[Federal Register Volume 77, Number 222 (Friday, November 16, 2012)]
[Rules and Regulations]
[Pages 68891-69373]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-26900]



[[Page 68891]]

Vol. 77

Friday,

No. 222

November 16, 2012

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; Revisions to Payment Policies Under the Physician Fee 
Schedule, DME Face-to-Face Encounters, Elimination of the Requirement 
for Termination of Non-Random Prepayment Complex Medical Review and 
Other Revisions to Part B for CY 2013; Final Rule

Federal Register / Vol. 77 , No. 222 / Friday, November 16, 2012 / 
Rules and Regulations

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 410, 414, 415, 421, 423, 425, 486, and 495

[CMS-1590-FC]
RIN 0938-AR11


Medicare Program; Revisions to Payment Policies Under the 
Physician Fee Schedule, DME Face-to-Face Encounters, Elimination of the 
Requirement for Termination of Non-Random Prepayment Complex Medical 
Review and Other Revisions to Part B for CY 2013

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

ACTION: Final rule with comment period.

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SUMMARY: This major final rule with comment period addresses changes to 
the physician fee schedule, payments for Part B drugs, 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 implements provisions of the Affordable Care Act 
by establishing a face-to-face encounter as a condition of payment for 
certain durable medical equipment (DME) items. In addition, it 
implements statutory changes regarding the termination of non-random 
prepayment review. This final rule with comment period also includes a 
discussion in the Supplementary Information regarding various programs 
. (See the Table of Contents for a listing of the specific issues 
addressed in this final rule with comment period.)

DATES: Effective date: The provisions of this final rule with comment 
period are effective on January 1, 2013 with the exception of 
provisions in Sec.  410.38 which are effective on July 1, 2013. The 
incorporation by reference of certain publications listed in the rule 
was approved by the Director of the Federal Register on May 16, 2012.
    Comment date: To be assured consideration, comments must be 
received at one of the addresses provided below, no later than 5 p.m. 
on December 31, 2012. (See the SUPPLEMENTARY INFORMATION section of 
this final rule with comment period for a list of the provisions open 
for comment.)

ADDRESSES: In commenting, please refer to file code CMS-1590-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 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-1590-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-1590-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) 786-7195 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:

Elliott Isaac, (410) 786-4735, for any physician payment issue not 
identified below.
Ryan Howe, (410) 786-3355, for issues related to practice expense 
methodology and direct practice expense inputs, telehealth services, 
and issues related to primary care and care coordination.
Sara Vitolo, (410) 786-5714, for issues related to potentially 
misvalued services, malpractice RVUs, molecular pathology, and payment 
for new preventive service HCPCS G-codes, and the sustainable growth 
rate.
Carol Schwartz, (410) 786- 0576, for issues related to colonoscopy and 
preventive services.
Ken Marsalek, (410) 786-4502, for issues related to the multiple 
procedure payment reduction and payment for the technical component of 
pathology services.
Craig Dobyski, (410) 786-4584, for issues related to geographic 
practice cost indices.
Pam West, (410) 786-2302, for issues related to therapy services.
Chava Sheffield, (410) 786-2298, for issues related to certified 
registered nurse anesthetists scope of benefit.
Roberta Epps, (410) 786-4503, for issues related to portable x-ray.
Anne Tayloe-Hauswald, (410) 786-4546, for issues related to ambulance 
fee schedule and Part B drug payment.
Amanda Burd, (410) 786-2074, for issues related to the DME provisions.
Debbie Skinner, (410) 786-7480, for issues related to non-random 
prepayment complex medical review.
Latesha Walker, (410) 786-1101, for issues related to ambulance 
coverage--physician certification statement.
Alexandra Mugge, (410) 786-4457, for issues related to physician 
compare.
Christine Estella, (410) 786-0485, for issues related to the physician 
quality reporting system, incentives for e-prescribing, and Medicare 
shared savings program.
Pauline Lapin, (410) 786-6883, for issues related to the chiropractic 
services demonstration budget neutrality issue.
Gift Tee, (410) 786-9316, for issues related to the physician feedback 
reporting program and value-based payment modifier.
Jamie Hermansen, (410) 786-2064, for issues related to Medicare 
coverage for hepatitis B vaccine.
Andrew Morgan, (410) 786-2543, for issues related to e-prescribing 
under Medicare Part D.

