality measures)
may not be fully processed until 2014. As such, we will need adequate
lead time to collect performance data, assess performance, and
construct and compute the value modifier during 2014 so that it can be
applied to specific physicians starting January 1, 2015, as required by
statute. As we have done in other payment systems, we plan to use
claims that are paid within a specified time period, such as, 90 days
after 2013, for assessment of performance and application of the value
modifier for 2015. We will propose the specific cut-off period as part
of the more detailed methodology for computation and application of the
value modifier in future rulemaking(s). We requested comment on this
proposed performance period.
Comment: Commenters strongly opposed the use of 2013 as the initial
performance period given ``the myriad methodological issues involved.''
Many commenters stated it was unfair to have the initial performance
period begin January 1, 2013 before the methodology to compute the
value modifier is finalized in November 2013. Some commenters suggested
that the gap between the performance period and the payment adjustment
period was too long. Some commenters suggested we were not required to
use a full year as the performance period. Other commenters suggested
that ``unless and until there is evidence that it is possible to
accurately measure value without penalizing those physicians who treat
the most difficult patients,'' CMS should not move forward with
specifying a performance year. Other commenters suggested CMS designate
calendar year 2015 as a ``practice year'' to allow for additional
physician acceptance of the methodology we use to calculate the value
modifier.
Response: Section 1848(p)(4)(B)(iii) of the Act requires us to
apply the payment modifier to specific physicians and physician groups
the Secretary determines appropriate for items and services furnished
beginning January 1, 2015. We proposed calendar year 2013 as the
initial performance period because it provides physicians with
substantial lead time to participate in the Physician Quality Reporting
System and the EHR Incentive Program and to begin to take the necessary
steps to report quality and use the results to improve the quality of
their care. Indeed, there is still an opportunity to participate in the
Physician Quality Reporting System program for the 2011 program year,
two years before the initial performance period for the value modifier.
As we discussed above, we do not seek to evaluate individual physicians
on each of the quality of care measures used in the value modifier, but
rather assess physician performance using quality of care measures for
the types of care they provide. We strongly encourage physicians to
participate in the Physician Quality Reporting System program and the
EHR Incentive Program sooner rather than later and to choose to report
quality of care measures that best reflect their practice and patient
population. Although we have not yet proposed the value modifier
methodology, our primary interest at this point is to increase the
quality of care for Medicare beneficiaries. We note that we also plan
to propose a value modifier in rulemaking during 2012,

[[Page 73436]]

prior to the initial performance period. Thus, we believe it is
reasonable to encourage physicians to report appropriate quality
measures well in advance and irrespective of the exact value modifier
methodology at this time.
We explored using 2015 as the performance period and making
retroactive adjustments in 2016 to claims paid for care furnished in
2015. This retroactive approach would require us to reprocess all 2015
claims so that each claim shows actual amounts paid. Additionally,
retroactive adjustments affect beneficiary cost sharing amounts, which
also would need to be adjusted retrospectively. Requiring physicians to
collect or refund small cost sharing amounts is operationally complex
and confusing for beneficiaries. These same two issues arise if we were
to use calendar year 2014 as the performance period for the 2015
payment adjustment year.
We also examined whether we could use an abbreviated period (such
as, 6 months) or a period that crossed years (such as, July 1-June 30)
as the performance period. The former approach is unlikely to yield
sufficient volume of cases to develop reliable measures for individual
physicians and the latter approach is inconsistent with reporting
periods currently established for the Physician Quality Reporting
System and the EHR Incentive Program.
Despite these challenges, we are still seeking other ways to close
the gap between the performance period and the payment adjustment
period. In the interim, however, we are finalizing our proposal that
calendar year 2013 be the initial performance period, because it aligns
with the Physician Quality Reporting System and the EHR Incentive
Program and because the alternatives are more onerous to physicians and
beneficiaries than our original proposal. We will reexamine the initial
performance period in future rulemakings as we seek to provide more
timely feedback to physicians.
d. Other Issues
We also requested comment on two issues related to the development
of the value modifier, although we did not make proposals to address
either issue in the proposed rule. First, section 1848(p)(5) of the Act
requires the Secretary, as appropriate, to apply the value-based
modifier in a manner that promotes systems-based care. We sought
comment on how we might determine the scope of systems-based care and
how best to promote it in applying the value modifier. Second, section
1848(p)(6) of the Act requires the Secretary in applying the value
modifier, as appropriate, to take into account the special
circumstances of physicians or groups of physicians in rural areas and
other underserved communities. We requested comment on how we should
identify physicians or groups of physicians in rural areas and other
underserved communities, the specific special circumstances they face,
and once identified, how these special circumstances should be taken
into account for purposes of applying the value modifier (76 FR 42914).
Comment: CMS received many comments promoting systems-based care.
These commenters suggested that applying the value modifier at the
group level reinforced systems-based care. Hospital-based physicians
stated that aligning the value modifier and the hospital value based
purchasing program on both cost and quality would encourage systems-
based care. Another commenter suggested that using a value modifier
that would apply to all physicians in a specific region would encourage
systems-based care. Other commenters indicated that establishment of
medical homes and ``Independence at Home'' for the sickest, most costly
patients encouraged systems-based care. Commenters stated that these
two programs emphasize coordination of care by providing services early
before beneficiary medical conditions become more serious and costly to
treat. Other commenters supported the concept of a coordinated surgical
home model. Another commenter encouraged CMS to work with specialty
societies to define systems-based care for the purpose of the value
modifier.
Response: We thank these commenters for their comments and will
take them into account as we progress in our thinking of ways to
promote systems-based care in the value modifier program, and
particularly how to incorporate care transition/coordination measures
into the program.
Comment: One commenter said we should expand our inquiry beyond
identifying rural physicians and examine whether beneficiaries in rural
areas have sufficient access to care by looking at the breadth and
level of services available to them. This commenter also emphasized the
importance of mid-level providers such as nurse practitioners and
physician assistants and that the value modifier should apply to them.
Commenters stressed that rural providers are already overworked and the
value modifier should be simple and not require additional staff or
technology. One commenter suggested we work with the Veterans
Administration due to their extensive experience and analytic
capabilities. CMS also received comment to consult and work with the
Indian Health Service to understand the organizational structures of
tribal hospitals and clinics. One commenter also suggested that a
modifier that reflects a regional practice mode would ``facilitate
measurement in rural and underserved communities because it emphasizes
a broader perspective and one that is more relevant for providers and
patients.''
Response: We thank these commenters for their input and will take
these comments and the information provided into account as we progress
with the methodology for the value modifier.
3. Physician Feedback Program
Section 1848(n) requires us to provide confidential reports to
physicians that measure the resources involved in furnishing care to
Medicare beneficiaries. Section 1848(n)(1)(A)(iii) of the Act also
authorizes us to include information on the quality of care furnished
to Medicare beneficiaries by a physician or group of physicians. We
have completed two phases of the Physician Feedback Program. By the end
of 2011, we intend to implement Phase III of the Physician Feedback
Program by providing reports on both resource use and quality measures
to physician groups that participated in the Group Practice Reporting
Option (GPRO-1) in 2010 and to physicians practicing in the following
States: Iowa, Kansas, Missouri, and Nebraska. As we explained
previously, many of the methodological issues that we are addressing in
the Physician Feedback Program reports will assist us as we implement
the value modifier.
a. Alignment of Physician Quality Reporting System Quality of Care
Measures With the Physician Feedback Reports
We explained in the proposed rule that we are using the quality
measures reported in the Physician Quality Reporting System in the
Physician Feedback Program reports that we disseminate this year (76 FR
42903). We took this step because use of Physician Quality Reporting
System measures aligns both quality initiatives and reduces potential
program inconsistencies, ensures we do not measure the same clinical
process or outcome using different data sources or methodologies, and
does not place new reporting burdens on physicians. Although we did not
make any proposals in this area, we requested

[[Page 73437]]

comment on using the performance data in the Physician Quality
Reporting System in the Physician Feedback Program.
Comment: Most commenters supported using the Physician Quality
Reporting System's quality measures in the Physician Feedback Program
reports. These commenters frequently also requested a closer alignment
of all of our physician quality improvement programs. A number of
commenters, including hospital-based physicians such as hospitalists,
surgeons, and certain specialists and sub-specialists, noted that the
Physician Quality Reporting System measures did not include measures to
assess their performance or apply to elements of their practice. Many
commenters expressed interest in working with us to identify the
measures that captured the seminal elements of their practice.
Response: We plan to continue to use the quality of care measures
reported in the Physician Quality Reporting System to reduce physician
burden, align physician reporting and support a common infrastructure
for the measurement of physician value. We appreciate the commenter's
interest in working with us as we refine the Physician Feedback Program
to make the reports more meaningful and relevant to more physicians.
b. 2010 Physician Group and Individual Reports Disseminated in 2011
We described in the proposed rule how we intended to create
physician feedback reports for the 35 large medical group practices
(each with 200 or more physicians) that chose to participate in the
Physician Quality Reporting System Group Practice Reporting Option
(GPRO-1) in 2010 (76 FR 42903). In addition, we described how we
planned to disseminate Physician Feedback Program reports to individual
physicians paid under the Physician Fee Schedule within four States:
Iowa, Kansas, Missouri, and Nebraska (76 FR 42904). We explained that
we chose these four States because the Medicare Administrative
Contractor serving these States could assist us in emailing these
reports to a substantial number of physicians because of its robust
electronic communications infrastructure.
We stated in the proposed rule that deciding which physician(s) is/
are responsible for the care of which beneficiaries is an important
aspect of measurement (76 FR 42907). When attributing beneficiary cost
information to physicians, we stated that we must balance between costs
for delivered services that are within the physician's control and
costs for delivered services that are not within their control. We
recognized that attribution rules have the potential to alter
incentives regarding how physicians coordinate and deliver care to
beneficiaries and seek to encourage better care coordination and
accountability for patient outcomes. In addition, determining how to
make relevant comparisons of physicians to a standard or to their peers
is also an important policy aspect of the Physician Feedback Program.
In light of these issues, we indicated that the individual
physician reports that we are disseminating this year will allow more
Medicare beneficiaries to be matched to physicians for purposes of
assessing the quality of care furnished and the associated resources.
In addition, we indicated that the reports will stratify physicians by
specialty and by the conditions they treat, which allow both cost and
clinical measures to reflect procedures and services that best portray
physician practice patterns. Finally, we stated we intended to examine
whether to provide reports to groups of physicians who submit Medicare
claims under a single tax identification number (TIN) to see if we can
provide feedback reports that cover more physicians. Although we did
not make any proposals in this area, we requested comment on these and
any other issues to ensure that the future Physician Feedback Program
reports provide meaningful and actionable information.
Comment: Many commenters agreed with our examination of alternative
attribution methods to assign beneficiaries that would allow increased
numbers of beneficiaries to be matched to physicians but they also
questioned our ability to do so. Many commenters cited the recent
Government Accountability Office (GAO) report, ``Medicare Physician
Feedback program: CMS Faces Challenges with Methodology and
Distribution of Physician Reports,'' that described the challenges
involved with developing and disseminating physician feedback
reports.\3\ In particular, the GAO recommended that we use
methodological approaches that increase the number of physicians
eligible to receive a report, such as: (1) Multiple provider
attribution methods, which could also enhance credibility of the
reports with physicians; and (2) distributing feedback reports that
include only resource use information, if quality information is
unavailable.
---------------------------------------------------------------------------

\3\ Medicare Physician Feedback Program: CMS Faces Challenges
with Methodology and Distribution of Physician Reports, GAO-11-720
(August 12, 2011), available at http://www.gao.gov/new.items/d11720.pdf
---------------------------------------------------------------------------

Response: We worked closely with the GAO in its review of the
Physician Feedback Program by providing them our plans to improve and
expand the program, and we concur with their recommendations to:
Use methodological approaches that increase the number of
physicians eligible to receive a report, such as (a) multiple provider
attribution methods, which could also enhance credibility of the
reports with physicians and (b) distributing feedback reports that
include only resource use information, if quality information is
unavailable.
Conduct statistical analyses of the impact of key
methodological decisions on reliability.
Identify factors that may have prevented physicians from
accessing their reports and, as applicable, develop strategies to
improve the process for distributing reports and facilitating
physicians' access to them.
Obtain input from a sample of physicians who received
feedback reports on the usefulness and credibility of the performance
measures contained in the reports and consider using this information
to revise future reports.
As we discussed with GAO, we are taking steps this year to address
many of the issues that they raised regarding the first two phases of
the Physician Feedback program.
For example, on September 26, 2011, we distributed physician
reports to the physician groups that participated in the Group
Reporting Option in the Physician Quality Reporting System in 2010.
These reports represent the first time performance on a wide-range of
quality of care and cost measures can be viewed in the same report for
Medicare beneficiaries in large group practices across the country. As
recommended by the GAO, we invited all report recipients to provide us
input on the usefulness and credibility of the performance measures
contained in the report so that we could improve the reports for future
years. We will be releasing publicly the general findings from these
reports. This analysis will include statistical analysis of the impact
of key methodological decisions on reliability that the GAO recommended
that we conduct.
In addition, the reports that we are producing for individual
physicians in Iowa, Kansas, Missouri, and Nebraska will contain quality
performance data on the 28 administrative claims-based measures
described in the proposed rule (76 FR 42904 through 42907) for all
physicians and performance on the Physician Quality Reporting System

[[Page 73438]]

measures for those physicians who satisfactorily reported in 2010. For
the cost measures, we will categorize physicians' Medicare fee for
service patients based on the level of care provided to them in 2010 as
measured by outpatient Evaluation and Management (``E/M'') office
visits and total professional costs. Using this approach, we expect to
be able to attribute all Medicare beneficiaries who were enrolled in
Medicare for at least one full year to physicians practicing in those
four States during 2010.
This approach addresses the GAO's recommendations to use
methodological approaches to increase the number of physicians eligible
to receive a report. We will invite report recipients to provide us
input to increase the usefulness and credibility of future individual
physician reports and we will be conducting statistical analysis of the
impact of our methodological decisions on reliability as recommended by
the GAO. In addition, we have taken steps this year to overcome the
barriers that have prevented physicians from accessing their reports in
the past and we will be working on developing future strategies to
improve the process for distributing the reports in the future, as
recommended by the GAO.
Comment: Many commenters supported measuring physician performance
and creating peer groups for comparisons based on specialty or even
more narrowly, subspecialty. By contrast, other commenters supported
measuring physician performance and creating peer groups for
comparisons by patient condition. In either case, many commenters
stated that without a method to identify and compare physicians caring
for the highest acuity patients, we might be unfairly biasing any cost
comparisons or encouraging physicians to avoid caring for the most
complex Medicare patients. Commenters varied in their support of group
versus individual physician level reporting. Several commenters cited
the need for large enough numbers of cases to apply confidence
intervals and noted that reliable results were critical to acceptance
of the Physician Feedback Program reports.
Response: Using the data from the 2010 group and individual
physician feedback reports disseminated in 2011, we plan to evaluate
the reliability for quality of care and cost measures and comparison
groups included in the reports. We will use this analysis to inform how
we move forward with the Physician Feedback Program to ensure that they
contain valid and reliable measures that are fair and meaningful to
physicians' efforts to improve quality while reducing costs.

J. Physician Self-Referral Prohibition: Annual Update to the List of
CPT/HCPCS Codes

1. General
Section 1877 of the Act prohibits a physician from referring a
Medicare beneficiary for certain designated health services (DHS) to an
entity with which the physician (or a member of the physician's
immediate family) has a financial relationship, unless an exception
applies. Section 1877 of the Act also prohibits the DHS entity from
submitting claims to Medicare or billing the beneficiary or any other
entity for Medicare DHS that are furnished as a result of a prohibited
referral.
Section 1877(h)(6) of the Act and Sec. 411.351 of our regulations
specify that the following services are DHS:
Clinical laboratory services.
Physical therapy services.
Occupational therapy services.
Outpatient speech-language pathology services.
Radiology services.
Radiation therapy services and supplies.
Durable medical equipment and supplies.
Parenteral and enteral nutrients, equipment, and supplies.
Prosthetics, orthotics, and prosthetic devices and
supplies.
Home health services.
Outpatient prescription drugs.
Inpatient and outpatient hospital services.
2. Annual Update to the Code List
a. Background
In Sec. 411.351, we specify that the entire scope of four DHS
categories is defined in a list of CPT/HCPCS codes (the Code List),
which is updated annually to account for changes in the most recent CPT
and HCPCS publications. The DHS categories defined and updated in this
manner are as follows:
Clinical laboratory services.
Physical therapy, occupational therapy, and outpatient
speech-language pathology services.
Radiology and certain other imaging services.
Radiation therapy services and supplies.
The Code List also identifies those items and services that may
qualify for either of the following two exceptions to the physician
self-referral prohibition:
Dialysis-related drugs furnished in or by an ESRD facility
(Sec. 411.355(g)).
Preventive screening tests, immunizations, or vaccines
(Sec. 411.355(h)).
The definition of DHS at Sec. 411.351 excludes services that are
reimbursed by Medicare as part of a composite rate (unless the services
are specifically identified as DHS and are themselves payable through a
composite rate, such as home health and inpatient and outpatient
hospital services). Effective January 1, 2011, EPO and other dialysis-
related drugs furnished by an ESRD facility (except drugs for which
there are no injectable equivalents or other forms of administration)
are being paid under the ESRD PPS promulgated in the final rule
published on August 12, 2010 in the Federal Register (75 FR 49030).
Drugs for which there are no injectable equivalents or other forms of
administration will be payable under the ESRD PPS beginning January 1,
2014.
The Code List was last updated in Addendum J of the CY 2011 PFS
final rule with comment period (75 FR 73831 through 73841) and revised
in a subsequent correction notice (76 FR 1670).
b. Response to Comments
We received no public comments relating to the Code List that
became effective January 1, 2011.
c. Revisions Effective for 2012
The updated, comprehensive Code List effective January 1, 2012, is
listed as Addendum J in this final rule with comment period and is
available on our Web site at http://www.cms.gov/PhysicianSelfReferral/40_List_of_Codes.asp#TopOfPage.
Additions and deletions to the Code List conform the Code List to
the most recent publications of CPT and HCPCS and to changes in
Medicare coverage policy and payment status.
The following Tables 83 and 84, identify the additions and
deletions, respectively, to the comprehensive Code List that become
effective January 1, 2012. Tables 83 and 84 also identify the additions
and deletions to the list of codes used to identify the items and
services that may qualify for the exception in Sec. 411.355(g)
(regarding dialysis-related outpatient prescription drugs furnished in
or by an ESRD facility) and in Sec. 411.355(h) (regarding preventive
screening tests, immunizations, and vaccines).
In Table 82, we specify additions that reflect new CPT and HCPCS
codes that become effective January 1, 2012, or that became effective
since our last update. We also include additions that reflect changes
in Medicare coverage policy or

[[Page 73439]]

payment status that become effective January 1, 2012, or that became
effective since our last update.
Table 83 reflects the deletions necessary to conform the Code List
to the most recent publications of the CPT and HCPCS, and to changes in
Medicare coverage policy and payment status. In addition, we are
deleting CPT code 96110 from the category of ``physical therapy,
occupational therapy, and outpatient speech-language pathology
services'' because the code was revised. It has been replaced by HCPCS
code G0451, which is listed in Table 82.
We will consider comments regarding the codes listed in 83 and 84.
Comments will be considered if we receive them by the date specified in
the ``DATES'' section of this final rule with comment period. We will
not consider any comment that advocates a substantive change to any of
the DHS defined in Sec. 411.351.
[GRAPHIC] [TIFF OMITTED] TR28NO11.198

[[Page 73440]]

[GRAPHIC] [TIFF OMITTED] TR28NO11.199

K. Technical Corrections

1. Outpatient Speech-Language Pathology Services: Conditions and
Exclusions
We proposed and are now finalizing a technical correction to the
heading of the condition of coverage at Sec. 410.62(b) for outpatient
speech-language pathology services. The heading was inadvertently
changed in the course of rulemaking for CY 2009 when a new paragraph
was added at Sec. 410.62(c) to recognize speech-language pathologists
in private practice. The section heading at Sec. 410.62(b) currently
reads ``Special provisions for services furnished by speech-language
pathologists in private practice.'' We did not receive public comments
on our proposal to make a technical correction to Sec. 410.62(b), as
such, we are finalizing the change to reinstate the correct heading at
Sec. 410.62(b) to read ``Condition for coverage of outpatient speech-
language pathology services furnished to certain inpatients of a
hospital or a CAH or SNF.''
2. Outpatient Diabetes Self-Management Training and Diabetes Outcome
Measurements
We proposed to make two technical corrections to Subpart H of the
regulations for Outpatient Diabetes Self-Management Training and
Diabetes Outcome Measurements at Sec. 410.140 to the definition of
``deemed entity'' and at Sec. 410.141(b)(1) entitled ``training
orders''. We did not receive public comments on either proposal; as a
result we are finalizing both of these technical corrections as
proposed and discussed below.
a. Changes to the Definition of Deemed Entity
We proposed and are now finalizing the following technical
corrections to the definition of ``deemed entity'' in Sec. 410.140
to--
Remove the following phrases to clarify the purpose of the
reference to an approved entity:
++ ``[B]y CMS to furnish and receive Medicare payment for the
training''.
++ ``Upon being approved''.
++ ``CMS refers to this entity as an ``approved entity''''.
Remove an incorrect reference to Sec. 410.141(e) and
replacing it with Sec. 410.145(b).
The final revisions read as follows:
Deemed entity means an individual, physician, or entity accredited
by an approved organization, but that has not yet been approved by CMS
under Sec. 410.145(b) to furnish training.
b. Changes to the Condition of Coverage Regarding Training Orders
We proposed and are now finalizing the following technical
correction to Sec. 410.141(b)(1) entitled ``training orders'' to:
Remove the cross-reference ``Sec. 410.32(a)'' and adding
the cross-reference ``Sec. 410.32(a)(2)''.
Remove the term ``it'' and adding the phrase ``the
training'' in its place.
The final revisions read as follows:

[[Page 73441]]

Training orders. Following an evaluation of the beneficiary's need
for the training, the training is ordered by the physician (or
qualified nonphysician practitioner) (as defined in Sec. 410.32(a)(2))
treating the beneficiary's diabetes.
3. Practice Expense Relative Value Units (RVUs)
In the CY 2012 PFS proposed rule (76 FR 42920), we proposed
technical corrections to the regulation at Sec. 414.22(b) to include
examples of the settings in which the facility or nonfacility practice
expense (PE) RVUs are applied and to clarify that the settings list was
not exhaustive. We proposed adding ``hospice'' after ``community mental
health center'' under Sec. 414.22(b)(5)(i)(A) as a setting in which
facility PE RVUs apply. We proposed revising the language under Sec.
414.22(b)(5)(i)(B) to include ``comprehensive outpatient rehabilitation
facility (CORF)'' as a setting in which nonfacility PE RVUs are
applied, and we proposed to revise the description of outpatient
therapy services.
Comment: We received one comment from an association representing
speech-language pathologists and audiologists requesting that we add
audiology services in our proposed revision of paragraph (b)(5)(i)(C)
of the regulation at Sec. 414.22(b) that specifies the nonfacility
practice expense RVUs are always applied to outpatient therapy services
and CORF services billed under the physician fee schedule. Following
this logic, the commenters requested that we remove the facility
practice expense RVUs from 15 of the CPT codes on the Audiology Code
list at http://www.cms.gov/PhysicianFeeSched/ and always pay for
audiology services at the nonfacility practice expense RVU amount.
Response: Our proposed revision to the regulation at Sec.
414.22(b)(5)(i)(C) was merely a technical change to reflect more
accurately our current policy to apply the nonfacility PE RVUs for
outpatient therapy and CORF services billed under the PFS, and to add a
parenthetical description of outpatient therapy services. We did not
propose to make any changes in our current policy regarding the
settings in which the facility or nonfacility PE RVUs are applied.
Under sections 1833(a)(8) and (9), and 1834(k) of the Act, payment for
all outpatient therapy services, including physical therapy,
occupational therapy, speech-language pathology and CORF services, is
made at the ``applicable fee schedule amount'' which is the payment
amount determined under the PFS. Audiology services are not included
within the definition of outpatient therapy services subject to this
payment basis. As a result, we will continue to pay for audiology
services under the physician fee schedule, applying nonfacility or
facility PE RVUs, as appropriate based on the setting in which services
are furnished.
We are finalizing the following technical corrections to the
regulation at Sec. 414.22(b):
In paragraphs (b)(5)(i)(A) and (B), we--
++ Included additional examples of the settings in which the
facility or nonfacility practice expense (PE) RVUs are applied,
respectively; and
++ Clarified that the lists of settings are not exhaustive; and
amended these lists to include additional place of service examples.
In paragraph (b)(5)(i)(A) we added ``hospice'' to the list
of places of service after ``community mental health center.''
In paragraph (b)(5)(i)(B), we--
++ Revised the language to be more consistent with (b)(5)(i)(A) and
to include the ``comprehensive outpatient rehabilitation facility
(CORF)'' as a place of service example; and
++ Clarified this provision by removing the text regarding the use
of the nonfacility PE RVUs for services in `` * * * a facility or
institution other than the hospital, skilled nursing facility,
community mental health center, or ASC'' because this phrase does not
accurately reflect the places of service where the nonfacility PE RVUs
are applied.
In paragraph (b)(5)(i)(C), we--
++ Revised the paragraph introduction by adding ``and CORF'' after
``outpatient therapy'' and before ``services'' and, to more accurately
define the term ``outpatient therapy services,'' to add ``(including
physical therapy, occupational therapy and speech-language pathology
services)'' after ``therapy services'' and before ``CORF services
billed under * * *''.
The final revisions to Sec. 414.22(b)(5)(i)(A), (B), and (C) read
as follows:
(A) Facility practice expense RVUs. The facility practice expense
RVUs apply to services furnished to patients in places of service
including, but not limited to, a hospital, a skilled nursing facility,
a community mental health center, a hospice, or an ambulatory surgical
center.
(B) Nonfacility practice expense RVUs. The nonfacility practice
expense RVUs apply to services furnished to patients in places of
service including, but not limited to, a physician's office, the
patient's home, a nursing facility, or a comprehensive outpatient
rehabilitation facility (CORF).
(C) Outpatient therapy and CORF services. Outpatient therapy
services (including physical therapy, occupational therapy, and speech-
language pathology services) and CORF services billed under the
physician fee schedule are paid using the nonfacility practice expense
RVUs.

VII. Waiver of Proposed Rulemaking and Collection of Information
Requirements

A. Waiver of Proposed Rulemaking and Delay in Effective Date

We ordinarily publish a notice of proposed rulemaking in the
Federal Register and invite public comment on the proposed rule. The
notice of proposed rulemaking includes a reference to the legal
authority under which the rule is proposed, and the terms and substance
of the proposed rule or a description of the subjects and issues
involved. This procedure can be waived, however, if an agency finds
good cause that a notice-and-comment procedure is impracticable,
unnecessary, or contrary to the public interest and incorporates a
statement of the finding and its reasons in the rule issued.
We utilize HCPCS codes for Medicare payment purposes. The HCPCS is
a national drug coding system comprised of Level I (CPT) codes and
Level II (HCPCS National Codes) that are intended to provide uniformity
to coding procedures, services, and supplies across all types of
medical providers and suppliers. Level I (CPT) codes are copyrighted by
the AMA and consist of several categories, including Category I codes
which are 5-digit numeric codes, and Category III codes which are
temporary codes to track emerging technology, services, and procedures.
The AMA issues an annual update of the CPT code set each Fall, with
January 1 as the effective date for implementing the updated CPT codes.
The HCPCS, including both Level I and Level II codes, is similarly
updated annually on a CY basis. Annual coding changes are not available
to the public until the Fall immediately preceding the annual January
update of the PFS. Because of the timing of the release of these new
codes, it is impracticable for us to provide prior notice and solicit
comment on these codes and the RVUs assigned to them in advance of
publication of the final rule that implements the PFS. Yet, it is
imperative that these coding changes be

[[Page 73442]]

accounted for and recognized timely under the PFS for payment because
services represented by these codes will be provided to Medicare
beneficiaries by physicians during the CY in which they become
effective. Moreover, regulations implementing HIPAA (42 CFR parts 160
and 162) require that the HCPCS be used to report health care services,
including services paid under the PFS. We assign interim RVUs to any
new codes based on a review of the AMA RUC recommendations for valuing
these services. We also assign interim RVUs to certain codes for which
we did not receive specific AMA RUC recommendations, but that are
components of new combined codes. We set interim RVUs for the component
codes in order to conform them to the value of the combined code.
Finally, we assign interim RVUs to certain codes for which we received
AMA RUC recommendations for only one component (work or PE) but not
both. By reviewing these AMA RUC recommendations for the new codes, we
are able to assign RVUs to services based on input from the medical
community and to establish payment for them, on an interim basis, that
corresponds to the relative resources associated with furnishing the
services. We are also able to determine, on an interim final basis,
whether the codes will be subject other payment policies. If we did not
assign RVUs to new codes on an interim basis, the alternative would be
to either not pay for these services during the initial CY or have each
Medicare contractor establish a payment rate for these new codes. We
believe both of these alternatives are contrary to the public interest,
particularly since the AMA RUC process allows for an assessment of the
valuation of these services by the medical community prior to our
establishing payment for these codes on an interim basis. Therefore, we
believe it would be contrary to the public interest to delay
establishment of fee schedule payment amounts for these codes.
For the reasons previously outlined in this section, we find good
cause to waive the notice of proposed rulemaking for the interim RVUs
for selected procedure codes identified in Addendum C and to establish
RVUs for these codes on an interim final basis. We are providing a 60-
day public comment period.
Section II.C. of this final rule with comment period discusses the
identification and review of potentially misvalued codes by the AMA
RUC, as well as our review and decisions regarding the AMA RUC
recommendations. Similar to the AMA RUC recommendations for new and
revised codes previously discussed, due to the timing of the AMA RUC
recommendations for the potentially misvalued codes, it was
impracticable for CMS to solicit public comment regarding specific
proposals for revision prior to this final rule with comment period. We
believe it is in the public interest to implement the revised RVUs for
the codes that were identified as misvalued, and that have been
reviewed and re-evaluated by the AMA RUC, on an interim final basis for
CY 2012. The revisions of RVUs for these codes will establish a more
appropriate payment that better corresponds to the relative resources
associated with furnishing these services. A delay in implementing
revised values for these misvalued codes would not only perpetuate the
known misvaluation for these services, it would also perpetuate a
distortion in the payment for other services under the PFS.
Implementing the changes now allows for a more equitable distribution
of payments across all PFS services. We believe a delay in
implementation of these revisions would be contrary to the public
interest, particularly since the AMA RUC process allows for an
assessment of the valuation of these services by the medical community
prior to the AMA RUC's recommendation to CMS. For the reasons
previously described, we find good cause to waive notice and comment
procedures with respect to the misvalued codes identified in Tables 19
through 22 and to revise RVUs for these codes on an interim final
basis. We are providing a 60-day public comment period.
We ordinarily provide a 60-day delay in the effective date of the
provisions of a rule in accordance with the Administrative Procedure
Act (APA) (5 U.S.C. 553(d)), which requires a 30-day delayed effective
date, and the Congressional Review Act (5 U.S.C. 801(a)(3)), which
requires a 60-day delayed effective date for major rules. However, we
can waive the delay in the effective date if the Secretary finds, for
good cause, that the delay is impracticable, unnecessary, or contrary
to the public interest, and incorporates a statement of the finding and
the reasons in the rule issued (5 U.S.C. 553(d)(3); 5 U.S.C. 808(2)).

B. Collection of Information Requirements

Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
Section 4103 of the Affordable Care Act expanded Medicare Part B to
include coverage for an annual wellness visit providing personalized
prevention plan services (hereinafter referred to as an annual wellness
visit) in section 1861(s)(2)(FF) of the Act, effective January 1, 2011.
In 42 CFR 410.15, we adopted the components of the annual wellness
visit, consistent with the statutory elements described in section
1861(hhh)(2) of the Act. The first and subsequent annual wellness
visits, as defined in 42 CFR 410.15(a), are meant to represent a
beneficiary visit focused on prevention. Among other things, the annual
wellness visit encourages beneficiaries to obtain the preventive
services covered by Medicare that are appropriate for them. First and
subsequent annual wellness visits also include elements that focus on
the furnishing of personalized health advice and referral, as
appropriate, to health education, preventive counseling services,
programs aimed at improving self-management, and community-based
lifestyle interventions.
Medicare beneficiaries will likely need assistance from physician
office staff in completing an HRA as envisioned in the CDC interim
guidance. The physician office staff time for assisting a beneficiary
in completing an HRA is estimated to be 10 minutes (.16 hours) for a
first annual wellness visit. During subsequent annual wellness visits,
we would typically expect that the HRA would be updated, making
physician staff time estimated at 5 minutes (.08 hours). The number of
beneficiaries that received the annual wellness visit during the first
10 months of 2011 was 1.6 million. Based on this information, the
estimated hour burden for the initial HRA is 256,000 total hours.
However, for purposes of OMB review and approval, the average annual
burden which accounts both the initial HRA and subsequent HRAs is
200,000

[[Page 73443]]

hours. An average burden of 7.5 minutes (0.125 hours) multiplied by 1.6
million beneficiaries.
The final rule with comment period imposes collection of
information requirements as outlined in the regulation text and
specified in various section of this final rule with comment period.
However, this final rule with comment period also makes reference to
several associated information collections that are not discussed in
the regulation text contained in this document. The following is a
discussion of these information collections, some of which have already
received OMB approval.
1. Part B Drug Payment
The discussion of average sales price (ASP) issues in section
VI.A.1 of this final rule with comment period pertains to payment for
Medicare Part B drugs and biologicals under the ASP methodology. Drug
manufacturers are required to submit ASP data to us on a quarterly
basis. The ASP reporting requirements are set forth in section 1927(b)
of the Act. In order to facilitate more accurate and consistent ASP
data reporting from manufacturers, we proposed the following:
To revise existing reporting fields and add new fields to
the Addendum A template.
To add a macro to the Addendum A template that will allow
manufacturers to validate the format of their data prior to submission.
To maintain a list of HCPCS codes for which manufacturer's
report ASPs for NDCs on the basis of a specified unit.
A clarification to existing regulation text at Sec.
414.802. Current regulation text states that ``Unit means the product
represented by the 11 digit National Drug Code.'' We proposed to update
the definition to account for situations when an alternative unit of
reporting must be used.
Additionally, we will also be revising our instructions for the
reporting of dermal grafting products in a user guide available on the
ASP Web site at: http://www.cms.gov/McrPartBDrugAvgSalesPrice/.
The burden associated with this requirement is the time and effort
required by manufacturers of Medicare Part B drugs and biologicals to
calculate, record, and submit the required data to CMS. The Addendum A
template is currently approved under OMB control number 0938-0921. For
the first year, we estimate that collection of the additional data
elements will take approximately 2 additional hours for each submission
of data, or 12 hours per response, at a cost of $252 per response.
Based on the current number of respondents, we estimate that this
requirement will affect approximately 180 manufacturers. Since
manufacturers will respond 4 times per year, we estimate that, on an
annual basis, the annual number of responses will be 720 (180
manufacturers x 4 responses) and the total annual hours burden will be
8,640 hours (720 annual responses x 12 annual hours per response).
Please note that this is a corrected annual hour burden estimate; the
34,560 hour estimate in the proposed rule (76 FR 42921) resulted from a
mathematical error. We estimate the annual cost burden to be $181,440
($252 per response x 720 responses). Once manufacturers adjust to the
changes associated with electronic reporting after the first year, we
anticipate that the burden estimate will decrease.
We invited comments on this burden analysis, including the
underlying assumptions used in developing our burden estimates and
received no comments. We have corrected a mathematical error associated
with the total annual burden which decreases the hourly burden. The
cost estimate remains unchanged. Operational aspects and comments
regarding the ASP template were discussed in section VI.A.3 of this
rule where we finalized our proposal to amend the Addendum A template,
including the use of a data validation macro with the expansion of the
``Alternate ID'' field. A companion Users' Guide, and other documents
will be posted on the CMS ASP Web site.
2. The Physician Quality Reporting System
Section VI.F.1. of this final rule with comment period discusses
the background of the Physician Quality Reporting System, provides
information about the measures and reporting mechanisms that will be
available to eligible professionals and group practices who choose to
participate in the 2012 Physician Quality Reporting System, and the
criteria for satisfactory reporting in 2012.
a. Estimated Participation in the 2012 Physician Quality Reporting
System
With respect to satisfactory submission of data on quality measures
by eligible professionals, eligible professionals include physicians,
other practitioners as described in section 1842(b)(18)(c) of the Act,
physical and occupational therapists, qualified speech-language
pathologists, and qualified audiologists. Eligible professionals may
choose whether to participate and, to the extent they satisfactorily
submit data on quality measures for covered professional services, they
can qualify to receive an incentive payment. To qualify to receive an
incentive payment for 2012, the eligible professional (or group
practice) must meet one of the criteria for satisfactory reporting
described in section VI.F.1.e. or VI.F.1.f. of this final rule with
comment period (or section VI.F.1.g. for group practices).
Because this is a voluntary program, it is difficult to accurately
estimate how many eligible professionals will opt to participate in the
Physician Quality Reporting System in CY 2012. Information from the
``Physician Quality Reporting System 2009 Reporting Experience Report''
(hereinafter 2009 Experience Report) which is available on the
Physician Quality Reporting System section of the CMS Web site at
http://www.cms.hhs.gov/pqrs, indicates that eligible professionals from
nearly 120,000 unique TIN/NPI combinations satisfactorily submitted
Physician Quality Reporting System quality measures data for the 2009
Physician Quality Reporting System. Therefore, for purposes of
conducting a burden analysis for the 2012 Physician Quality Reporting
System, we will assume that all eligible professionals who attempted to
participate in the 2009 Physician Quality Reporting System will also
attempt to participate in the 2012 Physician Quality Reporting System.
We invited but received no public comment on our estimates
regarding the projected participation in the 2012 Physician Quality
Reporting System. However, for the reasons explained below, we believe
that more eligible professionals will participate in the Physician
Quality Reporting System in 2012 than in 2009.
According to the 2009 Experience Report, the number of eligible
professionals eligible to participate and actually participating in the
Physician Quality Reporting System has increased each year from 2007
through 2009. Participation in the Physician Quality Reporting System
has increased from 98,696 out of 621,840 eligible professionals in 2007
to 164,828 out of 977,415 eligible professionals in 2008 to 221,858 out
of 1,042,260 eligible professionals in 2009.
With respect to participation in 2008, 66,132 more eligible
professionals participated in the 2008 Physician Quality Reporting
System (then called the Physician Quality Reporting Initiative or PQRI)
than in 2007. The percentage of eligible professionals participating in
2008 also increased from 16 percent in 2007 to 17 percent in 2008. We
believe that this increase