SUPPLEMENTARY INFORMATION:

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    Provisions open for comment: We will consider comments that are 
submitted as indicated above in the ``Dates'' and ``Addresses'' 
sections on the following subject areas discussed in this final rule 
with comment period:
     Interim final work, practice expense, and malpractice RVUs 
(including physician time, direct practice expense (PE) inputs, and the 
equipment utilization rate assumption) for new, revised, potentially 
misvalued, and certain other CY 2013 HCPCS codes as indicated in the 
sections that follow and listed in Addendum C to this final rule with 
comment period; and
     The appropriate direct PE inputs for establishing 
nonfacility PE RVUs for CPT code 63650 (Percutaneous implantation of 
neurostimulator electrode array, epidural).
    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 following Web 
site as soon as possible after they have been received: 
www.regulations.gov. 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 VIII. 
of this final rule with comment period.

I. Executive Summary and Background
II. Provisions of the Final Rule With Comment Period
    A. Resource-Based Practice Expense (PE) Relative Value Units 
(RVUs)
    B. Potentially Misvalued Codes Under the Physician Fee Schedule
    C. Malpractice RVUs
    D. Geographic Practice Cost Indices (GPCIs)
    E. Medicare Telehealth Services for the Physician Fee Schedule
    F. Extension of Payment for Technical Component of Certain 
Physician Pathology Services
    G. Therapy Services
    H. Primary Care and Care Coordination
    I. Payment for Molecular Pathology Services
    J. Payment for New Preventive Services HCPCS G Codes
    K. Certified Registered Nurse Anesthetists Scope of Benefit
    L. Ordering of Portable X-Ray Services
    M. Addressing Interim Final Relative Value Units (RVUs) From CY 
2012 and Establish Interim Final Rule RVU's for CY 2013
    N. Allowed Expenditures for Physicians' Services and the 
Sustainable Growth Rate
III. Other Provisions of the Final Rule With Comment Period
    A. Ambulance Fee Schedule
    B. Part B Drug Payment: Average Sales Price (ASP) Issues
    C. Durable Medical Equipment (DME) Face-to-Face Encounters and 
Written Orders Prior to Delivery
    D. Elimination of the Requirement for Termination of Non-Random 
Prepayment Complex Medical Review
    E. Ambulance Coverage-Physician Certification Statement
    F. Physician Compare Web Site
    G. Physician Payment, Efficiency, and Quality Improvements--
Physician Quality Reporting System
    H1. Electronic Prescribing (eRx) Incentive Program
    H2. The PQRS-Medicare EHR Incentive Pilot
    I. Medicare Shared Savings Program
    J. Discussion of Budget Neutrality for the Chiropractic Services 
Demonstration
    K. Physician Value-Based Payment Modifier and the Physician 
Feedback Reporting Program
    L. Medicare Coverage of Hepatitis B Vaccine
    M. Updating Existing Standards for E-Prescribing Under Medicare 
Part D and Lifting the LTC Exemption
IV. Additional Provisions
    A. Waiver of Deductible for Surgical Services Furnished on the 
Same Date as a Planned Screening Colorectal Cancer Test and 
Colorectal Cancer Screening Test Definition--Technical Correction
    B. Physician Self-Referral Prohibition: Annual Update to the 
List of CPT/HCPCS Codes
V. Collection of Information Requirements
VI. Waiver of Proposed Rulemaking
VII. Response to Comments
VIII. Regulatory Impact Analysis

Acronyms

    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 below:

AHRQ [HHS] Agency for Healthcare Research and Quality
AMA American Medical Association
AMA RUC AMA [/Specialty Society] Relative [Value] Update Committee
ARRA American Recovery and Reinvestment Act (Pub. L. 111-5)
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 Statistics
BN Budget neutrality
CAH Critical access hospital
CBSA Core-Based Statistical Area
CF Conversion factor
CfC Conditions for Coverage
CFR Code of Federal Regulations
CNS Clinical nurse specialist
CoPs Conditions of Participation
CORF Comprehensive Outpatient Rehabilitation Facility
CPI Consumer Price Index
CPT [Physicians] Current Procedural Terminology (CPT codes, 
descriptions and other data only are copyright 2012 American Medical 
Association. All rights reserved.)
CRNA Certified registered nurse anesthetist
CY Calendar year
DHS Designated health services
DME Durable medical equipment
DMEPOS Durable medical equipment, prosthetics, orthotics, and 
supplies
DOTPA Development of Outpatient Therapy Payment Alternatives
DRA Deficit Reduction Act of 2005 (Pub. L. 109-171)
E/M Evaluation and management
EHR Electronic health record
eRx Electronic prescribing
FFS Fee-for-service
FR Federal Register
GAF Geographic adjustment factor
GAO [U.S.] Government Accountability Office
GPRO Group Practice Reporting Option
GPCI Geographic practice cost index
HAC Hospital-acquired conditions
HCPCS Healthcare Common Procedure Coding System
HHA Home health agency
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)
HPSA Health Professional Shortage Area
ICD International Classification of Diseases
IMRT Intensity Modulated Radiation Therapy
IOM Internet-only Manual
IPCI Indirect practice cost index
IPPS Inpatient prospective payment system
IWPUT Intra-service work per unit of time
MAC Medicare Administrative Contractor
MCTRJCA Middle Class Tax Relief and Job Creation Act of 2012 (Pub. 
L. 112-96)
MEDCAC Medicare Evidence Development and Coverage Advisory Committee

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(formerly the Medicare Coverage Advisory Committee)
MedPAC Medicare Payment Advisory Commission
MEI Medicare Economic Index
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)
MPPR Multiple procedure payment reduction
MQSA Mammography Quality Standards Act of 1992 (Pub. L. 102-539)
NP Nurse practitioner
NPP Nonphysician practitioner
OACT [CMS] Office of the Actuary
OBRA Omnibus Budget Reconciliation Act (Pub. L. 101-239)
OIG [HHS] Office of Inspector General
PA Physician assistant
PC Professional component
PE Practice expense
PE/HR Practice expense per hour
PERC Practice Expense Review Committee
PFS Physician Fee Schedule
PGP [Medicare] Physician Group Practice
PLI Professional liability insurance
PPS Prospective payment system
PQRS Physician Quality Reporting System
PRA Paperwork Reduction Act
PPTRA Physician Payment and Therapy Relief Act of 2010 (Pub. L. 111-
286)
PVBP Physician and Other Health Professional Value-Based Purchasing 
Workgroup
RAC [Medicare] Recovery Audit Contractor
RFA Regulatory Flexibility Act
RIA Regulatory impact analysis
RVU Relative value unit
SBRT Stereotactic body radiation therapy
SGR Sustainable growth rate
TC Technical component
TIN Tax identification number
TPTCCA Temporary Payroll Tax Cut Continuation Act of 2011 (Pub. L. 
112-78)
TRHCA Tax Relief and Health Care Act of 2006 (Pub. L. 109-432)
VBP Value-based purchasing

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, effective with the CY 2012 
PFS final rule with comment period, 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 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 2013 PFS 
final rule with comment period, refer to item CMS-1590-FC. 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 Elliott Isaac at (410) 786-
4735.

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 2012 American Medical Association. 
All Rights Reserved. CPT is a registered trademark of the American 
Medical Association (AMA). Applicable Federal Acquisition Regulations 
(FAR) and Defense Federal Acquisition Regulations (DFAR) apply.