[[Page 73444]]

was due to a number of factors, including but not exclusive to:
An increased number of professionals eligible to
participate in the Physician Quality Reporting System in 2008: The
number of professionals eligible to participate increased from 621,840
to 977,415 professionals from 2007 to 2008.
Increased familiarity with the program: The Physician
Quality Reporting System was first implemented in 2007. As such, we
believe that our efforts to educate the public on the Physician Quality
Reporting System through education and outreach efforts as well as
general increased familiarity of the availability of earning incentives
by satisfactorily reporting Physician Quality Reporting System measures
led to an increase in program participation.
The introduction of the registry-based reporting
mechanism: In 2007, the claims-based reporting mechanism was the only
reporting mechanism available for reporting Physician Quality Reporting
System quality measures. In 2008, eligible professionals were able to
submit data on Physician Quality Reporting System quality measures via
the registry-based reporting mechanism as well.
The introduction of reporting Physician Quality Reporting
System quality measures via measures groups in addition to reporting
measures individually: The reporting of Physician Quality Reporting
System quality measures via measures groups was not available in 2007.
However, in 2008, eligible professionals had the option of reporting
Physician Quality Reporting System quality measures via measures groups
via claims and registry.
An increased number of measures and measures groups
available for reporting under the Physician Quality Reporting System.
With respect to participation in 2009, 64,648 more eligible
professionals participated in the 2009 Physician Quality Reporting
System (then called the Physician Quality Reporting Initiative or PQRI)
than in 2008. The percentage of eligible professionals participating in
2008 also increased from 17 percent in 2008 to 21 percent in 2009. We
believe that this increase was due to a number of factors, including
but not exclusive to:
An increased number of professionals eligible to
participate in the Physician Quality Reporting System in 2008: The
number of professionals eligible to participate increased from 977,415
to 1,042,260 professionals from 2008 to 2009.
Increased familiarity with the program.
An increased incentive payment amount for satisfactory
reporting from 1.5 percent in 2008 to 2.0 percent in 2009.
An increased number of measures and measures groups
available for reporting under the Physician Quality Reporting System.
Accordingly, we expect participation in the 2012 Physician Quality
Reporting System to increase due to a number of factors, including but
not exclusive to:
Increased familiarity with the program: 2012 will mark the
6th year since the Physician Quality Reporting System was first
implemented.
The availability of the EHR-based reporting mechanism: As
described in further detail in section VI.F.1.d.3 of this final rule
with comment period, for 2012, we finalized two options under EHR-based
reporting mechanism by which eligible professionals may utilize to
submit data on Physician Quality Reporting System quality measures: The
EHR data submission vendor and direct EHR options.
An increased number of measures and measures groups
available for reporting under the Physician Quality Reporting System:
As described in further detail in section VI.F.1.f of this final rule
with comment period, we have added additional measures available for
claims, registry, and/or EHR-based reporting as well as additional
measures groups available for claims and/or registry reporting.
The establishment of CY 2013 as the reporting period for
the 2015 payment adjustment. As described in greater detail in section
VI.F.1.j of this final rule with comment period, we finalized our
proposal to establish CY 2013 as the reporting period for the 2015
payment adjustment. We expect that more eligible professionals will
attempt to meet the criteria for satisfactory reporting in 2012 before
the 2015 payment adjustment reporting period commences on January 1,
2013.
Alignment and incorporation of certain Physician Quality
Reporting System reporting requirements under other CMS programs, such
as the EHR Incentive Program and the Medicare Shared Savings Program.
In an effort to align various CMS quality reporting programs, we have
created reporting requirements under other CMS programs that are
similar or identical to those required under the Physician Quality
Reporting System. For example, as described in greater detail under
section VI.F.1.e.3 of this final rule with comment period, we
established reporting criteria that satisfy both the Physician Quality
Reporting System incentive and fulfill the CQM requirement for
achieving meaningful use under the EHR Incentive Program (75 FR 44409
through 44411). In addition, as described in section VI.F.4 of this
final rule with comment period, the EHR Incentive Program established
the Physician Quality Reporting System-Medicare EHR Incentive Pilot,
whereby eligible professionals may data on the same sample of
beneficiaries to fulfill the requirements for satisfactory reporting
under the Physician Quality Reporting System while also fulfilling the
CQM reporting requirements for achieving meaningful use under the EHR
Incentive Program.
As finalized in the final rule entitled ``Medicare Program;
Medicare Shared Savings Program: Accountable Care Organizations,''
displayed in the Federal Register on October 20, 2011, the Medicare
Shared Savings Program also incorporated certain Physician Quality
System reporting requirements and incentives whereby eligible
professionals within Accountable Care Organizations (ACOs) may earn
under a group practice reporting option (GPRO) a Physician Quality
Reporting System incentive under the Medicare Shared Savings Program.
Furthermore, as stated in section VI.I of this final rule, under
the Physician Feedback Program, we plan to use the Physician Quality
Reporting System quality measures in the Physician Feedback reports we
disseminate, and we are finalizing certain measures from the Physician
Quality Repoting System and EHR Incentive Program for purposes of the
Physician value modifier, which will be applied beginning in CY 2015.
According to the 2009 Experience Report, we have seen a 1 percent
and 4 percent increase in participation in the Physician Quality
Reporting System from 2007 to 2008 and 2008 to 2009 respectively. Based
on our above assumptions, we believe we will see at least a 1 percent
increase in the number of eligible professionals participating in the
Physician Quality Reporting System from 2011 to 2012. Information on
participation rates for the 2010 and 2011 Physician Quality Reporting
System is not yet available. Therefore, for purposes of determining how
many eligible professionals will participate in 2012, we will assume a
1 percent increase in participation each program year from 2009 through
2012. Therefore, we assume that 224,076 eligible professionals (a 1
percent increase from 221,858) participated in the 2010 Physician
Quality Reporting System. We then assume that 226,316 eligible
professionals participated in the 2011 Physician Quality Reporting
System (a 1

[[Page 73445]]

percent increase from 224,076). Based on these assumptions, we estimate
that at least 228,579 eligible professionals will participate in the
2012 Physician Quality Reporting System (a 1 percent increase from
226,316).
b. Burden Estimate on Participation in the 2012 Physician Quality
Reporting System--Individual Eligible Professionals
As we stated in the proposed rule (76 FR 42921), we believe that
the burden for eligible professionals who are participating in the
Physician Quality Reporting System for the first time in 2012 will be
considerably higher than the burden for eligible professionals who have
participated in the Physician Quality Reporting System in prior years.
As described below, some preparatory steps are needed to begin
participating in the Physician Quality Reporting System. To the extent
that we did not retire the measures that an eligible professional has
reported in a prior year and there are no changes to the measure's
specifications from a prior year, such preparatory steps will not need
to be repeated in subsequent years.
For individual eligible professionals, in the proposed rule (76 FR
42922), we noted that the burden associated with the requirements of
this reporting initiative will be the time and effort associated with
eligible professional's practice identifying applicable Physician
Quality Reporting System quality measures for which they can report the
necessary information, collecting the necessary information, and
reporting the information needed to report the eligible professional's
or group practice's measures.
We believe it is difficult to definitively quantify the burden
because eligible professionals may have different processes for
integrating the data collection for the Physician Quality Reporting
System measures into their practice's work flows. Moreover, we expect
that the time needed for an eligible professional to review the quality
measures and other information, select measures applicable to his or
her patients and the services he or she furnishes to them, and
incorporate the use of quality data codes into the office work flows
will vary along with the number of measures that are potentially
applicable to a given professional's practice.
Since a majority of eligible professionals participate via claims
or registry-based reporting of individual measures, they will generally
be required to report on at least three measures to earn a Physician
Quality Reporting System incentive. Therefore, we will assume that each
eligible professional who attempts to submit Physician Quality
Reporting System quality measures data via claims or registry reporting
is attempting to earn a Physician Quality Reporting System incentive
payment and reports on an average of three measures for this burden
analysis.
This burden analysis focuses on those new to the Physician Quality
Reporting System. We will assign 5 hours as the amount of time needed
for eligible professionals to review the 2012 Physician Quality
Reporting System Measures List, review the various reporting options,
select the most appropriate reporting option, identify the applicable
measures or measures groups for which they can report the necessary
information, review the measure specifications for the selected
measures or measures groups, and incorporate reporting of the selected
measures or measures groups into the office work flows. This estimate
is based on our assumption that an eligible professional will need up
to 2 hours to review the 2012 Physician Quality Reporting System
Measures List, review the reporting options, and select a reporting
option and measures on which to report and 3 hours to review the
measure specifications for up to 3 selected measures or up to 1
selected measures group and to develop a mechanism for incorporating
reporting of the selected measures or measures group into the office
work flows.
In the proposed rule (76 FR 42922), based on information from the
Physician Voluntary Reporting Program (PVRP), which was a predecessor
to the Physician Quality Reporting System, we provided an estimated
labor cost of $60/hour. However, in an effort to provide a more
accurate labor cost estimate of participation for the 2012 Physician
Quality Reporting System, we conducted an informal poll among a small
sample of participants in the 2011 Physician Quality Reporting System
to determine what employees within an eligible professional's practice
are involved with Physician Quality Reporting System activities. The
poll revealed that a billing clerk typically handles administrative
details with respect to participating under the Physician Quality
Reporting System (such as submitting self-nomination statements),
whereas a computer analyst typically handles the reporting of Physician
Quality Reporting System quality measures. Based on this information,
we are changing our estimated labor costs associated with participating
in the Physician Quality Reporting System.
For purposes of this burden estimate, we will assume that a billing
clerk will handle the administrative duties associated with
participating in the 2012 Physician Quality Reporting System. According
to information published by the Bureau of Labor Statistics, available
at http://www.bls.gov/oes/current/oes433021.htm, the mean hourly wage
for a billing clerk is $16.00/hour. Therefore, for purposes of handling
administrative duties, we estimate an average labor cost of $16.00/
hour.
In addition, for purposes of this burden estimate, we will assume
that a computer analyst will engage in the duties associated with the
reporting of 2012 Physician Quality Reporting System quality measures.
According to information published by the Bureau of Labor Statistics,
available at http://www.bls.gov/oes/current/oes151121.htm, the mean
hourly wage for a computer analyst is $39.06/hour, or approximately
$40.00/hour. Therefore, for purposes of reporting on 2012 Physician
Quality Reporting System quality measures, we estimate an average labor
cost of $40.00/hour.
We continue to expect the ongoing costs associated with Physician
Quality Reporting System participation to decline based on an eligible
professional's familiarity with and understanding of the Physician
Quality Reporting System, experience with participating in the
Physician Quality Reporting System, and increased efforts by CMS and
stakeholders to disseminate useful educational resources and best
practices. We also continue to expect the ongoing costs associated with
Physician Quality Reporting System participation to decline as we align
the participation requirements in the Physician Quality Reporting
System with the reporting requirements in the Medicare and Medicaid
Electronic Health Record (EHR) Incentive Program such that an eligible
professional may only need to submit data to CMS one time for multiple
purposes.
We believe the burden associated with actually reporting the
Physician Quality Reporting System quality measures will vary depending
on the reporting mechanism selected by the eligible professional.
(1) Burden Estimate on Participation in the 2012 Physician Quality
Reporting System via the Claims-Based Reporting Mechanism--Individual
Eligible Professionals
For the claims-based reporting option being finalized, eligible
professionals must gather the required information, select the
appropriate quality data codes

[[Page 73446]]

(QDCs), and include the appropriate QDCs on the claims they submit for
payment. The Physician Quality Reporting System will collect QDCs as
additional (optional) line items on the existing HIPAA transaction 837-
P and/or CMS Form 1500 (OCN: 0938-0999). We do not anticipate any new
forms and or any modifications to the existing transaction or form. We
also do not anticipate changes to the 837-P or CMS Form 1500 for CY
2012.
Based on our experience with the PVRP, we continue to estimate that
the time needed to perform all the steps necessary to report each
measure (that is, reporting the relevant quality data code(s) for a
measure) on claims will ranges from 15 seconds (0.25 minutes) to over
12 minutes for complicated cases and/or measures, with the median time
being 1.75 minutes. At an average labor cost of $40/hour per practice,
the cost associated with this burden will range from $0.17 in labor to
about $8.00 in labor time for more complicated cases and/or measures,
with the cost for the median practice being $1.67.
The total estimated annual burden for this requirement will also
vary along with the volume of claims on which quality data is reported.
In previous years, when we required reporting on 80 percent of eligible
cases for claims-based reporting, we found that on average, the median
number of reporting instances for each of the Physician Quality
Reporting System measures was 9. Since we are reducing the required
reporting rate by over one-third to 50 percent in this final rule, then
for purposes of this burden analysis we will assume that an eligible
professional will need to report each selected measure for 6 reporting
instances. The actual number of cases on which an eligible professional
is required to report quality measures data will vary, however, with
the eligible professional's patient population and the types of
measures on which the eligible professional chooses to report (each
measure's specifications includes a required reporting frequency).
Based on the assumptions discussed previously, we estimate the
total annual reporting burden per individual eligible professional
associated with claims-based reporting will range from 4.5 minutes
(0.25 minutes per measure x 3 measures x 6 cases per measure) to 180
minutes (12 minutes per measure x 3 measures x 6 cases per measure),
with the burden to the median practice being 31.5 minutes (1.75 minutes
per measure x 3 measures x 6 cases). We estimate the total annual
reporting cost per eligible professional associated with claims-based
reporting will range from $3.06 ($0.17 per measure x 3 measures x 6
cases per measure) to $144.00 ($8.00 per measure x 3 measures x 6 cases
per measure), with the cost to the median practice being $30.06 per
eligible professional ($1.67 per measure x 3 measures x 6 cases per
measure).
b. Burden Estimate on Participation in the 2012 Physician Quality
Reporting System via the Registry-Based Reporting Mechanism--Individual
Eligible Professionals
For registry-based reporting, there will be no additional time
burden for eligible professionals to report data to a registry as
eligible professionals opting for registry-based reporting will more
than likely already be reporting data to the registry for other
purposes and the registry will merely be re-packaging the data for use
in the Physician Quality Reporting System. Little, if any, additional
data will need to be reported to the registry solely for purposes of
participation in the 2012 Physician Quality Reporting System. However,
eligible professionals will need to authorize or instruct the registry
to submit quality measures results and numerator and denominator data
on quality measures to CMS on their behalf. We estimate that the time
and effort associated with this will be approximately 5 minutes per
eligible professional.
Registries interested in submitting quality measures results and
numerator and denominator data on quality measures to CMS on their
participants' behalf in 2012 will need to complete a self-nomination
process in order to be considered qualified to submit on behalf of
eligible professionals unless the registry was qualified to submit on
behalf of eligible professionals for prior program years and did so
successfully. We estimate that the self-nomination process for
qualifying additional registries to submit on behalf of eligible
professionals for the 2012 Physician Quality Reporting System will
involve approximately 1 hour per registry to draft the letter of intent
for self-nomination. We estimate that each self-nominated entity will
also spend 2 hours for the interview with CMS officials and 2 hours
calculating numerators, denominators, and measure results for each
measure the registry wishes to report using a CMS-provided measure
flow. However, the time it takes to produce calculated numerators,
denominators, and measure results using the CMS-provided measure flows
could vary depending on the registry's experience and the number and
type of measures for which the registry wishes to submit on behalf of
eligible professionals. Additionally, part of the self-nomination
process involves the completion of an XML submission by the registry,
which we estimate to take approximately 5 hours, but may vary depending
on the registry's experience. We estimate that the registry staff
involved in the registry self-nomination process will have an average
labor cost of $16/hour. Therefore, assuming the total burden hours per
registry associated with the registry self-nomination process is 10
hours, we estimate that the total cost to a registry associated with
the registry self-nomination process will be approximately $160 ($16
per hour x 10 hours per registry).
The burden associated with the registry-based reporting
requirements of the Physician Quality Reporting System will be the time
and effort associated with the registry calculating quality measures
results from the data submitted to the registry by its participants and
submitting the quality measures results and numerator and denominator
data on quality measures to CMS on behalf of their participants. We
expect that the time needed for a registry to review the quality
measures and other information, calculate the measures results, and
submit the measures results and numerator and denominator data on the
quality measures on their participants' behalf will vary along with the
number of eligible professionals reporting data to the registry and the
number of applicable measures. However, we believe that registries
already perform many of these activities for their participants.
Therefore, there may not necessarily be a burden on a particular
registry associated with calculating the measure results and submitting
the measures results and numerator and denominator data on the quality
measures to CMS on behalf of their participants. Whether there is any
additional burden to the registry as a result of the registry's
participation in the Physician Quality Reporting System will depend on
the number of measures that the registry intends to report to CMS and
how similar the registry's measures are to CMS' Physician Quality
Reporting System measures.
(2) Burden Estimate on Participation in the 2012 Physician Quality
Reporting System via the EHR-Based Reporting Mechanism--Individual
Eligible Professionals
For EHR-based reporting for the CY 2012 Physician Quality Reporting
System, the individual eligible professional may either submit the
quality measures data directly to CMS

[[Page 73447]]

from their EHR or utilize an EHR data submission vendor to submit the
data to CMS on the eligible professionals' behalf. To submit data to
CMS directly from their EHR, the eligible professional must have access
to a CMS-specified identity management system, such as IACS, which we
believe takes less than 1 hour to obtain. Once an eligible professional
has an account for this CMS-specified identity management system, he or
she will need to extract the necessary clinical data from his or her
EHR, and submit the necessary data to the CMS-designated clinical data
warehouse. With respect to the requirement for an eligible professional
to submit a test file, we believe that doing so will take less than 1
hour. With respect to submitting the actual 2012 data file in 2013, we
believe that this will take an eligible professional no more than 2
hours, depending on the number of patients on which the eligible
professional is submitting. We believe that once the EHR is programmed
by the vendor to allow data submission to CMS, the burden to the
eligible professional associated with submission of data on Physician
Quality Reporting System quality measures should be minimal as all of
the information required to report the measure should already reside in
the eligible professional's EHR. We did not introduce the EHR-based
reporting mechanism into the Physician Quality Reporting System until
2010. We are still in the process of analyzing 2010 data. As such, we
believe it is difficult to predict how many eligible professionals may
choose to participate in the 2012 Physician Quality Reporting System
via the EHR-based reporting mechanism.
An EHR vendor interested in having their product(s) used by
eligible professionals to submit the Physician Quality Reporting System
quality measures data to CMS or interested in submitting data obtained
from an EHR to CMS on behalf of eligible professionals is required to
complete a self-nomination process in order for the vendor and/or its
product(s) to be considered qualified for 2012. It is difficult to
definitively quantify the burden associated with the EHR self-
nomination process as there is variation regarding the technical
capabilities and experience among vendors. For purposes of this burden
analysis, however, we estimate that the time required for an EHR vendor
to complete the self-nomination process will be similar to the time
required for registries to self-nominate, which is approximately 10
hours at $16/hour for a total of $160/EHR vendor ($16/hour x 10 hours/
EHR vendor).
The burden associated with the EHR vendor programming its EHR
product(s) to extract the clinical data that the eligible professional
must submit to CMS for purposes of reporting 2012 Physician Quality
Reporting System quality measures will be dependent on the EHR vendor's
familiarity with the Physician Quality Reporting System, the vendor's
system capabilities, as well as the vendor's programming capabilities.
Some vendors already have these necessary capabilities and for such
vendors, we estimate that the total burden hours will be 40 hours at a
rate of $40/hour for a total burden estimate of $1,600 ($40/hour x 40
hours per vendor). However, given the variability in the capabilities
of the vendors, we believe those vendors with minimal experience will
have a burden of approximately 200 hours at $40/hour, for a total
estimate of $8,000 per vendor ($40/hour x 200 hours/EHR vendor).
(3) Burden Estimate on Participation in the 2012 Physician Quality
Reporting System--Group Practices
With respect to the criteria for satisfactorily reporting data on
the quality measures for group practices under the 2012 Physician
Quality Reporting System discussed in section VI.F.1. of this final
rule with comment period, group practices interested in participating
in the 2012 Physician Quality Reporting System through the group
practice reporting option (GPRO) must complete a self-nomination
process similar to the self-nomination process required of registries
and EHR vendors. Therefore, assuming it takes 2 hours for a group
practice to decide whether to participate as a group or individually,
approximately 2 hours per group practice to draft the letter of intent
for self-nomination, gather the requested information, and provide this
requested information, and an additional 2 hours undergoing the vetting
process with CMS officials, we estimate a total of 6 hours associated
with the self-nomination process. Assuming that the group practice
staff involved in the group practice self-nomination process have the
same average practice labor cost as the average practice labor cost
estimates we used for individual eligible professionals of $16/hour, we
estimate that the total cost to a group practice associated with the
group practice self-nomination process will be approximately $96 ($16/
hour x 6 hours per group practice).
The burden associated with the group practice reporting
requirements for the 2012 Physician Quality Reporting System is the
time and effort associated with the group practice submitting the
quality measures data. For practices participating under the GPRO, this
will be the time associated with the physician group completing the
data collection tool. The information collection components of this
data collection tool have been reviewed by OMB and are currently
approved under OMB control number 0938-0941, with an expiration date of
December 31, 2011, for use in the Physician Group Practice, Medicare
Care Management Performance (MCMP), and EHR demonstrations. Based on
burden estimates for the PGP demonstration, which uses the same data
submission methods, we estimate the burden associated with a physician
group completing the data collection tool will be approximately 79
hours per physician group. Based on an average labor cost of $40 per
physician group, we estimate the cost of data submission per physician
group associated with participating in the 2012 Physician Quality
Reporting System GPRO will be $3,160 ($40/hour x 79 hours per group
practice).
(4) Burden Estimate on Participation in the Maintenance of
Certification Program Incentive
Eligible professionals who wish to qualify for the additional 0.5
percent incentive payment authorized under section 1848(m)(7) of the
Act (``Additional Incentive Payments'') for 2012 will need to more
frequently than is required to qualify for or maintain board
certification status participate in a qualified Maintenance of
Certification Program for 2012 and successfully complete a qualified
Maintenance of Certification Program practice assessment for 2012. We
believe that a majority of the eligible professionals who will attempt
to qualify for this additional 0.5 percent incentive payment will be
those who are already enrolled and participating in a Maintenance of
Certification Board. The amount of time that it will take for the
eligible professional to participate in the Maintenance of
Certification Program more frequently than is required to qualify for
or maintain board certification status will vary based on what each
individual board determines constitutes ``more frequently.'' We expect
that the amount of time needed to complete a qualified Maintenance of
Certification Program practice assessment will be spread out over time
since a quality improvement component is often required. Information
from an informal poll of a few ABMS member