I. Executive Summary and Background

A. Executive Summary

1. Purpose
    This major final rule with comment period revises payment policies 
under the Medicare Physician Fee Schedule (PFS) and makes other policy 
changes related to Medicare Part B payment. These changes are 
applicable to services furnished in CY 2013. It also implements 
provisions of the Affordable Care Act by establishing a face-to-face 
encounter as a condition of payment for certain durable medical 
equipment (DME) items. In addition, it implements statutory changes 
regarding the termination of non-random prepayment review.
2. Summary of the Major Provisions
    The Social Security Act (Act) requires us to establish payments 
under the PFS based on national uniform relative value units (RVUs) and 
the relative resources used in furnishing a service. The Act requires 
that national RVUs be established for physician work, practice expense 
(PE), and malpractice expense. In this major final rule with comment 
period, we establish payment rates for CY 2013 for the PFS, payments 
for Part B drugs, and other Medicare Part B payment policies to ensure 
that our payment systems are updated to reflect changes in medical 
practice and in the relative value of services. It also implements 
provisions of the Affordable Care Act by establishing a face-to-face 
encounter as a condition of payment for certain durable medical 
equipment (DME) items, and by removing certain regulations regarding 
the termination of non-random prepayment review. It also establishes 
new claims-based data reporting requirements for therapy services to 
implement a provision in the Middle Class Tax Relief and Jobs Creation 
Act (MCTRCA). In addition, this rule:
     Identifies Potentially Misvalued Codes to be Evaluated.
     Establishes Additional Multiple Procedure Payment 
Reductions (MPPR).
     Expands Medicare Telehealth Services.
     Implements Regulatory Changes Regarding Payment for 
Technical Component of Certain Physician Pathology Services to Conform 
to Statute.
     Requires the Inclusion of Specific Information on Claims 
for Therapy Services.
     Establishes New Transitional Care Management Services.
     Clarifies Services Included in the Certified Registered 
Nurse Anesthetists Scope of Benefit.
     Modifies Ordering Requirements for Portable X-ray 
Services.
     Updates the Ambulance Fee Schedule.
     Sets Part B Drug Payment Rates for 2013.
     Addresses Ambulance Coverage--Physician Certification 
Statement.
     Updates policies regarding the--
    ++ Physician Compare Web site.
    ++ Physician Quality Reporting System.
    ++ Electronic Prescribing (eRx) Incentive Program.
    ++ Electronic Health Record (EHR) Incentive Program.
    ++ Medicare Shared Savings Program.
     Discusses Budget Neutrality for the Chiropractic 
Demonstration.
     Addresses Implementation of the Physician Value-Based 
Payment Modifier and the Physician Feedback Reporting Program.
     Establishes Medicare Coverage of Hepatitis B Vaccine.
     Updates Existing Standards for e-prescribing under 
Medicare Part D and Lifting the LTC Exemption.
3. Summary of Costs and Benefits
    The statute requires that we establish by regulation each year 
payment amounts for all physicians' service. These payment amounts are 
required to be adjusted to reflect the variations in

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the costs of providing services in different geographic areas. The 
statute also requires that annual adjustments to the RVUs not cause 
annual estimated expenditures to differ by more than $20 million from 
what they would have been had the adjustments not been made. If 
adjustments to RVUs would cause expenditures to change by more than $20 
million, we must make adjustments to preserve budget neutrality.
    Several changes affect the specialty distribution of Medicare 
expenditures. This final rule with comment period reflects the 
Administration's priority to improve payment for primary care services. 
As described in Section II.N, in the absence of Congressional action, 
an overall reduction of 26.5 percent will be imposed in the conversion 
factor used to calculate payment for physicians' services on or after 
January 1, 2013 due to the Sustainable Growth Rate (SGR). To isolate 
the impact of changes that we are proposing in this final rule with 
comment period, we analyze and discuss the policies' impact with a 
constant conversion factor. In the absence of a change in the 
conversion factor, payments to primary care specialties will increase 
and payments to select other specialties will decrease due to several 
changes in how we calculate payments for CY 2013.
    The largest payment increase for primary care specialties overall 
will result from a new payment for managing a beneficiary's care when 
the beneficiary is discharged from an inpatient hospital, a SNF, an 
outpatient hospital observation, partial hospitalization services, or a 
community mental health center. Payments to primary care specialties 
also will increase due to redistributions from changes in payments for 
services furnished by other specialties. Because of the budget-neutral 
nature of this system, decreases in payments for one service result in 
increases in payments in others.
    Payments to primary care specialties are also impacted by the 
completion of the 4-year transition to new PE RVUs using the new 
Physician Practice Information Survey (PPIS) data that was adopted in 
the CY 2010 PFS final rule with comment period. The projected impacts 
of using the new PPIS data are generally consistent with the impacts 
discussed in the CY 2012 final rule with comment period (76 FR 72452).
    Several types of providers are projected to see decreases in 
Medicare PFS payments, mainly as a result of the potentially misvalued 
codes initiative. We have received numerous new codes with new values 
and revised codes with new values for CY 2013 as a result of our 
ongoing misvalued codes initiative, an effort to improve payment 
accuracy. Many of the new and revised codes that we valued on an 
interim basis for CY 2013 originated with the potentially misvalued 
codes initiative. Reductions for pathology, neurology, and independent 
laboratories are a result of the misvalued code initiative. In the case 
of independent laboratories, we note that independent laboratories 
receive the majority of the Medicare revenue from the Clinical Lab Fee 
Schedule, which is unaffected by the misvalued code initiative. 
Radiation therapy centers will see an overall decrease of 9 percent 
primarily as a result of the PPIS transition discussed above and a 
change in the interest rate assumption used to calculate PE. Radiation 
oncology sees a 7 percent decrease for the same reasons as radiation 
therapy centers.