[[Page 73448]]

boards indicates that the time an individual eligible professional
spends to complete the practice assessment component of the Maintenance
of Certification ranges from 8 to 12 hours.
We requested comments on this burden analysis for physicians
participating in the Maintenance of Certification Program incentive,
including the underlying assumptions used in developing our burden
estimates. Below is a summary of the comments we received.
Comment: One commenter believed that a more disciplined approach
for estimating the time and effort it takes to earn an incentive under
the Maintenance of Certification Program incentive should be adopted.
Another commenter stated that our estimates regarding the length of
time it takes to complete the processes required to earn a Maintenance
of Certification Program incentive does not fully encompass all
activities necessary to participate in a Maintenance of Certification
Program.
Response: We appreciate the commenters' feedback. As noted above,
it is difficult to determine the time and effort it takes to earn an
incentive under the Maintenance of Certification Program incentive due
to varying specialties, as well as degrees of experience, and
therefore, varying requirements for participation. We also note that,
for purposes of this burden estimate, we did not take into account the
time and effort it takes for a physician to maintain board
certification status under an established Maintenance of Certification
Program. Rather, we provided an estimate based on the additional time
and effort it will take for eligible professionals to meet the
additional requirements for earning the additional 0.5 percent
Maintenance of Certification Program incentive.
3. Electronic Prescribing (eRx) Incentive Program
a. Estimate on Participation in the 2012, 2013, and 2014 eRx Incentive
Program
The electronic prescribing measure was first reportable under the
Physician Quality Reporting System before it was used for the eRx
Incentive Program, which began in 2009. According to the 2009
Experience Report, the number of eligible professionals participating
reporting the electronic prescribing measure increased from 4,973 out
of approximately 500,000 eligible professionals to 92,132 out of
670,000 eligible professionals from 2008 to 2009. This is an increase
of least 12 percent (from 1 percent in 2008 to 13 percent in 2009). As
discussed in section VI.F.2.h.1 in this final rule, we finalized
limitations whereby a 2013 or 2014 payment adjustment will not apply to
an eligible professional. However, we still believe that, due to the
implementation of the 2013 and 2014 payment adjustments, as well as the
expansion of the reporting mechanisms for purposes of reporting the
electronic prescribing measure for the 2013 and 2014 payment
adjustments, we expect that there will be a significant increase in
eligible professionals who participate in the eRx Incentive Program for
CYs 2012 through 2014 from 2009 participation rates. Therefore, for
purposes of conducting a burden analysis for the 2012 through 2014 eRx
Incentive Program, we will assume that, based on participation rates in
2009, there will be an increase of at least 12 percent of eligible
professionals participating in the eRx Incentive Program from 2012
through 2014. Therefore, for purposes of this burden analysis, we
estimate that more than 100,800 unique TIN/NPI combinations will
participate in the 2012, 2013, and 2014 eRx Incentive Program for
purposes of the 2013 and 2014 payment adjustment (see the ``2009
Reporting Experience,'' which is available on the Physician Quality
Reporting System section of the CMS Web site at http://www.cms.hhs.gov/
pqrs). Although this estimate only accounts for approximately 15
percent of all professionals eligible to participate in the eRx
Incentive Program, we believe that participation may be offset by the
limitations and significant hardship exemptions we are finalizing for
the 2013 and 2014 payment adjustment.
b. Burden Estimate on Participation in the eRx Incentive Program--
Individual Eligible Professionals
Section VI.F.2. of this final rule with comment period discusses
the background of the eRx Incentive Program. For the programs for 2012
through 2014, eligible professionals and group practices may choose
whether to participate and, to the extent they meet--(1) certain
thresholds with respect to the volume of covered professional services
furnished; and (2) the criteria for being a successful electronic
prescriber described in section VI.F.2. of this final rule with comment
period, they will qualify to receive an incentive payment for 2012 and
2013 and/or avoid being subject to the 2013 and 2014 payment
adjustment.
In section VI.F.2.g. of this final rule with comment period, we
describe the requirements for eligible professionals and group
practices to be successful electronic prescribers in order to earn a
2012 and/or 2013 incentive payment. For the 2012 and 2013 incentives,
as discussed in section VI.F.2.g.2. of this final rule with comment
period, each eligible professional must to report the electronic
prescribing measure's numerator indicating that at least one
prescription generated during an encounter was electronically submitted
at least 25 instances during the reporting period in association with a
denominator-eligible visit.
In section VI.F.2.h. of this final rule with comment period, we
finalized additional requirements for eligible professionals and group
practices can meet for the 2013 payment adjustment, as well as
finalized requirements for being a successful electronic prescriber for
the 2014 payment adjustment. For the 2013 and 2014 payment adjustment,
each eligible professional must report the electronic prescribing
measure's numerator at least 10 instances during the reporting period.
We expect the ongoing costs associated with participation in the
eRx Incentive Program to decline based on an eligible professional's
understanding of the eRx Incentive Program, experience with
participating in the eRx Incentive Program, and increased efforts by
CMS and stakeholders to disseminate useful educational resources and
best practices.
Similar to the Physician Quality Reporting System, one factor in
the burden to individual eligible professionals is the time and effort
associated with individual eligible professionals reviewing the
electronic prescribing measure to determine whether it is applicable to
them, reviewing and selecting one of the available reporting options
(for purposes of the 2012 and 2013 incentives and the 2013 and 2014
payment adjustments, the electronic prescribing quality measure is
reportable through claims-based reporting, registry-based reporting, or
through EHRs) and selecting one, gathering the required information,
and incorporating reporting of the measure into their office work
flows. Since the eRx Incentive Program consists of only 1 measure to
report, we estimate 2 hours as the amount of time that will be needed
for individual eligible professionals to prepare for participation in
the eRx Incentive Program. At an average cost of approximately $40/hour
per practice, we estimate the total preparation costs to individual
eligible professionals will be approximately $80 (2 hours x $40/hour).
Another factor that we believe influences the burden to eligible
professionals is how they choose to report the electronic prescribing

[[Page 73449]]

measure. Our burden estimates for participating in the eRx Incentive
Program via each of three finalized reporting mechanisms (that is,
claims, registry, and EHR) are described in this section.
(1) Burden Estimate on Participation in the eRx Incentive Program via
the Claims-Based Reporting Mechanism--Individual Eligible Professionals
For eligible professionals who choose to do so via claims, we
estimate that the burden associated with the requirements of this
incentive program will be the time and effort associated with gathering
the required information and identifying when it is appropriate to
include the measure's quality data code (QDC) on the claims they submit
for payment. For claims-based reporting, the measure's QDC will be
collected as additional (optional) line items on the existing HIPAA
transaction 837-P and/or CMS Form 1500. We do not anticipate any new
forms and or modifications to the existing transaction or form. We also
do not anticipate changes to the 837-P or CMS Form 1500 for CY 2012.
Based on the information from the PVRP for the amount of time it
takes a median practice to report one measure one time on claims (1.75
minutes) and our requirement that eligible professionals report the
measure 25 times for purposes of the incentive payment, we estimate the
burden associated with claims-based data submission to will be 43.75
minutes (1.75 minutes per case x 1 measure x 25 cases per measure).
This equates to a cost of approximately $29.17 (1.75 minutes per case x
1 measure x 25 cases per measure x $40/hour) per individual eligible
professional. For purposes of the 2013 and 2014 eRx payment adjustment,
an eligible professional is required to report the measure only 10
times, and therefore, we estimate the burden associated with claims-
based submission will be 17.5 minutes (1.75 minutes per case x 1
measure x 10 cases per measure). This equates to a cost of
approximately $9.67 (1.75 minutes per case x 1 measure x 10 cases per
measure x $40/hour) per individual eligible professional.
(2) Burden Estimate on Participation in the eRx Incentive Program via
the Registry-Based Reporting Mechanism--Individual Eligible
Professionals and Group Practices
Because registry-based reporting of the electronic prescribing
measure to CMS was added to the eRx Incentive Program for 2010 and
eligible professionals are not required to indicate how they plan to
report the electronic prescribing measure each year, it is difficult to
accurately estimate how many eligible professionals will opt to
participate in the eRx Incentive Program through the registry-based
reporting mechanism in CYs 2012 through 2014. We do not anticipate,
however, any additional burden for eligible professionals to report
data to a registry as eligible professionals opting for registry-based
reporting will more than likely already be reporting data to the
registry for other purposes. Little, if any, additional data will need
to be reported to the registry for purposes of participation in the
2012, 2013, and 2014 eRx Incentive Program since the only information
that the registry will need to report to us is the number of times the
eligible professional electronically prescribed. However, eligible
professionals will need to authorize or instruct the registry to submit
quality measures results and numerator and denominator data on the
electronic prescribing measure to CMS on their behalf. We estimate that
the time and effort associated with this will be approximately 5
minutes for each eligible professional that wishes to authorize or
instruct the registry to submit quality measures results and numerator
and denominator data on the electronic prescribing measure to CMS on
their behalf.
Based on our final decision to consider only registries qualified
to submit Physician Quality Reporting System quality measures results
and numerator and denominator data on quality measures to CMS on their
participants' behalf for the 2012 and 2013 Physician Quality Reporting
System reporting periods to be qualified to submit results and
numerator and denominator data on the electronic prescribing measure
for the respective eRx Incentive Program reporting periods that occur
in 2012 and 2013, there will be no need for a registry to undergo a
separate self-nomination process for the eRx Incentive Program and
therefore, no additional burden associated with the registry self-
nomination process.
There will also be a burden to the registry associated with the
registry calculating results for the electronic prescribing measure
from the data submitted to the registry by its participants and
submitting the quality measures results and numerator and denominator
data on the electronic prescribing quality measure to CMS on behalf of
their participants. We expect that the time needed for a registry to
review the electronic prescribing measure's specifications, calculate
the measure's results, and submit the measure's results and numerator
and denominator data on their participants' behalf will vary along with
the number of eligible professionals reporting data to the registry.
However, we believe that registries already perform many of these
activities for their participants. Since the eRx Incentive Program
consists of only one measure, we believe that the burden associated
with the registry reporting the measure's results and numerator and
denominator to CMS on behalf of their participants will be minimal.
(3) Burden Estimate on Participation in the eRx Incentive Program via
the EHR-Based Reporting Mechanism--Individual Eligible Professionals
and Group Practices
For the EHR-based reporting mechanism, the eligible professional
must either extract the necessary clinical data from his or her EHR and
submit the necessary data to the CMS-designated clinical data warehouse
or have an EHR data submission vendor extract the necessary clinical
data from his or her EHR and submit the necessary data to CMS on the
professional's behalf. Because this manner of reporting quality data to
CMS was first added to the eRx Incentive Program in 2010 and eligible
professionals are not required to (and were not previously required to)
indicate to us how they intend to report the electronic prescribing
measure, it is difficult to estimate how many eligible professionals
will opt to participate in the eRx Incentive Program through the EHR-
based reporting mechanism for reporting periods that occur in CYs 2012
and 2013. We believe that once an eligible professional's EHR is
programmed by the vendor to allow data submission to CMS, the burden to
the eligible professional associated with submission of data on the
electronic prescribing measure should be minimal. The eligible
professional who chooses to submit the electronic prescribing measure
data directly to CMS from his or her EHR will have to have access to a
CMS-specified identity management system, such as IACS. We believe it
takes less than 1 hour to obtain access to the identity management
system.
Because only EHR products and data submission vendors qualified for
2012 and 2013 Physician Quality Reporting System reporting periods may
be used to submit data on the electronic prescribing measure for the
respective eRx Incentive Program reporting periods that occur in CYs
2012 and 2013, there is no need for EHR vendors and/or their products
to undergo a separate self-nomination process for the eRx Incentive
Program and therefore, no

[[Page 73450]]

additional burden associated with the self-nomination process for the
eRx Incentive Program.
There will also be a burden to the EHR vendor associated with the
EHR vendor programming its EHR product(s) to extract the clinical data
that the eligible professional and/or vendor will need to submit to CMS
for purposes of reporting the electronic prescribing measure. The time
needed for an EHR vendor to review the measure's specifications and
program its product to submit data on the measure to the CMS-designated
clinical data warehouse will be dependent on the EHR vendor's
familiarity with the electronic prescribing measure, the vendor's
system capabilities, as well as the vendor's programming capabilities.
Since only EHR products qualified for 2012 and 2013 Physician Quality
Reporting System reporting periods will qualify for the respective eRx
Incentive Program reporting periods that occur in CY 2012 or 2013, and
the eRx Incentive Program consists of only one measure, we believe that
any burden associated with the EHR vendor to program its product(s) to
submit data on the electronic prescribing measure to the CMS-designated
clinical data warehouse will be minimal.
(4) Burden Estimate on Participation in the eRx Incentive Program--
Group Practices
Finally, with respect to the criteria for group practices to be
successful electronic prescribers for the 2012 and 2013 incentive, as
well as with regard to the 2013 and 2014 payment adjustments, as
discussed in section VI.F.2. of this final rule with comment period,
respectively, group practices have the same options as individual
eligible professionals in terms of the form and manner for reporting
the electronic prescribing measure (that is, group practices have the
option of reporting the measure through claims, a qualified registry,
or a qualified EHR product). There are only 2 differences between the
requirements for an individual eligible professional and a group
practice: (1) The fact that a group practice must self-nominate; and
(2) a difference in the number of times that a group practice must
report the electronic prescribing measure.
We do not anticipate any additional burden associated with the
group practice self-nomination process since we limit the group
practices to those selected to participate in the Physician Quality
Reporting System GPRO. The practice only will need to indicate its
desire to participate in the eRx GPRO at the same time it self-
nominates for the Physician Quality Reporting System GPRO and indicate
how it intends to report the electronic prescribing measure.
In terms of the burden to group practices comprised of 25 to 99
eligible professionals associated with submission of the electronic
prescribing measure, we believe that this will be similar to the burden
to individual eligible professionals for submitting the electronic
prescribing measure. In fact, overall, there could be less burden
associated with a practice participating as a group rather than as
individual eligible professionals because the total number of reporting
instances required by the group could be less than the total number of
reporting instances that will be required if each member of the group
separately reported the electronic prescribing measure. Thus, we
believe that the burden to a group practice associated with reporting
the electronic prescribing measure could range from almost no burden
(for groups who choose to do so through a qualified EHR or registry) to
18.22 hours (1.75 minutes per measure x 1 measure x 625 cases per
measure) for a group practice that chooses to report the electronic
prescribing measures through the claims submission process.
Consequently, the total estimated cost per group practice to report the
electronic prescribing measure could be as high as $1,043.75 ($1.67 per
measure x 1 measure x 625 cases per measure).
In terms of the burden to group practices comprised of 100 or more
eligible professionals associated with submission of the electronic
prescribing measure, we believe that this will be similar to the burden
to individual eligible professionals for submitting the electronic
prescribing measure. In fact, overall, there could be less burden
associated with a practice participating as a group rather than as
individual eligible professionals because the total number of reporting
instances required by the group could be less than the total number of
reporting instances that will be required if each member of the group
separately reported the electronic prescribing measure. Thus, we
believe that the burden to a group practice associated with reporting
the electronic prescribing measure could range from almost no burden
(for groups who choose to do so through a qualified EHR or registry) to
72.92 hours (1.75 minutes per measure x 1 measure x 2500 cases per
measure) for a group practice that chooses to report the electronic
prescribing measures through the claims submission process.
Consequently, the total estimated cost per group practice to report the
electronic prescribing measure could be as high as $4,175 ($1.67 per
measure x 1 measure x 2500 cases per measure).
As with individual eligible professionals, we believe that group
practices that choose to participate in the eRx GPRO through the
registry-based reporting mechanism of the electronic prescribing
measure will more than likely already be reporting data to the
registry. Little, if any, additional data will need to be reported to
the registry for purposes of participation in the eRx Incentive Program
for CYs 2012 through 2014 beyond authorizing or instructing the
registry to submit quality measures results and numerator and
denominator data on the electronic prescribing measure to CMS on their
behalf. We estimate that the time and effort associated with this
registry option will be approximately 5 minutes for each group practice
that wishes to authorize or instruct the registry to submit quality
measures results and numerator and denominator data on the electronic
prescribing measure to CMS on their behalf.
For group practices that choose to participate in the eRx Incentive
Program for CYs 2012 through 2014 via the EHR-based reporting of the
electronic prescribing mechanism, once the EHR is programmed by the
vendor to allow data submission to CMS, the burden to the group
practice associated with submission of data on the electronic
prescribing measure should be minimal.
4. Medicare Electronic Health Record (EHR) Incentive Program for
Eligible Professionals for the 2012 Payment Year
The EHR Incentive Program (discussed in section VI.H. of this final
rule with comment period) is a voluntary program whereby eligible
professionals (EPs) may earn an incentive payment for demonstrating
meaningful use of certified EHR technology, which includes among other
requirements, the submission of clinical quality measures (CQMs). The
``Electronic Health Record Incentive Program'' final rule (75 FR 44314
through 75 FR 44588) describes the CQMs and the CQM reporting
mechanisms that will be available to EPs who choose to participate in
the EHR Incentive Program (75 FR 44380) and established the criteria
for achieving meaningful use in Stage 1, which includes CY 2012. In
that final rule, for CY 2012, we estimated that approximately 385,954
Medicare EPs will be eligible to receive an incentive under the EHR
Incentive Program (75 FR 44518). Section VI.H.2. of this final rule
with comment period finalizes

[[Page 73451]]

changes to the EHR Incentive Program for EPs for the 2012 payment year
with respect to the reporting of CQMs for purposes of achieving
meaningful use. Aside from continuing the attestation method of
reporting CQMs, we will allow the reporting of CQMs for purposes of
meeting the CQM objective for demonstrating meaningful use through
participation in the Physician Quality Reporting System-Medicare EHR
Incentive Pilot. Eligible professionals may participate in the Pilot by
submitting CQMs via (1) a Physician Quality Reporting System qualified
EHR data submission vendor or (2) an EHR-based reporting option using
the EP's certified EHR technology, which must also be a Physician
Quality Reporting System qualified EHR.
Because the EHR Incentive Program is a voluntary program, EPs may
choose whether to participate and attest that they have met the
meaningful use objectives and measures. Registration for the EHR
Incentive Program opened in January 2011. At this time, we do not have
sufficient data available on participation in the EHR Incentive Program
by EPs to revise the final rule's estimate of how many EPs will opt to
participate in the EHR Incentive Program for payment year 2012.
We believe the burden associated with actually reporting CQMs will
vary depending on the reporting mechanism selected by the EP.
Attestation to the objectives and measures is the only method available
for EPs to demonstrate that they have met the meaningful use criteria
in 2011. Attestation was first available on April 18, 2011 and we do
not yet have sufficient data on the 2011 participation in the EHR
Incentive Program. Therefore, it is difficult to estimate the level of
participation in the Pilot versus the number of EPs that will prefer to
attest to the CQMs. However, we believe that the number of EPs who
choose to participate via attestation will largely be those who are not
participating in both the EHR Incentive Program and Physician Quality
Reporting System. This is because EPs participating in the Physician
Quality Reporting System will be more likely to participate in the
Pilot.
As we estimated in the EHR Incentive Program final rule, we
estimate that it will take 8 hours and 52 minutes for an EP to attest
that during the EHR reporting period, the EP used certified EHR
technology, specify the technology, and satisfied all Stage 1
meaningful use core criteria for payment year 2012 (75 FR 44518). We
estimate that it will further take an additional 0.5 hours to select
and attest to the clinical quality measures, in the format and manner
specified by CMS (75 FR 44517).
There will be no additional time burden for eligible professionals
to report CQM data to a qualified EHR data submission vendor as EPs who
choose this option for the Pilot will more than likely already be
reporting data to the qualified EHR data submission vendor for other
purposes, such as the Physician Quality Reporting System, and the
qualified EHR data submission vendor will merely be re-packaging the
data for use in the EHR Incentive Program. Furthermore, EPs more than
likely will not need to authorize or instruct the qualified EHR data
submission vendor to submit CQM data to CMS on their behalf because
this likely will have already been done as a requirement for reporting
via a qualified EHR data submission vendor under the Physician Quality
Reporting System.
Qualified EHR data submission vendors interested in submitting CQM
data to CMS on their participants' behalf will not need to complete a
self-nomination process in order to be considered qualified to submit
on behalf of EPs as this process will have already been performed for
the Physician Quality Reporting System. Therefore, we believe that
there is no additional burden aside from the burden associated with
being a Physician Qualified Reporting System qualified EHR data
submission vendor for such vendors to submit CQMs on behalf of EPs.
For EPs who choose to participate in the Pilot via direct data
submission to CMS from the EP's certified EHR technology, an EP must
have access to a CMS-specified identity management system, such as
IACS, to participate in the Physician Quality Reporting System or eRx
Incentive Program. EPs that choose the EHR-based reporting pilot to
report CQMs will do so only if they are participating in the Physician
Quality Reporting System. As such, we believe there will be no
additional burden on EPs to have access to a CMS-specified identity
management system if the EP is already participating in the Physician
Quality Reporting System. With respect to submitting the actual 2012
data file in 2013, we believe that this will take an EP no more than 2
hours, depending on the number of patients on which the EP is
submitting. We believe that once the EHR is programmed by the vendor to
allow data submission to CMS and the EP participates in the Physician
Quality Reporting System, the additional burden to the EP associated
with electronic submission of the CQMs should be minimal. Since this is
a new reporting mechanism for the EHR Incentive Program 2012 payment
year, it is difficult to predict the level of participation in EHR-
based reporting. However, we believe that the number of EPs who choose
to participate in the EHR-based reporting option for the Pilot will be
the same as the number of eligible professionals who choose the EHR-
based reporting mechanism for the Physician Quality Reporting System.
This is primarily because in addition to being certified EHR
technology, the technology used under this reporting option will need
to be qualified according to the Physician Quality Reporting System
qualification process.
The burden associated with the EHR vendor programming its EHR
product(s) to extract the clinical data that the EP or vendor needs to
submit to CMS for purposes of reporting CQMs will be dependent on the
EHR vendor's familiarity with the EHR Incentive Program and Physician
Quality Reporting System, the vendor's system capabilities, as well as
the vendor's programming capabilities. As we already are requiring
qualified EHRs vendors to perform these functions under the Physician
Quality Reporting System, the burden for submitting CQMs under the EHR
Incentive Program will be similar to the EHR vendor reporting burden
under the Physician Quality Reporting System. For vendors who already
have these necessary capabilities, we estimate the total burden hours
to be 40 hours at a rate of $40/hour for a total burden estimate of
$800 ($40/hour x 40 hours per vendor). However, given the variability
in the capabilities of the vendors, those vendors with minimal
experience will have a burden of approximately 200 hours at $40/hour,
for a total estimate of $8,000 per vendor ($40/hour x 200 hours per EHR
vendor).
To obtain copies of the supporting statement and any related forms
for the paperwork collections referenced above, access CMS' Web site at
http://www.cms.gov/PaperworkReductionActof1995/PRAL/list.asp#TopOfPage
or email your request, including your address, phone number, OMB
number, and CMS document identifier, to [email protected], or call
the Reports Clearance Office at (410) 786-1326.
If you comment on these information collection and recordkeeping
requirements, please do either of the following:
1. Submit your comments electronically as specified in the
ADDRESSES section of this final rule with comment period; or
2. Submit your comments to the Office of Information and Regulatory
Affairs, Office of Management and

[[Page 73452]]

Budget, Attention: CMS Desk Officer, [CMS-1524-FC] Fax: (202) 395-5806;
or Email: [email protected].

VIII. Response to Comments

Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.

IX. Regulatory Impact Analysis

A. Statement of Need

This final rule with comment period is necessary in order to make
payment and policy changes under the Medicare PFS and to make required
statutory changes under the Affordable Care Act and MIPPA and other
statutory changes. This final rule with comment period is also
necessary to make changes to the Part B drug payment policy and other
related Part B related policies.

B. Overall Impact

We have examined the impact of this rule as required by Executive
Order 12866 on Regulatory Planning and Review (September 30, 1993),
Executive Order 13563 on Improving Regulation and Regulatory Review
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19,
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act,
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22,
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4,
1999) and the Congressional Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. A regulatory impact analysis (RIA) must be prepared for
major rules with economically significant effects ($100 million or more
in any 1 year). This final rule with comment period has been designated
as ``economically'' significant, under section 3(f)(1) of Executive
Order 12866 and hence also a major rule under the Congressional Review
Act. Accordingly, the rule has been reviewed by the Office of
Management and Budget. We have prepared an RIA, that to the best of our
ability presents the costs and benefits of the final rule with comment
period. We solicited comment on the RIA provided. We received one
comment regarding the RIA.
The RFA requires agencies to analyze options for regulatory relief
of small entities, if a rule has a significant impact on a substantial
number of small entities. For purposes of the RFA, small entities
include small businesses, nonprofit organizations, and small
governmental jurisdictions. Most hospitals and most other providers and
suppliers are small entities, either by nonprofit status or by having
revenues of $7.0 million to $34.5 million in any 1 year (for details
see the SBA's Web site at http://www.sba.gov/content/table-small-business-size-standards (refer to the 620000 series)). Individuals and
States are not included in the definition of a small entity. The RFA
requires that we analyze regulatory options for small businesses and
other entities. A RFA analysis must include a justification concerning
the reason action is being taken, the kinds and number of small
entities the rule affects, and an explanation of any meaningful options
that achieve the objectives with less significant adverse economic
impact on the small entities.
For purposes of the RFA, physicians, NPPs, and suppliers including
IDTFs are considered small businesses if they generate revenues of $10
million or less based on SBA size standards. Approximately 95 percent
of physicians are considered to be small entities. There are over 1
million physicians, other practitioners, and medical suppliers that
receive Medicare payment under the PFS.
Because we acknowledge that many of the affected entities are small
entities, the analysis provided here and throughout the preamble of
this final rule with comment period constitutes our Final Regulatory
Flexibility Act (FRFA) analysis for the remaining provisions. This
includes alternatives considered for the various final policies in this
rule. We solicited public comment on the IRFA analysis provided in the
proposed rule, but did not receive any comments that were in scope. We
conclude that this final rule with comment has a significant impact on
a substantial number of small entities.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 604 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area for Medicare payment regulations and has fewer than
100 beds. We are not preparing an analysis for section 1102(b) of the
Act because the Secretary has determined that this final rule with
comment period would not have a significant impact on the operations of
a substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2011, that
threshold is approximately $136 million. This final rule with comment
period does not contain mandates that will impose any costs on State,
local, or tribal governments in aggregate, or by the private sector, of
$136 million respectively.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. This final rule with comment period will not have a
substantial direct effect on State or local governments, preempt
States, or otherwise have a Federalism implication.
We have prepared the following analysis, which together with the
information provided in the rest of this preamble, meets all assessment
requirements. The analysis explains the rationale for and purposes of
this final rule with comment period; details the costs and benefits of
the rule; analyzes alternatives; and presents the measures we would use
to minimize the burden on small entities. As indicated elsewhere in
this final rule with comment period, we are implementing a variety of
changes to our regulations, payments, or payment policies to ensure
that our payment systems reflect changes in medical practice and the
relative value of services. We provide information for each of the
policy changes in the relevant sections of this final rule with comment
period. We are unaware of any relevant Federal rules that duplicate,
overlap, or conflict with this final rule with comment period. The
relevant sections of this final rule with comment period contain a

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description of significant alternatives if applicable.

C. RVU Impacts

1. Resource-Based Work, PE, and Malpractice RVUs
Section 1848(c)(2)(B)(ii)(II) of the Act requires that increases or
decreases in RVUs may not cause the amount of expenditures for the year
to differ by more than $20 million from what expenditures would have
been in the absence of these changes. If this threshold is exceeded, we
make adjustments to preserve budget neutrality.
Our estimates of changes in Medicare revenues for PFS services
compare payment rates for CY 2011 with final payment rates for CY 2012
using CY 2010 Medicare utilization for all years. To the extent that
there are year-to-year changes in the volume and mix of services
provided by physicians, the actual impact on total Medicare revenues
will be different than those shown in Table 84. The payment impacts
reflect averages for each specialty based on Medicare utilization. The
payment impact for an individual physician would be different from the
average, based on the mix of services the physician furnishes. The
average change in total revenues would be less than the impact
displayed here because physicians furnish services to both Medicare and
non-Medicare patients and specialties may receive substantial Medicare
revenues for services that are not paid under the PFS. For instance,
independent laboratories receive approximately 85 percent of their
Medicare revenues from clinical laboratory services that are not paid
under the PFS.
Table 84 shows only the payment impact on PFS services. We note
that these impacts do not include the effect of the January 2012
conversion factor changes under current law. The annual update to the
PFS conversion factor is calculated based on a statutory formula that
measures actual versus allowed or ``target'' expenditures, and applies
a sustainable growth rate (SGR) calculation intended to control growth
in aggregate Medicare expenditures for physicians' services. This
update methodology is typically referred to as the ``SGR'' methodology,
although the SGR is only one component of the formula. Medicare
physician fee schedule 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
to eventually bring actual expenditures back in line with targets. If
actual expenditures exceed allowed expenditures, the update is reduced.
If actual expenditures are less than allowed expenditures, the update
is increased. We currently estimate that the statutory formula used to
determine the physician update will result in a CY 2012 conversion
factor of 24.6712 which represents a PFS update of -27.4 percent. By
law, we are required to make these reductions in accordance with
section 1848(d) and (f) of the Act, and these reductions can only be
averted by an Act of the Congress. While the Congress has provided
temporary relief from these reductions for every year since 2003, a
long-term solution is critical. We are committed to working with the
Congress to permanently reform the SGR methodology for Medicare
physician fee schedule updates so doctors and patients no longer have
to worry about the stability and adequacy of their payments from
Medicare.
The following is an explanation of the information represented in
Table 84:
Column A (Specialty): The Medicare specialty code as
reflected in our physician/supplier enrollment files.
Column B (Allowed Charges): The aggregate estimated PFS
allowed charges for the specialty based on CY 2010 utilization and CY
2011 rates. That is, allowed charges are the PFS amounts for covered
services and include coinsurance and deductibles (which are the
financial responsibility of the beneficiary). These amounts have been
summed across all services furnished by physicians, practitioners, and
suppliers within a specialty to arrive at the total allowed charges for
the specialty.
Column C (Impact of Work and Malpractice (MP) RVU
Changes): This column shows the estimated CY 2012 impact on total
allowed charges of the changes in the work and malpractice RVUs,
including the impact of changes due to potentially misvalued codes.
These impacts are primarily due to the multiple procedure payment
reduction (MPPR) for the professional component of advanced imaging
services.
Column D (Impact of PE RVU Changes--Full): This column
shows the estimated CY 2012 impact on total allowed charges of the
changes in the PE RVUs if there were no remaining transition to the
full use of the PPIS data.
Column E (Impact of PE RVU Changes--Tran): This column
shows the estimated CY 2012 impact on total allowed charges of the
changes in the PE RVUs under the third year of the 4-year transition to
the full use of the PPIS data. This column also includes the impact of
the MPPR policy and, and the impact of changes due to potentially
misvalued codes.
Column F (Combined Impact--Full): This column shows the
estimated CY 2012 combined impact on total allowed charges of all the
changes in the previous columns if there were no remaining transition
to the new PE RVUs using the PPIS data.
Column G (Combined Impact--Tran): This column shows the
estimated CY 2012 combined impact on total allowed charges of all the
changes in the previous columns under the third year of the 4-year
transition to the new PE RVUs using the PPIS data. These are the
combined impacts for CY 2012.
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2. CY 2012 PFS Impact Discussion
a. Changes in RVUs
The most widespread specialty impacts of the RVU changes are
generally related to several factors. First, as discussed in section
II.A.2. of this final rule with comment period, we are currently
implementing the third year of the 4-year transition to new PE RVUs
using the PPIS data that were adopted in the CY 2010 PFS final rule
with comment period. The impacts of the third year of the transition
are generally consistent with the impacts that would be expected based
on the impacts displayed in the CY 2011 PFS final rule with comment
period.
The second general factor contributing to the CY 2012 impacts shown
in Table 84 is a secondary effect of the CY 2011 rescaling of the RVUs
so that, in the aggregate, they match the work, PE, and malpractice
proportions in the revised and rebased MEI for CY 2011. That is, the
rebased MEI had a greater proportion attributable to malpractice and PE
and, correspondingly, a lesser proportion attributable to work.
Specialties that have a high proportion of total RVUs attributable to
work, such as emergency medicine, experienced a decrease in aggregate
payments as a result of this rescaling, while specialties that have a
high proportion attributable to PE, such as diagnostic testing
facilities, experienced an increase in aggregate payments. (For further
details on the MEI rebasing, see the discussion beginning on (75 FR
73262) in the CY 2011 PFS final rule.)
Table 86 also includes the impacts resulting from our expansion of
the current MPPR policy to the professional component of advanced
imaging services. We estimate that this policy will redistribute
approximately $50 million through a small increase in the conversion
factor and a small adjustment to all PE RVUs. We estimate that this
change would primarily reduce payments to the specialties of radiology
and interventional radiology. Finally, Table 84 also reflects the
impacts of our final adjustments to improve the accuracy of the time
associated with the work RVUs for certain services, including group
therapy services, as discussed previously in section II.A. of this
final rule with comment period.
Comment: We received comments asking for clarification of the
secondary effect of the CY 2011 rescaling of the RVUs for the revised
and rebased MEI.
Response: As stated in the CY 2012 PFS proposed rule (ADD CITATION
TO PAGE), a general factor contributing to the CY 2012 impacts is an
effect of the CY 2011 rescaling of the RVUs so that, in the aggregate,
they match the work, PE, and malpractice proportions in the revised and
rebased MEI for CY 2011. That is, the rebased MEI had a greater
proportion attributable to malpractice and PE and, correspondingly, a
lesser proportion attributable to work. Specialties that have a high
proportion of total RVUs attributable to work, such as emergency
medicine, experienced a decrease in aggregate payments as a result of
this rescaling, while specialties that have a high proportion
attributable to PE, such as diagnostic testing facilities, experienced
an increase in aggregate payments. This occurs because we allocate
indirect practice expenses to the code level partly on the basis of the
direct practice expenses and the physician work RVUs. The rescaling of
the RVUs for the revised and rebased MEI slightly increased the
proportion of the indirect allocation based on the direct practice
expenses and decreased the proportion based on the work RVUs.
b. Combined Impact
Column G of Table 84 displays the estimated CY 2012 combined impact
on total allowed charges by specialty of all the final RVU and MPPR
changes. These impacts range from an increase of 4 percent for
physical/occupational therapy and portable x-ray suppliers to

[[Page 73456]]

a decrease of 6 percent for radiation oncology and radiation therapy
centers. Again, these impacts are estimated prior to the application of
the negative CY 2012 Conversion Factor (CF) update applicable under the
current statute.
Table 85 shows the estimated impact on total payments for selected
high-volume procedures of all of the changes discussed previously. We
have included CY 2012 payment rates with and without the effect of the
CY 2012 negative PFS CF update for comparison purposes. We selected
these procedures because they are the most commonly furnished by a
broad spectrum of physician specialties. There are separate columns
that show the change in the facility rates and the nonfacility rates.
For an explanation of facility and nonfacility PE, we refer readers to
Addendum A of this final rule with comment period.
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D. Effects of Annual Review Process for Potentially Misvalued Codes
Under the PFS

The process we are adopting in this final rule with comment period
to consolidate the Five-Year Reviews of Work and PE RVUs with the
annual review of potentially misvalued codes, is not anticipated to
have a budgetary impact in CY 2012. As noted previously, to the extent
that we have finalized revised RVUs for codes identified under the
potentially misvalued codes initiative for CY 2012, Table 84 includes
the estimated CY 2012 impact on total allowed charges of the changes in
the RVUs for these codes.

E. Effect of Final Revisions to Malpractice RVUs

As discussed in section III.B.3.b. of this final rule with comment
period, we revised the malpractice risk factors assigned to a limited
number of cardiothoracic surgery services. The utilization of many of
these services is zero, while the others have a very low utilization.
Therefore, we estimate no significant budgetary impact from the final
changes to the MP RVUs due to the very low utilization of these
services.

F. Effect of Final Changes to Geographic Practice Cost Indices (GPCIs)

As discussed in section II.D. of this final rule with comment
period, we are required to update the GPCI values at least every 3
years and phase in the adjustment over 2 years (if there has not been
an adjustment in the past year). For CY 2012, we are finalizing
revisions to the PE GPCIs for each Medicare locality, as well as the
cost share weights for all three GPCI components. Moreover, the final
revised PE GPCI values are a result of our analysis of the PE
methodology as required by section 1848(e)(1)(H)(iv) of the Act. The
final GPCIs rely upon the 2006-2008 American Community Survey (ACS)
data to determine the relative cost differences in the office rent
component of the PE GPCIs. In addition, we are finalizing the use of
2006-2008 Bureau of Labor and Statistics (BLS) Occupational Employment
Statistics (OES) data to determine the employee compensation component.
Further, we are finalizing that the occupations to be used in the
calculation of the employee compensation component will include the
full range of non-physician occupations which are employed within the
offices of physicians industry. Lastly, we are finalizing a purchased
services index that will be used to geographically adjust for
differences in the labor-related share of the industries occupying the
``All Other Services'' and ``Other Professional Expenses'' 2006-based
MEI categories.
We are finalizing a cost share weight for the PE GPCIs of 47.439
percent. For the employee compensation portion of the PE GPCIs, we are
using the non-physician employee compensation category weight of 19.153
percent. The fixed capital and utilities MEI categories were combined
to achieve a total office rent weight of 10.223 percent. In order to
calculate the purchased services index, we are finalizing our proposal
to merge the corresponding weights of the ``All Other Services'' and
``Other Professional Expenses'' MEI categories to form a combined
purchased services weight of 8.095. We are finalizing a cost share
weight for the medical equipment, supplies, and other miscellaneous
expenses component of 9.968 percent. Furthermore, the physician
compensation cost category and its weight of 48.266 percent reflects
the work GPCI cost share weight; the professional liability insurance
weight of 4.295 percent reflects the malpractice GPCI cost share
weight. A more detailed discussion on the final CY 2012 GPCI cost share
weights can be found in section II.D. of this final rule with comment
period.
Additionally, section 1848(e)(1)(E) of the Act (as amended by
section 103 of the Medicare and Medicaid Extenders Act of 2010)
extended the 1.000 work GPCI floor through December 31, 2011.
Therefore, the CY 2012 GPCIs reflect the sunset of the 1.000 work GPCI
floor. Section 1848(e)(1)(G) of the Act (as amended by section 134(b)
of the MIPPA) established a permanent 1.500 work GPCI floor in Alaska
beginning January 1, 2009; therefore, the 1.500 work GPCI floor in
Alaska will remain in place for CY 2012. Moreover, section
1848(e)(1)(I) of the Act (as added by section 10324(c) of the
Affordable Care Act) established a permanent 1.000 PE GPCI floor for
services furnished in frontier States effective January 1, 2011.
Addendum D to this final rule with comment period shows the
estimated effects of the revised GPCIs on locality Geographic
Adjustment Factors (GAFs) for CY 2012. The GAFs reflect the use of
revised GPCI data and the updated cost share weights. The GAFs are a
weighted composite of each locality's work, PE, and malpractice GPCIs
using the national GPCI cost share weights. While we do not actually
use the GAFs in computing the PFS payment for a specific service, they
are useful in comparing the estimated overall costs and payments for
different localities. The cumulative effects of all of the GPCI
revisions, including the updated underlying GPCI data, updated cost
share weights, and provisions of the Affordable Care Act, are reflected
in the CY 2012 GPCI values that are displayed in Addendum E in this
final rule with comment period.
Table 86 illustrates the impact of moving from the current law CY
2011 GAFs to the final CY 2012 GAFs by PFS locality. The table first
shows the impact under current law and regulation, and then shows the
impact due to the final rule modifications. As shown in the table, the
primary driver of the CY 2012 impact is the current law expiration of
the non-budget neutral increases to the CY 2011 GPCIs for lower cost
areas that was required by the Affordable Care Act and the MMEA. The
table is sorted by total impact from largest reductions to largest
increases. When the overall impacts directly resulting from our final
changes to the PE GPCI are isolated, these final rule impacts are much
smaller (Column F) than the impacts due to current law and regulation.
Specifically, the PE GPCI final rule changes cause a change in GAF
values of less than or equal to one percentage point for approximately
nine out of ten localities. The following description explains the
information represented in Table 86 in more detail:
Column (A): Medicare Locality--The PFS geographic
locality.
Column (B): CY 2011 GAF--The current CY 2011 Geographic
Adjustment Factor for the locality, which includes the non-budget
neutral increases to the CY 2011 GPCIs for lower expense areas
authorized by the Affordable Care Act and the Medicare and Medicaid
Extenders Act. These figures also reflect the first year of the 2-year
transition to the latest GPCIs that began in 2011.
Column (C): CY 2012 GAF (Current Law/Reg)--The CY 2012
Geographic Adjustment Factor for the locality under current law and
regulations, which includes the expiration of the non-budget neutral
increases to the CY 2011 GPCIs for lower expense areas authorized by
the Affordable Care Act and the MMEA. These numbers also reflect the
end of the transition to the latest GPCIs that began in 2011.
Column (D): CY 2012 GAF (Final):--The final CY 2012
Geographic Adjustment Factor for each locality. The two largest drivers
of the differences between the GAFs in column (C) and Column (D) are:
The utilization of residential rent data from the Census Bureau's ACS
data instead of the Department of Housing and Urban Development's FMR
data, and the benchmarking of the GPCI practice expense weights to the
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[[Page 73460]]

cost share weights. The Geographic Adjustment Factors in this column
are for 2012 and do not reflect any temporary increases to work and
practice expense required by the Affordable Care Act.
Column (E): Percent Change CY 2011 to CY 2012 (current)--
Impact of the expiration of the non-budget neutral increases to the CY
2011 GPCIs for lower expense areas authorized by the Affordable Care
Act and the MMEA and the end of the transition to the latest GPCIs that
began in 2011.
Column (F): Percent Change CY 2012 (No NPRM) to CY 2012
(NPRM)--Impact of the four regulatory changes described previously.
Column (G): Percent Change Combined Impact CY 2011 to CY
2012--Combined impact of all changes from CY 2011 to CY 2012.
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G. Effects of Final Changes to Medicare Telehealth Services Under the
Physician Fee Schedule

As discussed in section II.E. of this final rule with comment
period, we are finalizing our policy to add several new codes to the
list of telehealth services and revise the criteria for adding services
to the list of telehealth services. While we expect these changes to
increase access to care in rural areas, based on recent utilization of
similar services already on the telehealth list, we estimate no
significant budgetary impact from the additions. In addition, the final
revision to the telehealth criteria will be effective for CY 2013 PFS
telehealth services, with no impact in CY 2012.