B. Background

    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) who are 
permitted to bill Medicare under the PFS for their services. Since 
January 1, 1992, Medicare has paid for physicians' services under 
section 1848 of the Act, ``Payment for Physicians' Services.'' The Act 
requires that CMS make payments under the PFS using 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, PE, and malpractice expense. 
Before the establishment of the resource-based relative value system, 
Medicare payment for physicians' services was based on reasonable 
charges.
1. Development of the Relative Value System
a. 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.
    The physician work RVUs established for the implementation of the 
fee schedule in January 1992 were 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 (HHS). 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/Specialty Society Relative Value Update Committee 
(AMA RUC).
b. Practice Expense Relative Value Units (PE RVUs)
    Initially, only the physician work RVUs were resource-based, and 
the PE and malpractice RVUs were based on average allowable charges. 
Section 121 of the Social Security Act Amendments of 1994 (Pub. L. 103-
432), and 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 and 
required us to develop resource-based PE RVUs for each physicians' 
service. We were to consider general categories of expenses (such as 
office rent and wages of personnel, but excluding malpractice expenses) 
comprising PEs.
    We established the resource-based PE RVUs for each physicians' 
service in a final rule, published November 2, 1998 (63 FR 58814), 
effective for services furnished in 1999. Separate PE RVUs are 
established for procedures that can be furnished 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 
furnishing the service, apart from payment under the PFS. The 
nonfacility

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RVUs reflect all of the direct and indirect PEs of furnishing a 
particular service. Based on the BBA 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. Panels of physicians, practice administrators, and 
nonphysician health professionals (for example, registered nurses 
(RNs)), who were nominated by physician specialty societies and other 
groups identified the direct inputs required for each physicians' 
service. (We have since refined and revised these inputs based on 
recommendations from the AMA RUC.) Aggregate specialty-specific 
information on hours worked and PEs was obtained from the AMA's 
Socioeconomic Monitoring System (SMS).
    Section 212 of the Balanced Budget Refinement Act of 1999 (BBRA) 
(Pub. L. 106-113) directed us 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 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 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. We adopted a 4-
year transition to the new PE RVUs. This transition was completed in CY 
2010. Direct PE RVUs were calculated for CY 2013 using this 
methodology, unless otherwise noted.
    In the CY 2010 PFS final rule with comment period, we updated the 
practice expense per hour (PE/HR) data that are used in the calculation 
of PE RVUs for most specialties (74 FR 61749). 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 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 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 2013, the final year of the 
transition, PE RVUs are calculated based on the new data.
c. 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 malpractice RVUs were based on 
malpractice insurance premium data collected from commercial and 
physician-owned insurers.
d. 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. Prior to CY 2013, we conducted 
separate periodic reviews of work RVUs and PE RVUs. 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 published in the CY 2012 PFS final rule 
with comment period (76 FR 73026).
    Initially refinements to the direct PE inputs relied on input from 
the AMA RUC-established the Practice Expense Advisory Committee (PEAC). 
Through March 2004, the PEAC provided recommendations to CMS for more 
than 7,600 codes (all but a few hundred of the codes included in the 
AMAs 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 2012 PFS final rule with comment period (76 FR 73057), we 
finalized a proposal to consolidate reviews of work and PE RVUs under 
section 1848(c)(2)(B) of the Act and reviews of potentially misvalued 
codes under section 1848(c)(2)(K) of the Act into one annual process.
    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 the amendments to Section 1848 of 
the Act, as enacted 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 PEs; (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 since the implementation of the fee schedule 
(the so-called `Harvard valued codes'); and (7) other codes determined 
to be appropriate by the Secretary.
e. Application of Budget Neutrality to Adjustments of RVUs
    Budget neutrality (BN) 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

[[Page 68897]]

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 would 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.
2. Components of the Fee Schedule Payment Amounts
    To calculate the payment for each physicians' service, the 
components of the fee schedule (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.
3. Most Recent Changes to the Fee Schedule
    The CY 2012 PFS final rule with comment period (76 FR 73026) 
implemented changes to the PFS and other Medicare Part B payment 
policies. It also finalized many of the CY 2011 interim RVUs and 
implemented interim RVUs for new and revised codes for CY 2012 to 
ensure that our payment systems are updated to reflect changes in 
medical practice and the relative values of services. In the CY 2012 
PFS final rule with comment period, we announced the following for CY 
2012: the total PFS update of -27.4 percent; the initial estimate for 
the sustainable growth rate (SGR) of -16.9 percent; and the conversion 
factor (CF) of $24.6712. These figures were calculated based on the 
statutory provisions in effect on November 1, 2011, when the CY 2012 
PFS final rule with comment period was issued.
    A correction notice was issued (77 FR 227) to correct several 
technical and typographical errors that occurred in the CY 2012 PFS 
final rule with comment period.
    On December 23, 2011, the Temporary Payroll Tax Cut Continuation 
Act of 2011 (TPTCCA) (Pub. L. 112-78) was signed into law. Section 301 
of the TPTCCA specified a zero percent update to the PFS from January 
1, 2012 through February 29, 2012. As a result, the CY 2012 PFS 
conversion factor was revised to $34.0376 for claims with dates of 
service on or after January 1, 2012 through February 29, 2012. In 
addition, the TPTCCA extended several provisions affecting Medicare 
services furnished on or after January 1, 2012 through February 29, 
2012, including:
     Section 303--the 1.0 floor on the physician work 
geographic practice cost index;
     Section 304--the exceptions process for outpatient therapy 
caps;
     Section 305--the payment to independent laboratories for 
the technical component (TC) of physician pathology services furnished 
to certain hospital patients, and
     Section 307--the 5 percent increase in payments for mental 
health services.
    On February 22, 2012, the Middle Class Tax Relief and Job Creation 
Act of 2012 (Pub. L. 112-96) (MCTRJCA) was signed into law. Section 
3003 of the MCTRJCA extended the zero percent PFS update to the 
remainder of CY 2012. As a result of the MCTRJCA, the CY 2012 PFS CF 
was maintained as $34.0376 for claims with dates of service on or after 
March 1, 2012 through December 31, 2012. In addition:
     Section 3004 of MCTRJCA extended the 1.0 floor on the 
physician work geographic practice cost index through December 31, 
2012;
     Section 3006 continued payment to independent laboratories 
for the TC of physician pathology services furnished to certain 
hospital patients through June 30, 2012; and
     Section 3005 extended the exceptions process for 
outpatient therapy caps through CY 2012 and made several other changes 
related to therapy claims and caps.

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, amended section 
1848(c)(2)(C)(ii) of the Act to require 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 otherwise 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 explanation 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 involved with furnishing 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 PEs incurred per hour worked in 
developing the indirect 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

[[Page 68898]]