H. Effects of the Impacts of Other Provisions of the Final Rule With
Comment Period

1. Part B Drug Payment: ASP Issues
Application of our proposals for ``ASP Reporting Template Update''
and ``Reporting of ASP Units and Sales Volume for Certain Products,''
as discussed in section VI.A. of this final rule with comment period
involve revisions to the existing ASP reporting template which will
facilitate the accuracy and efficiency of data transfer from
manufacturers. Any impacts are dependent on the status and quality of
quarterly manufacturer data submissions, so we cannot quantify
associated savings.
Finally, as discussed in section VI.A. of this final rule with
comment period, we provided for appropriate price substitutions that
account for market-related pricing changes and would allow Medicare to
pay based off lower market prices for those drugs and biologicals that
consistently exceed the applicable threshold percentage. Based on
estimates published in various OIG reports (see section VI.A. for a
list of citations), we believe that this proposal will generate minor
savings for the Medicare program and its beneficiaries since any
substituted prices would be for amounts less than the calculated 106
percent of the ASP.
2. Chiropractic Services Demonstration
As discussed in section VI.B. of this final rule with comment
period, we are continuing the recoupment of the $50 million in
expenditures from this demonstration in order to satisfy the budget
neutrality requirement in section 651(f)(1)(b) of the MMA. We initiated
this recoupment in CY 2010 and this will be the third year. As
discussed in the CY 2010 PFS final rule with comment period, we
finalized a policy to recoup $10 million each year through adjustments
to the PFS for all chiropractors in CYs 2010 through 2014. To implement
this required budget neutrality adjustment, we are recouping $10
million in CY 2012 by reducing the payment amount under the PFS for the
chiropractic CPT codes (that is, CPT codes 98940, 98941, and 98942) by
approximately 2 percent.
3. Extension of Payment for Technical Component of Certain Physician
Pathology Services
As discussed in section V.A. of this final rule with comment
period, we are implementing the provision that specifies that for
services furnished after December 31, 2011, an independent laboratory
may not bill the Medicare contractor for the TC of physician pathology
services furnished to a hospital inpatient or outpatient. The savings
associated with implementing this provision are estimated to be
approximately $80 million for CY 2012.
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
As discussed in section VI.E. of this final rule with comment
period, section 1861(s)(2)(FF) of the Act, as described more fully in
section 1861(hhh), of the Act (as added by section 4103 of the
Affordable Care Act) provides Medicare coverage for an annual wellness
visit. Regulations for Medicare coverage of the AWV are established at
42 CFR 410.15. The annual wellness visit is covered with no coinsurance
or deductible when furnished by a health professional as that term is
defined in 42 CFR 410.15. The annual wellness visit entails the
creation of a personalized prevention plan for an individual and
includes elements, such as updating medical and family history,
identifying providers that regularly provide medical care to the
individual, measurement of height, weight, and body mass index,
identification of risk factors, the provision of personalized health
advice, and development of a screening schedule (such as a checklist),
and referrals as appropriate for additional preventive services.
Section 1861(hhh)(1)(A) of the Act specifies that a personalized
prevention plan for an individual includes a HRA that meets the
guidelines established by the Secretary and takes into account the
results of a HRA. We are proposing to incorporate the use and results
of an HRA as part of the provision of personalized prevention plan
services during the AWV. The estimated impact of incorporating the HRA
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[[Page 73463]]

AWV is unknown for CY 2012. We specifically requested public comment on
the following:
The impact of use of the HRA on health professional
practices.
The burden on health professional practices of
incorporating an HRA into subsequent AWVs, as well as the first AWV.
The impact of the elements included in the definitions of
first and subsequent AWVs.
Modification of those AWV elements for which the Secretary
has authority to determine appropriateness.
A discussion of the comments we received, our responses, and our
final policy for CY 2012 is available in section VI.E. of this final
rule with comment period. Our final policy to increase payment for the
AWV to acknowledge the increased clinical staff time required to
incorporate the HRA into the AWV is subject to budget neutrality.
5. Physician Payment, Efficiency, and Quality Improvements--Physician
Quality Reporting System
As discussed in section VI.F.1 of this final rule with comment
period, we are finalizing several different reporting options for
eligible professionals who wish to participate in the 2012 Physician
Quality Reporting System. Although there may be some cost incurred by
CMS for maintaining the Physician Quality Reporting System measures and
their associated code sets, and for expanding an existing clinical data
warehouse to accommodate the final registry-based reporting, EHR-based
reporting, and group practice reporting options for the 2012 Physician
Quality Reporting System, we do not anticipate a significant cost
impact on the Medicare program.
With respect to the potential incentive payments that may be made
to satisfactory reporters under the 2012 Physician Quality Reporting
System, we estimate this amount for individual eligible professionals
would be approximately $60 million. This estimate is derived from
looking at our 2009 incentive payment of approximately $235 million and
then accounting for the fact that the 2009 incentive payment was 2.0
percent of an eligible professional's total estimated Medicare Part B
PFS allowed charges for all such covered professional services
furnished by the eligible professional during the 2009 reporting
period. For 2012, the incentive payment is 0.5 percent of an eligible
professional's total estimated Medicare Part B PFS allowed charges for
all covered professional services furnished by an eligible professional
during the 2012 reporting period. Although we expect that the lower
incentive payment percentage for 2012 would reduce the total outlay by
approximately one-fourth, we also expect more eligible professionals to
participate in the 2012 Physician Quality Reporting System because we
are finalizing multiple methods of data submission, additional
alternative reporting methods, methods to align the Physician Quality
Reporting System with the EHR Incentive Program and the Medicare Shared
Savings Program, and CY 2013 as the reporting period for the 2015
payment adjustment. We also believe that some eligible professionals
will qualify for the additional 0.5 percent incentive authorized under
section 1848(m)(7) of the Act (``Additional Incentive Payment'').
With respect to estimated costs associated with reporting by
individual eligible professionals, one factor that influences the cost
to individual eligible professionals is the time and effort associated
with identifying applicable Physician Quality Reporting System quality
measures and reviewing and selecting a reporting option. This burden
will vary with each individual eligible professional by the number of
applicable measures, the eligible professional's understanding of the
Physician Quality Reporting System, experience with Physician Quality
Reporting System participation, and the method(s) selected by the
eligible professional for reporting of the measures, and incorporating
the reporting of the measures into the office work flows.
In the proposed rule (72 FR 42938), we estimated an average
practice labor cost of $40/hour for our impact analysis. However, in an
effort to provide a more accurate labor cost estimate of participation
for the 2012 Physician Quality Reporting System, we conducted an
informal poll among a small sample of participants in the 2011
Physician Quality Reporting System to determine what employees within
an eligible professional's practice are involved with Physician Quality
Reporting System activities. The poll revealed that a billing clerk
typically handles administrative details with respect to participating
under the Physician Quality Reporting System (such as submitting self-
nomination statements), whereas a computer analyst typically handles
the reporting of Physician Quality Reporting System quality measures.
Based on this information, we are changing our estimated labor costs
associated with participating in the Physician Quality Reporting
System.
For purposes of this impact analysis, we will assume that a billing
clerk will handle the administrative duties associated with
participating in the 2012 Physician Quality Reporting System. According
to information published by the Bureau of Labor Statistics, available
at http://www.bls.gov/oes/current/oes433021.htm, the mean hourly wage
for a billing clerk is $16.00/hour. Therefore, for purposes of handling
administrative duties, we estimate an average labor cost of $16.00/
hour.
In addition, for purposes of this impact analysis, we will assume
that a computer analyst will engage in the duties associated with the
reporting of 2012 Physician Quality Reporting System quality measures.
According to information published by the Bureau of Labor Statistics,
available at http://www.bls.gov/oes/current/oes151121.htm, the mean
hourly wage for a computer analyst is $39.06/hour, or approximately
$40.00/hour. Therefore, for purposes of reporting on 2012 Physician
Quality Reporting System quality measures, we estimate an average labor
cost of $40.00/hour.
Participation in the CY 2012 Physician Quality Reporting System by
individual eligible professionals and group practices is voluntary and
individual eligible professionals and group practices may have
different processes for integrating the collection of the Physician
Quality Reporting System measures into their practice's work flows.
Given this variability and the multiple reporting options that we
provide, it is difficult to definitively estimate the impact of the
Physician Quality Reporting System on providers. Furthermore, we
believe that costs for eligible professionals who are participating in
the Physician Quality Reporting System for the first time in 2012 would
be considerably higher than the cost for eligible professionals who
participated in the Physician Quality Reporting System in prior years.
Some preparatory steps are needed to begin participating in the
Physician Quality Reporting System. To the extent that we are retaining
measures that an eligible professional has reported in a prior year and
there are no changes to the measure's specifications from a prior year,
such preparatory steps do not need to be repeated in subsequent years.
In addition, for many eligible professionals, the cost of participating
in the Physician Quality Reporting System is offset by the incentive
payment, if earned.
Assuming that it takes an individual eligible professional
approximately 5 hours to review the Physician Quality

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Reporting System quality measures, review the various reporting
options, select the most appropriate reporting option, identify the
applicable measures for which they can report the necessary
information, and incorporate reporting of the selected measures into
their office work flows, we estimate that the cost to eligible
professionals associated with preparing to report Physician Quality
Reporting System quality measures will be approximately $200 per
individual eligible professional ($40 per hour x 5 hours).
Another factor that influences the cost to individual eligible
professionals is how they choose to report the Physician Quality
Reporting System measures (that is, whether they select the claims-
based, registry-based or EHR-based reporting mechanism we are
finalizing). For the claims-based reporting mechanism, estimates from
the PVRP indicate the time needed to perform all the steps necessary to
report quality data codes (QDCs) for 1 measure on a claim ranges from
15 seconds (0.25 minutes) to 12 minutes for complicated cases or
measures. In previous years, when we required reporting on 80 percent
of eligible cases for claims-based reporting, we found that on average,
the median number of reporting instances for each of the Physician
Quality Reporting System measures was 9. Since we reduced the required
reporting rate by over one-third to 50 percent, then for purposes of
this impact analysis we will assume that an eligible professional will
need to report each selected measure for 6 reporting instances, or 6
cases. Assuming that an eligible professional, on average, will report
3 measures since a majority of eligible professionals participate in
the Physician Quality Reporting System by reporting individual measures
via claims or registry and that an eligible professional reports on an
average of 6 reporting instances per measure, we estimate that the cost
to an individual eligible professional associated with the claims-based
reporting option of Physician Quality Reporting System measures will
range from approximately $2.64 (0.25 minutes per reporting instance x 6
reporting instances per measure x 3 measures x $40/hour) to $144.00 (12
minutes per reporting instance x 6 reporting instances per measure x 3
measures x $40/hour). If an eligible professional satisfactorily
reports, these costs will more than likely be negated by the incentive,
if earned. For the 2009 Physician Quality Reporting System, which had a
2.0 percent incentive, the mean incentive amount was close to $2,000
for an individual eligible professional. For the registry-based
reporting option, individual eligible professionals will generally
incur a cost to submit data to registries. We estimate that fees for
using a qualified registry will range from no charge, or a nominal
charge, for an individual eligible professional to use a registry to
several thousand dollars, with a majority of registries charging fees
ranging from $500 to $1,000. However, our impact analysis is limited to
the incremental costs associated with Physician Quality Reporting
System reporting, which we believe are minimal. We believe that many
eligible professionals who select the registry-based reporting option
will already be utilizing the registry for other purposes and will not
need to report additional data to the registry specifically for
Physician Quality Reporting System. The registries also often provide
the eligible professional services above and beyond what is required
for the Physician Quality Reporting System.
For the EHR-based reporting option, an individual eligible
professional generally will incur a cost associated with purchasing an
EHR product. Although we do not believe that the majority of eligible
professionals will purchase an EHR solely for the purpose of
participating in Physician Quality Reporting System, cost estimates for
EHR adoption by eligible professionals from the EHR Incentive Program
final rule (75 FR 44549) show that an individual eligible professional
who chooses to do so will have to spend anywhere from $25,000 to
$54,000 to purchase and implement an EHR and up to $18,000 annually for
ongoing maintenance.
Although we believe that the majority of eligible professionals
attempting to qualify for the additional 0.5 percent incentive payment
authorized by section 1848(m)(7) of the Act will be those who are
already required by their Boards to participate in a Maintenance of
Certification Program, individual eligible professionals who wish to
qualify for the additional 0.5 percent incentive payment and are not
currently participating in a Maintenance of Certification Program will
also have to incur a cost for participating in a Maintenance of
Certification Program. The manner in which fees are charged for
participating in a Maintenance of Certification Program vary by
specialty. Some Boards charge a single fee for participation in the
full cycle of Maintenance of Certification Program. Such fees appear to
range anywhere from over $1,100 to nearly $1,800 per cycle. Some Boards
have annual fees that are paid by their diplomates. On average, ABMS
diplomates pay approximately $200.00 per year for participating in
Maintenance of Certification Program. Some Boards have an additional
fee for the Maintenance of Certification Program Part III secure
examination, but most Boards do not have additional charges for
participation in practice/quality improvement activities.
With respect to the final group practice requirements for
satisfactorily submitting quality measures data for the CY 2012
Physician Quality Reporting System discussed in section VI.F.1 of this
final rule with comment period, group practices interested in
participating in the CY 2012 Physician Quality Reporting System through
the group practice reporting option (GPRO) may also incur a cost.
However, for groups that satisfactorily report for the 2012 Physician
Quality Reporting System, we believe these costs will be completely
offset if the group practice earns the incentive payment since the
group practice will be eligible for an incentive payment equal to 0.5
percent of the entire group's total estimated Medicare Part B PFS
allowed charges for covered professional services furnished by the
group practice during the reporting period.
One factor in the cost to group practices will be the costs
associated with the self-nomination process. Similar to our estimates
for staff involved with the claims-based reporting option for
individual eligible professionals, we also estimate that the group
practice staff involved in the group practice self-nomination process
will have an average administrative labor cost of $16/hour. Therefore,
assuming 2 hours for a group practice to decide whether to participate
as a group or have members of the practice participate individually and
4 hours for the self-nomination process, we estimate the total cost to
a group practice associated with the group practice self-nomination
process will be approximately $96 ($16/hour x 6 hours per group
practice).
For groups participating under the GPRO process that are comprised
of 25 or more eligible professionals, another factor in the cost to the
group will be the time and effort associated with the group practice
completing and submitting the GPRO web interface. Based on the
Physician Group Practice (PGP) demonstration's estimate that it takes
approximately 79 hours for a group practice to complete the data
collection, which uses the same data submission methods as those we
have finalized, we estimate the cost

[[Page 73465]]

associated with a physician group completing the GPRO web interface
will be approximately $4,740 ($40/hour x 79 hours per group practice).
In addition to costs incurred by individual eligible professionals
and group practices, registries and EHR vendors may also incur some
costs related to the final requirements for the 2012 Physician Quality
Reporting System. Registries interested in becoming ``qualified'' to
submit on behalf of individual eligible professionals will also have to
incur a cost associated with the vetting process, calculating quality
measures results from the data submitted to the registry by its
participants, and submitting the quality measures results, as well as
numerator and denominator data on quality measures, to CMS on behalf of
their participants. We estimate the registry self-nomination process
will cost approximately $400 per registry ($40 per hour x 10 hours per
registry). This cost estimate includes the cost of submitting the self-
nomination letter to CMS and completing the final CMS vetting process.
Our estimate of $40 per hour average labor cost for registries is based
on the assumption that registry staff include computer analysts. We do
not believe that there are any additional costs for registries
associated with a registry calculating quality measures results from
the data submitted to the registry by its participants and submitting
the quality measures results and numerator and denominator data on
quality measures to CMS on behalf of their participants under the final
program for 2012. We believe that the majority of registries already
perform these functions for their participants.
An EHR vendor interested in having its product(s) be used by
individual eligible professionals to submit the final Physician Quality
Reporting System measures to CMS for 2012 will have to complete the
vetting process during 2012 and program its EHR product(s) to extract
the clinical data that the eligible professional will need to submit to
CMS for purposes of reporting the final 2012 quality measures in 2013
as well. Previously qualified vendors will need to only update their
electronic measure specifications and data transmission schema during
2012 to incorporate any new EHR measures we are finalizing to maintain
their qualification for the 2012 Physician Quality Reporting System.
Therefore, for EHR vendors that were not previously qualified, we
estimate the cost associated with completing the self-nomination
process, including the vetting process with CMS officials, will be $400
($40/hour x 10 hours per EHR vendor). Our estimate of a $40 per hour
average labor cost for EHR vendors is based on the assumption that
vendor staff include computer analysts. We believe that the cost
associated with the time and effort needed for an EHR vendor to review
the quality measures and other information and program the EHR product
to enable individual eligible professionals to submit Physician Quality
Reporting System quality measures data to the CMS-designated clinical
warehouse will be dependent on the EHR vendor's familiarity with the
Physician Quality Reporting System, the vendor's system's capabilities,
as well as the vendor's programming capabilities. Some vendors already
have the necessary capabilities and for such vendors, we estimate the
total cost will be approximately $1,600 ($40/hour x 40 hours per
vendor). However, given the variability in the capabilities of the
vendors, we believe an estimate for those vendors with minimal
experience will be approximately $8,000 per vendor ($40/hour x 200
hours per EHR vendor).
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[[Page 73466]]