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 the CY 2010 PFS for almost all of the 
Medicare-recognized specialties that participated in the survey.
    When we began using 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 1848(c)(2)(H)(i) of the Act requires us to use the medical 
oncology supplemental survey data submitted in 2003 for oncology drug 
administration services. Therefore, the PE/HR for medical oncology, 
hematology, and hematology/oncology reflects the continued use of these 
supplemental survey data.
    We do not use the PPIS data for reproductive endocrinology and 
spine surgery since these specialties currently are not separately 
recognized by Medicare, nor do we have a method to blend these data 
with Medicare-recognized specialty data. Similarly, we do not use the 
PPIS data for sleep medicine since there is not a full year of Medicare 
utilization data for that specialty given when the specialty code was 
created.
    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 for 
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 were five specialties whose utilization data were newly 
incorporated into ratesetting for CY 2012. In accordance with the final 
policies adopted in the CY 2012 final rule with comment period (76 FR 
73036), we 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; Intensive Cardiac 
Rehabilitation from Cardiology, and Certified Nurse Midwife from 
Obstetrics/gynecology.
    For CY 2013, there are two specialties whose utilization data will 
be newly incorporated into ratesetting. We proposed to use proxy PE/HR 
values for these specialties by crosswalking values from other 
specialties that furnish similar services as follows: Cardiac 
Electrophysiology from Cardiology; and Sports Medicine from Family 
Practice. These proposed changes are reflected in the ``PE HR'' file 
available on the CMS Web site under the supporting data files for the 
CY 2013 PFS final rule with comment period at www.cms.gov/PhysicianFeeSched/.
    We did not receive any comments regarding our proposal to use these 
proxy PE/HR values for these specialties, and we continue to believe 
that the values crosswalked from other specialties that furnish similar 
services are appropriate. Therefore, we are finalizing our CY 2013 
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 2013 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 2013 is the final year of the 4-year transition to the PE 
RVUs calculated using the PPIS data. Therefore, the CY 2013 PE RVUs are 
developed based entirely on the PPIS data, except as noted in this 
section.
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 involved with furnishing 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 allocated 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 incorporated the

[[Page 68899]]

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 furnish the service to determine an initial indirect 
allocator. For example, if the direct portion of the PE RVUs for a 
given service was 2.00 and direct costs, on average, represented 25 
percent of total costs for the specialties that furnished 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.
     Next, we add the greater of the work RVUs or clinical 
labor portion of the direct portion of the PE RVUs to this initial 
indirect allocator. In our example, if this service had 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.
     Next, 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 
furnishing the first service with an allocator of 10.00 was half of the 
average indirect cost of the specialties furnishing the second service 
with an indirect allocator of 5.00. 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 furnished independently or by different providers, or they 
may be furnished 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 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 1, the formulas 
were divided into two parts for each service.

[[Page 68900]]

     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 furnished 
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 in order to redistribute RVUs from step 18 to all PE RVUs in 
the PFS and 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.

                           Table 1--Specialties Excluded From Ratesetting Calculation
----------------------------------------------------------------------------------------------------------------
        Specialty code                                       Specialty description
----------------------------------------------------------------------------------------------------------------
49...........................  Ambulatory surgical center.
50...........................  Nurse practitioner.
51...........................  Medical supply company with certified orthotist.
52...........................  Medical supply company with certified prosthetist.
53...........................  Medical supply company with certified prosthetist[dash]orthotist.
54...........................  Medical supply company not included in 51, 52, or 53.
55...........................  Individual certified orthotist.
56...........................  Individual certified prosthestist.
57...........................  Individual certified prosthetist[dash]orthotist.
58...........................  Individuals not included in 55, 56, or 57.
59...........................  Ambulance service supplier, e.g., private ambulance companies, funeral homes,
                                etc.
60...........................  Public health or welfare agencies.
61...........................  Voluntary health or charitable agencies.
73...........................  Mass immunization roster biller.
74...........................  Radiation therapy centers.
87...........................  All other suppliers (e.g., drug and department stores).
88...........................  Unknown supplier/provider specialty.
89...........................  Certified clinical nurse specialist.
95...........................  Competitive Acquisition Program (CAP) Vendor.
96...........................  Optician.
97...........................  Physician assistant.
A0...........................  Hospital.
A1...........................  SNF.
A2...........................  Intermediate care nursing facility.
A3...........................  Nursing facility, other.
A4...........................  HHA.
A5...........................  Pharmacy.
A6...........................  Medical supply company with respiratory therapist.
A7...........................  Department store.
1............................  Supplier of oxygen and/or oxygen related equipment.
2............................  Pedorthic personnel.