6. Incentives for Electronic Prescribing (eRx)--The Electronic
Prescribing Incentive Program
Section VI.F.2. of this final rule with comment period describes
the Electronic Prescribing (eRx) Incentive Programs finalized for CYs
2012 through 2014. To be considered a successful electronic prescriber
in CYs 2012 through 2014, an individual eligible professional must meet
the final requirements described in section VI.F.2. of this final rule
with comment period.
From 2009, over 90,000 eligible professionals participated in the
eRx Incentive Program. We anticipate that despite a decrease in the
applicable quality incentive percent from 2 percent in 2009 to 1
percent (of total estimated Medicare Part B allowed charges for covered
professional services) in 2012 and 0.5 percent in 2013, more eligible
professionals (and group practices) will choose to participate in the
eRx Incentive Program due to the 2013 and 2014 payment adjustments of
1.5 percent and 2.0 percent, respectively (reduction of the physician
fee schedule amount that would otherwise apply to such services in 2013
and 2014), for eligible professionals who are not successful electronic
prescribers. In order to become a successful electronic prescriber for
purposes of the 2013 and 2014 payment adjustments under the 6-month
payment adjustment reporting periods, we are finalizing more
opportunities to report on the electronic prescribing measure by
concentrating only on the numerator of the measure. Similar to the
percentage increase from the 2008 to 2009 eRx Incentive Program, as
well as taking into account the limitations and significant hardship
exemptions we are finalizing for the 2013 and 2014 payment adjustments,
we anticipate a 12 percent increase in the number of eligible
professionals participating in the eRx Incentive Program from 2012
through 2014. Therefore, for purposes of this burden analysis, we
estimate that more than 100,800 unique TIN/NPI combinations will
participate in the 2012, 2013, and 2014 eRx Incentive Program
Although, as we stated previously, we expect participation in the
eRx Incentive Program to increase due to the implementation of the 2013
and 2014 payment adjustments, we do not believe this expected increase
in participation will affect the number of eligible professionals
participating in the eRx Incentive Program for purposes of earning an
incentive. For the 2009 eRx Incentive Program, based on an incentive of
2.0 percent of eligible professionals' total estimated Medicare Part B
allowed charges for covered professional services, approximately $148
million in total incentives were paid to eligible professionals with a
mean incentive amount of approximately $3,000. Whereas the applicable
quality incentive percent for 2009 was 2.0 percent, the applicable
percent for the 2012 and 2013 incentives are 1.0 percent and 0.5
percent, respectively. Since the applicable quality percent for the
2012 incentive is half that of the 2009 incentive, we estimate that $74
million in total incentives will be paid to eligible professionals for
the 2012 incentive. Since the applicable quality percent for the 2013
incentive is one-fourth that of the 2009 incentive, we estimate that
$37 million in total incentives will be paid to eligible professionals
for the 2013 incentive. Therefore, for the 2012 and 2013 incentives, we
estimate that a total of $111 million will be distributed to eligible
professionals who become successful electronic prescribers.
With respect to the costs of participating in the eRx Incentive
Program for eligible professionals and group practices, we estimate
that the cost impact of the eRx Incentive Programs for CYs 2012 through
2014 on the Medicare program will be the cost incurred for maintaining
the electronic prescribing measure and its associated code set, and for
maintaining the existing clinical data warehouse to accommodate the
registry-based reporting and EHR-based reporting options for the
electronic prescribing measure. However, we do not believe that the
program for CYs 2012 through 2014 have a significant administrative
cost impact on the Medicare program since much of this infrastructure
has already been established for the eRx Incentive Program.
Individual eligible professionals and group practices may have
different processes for integrating data collection on the electronic
prescribing measure into their practices' work workflows. Given this
variability and the multiple reporting options that we are finalizing,
it is difficult to accurately estimate the impact of the eRx Incentive
Program for CYs 2012 through 2014 on providers. Furthermore, we believe
that costs for eligible professionals who will participate in the eRx
Incentive Program for the first time will be considerably higher than
the cost for eligible professionals who participated in the eRx
Incentive Program in prior years, as there are preparatory steps that
an eligible professional will need to take to begin participating in
the program. In addition, for many eligible professionals (especially
those who participated in the eRx Incentive Program in prior years), we
believe the cost of participating in the eRx Incentive Program in 2012
or 2013 will be offset by the incentive payment, if earned. As a result
of the payment adjustment that begins in 2012 and continues until 2014,
the cost of not participating in the eRx Incentive Program for CYs 2012
through 2014 could be higher than the cost of participating in the form
of reduced Medicare payments as a result of the payment adjustment (if
applicable).
Any eligible professional who wishes to participate in the eRx
Incentive Program must have a qualified electronic prescribing system
in order to participate. Therefore, a one-time potential cost to some
individual eligible professionals will be the cost of purchasing and
using an electronic prescribing system, which varies by the commercial
software package selected, the level at which the professional
currently employs information technology in his or her practice and the
training needed. One study indicated that a midrange complete
electronic medical record with electronic prescribing functionality
costs $2,500 per license with an annual fee of $90 per license for
quarterly updates of the drug database after setup costs while
standalone prescribing, messaging, and problem list system may cost
$1,200 per physician per year after setup costs. Hardware costs and
setup fees substantially add to the final cost of any software package.
(Corley, S.T. (2003). ``Electronic prescribing: a review of costs and
benefits.'' Topics in Health Information Management 24(1):29-38.).
These are the estimates that we are using for our impact analysis.
Similar to the Physician Quality Reporting System, one factor in
the cost to individual eligible professionals is the time and effort
associated with individual eligible professionals reviewing the
electronic prescribing measure to determine whether it is applicable to
them, reviewing the available reporting options and selecting one,
gathering the required information, and incorporating reporting of the
measure into their office work flows. Since the eRx Incentive Program
consists of only 1 quality measure, we estimate 2 hours as the amount
of time needed for individual eligible professionals to prepare for
participation in the eRx Incentive Program. Information obtained from
the PVRP, which was a predecessor to the Physician Quality Reporting
System and was the first step for physician quality

[[Page 73467]]

reporting through certain quality metrics, indicated an average labor
cost per practice of approximately $40/hour. To account for salary
increases over time, we use an average practice labor cost of $40/hour
for our estimates, based on an assumption of an average annual increase
of approximately 3 percent. At an average cost of approximately $40/
hour, we estimate the total preparation costs to individual eligible
professionals to be approximately $80 ($40/hour x 2 hours).
Another factor that influences the cost to individual eligible
professionals is how they choose to report the electronic prescribing
measure (that is, whether they select the claims-based, registry-based
or EHR-based reporting mechanism). For claims-based reporting, there
will be a cost associated with reporting the appropriate QDC on the
claims an individual eligible professional submits for payment. Based
on the information from the PVRP described previously for the amount of
time it takes a median practice to report one measure one time (1.75
minutes) and the requirement to report 25 electronic prescribing events
during 2012, we estimate the annual estimated cost per individual
eligible professional to report the electronic prescribing measure via
claims-submission will be $43.75 (1.75 minutes per case x 1 measure x
25 cases per measure x $40/hour). We believe that for most successful
electronic prescribers who earn an incentive, these costs will be
negated by the incentive payment received given that the average
incentive for eligible professionals who qualified for a 2009 eRx
incentive was around $3,000.
For eligible professionals who select the registry-based reporting
mechanism, we do not anticipate any additional cost for individual
eligible professionals to report data to a registry, as individual
eligible professionals opting for registry-based reporting are more
than likely already reporting data to the registry. Little if any,
additional data will need to be reported to the registry for purposes
of participation in the eRx Incentive Program for CYs 2012 through
2014. Individual eligible professionals using registries for Physician
Quality Reporting System will likely experience minimal, if any,
increased costs charged by the registry to report this 1 additional
measure.
For EHR-based reporting, the eligible professional must extract the
necessary clinical data from his or her EHR, and submit the necessary
data to the CMS-designated clinical data warehouse. Once the EHR is
programmed by the vendor to allow data submission to CMS, the cost to
the individual eligible professional associated with the time and
effort to submit data on the electronic prescribing measure should be
minimal.
With respect to the requirements for group practices for the 2012
and 2013 incentives and 2013 and 2014 payment adjustments discussed in
section VI.F.2. of this final rule with comment period, group practices
have the same options as individual eligible professionals in terms of
the form and manner for reporting the electronic prescribing measure
(that is, group practices have the option of reporting the measure
through claims, a qualified registry, or a qualified EHR product).
There are only 2 differences between the requirements for an individual
eligible professional and a group practice: (1) the fact that a group
practice must self-nominate; and (2) the number of times a group
practice must report the electronic prescribing measure. Overall, there
could be less cost associated with a practice participating in the eRx
Incentive Program as a group rather than the individual members of the
group separately participating. We do not believe that there are any
additional costs associated with the group practice self-nomination
process since we are limiting the group practices to those selected to
participate in the 2012, 2013, and/or 2014 respective Physician Quality
Reporting System GPRO. The practices only must indicate their desire to
participate in the eRx GPRO at the time they self-nominate for the
Physician Quality Reporting System GPRO.
The costs for a group practice reporting to an EHR or registry
should be similar to the costs associated with registry and EHR
reporting for an individual eligible professional, as the process is
the same with the exception that more electronic prescribing events
must be reported by the group. For similar reasons, the costs for a
group practice reporting via claims should also be similar to the costs
associated with claims-based reporting for an individual eligible
professional. Therefore, we estimate that the costs for group practices
who are selected to participate in the eRx Incentive Program for CYs
2012 through 2014 will range from $799.17 (1.75 minutes per case x 1
measure x 625 cases per measure x $40/hour) for groups comprised of 25-
99 eligible professionals participating to $2,916.67 (1.75 minutes per
case x 2500 cases per measure x $40/hour) for the groups comprised of
100 or more eligible professionals.
We believe that the costs to individual eligible professionals and
group practices associated with meeting the requirements for the 2013
and 2014 payment adjustments will be similar to the costs of an
eligible professional or group practice reporting the electronic
prescribing measure for purposes of the 2012 and 2013 incentives.
Specifically, we believe that the cost of reporting the electronic
prescribing measure in one instance for purposes of the payment
adjustment is identical to the cost of reporting the electronic
prescribing measure for one instance on claims for purposes of the
incentive payment. The only difference will be in the total costs for
an individual eligible professional. Group practices are required to
report the electronic prescribing measure for the same number of
electronic prescribing events for both the 2012 and 2013 incentives and
the 2013 and 2014 payment adjustments. Individual eligible
professionals, however, are required to report the electronic
prescribing measure for only 10 electronic prescribing events for
purposes of the 2013 and 2014 payment adjustments, as opposed to 25
electronic prescribing events for purposes of the 2012 and 2013
incentives.
Based on our decision to consider only registries qualified to
submit quality measures results and numerator and denominator data on
quality measures to CMS on their participant's behalf for the 2012,
2013, and 2014 Physician Quality Reporting System to be qualified to
submit results and numerator and denominator data on the electronic
prescribing measure for eRx Incentive Program for CYs 2012, 2013, and
2014, respectively, we do not estimate any cost to the registry
associated with becoming a registry qualified to submit the electronic
prescribing measure for CYs 2012 through 2014.
The cost for the registry will be the time and effort associated
with the registry calculating results for the electronic prescribing
measure from the data submitted to the registry by its participants and
submitting the quality measures results and numerator and denominator
data on the eRx quality measure to CMS on behalf of their participants.
We believe such costs will be minimal as registries will already be
required to perform these activities for Physician Quality Reporting
System.
Likewise, based on our decision to consider only EHR products
qualified for the Physician Quality Reporting System for CYs 2012,
2013, and 2014 to be qualified to submit results and numerator and
denominator data on the electronic prescribing measure for the eRx
Incentive Program for CYs 2012, 2013, and 2014, there is no need for

[[Page 73468]]

EHR vendors to undergo a separate self-nomination process for the eRx
Incentive Program. Therefore, there will be no additional cost
associated with the self-nomination process.
The cost to the EHR vendor associated with the proposed EHR-based
reporting requirements of this reporting initiative is the time and
effort associated with the EHR vendor programming its EHR product(s) to
extract the clinical data that the individual eligible professional
needs to submit to CMS for reporting the electronic prescribing
measure. Since we determined that only EHR products qualified for the
Physician Quality Reporting System are qualified for the eRx Incentive
Program, and the eRx Incentive Program consists of only one measure, we
believe that any burden associated with the EHR vendor to program its
product(s) to enable individual eligible professionals to submit data
on the electronic prescribing measure to the CMS-designated clinical
data warehouse will be minimal.
7. Physician Compare Web Site
Section VI.G.2. of this final rule with comment period discusses
the background of the Physician Compare Web site. As described in
section VI.G.2. of this final rule with comment period, we are
developing aspects of the Physician Compare Web Site in stages. We are
finalizing our proposal to include performance information with respect
to the 2012 Physician Quality Reporting System GPRO measures. As
reporting of physician performance rates on the Physician Compare Web
Site will be performed directly by us using the data that we collect
under the 2012 Physician Quality Reporting System GPRO, we do not
anticipate any notable impact on eligible professionals with respect to
the posting of information on the Physician Compare Web Site.
8. Medicare EHR Incentive Program
Section VI.H.2. of this final rule with period finalizes changes to
the EHR Incentive Program for EPs for the 2012 payment year with
respect to the reporting of CQMs for achieving meaningful use. Aside
from continuing the attestation method of reporting CQMs, we are
allowing the reporting of CQMs for purposes of demonstrating meaningful
use through participation in the Physician Quality Reporting System-
Medicare EHR Incentive Pilot via-- (1) a Physician Quality Reporting
System qualified EHR data submission vendor or (2) using an EP's
certified EHR technology, which also must be a Physician Quality
Reporting System qualified EHR.
We believe the impact associated with actually reporting CQMs will
vary depending on how the EP chooses to do so. We believe that the
number of EPs who choose to participate via attestation will largely be
those who are not participating in both the EHR Incentive Program and
Physician Quality Reporting System as this is the method of reporting
most favorable to EPs not participating in the Physician Quality
Reporting System. EPs participating in the Physician Quality Reporting
System will be more likely to participate in the pilot. Therefore,
based on the previously mentioned assumptions, we do not believe there
will be any additional impact on EPs that is specific to participation
in the pilot. EPs must participate in the Physician Quality Reporting
System in order to participate in the pilot.
9. Physician Feedback Program/Value Modifier Payment
The changes to the Physician Feedback Program in section VI.I. of
this final rule with comment period would not impact CY 2012 physician
payments under the Physician Fee Schedule. However, we expect that our
decision to use the Physician Quality Reporting System quality measures
in the Physician Feedback reports and in the value modifier to be
implemented in CY 2015 may result in increased participation in the
Physician Quality Reporting System in CY 2012. We anticipate that as we
approach implementation of the value modifier, physicians will
increasingly participate in the Physician Quality Reporting System to
determine and understand how the value modifier could affect their
payments.
10. 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 Offices
Medicare collects ownership information obtained in the 855A and
855B enrollment forms completed upon a facility or a practitioner's
Medicare enrollment. The 855 forms are self-selecting enrollment forms
that may be updated as necessary. The enrollment forms do not
specifically require complete information on whether a physician office
is wholly owned or wholly operated by a hospital. While we believe that
most hospital owned entities providing physician services will be
considered part of the hospital and operating as hospital outpatient
departments; there will be at least some hospital owned or operated
entities that will meet the definition of ``wholly-owned or wholly-
operated'' and will be subject to the 3-day payment window policy. We
are unable to accurately estimate and verify the number of wholly owned
or wholly operated entities enrolled in Medicare and furnishing health
services to Medicare beneficiaries that will be subject to the 3-day
payment window policy under the PFS because the 855 forms do not
explicitly capture information on sole ownership or operation. We do
not believe that our discussion in section V.B. of this final rule with
comment period regarding the entities to which this policy applies
changes our assessment that this policy would impact a small number of
providers/suppliers. We note that the application of the 3-day window
policy is limited to diagnostic or related nondiagnostic services that
are provided during the defined payment window by entities that are
wholly owned or operated by the hospital to which the patient is
ultimately admitted. The 3-day payment window policy would not apply to
the majority of services provided by a hospital's wholly-owned or
wholly-operated physician offices. Furthermore, the effects of applying
the 3-day window policy would be limited to the practice expense
component of the payment rate, and the professional component is not
affected by the 3-day window payment policy. We are unable to estimate
the impact of this final policy at this time. However, we note that if
we were able to estimate the effects of this policy on Part B payments,
the program savings would be redistributed across all other services
paid under the PFS in accordance with due to the PFS budget neutrality
provisions.
11. Clinical Laboratory Fee Schedule: Signature on Requisition
As discussed in section VI.D. of this final rule with comment
period, we are retracting the policy that was finalized in the CY 2011
PFS final rule with comment period, which required a physician's or
NPP's signature on a requisition for clinical diagnostic laboratory
tests paid under the CLFS and are reinstating our prior policy that the
signature of the physician or NPP is not required on a requisition for
a clinical diagnostic laboratory test paid under the CLFS for Medicare
purposes. There are no expenditures or fiscal impact on the Medicare
program associated with this policy. While this policy may have an
effect on beneficiaries, we believe that any effect would be positive
because we are changing a requirement that might have

[[Page 73469]]

impeded access to care in some cases. This policy does not impact
payment rates under the CLFS, or any other part of the Medicare
program.

I. Alternatives Considered

This final rule with comment period contains a range of policies,
including some provisions related to specific statutory provisions. The
preceding preamble provides descriptions of the statutory provisions
that are addressed, identifies those policies when discretion has been
exercised, presents rationale for our policies and, where relevant,
alternatives that were considered.

J. Impact on Beneficiaries

There are a number of changes in this final rule with comment
period that would have an effect on beneficiaries. In general, we
believe that many of the final changes, including the refinements of
the Physician Quality Reporting System with its focus on measuring,
submitting, and analyzing quality data will have a positive impact and
improve the quality and value of care provided to Medicare
beneficiaries.
The regulatory provisions may affect beneficiary liability in some
cases. Most changes in aggregate beneficiary liability due to a
particular provision would be a function of the coinsurance (20 percent
if applicable for the particular provision after the beneficiary has
met the deductible). To illustrate this point, as shown in Table 87,
the CY 2011 national payment amount in the nonfacility setting for CPT
code 99203 (Office/outpatient visit, new) is $102.95, which means that
in CY 2011 a beneficiary would be responsible for 20 percent of this
amount, or $20.59. Based on this final rule with comment period,
including the negative update, the CY 2012 national payment amount in
the nonfacility setting for CPT code 99203, as shown in Table 87, is
$76.23, which means that, in CY 2012, the beneficiary coinsurance for
this service would be $15.25. Most policies discussed in this final
rule with comment period that impact payment rates, such as the
expansion of the MPPR to the professional component of imaging
procedures, would similarly impact beneficiaries' coinsurance.

K. Accounting Statement

As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Table 89, we have
prepared an accounting statement showing the estimated expenditures
associated with this final rule with comment period. This estimate
includes the estimated CY 2012 incurred benefit impact associated with
the estimated CY 2012 PFS conversion factor update based on a
midsession review of the FY 2012 President's Budget.
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L. Conclusion

The analysis in the previous sections, together with the remainder
of this preamble, provides a Final Regulatory Flexibility Act Analysis.
The previous analysis, together with the remainder of this preamble,
provides a Regulatory Impact Analysis.

X. Addenda Referenced in This Final Rule With Comment Period and
Available Only Through the Internet on the CMS Web Site

This section lists the Addenda referred to throughout the preamble
of this final rule with comment period. Beginning with the CY 2012 PFS
proposed rule, the PFS Addenda A, B, C, D, E, F, G, and H will no
longer appear in the Federal Register. In addition, beginning with the
CY 2012 PFS final rule with comment period, the Designated Health
Services Code List (Addendum J) will no longer appear in the Federal
Register. Instead, these Addenda, along with other supplemental
documents, will be available through the Internet.
Readers who experience any problems accessing any of the Addenda
that are posted on the CMS Web sites identified in this section should
contact Erin Smith at (410) 786-4497.
The following PFS Addenda for CY 2012 PFS final rule with comment
period rule with 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.

Addendum A--Explanation and Use of Addendum B
Addendum B--Relative Value Units and Related Information Used in
Determining Medicare Payments for CY 2012
Addendum C--[Reserved]
Addendum D--CY 2012 Geographic Adjustment Factors (GAFs)
Addendum E--CY 2012 Geographic Practice Cost Indices (GPCIs) by States
and Medicare Locality
Addendum F--CY 2012 Diagnostic Imaging Services Subject to the Multiple
Procedure Payment Reduction
Addendum G--CPT/HCPCS Imaging Codes Defined by Section 5102(b) of the
DRA
Addendum H--CY 2011 ``Always Therapy'' Services Subject to the Multiple
Procedure Payment Reduction

The Designated Health Services Code List Addendum for CY 2012 PFS
final rule with comment period entitled ``Addendum J: List of CPT \1\/
HCPCS Codes Used to Define Certain Designated Health Service Categories
\2\ Under Section 1877 of the Social Security Act Effective January 1,
2012'' is available through the Internet on the CMS Web site at http://www.cms.gov/PhysicianSelfReferral/40_List_of_Codes.asp#TopOfPage.

[[Page 73470]]

List of Subjects

42 CFR Part 410

Health facilities, Health professions, Kidney diseases,
Laboratories, Medicare, Reporting and recordkeeping requirements, Rural
areas, X-rays.

42 CFR Part 414

Administrative practice and procedure, Health facilities, Health
professions, Kidney diseases, Medicare, Reporting and recordkeeping.

42 CFR Part 415

Health facilities, Health professions, Medicare, Reporting and
recordkeeping requirements.

42 CFR Part 495

Administrative practice and procedure, Electronic health records,
Health facilities, Health professions, Health maintenance organizations
(HMO), Medicaid, Medicare, Penalties, Privacy, Reporting and
recordkeeping requirements.

For the reasons set forth in the preamble of this final rule with
comment period, the Centers for Medicare & Medicaid Services amends 42
CFR chapter IV as set forth below:

PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

0
1. The authority citation for part 410 continues to read as follows:

Authority: Secs. 1102, 1834, 1871, and 1893 of the Social
Security Act (42 U.S.C. 1302, 1395m, 1395hh, and 1395ddd).

0
2. Amend Sec. 410.15(a) as follows:
0
A. Amending the definition of ``First annual wellness visit providing
personalized prevention plan services'' by--
0
i. Revising the introductory text.
0
ii. Redesignating paragraphs (i) through (ix) as paragraphs (ii)
through (x).
0
iii. Adding a new paragraph (i).
0
iv. Revising newly redesignated paragraph (viii)(A).
0
B. Adding the definition of ``Health risk assessment''.
0
C. In the definition of ``Subsequent annual wellness visit providing
personalized prevention plan services''.
0
i. Revising the introductory text.
0
ii. Redesignating paragraphs (i) through (vii) as paragraphs (ii)
through (viii).
0
iii. Adding a new paragraph (i).
0
iv. Revising newly redesigned paragraphs (iii) and (vi)(B).
The revisions and additions read as follows:

Sec. 410.15 Annual wellness visits providing Personalized Prevention
Plan Services: Conditions for and limitations on coverage.

(a) * * *
First annual wellness visit providing personalized prevention plan
services means the following services furnished to an eligible
beneficiary by a health professional that include, and take into
account the results of, a health risk assessment, as those terms are
defined in this section:
(i) Review (and administration if needed) of a health risk
assessment (as defined in this section).
* * * * *
(viii) * * *
(A) A written screening schedule for the individual such as a
checklist for the next 5 to 10 years, as appropriate, based on
recommendations of the United States Preventive Services Task Force and
the Advisory Committee on Immunization Practices, and the individual's
health risk assessment (as that term is defined in this section),
health status, screening history, and age-appropriate preventive
services covered by Medicare.
* * * * *
Health risk assessment means, for the purposes of this section, an
evaluation tool that meets the following criteria:
(i) Collects self-reported information about the beneficiary.
(ii) Can be administered independently by the beneficiary or
administered by a health professional prior to or as part of the AWV
encounter.
(iii) Is appropriately tailored to and takes into account the
communication needs of underserved populations, persons with limited
English proficiency, and persons with health literacy needs.
(iv) Takes no more than 20 minutes to complete.
(v) Addresses, at a minimum, the following topics:
(A) Demographic data, including but not limited to age, gender,
race, and ethnicity.
(B) Self assessment of health status, frailty, and physical
functioning.
(C) Psychosocial risks, including but not limited to, depression/
life satisfaction, stress, anger, loneliness/social isolation, pain,
and fatigue.
(D) Behavioral risks, including but not limited to, tobacco use,
physical activity, nutrition and oral health, alcohol consumption,
sexual health, motor vehicle safety (seat belt use), and home safety.
(E) Activities of daily living (ADLs), including but not limited
to, dressing, feeding, toileting, grooming, physical ambulation
(including balance/risk of falls), and bathing.
(F) Instrumental activities of daily living (IADLs), including but
not limited to, shopping, food preparation, using the telephone,
housekeeping, laundry, mode of transportation, responsibility for own
medications, and ability to handle finances.
* * * * *
Subsequent annual wellness visit providing personalized prevention
plan services means the following services furnished to an eligible
beneficiary by a health professional that include, and take into
account the results of an updated health risk assessment, as those
terms are defined in this section:
(i) Review (and administration, if needed) of an updated health
risk assessment (as defined in this section).
* * * * *
(iii) An update of the list of current providers and suppliers that
are regularly involved in providing medical care to the individual as
that list was developed for the first annual wellness visit providing
personalized prevention plan services or the previous subsequent annual
wellness visit providing personalized prevention plan services.
* * * * *
(vi) * * *
(B) The list of risk factors and conditions for which primary,
secondary or tertiary interventions are recommended or are underway for
the individual as that list was developed at the first annual wellness
visit providing personalized prevention plan services or the previous
subsequent annual wellness visit providing personalized prevention plan
services.
* * * * *

0
3. In Sec. 410.62 amend paragraph (b) by revising the heading to read
as follows:

Sec. 410.62 Outpatient speech-language pathology services: Conditions
and exclusions.

* * * * *
(b) Condition for coverage of outpatient speech-language pathology
services furnished to certain inpatients of a hospital or a CAH or SNF.
* * *
* * * * *

Sec. 410.78 [Amended]

4. In Sec. 410.78, amend paragraph (b) introductory text by
removing the phrase ``and individual and group health and behavior
assessment and intervention services furnished by an interactive
telecommunications system if the following conditions are met:'' and
adding in its place the phrase ``individual and group health and
behavior assessment and intervention

[[Page 73471]]

services, and smoking cessation services furnished by an interactive
telecommunications system if the following conditions are met:''.

0
5. Amend Sec. 410.140 by revising the definition of ``Deemed entity''
to read as follows:

Sec. 410.140 Definitions.

* * * * *
Deemed entity means an individual, physician, or entity accredited
by an approved organization, but that has not yet been approved by CMS
under Sec. 410.145(b) to furnish training.
* * * * *

Sec. 410.141 [Amended]

0
6. Amend Sec. 410.141(b)(1) by:
0
A. Removing the term ``it'' and adding the phrase ``the training'' in
its place.
0
B. Removing the cross-reference ``Sec. 410.32(a)'' and adding the
cross-reference ``Sec. 410.32(a)(2)'' in its place.

PART 414--PAYMENT FOR PART B MEDICAL AND OTHER HEALTH SERVICES

0
7. The authority citation for part 414 continues to read as follows:

Authority: Secs. 1102, 1871, and 1881(b)(l) of the Social
Security Act (42 U.S.C. 1302, 1395hh, and 1395rr(b)(l)).

0
8. Amend Sec. 414.22 by revising paragraphs (b)(5)(i)(A) through (C)
to read as follows:

Sec. 414.22 Relative value units (RVUs).

* * * * *
(b) * * *
(5) * * *
(i) * * *
(A) Facility practice expense RVUs. The facility practice expense
RVUs apply to services furnished to patients in places of service
including, but not limited to, a hospital, a skilled nursing facility,
a community mental health center, a hospice, or an ambulatory surgical
center, or in a wholly owned or wholly operated entity providing
preadmission services under Sec. 412.2(c)(5).
(B) Nonfacility practice expense RVUs. The nonfacility practice
expense RVUs apply to services furnished to patients in places of
service including, but not limited to, a physician's office, the
patient's home, a nursing facility, or a comprehensive outpatient
rehabilitation facility (CORF).
(C) Outpatient therapy and CORF services. Outpatient therapy
services (including physical therapy, occupational therapy, and speech-
language pathology services) and CORF services billed under the
physician fee schedule are paid using the nonfacility practice expense
RVUs.
* * * * *

Sec. 414.65 [Amended]

0
9. In Sec. 414.65, amend paragraph (a)(1) introductory text by
removing the phrase ``and individual and group health and behavior
assessment and intervention furnished via an interactive
telecommunications system is equal to the current fee schedule amount
applicable for the service of the physician or practitioner.'' and
adding in its place the phrase ``individual and group health and
behavior assessment and intervention, and smoking cessation services
furnished via an interactive telecommunications system is equal to the
current fee schedule amount applicable for the service of the physician
or practitioner.''

0
10. Amend Sec. 414.90 as follows:
0
A. In paragraph (b), by revising the definition of ``Group practice''.
0
B. In paragraph (c)(2) introductory text, by removing the phrases
``during the applicable reporting period. For purposes of this
paragraph,'' at the end of the paragraph and adding the phrase ``during
the reporting period.'' in its place.
0
C. Adding paragraph (c)(4) introductory text.
0
D. Redesignating paragraphs (c)(2)(i) through (c)(2)(iii) as paragraphs
(c)(4)(i) through (c)(4)(iii), respectively.
0
E. Revising paragraph (f)(1).
0
F. Removing paragraph (f)(2).
0
G. Redesignating paragraph (f)(3) as paragraph (f)(2).
0
H. Revising newly redesignated paragraph (f)(2) introductory text.
0
I. In newly redesignated paragraph (f)(2)(ii), removing the phrase
``behalf; or'' and adding the phrase ``behalf.'' in its place.
0
J. In newly redesignated paragraph (f)(2)(iii), removing the phrase
``containing real or dummy'' and adding in its place the phrase
``containing dummy''.
0
K. Revising paragraphs (g)(1) and (g)(3).
0
L. Redesignating paragraphs (g)(4) and (g)(5) as paragraphs (g)(5) and
(g)(6).
0
M. Adding a new paragraph (g)(4).
0
N. In newly redesignated paragraph (g)(5), by removing the ``.'' and
adding ``; and'' in its place.
0
O. Revising newly redesignated paragraph (g)(6).
0
P. Revising paragraphs (i)(1) and (i)(2) introductory text.
The revisions and additions read as follows:

Sec. 414.90 Physician Quality Reporting System.

* * * * *
(b) * * *
Group practice means a physician group practice, as defined by a
TIN, with 25 or more individual eligible professionals (or, as
identified by NPIs) who have reassigned their billing rights to the
TIN.
* * * * *
(c) * * *
* * * * *
(2) For purposes of this paragraph--
* * * * *
(4) For purposes of this paragraph--
* * * * *
(f) * * *
(1) Reporting periods. For purposes of this paragraph, the
reporting period is--
(i) The 12-month period from January 1 through December 31 of such
program year.
(ii) A 6-month period from July 1 through December 31 of such
program year.
(A) For 2011, such 6-month reporting period is not available for
EHR-based reporting of individual Physician Quality Reporting System
quality measures.
(B) For 2012 and subsequent program years, such 6-month reporting
period from July 1 through December 31 of such program year is only
available for registry-based reporting of Physician Quality Reporting
System measures groups by eligible professionals.
(2) Reporting mechanisms. For program year 2011 and subsequent
program years, an eligible professional who wishes to participate in
the Physician Quality Reporting System must report information on the
individual Physician Quality Reporting System quality measures or
Physician Quality Reporting System measures groups identified by CMS in
one of the following manners:
(g) * * *
(1) Meets the participation requirements specified by CMS for the
Physician Quality Reporting System group practice reporting option;
* * * * *
(3) Reports measures in the form and manner specified by CMS;
(4) For purposes of paragraph (g), the reporting period is the 12-
month period from January 1 through December 31 of such program year;
* * * * *
(6) Payments to a group practice under this paragraph must be in
lieu of the payments that would otherwise be made under the Physician
Quality Reporting System to eligible

[[Page 73472]]

professionals in the group practice for meeting the criteria for
satisfactory reporting for individual eligible professionals.
(i) If an eligible professional, as identified by an individual
NPI, has reassigned his or her Medicare billing rights to a TIN
selected to participate in the Physician Quality Reporting System group
practice reporting option for a program year, then for that program
year the eligible professional must participate in the Physician
Quality Reporting System via the group practice reporting option. For
any program year in which the TIN is selected to participate in the
Physician Quality Reporting System group practice reporting option, the
eligible professional cannot individually qualify for a Physician
Quality Reporting System incentive payment by meeting the requirements
specified in paragraph (f) of this section.
(ii) If, for the program year, the eligible professional
participates in the Physician Quality Reporting System under a TIN that
is not selected to participate in the Physician Quality Reporting
System group practice reporting option for that program year, then the
eligible professional may individually qualify for a Physician Quality
Reporting System incentive by meeting the requirements specified in
paragraph (f) of this section under that TIN.
* * * * *
(i) * * *
(1) To request an informal review, an eligible professional (or in
the case of reporting under paragraph (g) of this section, group
practices) must submit a request to CMS within 90 days of the release
of the feedback reports. The request must be submitted in writing and
summarize the concern(s) and reasons for requesting an informal review
and may also include information to assist in the review.
(2) CMS will provide a written response within 90 days of the
receipt of the original request.
* * * * *

0
11. AmendSec. 414.92 as follows:
0
A. In paragraph (b), by adding the definition of ``Certified electronic
health record technology''.
0
B. In paragraph (b), in the definition of ``Group practice,'' by
redesignating paragraphs (i), (ii)(A), and (ii)(B) as paragraphs
(i)(A), (i)(B) and (ii), respectively.
0
C. In paragraph (b), in the definition of ``Group practice,'' by
revising newly redesginated paragraph (i)(B).
0
D. In paragraph (c)(2) introductory text, by revising the paragraph
heading.
0
E. In paragraph (c)(2)(ii) introductory text, removing the phrase
``significant hardship exemption from the 2012 eRx payment adjustment
if one of the following circumstances apply:'' and adding the phrase
``significant hardship exemption from a eRx payment adjustment if one
of the following circumstances apply:'' in its place.
0
F. Redesignating paragraphs (c)(2)(ii)(A) through (F) as paragraphs
(c)(2)(ii)(A)(1) through (c)(2)(ii)(A)(6), respectively.
0
G. Adding paragraphs (c)(2)(ii)(A) introductory text, (c)(2)(ii)(B),
and (c)(2) (iii).
0
H. In paragraph (d) introductory text, by removing the phrase ``must
meet the criteria for successful'' and the phrase ``must meet the
criteria for being a successful'' is added in its place.
0
I. In paragraph (d)(1), by removing the phrase ``For purposes of this
paragraph in 2011,'' is removed and adding in its place the phrase
``For purposes of this paragraph,''.
0
J. In paragraph (d)(2) introductory text, by removing the phrase ``For
program year 2011, an eligible professional'' and adding the phrase
``An eligible professional'' in its place.
0
K. In paragraph (e)(2)(ii), by removing the phrase ``under another
TIN'' and adding the phrase ``under a TIN'' in its place.
0
L. Redesignating paragraph (f) as (g).
0
M. Adding a new paragraph (f).
0
The revisions and additions read as follows:

Sec. 414.92 Electronic Prescribing Incentive Program.

* * * * *
(b) * * *
Certified electronic health record technology means an electronic
health record vendor's product and version as described in 45 CFR
170.102.
Group practice
* * * * *
(i) * * *
(B) In a Medicare-approved demonstration project or other Medicare
program, under which Physician Quality Reporting System requirements
and incentives have been incorporated; and
* * * * *
(c) * * *
(2) Payment adjustment.* * *
(ii) * * *
(A) From the 2012 payment adjustments by meeting one of the
following:
* * * * *
(B) From the 2013 and 2014 payment adjustments by meeting one of
the following:
(1) The eligible professional or group practice is located in a
rural area without high speed internet access.
(2) The eligible professional or group practice is located in an
area without sufficient available pharmacies for electronic
prescribing.
(3) The eligible professional or group practice is unable to
electronically prescribe due to local, State, or Federal law or
regulation.
(4) The eligible professional or group practice has limited
prescribing activity, as defined by an eligible professional generating
fewer than 100 prescriptions during a 6-month reporting period.
(iii) Other limitations to the payment adjustment. An eligible
professional (or in the case of a group practice under paragraph (b) of
this section, a group practice) is exempt from the application of the
payment adjustment under paragraph (c)(2) of this section if one of the
following applies:
(A) The eligible professional is not an MD, DO, podiatrist, nurse
practitioner, or physician assistant.
(B) The eligible professional does not have at least 100 cases
containing an encounter code that falls within the denominator of the
electronic prescribing measure for dates of service during the 6-month
reporting period specified in paragraph (f)(1) of this section.
* * * * *
(f) Requirements for individual eligible professionals and group
practices for the payment adjustment. In order to be considered a
successful electronic prescriber for the electronic prescribing payment
adjustment, an individual eligible professional (or, in the case of a
group practice under paragraph (b) of this section, a group practice),
as identified by a unique TIN/NPI combination, must meet the criteria
for being a successful electronic prescriber specified by CMS, in the
form and manner specified in paragraph (f)(2) of this section, and
during the reporting period specified in paragraph (f)(1) of this
section.
(1) Reporting periods. (i) For purposes of this paragraph (f), the
reporting period for the 2013 payment adjustment is either of the
following:
(A) The 12-month period from January 1, 2011 through December 31,
2011.
(B) The 6-month period from January 1, 2012 through June 30, 2012.
(ii) For purposes of this paragraph (f), the reporting period for
the 2014 payment adjustment is either of the following:
(A) The 12-month period from January 1, 2012 through December 31,
2012.

[[Page 73473]]

(B) The 6-month period from January 1, 2013 through June 30, 2013.
(2) Reporting mechanisms. An eligible professional (or, in the case
of a group practice under paragraph (e) of this section, a group
practice) who wishes to participate in the Electronic Prescribing
Incentive Program must report information on the electronic prescribing
measure identified by CMS to one of the following:
(i) For the 6- and 12-month reporting periods under paragraph
(f)(1) of this section, CMS, by no later than 2 months after the end of
the applicable 12-month reporting period or by no later than 1 month
after the end of the applicable 6-month reporting period, on the
eligible professional's Medicare Part B claims for covered professional
services furnished by the eligible professional during the reporting
period specified in paragraph (f)(1) of this section.
(ii) For the 12-month reporting period under paragraph (f)(1) of
this section, a qualified registry (as defined in paragraph (b) of this
section) in the form and manner and by the deadline specified by the
qualified registry selected by the eligible professional. The selected
qualified registry submits information, as required by CMS, for covered
professional services furnished by the eligible professional during the
reporting period specified in paragraph (f)(1) of this section to CMS
on the eligible professional's behalf.
(iii) For the 12-month reporting period under paragraph (f)(1) of
this section, CMS by extracting clinical data using a secure data
submission method, as required by CMS, from a qualified electronic
health record product (as defined in paragraph (b) of this section) by
the deadline specified by CMS for covered professional services
furnished by the eligible professional during the reporting period
specified in paragraph (f)(1) of this section. Prior to actual data
submission for a given program year and by a date specified by CMS, the
eligible professional must submit a test file containing dummy clinical
quality data extracted from the qualified electronic health record
product selected by the eligible professional using a secure data
submission method, as required by CMS.
* * * * *

0
12. In Sec. 414.802 amend the definition of ``Unit'' by revising the
first sentence to reads as follows:

Sec. 414.802 Definitions.

* * * * *
Unit means the product represented by the 11-digit National Drug
Code, unless otherwise specified by CMS to account for situations where
labeling indicates that the amount of drug product represented by a
National Drug Code varies. * * *
* * * * *
0
13. Amend Sec. 414.904 by revising paragraph (d)(3) to read as
follows:

Sec. 414.904 Average sales price as the basis for payment.

* * * * *
(d) * * *
(3) Widely available market price and average manufacturer price.
If the Inspector General finds that the average sales price exceeds the
widely available market price or the average manufacturer price by the
applicable threshold percentage specified in paragraph (d)(3)(iii) or
(iv) of this section, the Inspector General is responsible for
informing the Secretary (at such times as specified by the Secretary)
and the payment amount for the drug or biological will be substituted
subject to the following adjustments:
(i) The payment amount substitution will be applied at the next
average sales price payment amount calculation period after the
Inspector General informs the Secretary (at such times specified by the
Secretary) about billing codes for which the average sales price has
exceeded the average manufacturer price by the applicable threshold
percentage, and will remain in effect for 1 quarter after publication.
(ii) Payment at 103 percent of the average manufacturer price for a
billing code will be applied at such times when--
(A) The threshold for making price substitutions, as defined in
paragraph (d)(3)(iii) of this section is met; and
(B) 103 percent of the average manufacturer price is less than the
106 percent of the average sales price for the quarter in which the
substitution would be applied.
(iii) The applicable percentage threshold for average manufacturer
price comparisons for CYs 2005 through 2011 is 5 percent. For CY 2012,
the applicable percentage threshold for average sales price comparisons
is reached when--
(A) The average sales price for the billing code has exceeded the
average manufacturer price for the billing code by 5 percent or more in
2 consecutive quarters, or 3 of the previous 4 quarters immediately
preceding the quarter to which the price substitution would be applied;
and
(B) The average manufacturer price for the billing code is
calculated using the same set of National Drug Codes used for the
average sales price for the billing code.
(iv) The applicable percentage threshold for widely available
market price comparisons for CYs 2005 through 2012 is 5 percent.
* * * * *

PART 415--SERVICES FURNISHED BY PHYSICIANS IN PROVIDERS,
SUPERVISING PHYSICIANS IN TEACHING SETTINGS, AND RESIDENTS IN
CERTAIN SETTINGS

0
14. The authority citation for part 415 continues to read as follows:

Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).

Sec. 415.130 [Amended]

0
15. In Sec. 415.130, amend paragraphs (d)(1) and (d)(2) by removing
the date ``December 31, 2010'' and adding the date ``December 31,
2011'' in its place.

PART 495--STANDARDS FOR THE ELECTRONIC HEALTH RECORD TECHNOLOGY
INCENTIVE PROGRAM

0
16. The authority citation for part 495 continues to read as follows:

Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).

0
17. Amend Sec. 495.8 as follows:
0
A. In paragraph (a)(2)(ii), by removing the phrase ``selected by CMS
electronically to CMS (or in the case of Medicaid EPs, the States) in
the manner specified by CMS (or in the case of Medicaid EPs, the
States).'' and adding the phrase ``selected by CMS to CMS (or in the
case of Medicaid EPs, the States) in the form and manner specified by
CMS (or in the case of Medicaid EPs, the States).'' in its place.
0
B. Adding a new paragraph (a)(2)(v) to read as follows:

Sec. 495.8 Demonstration of meaningful use criteria.

(a) * * *
(2) * * *
(v) Exception for Medicare EPs for PY 2012--Participation in the
Physician Quality Reporting System-Medicare EHR Incentive Pilot. In
order to satisfy the clinical quality measure reporting objective in
Sec. 495.6(d)(10), aside from attestation, an EP participating in the
Physician Quality Reporting System may also participate in the
Physician Quality Reporting System-Medicare EHR Incentive Pilot through
one of the following methods:
(A) Submission of data extracted from the EP's certified EHR
technology through a Physician Quality Reporting System qualified EHR
data submission vendor; or

[[Page 73474]]

(B) Submission of data extracted from the EP's certified EHR
technology, which must also be through a Physician Quality Reporting
System qualified EHR.
* * * * *
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program).

Dated: October 26, 2011.
Donald M. Berwick,
Administrator, Centers for Medicare & Medicaid Services.

Approved: October 31, 2011.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.
[FR Doc. 2011-28597 Filed 11-1-11; 4:15 pm]
BILLING CODE 4120-01-P