[[Page 68901]]

 
3............................  Medical supply company with pedorthic personnel.
----------------------------------------------------------------------------------------------------------------

    In the CY 2013 PFS proposed rule, we proposed to calculate the 
specialty mix for low volume services (fewer than 100 billed services 
in the previous year) using the same methodology we used for non-low 
volume services. We currently use the survey data from the dominant 
specialty for these low volume services. We proposed to calculate a 
specialty mix for these services rather than use the dominant specialty 
in order to smooth year-to-year fluctuations in PE RVUs due to changes 
in the dominant specialty. However, the PE RVUs for the affected HCPCS 
codes were inadvertently displayed in Addendum B for the CY 2013 PFS 
proposed rule using our previously established methodology of using the 
dominant specialty for these services. While we received comments on 
our proposal, including some suggesting alternative methods for 
handling low volume services, we do not believe that it would be 
appropriate to make changes to the current methodology since the 
correct impact of the proposed calculation was not reflected in the 
displayed PE RVUs. We appreciate the commenters' perspective on the 
proposal, and will take those comments into account as we consider the 
best methodology for calculating the specialty mix for low volume 
services in future rulemaking.
     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 consistent with current payment policy as 
implemented in claims processing. For example, services billed with the 
assistant at surgery modifier are paid 16 percent of the PFS amount for 
that service; therefore, the utilization file is modified to only 
account for 16 percent of any service that contains the assistant at 
surgery modifier. Similarly, for those services to which volume 
adjustments are made to account for the payment modifiers, time 
adjustments are applied as well. For time adjustments to surgical 
services, the intraoperative portion in the physician time file is 
used; where it is not present, the intraoperative percentage from the 
payment files used by Medicare contractors to process Medicare claims 
is used instead. Where neither is available, we use the payment 
adjustment ratio to adjust the time accordingly. Table 2 details the 
manner in which the modifiers are applied.

                         Table 2--Application of Payment Modifiers to Utilization Files
----------------------------------------------------------------------------------------------------------------
           Modifier                 Description         Volume adjustment              Time adjustment
----------------------------------------------------------------------------------------------------------------
80, 81, 82...................  Assistant at Surgery.  16%..................  Intraoperative portion.
AS...........................  Assistant at Surgery-- 14% (85% * 16%)......  Intraoperative portion.
                                Physician Assistant.
50 or LT and RT..............  Bilateral Surgery....  150%.................  150% of physician time.
51...........................  Multiple Procedure...  50%..................  Intraoperative portion.
52...........................  Reduced Services.....  50%..................  50%.
53...........................  Discontinued           50%..................  50%.
                                Procedure.
54...........................  Intraoperative Care    Preoperative +         Preoperative + Intraoperative
                                only.                  Intraoperative         portion.
                                                       Percentages on the
                                                       payment files used
                                                       by Medicare
                                                       contractors to
                                                       process Medicare
                                                       claims.
55...........................  Postoperative Care     Postoperative          Postoperative portion.
                                only.                  Percentage on the
                                                       payment files used
                                                       by Medicare
                                                       contractors to
                                                       process Medicare
                                                       claims.
62...........................  Co-surgeons..........  62.5%................  50%.
66...........................  Team Surgeons........  33%..................  33%.
----------------------------------------------------------------------------------------------------------------

    We also make adjustments to volume and time that correspond to 
other payment rules, including special multiple procedure endoscopy 
rules and multiple procedure payment reductions (MPPR) including the 
final ophthalmology and cardiovascular diagnostic services MPPR 
discussed in section II.B.4. of this final rule with comment period. We 
note that section 1848(c)(2)(B)(v) of the Act exempts certain reduced 
payments for multiple imaging procedures and multiple therapy services 
from the budget-neutrality calculation under section 
1848(c)(2)(B)(ii)(II) of the Act. These MPPRs are not included in the 
development of the RVUs.
    For anesthesia services, we do not apply adjustments to volume 
since the average allowed charge is used when simulating RVUs and 
therefore includes all discounts. A time adjustment of 33 percent is 
made only for medical direction of two to four cases since that it is 
the only occasion where time units are duplicative.
    Comment: One commenter expressed concern regarding the accuracy of 
the 33 percent time adjustment made for these services.
    Response: We note that we did not make any proposals regarding the 
33 percent time adjustment for medical direction in the CY 2013 PFS 
proposed rule. As such, we do not believe it would be appropriate to 
modify that

[[Page 68902]]

figure in this final rule. However, we would welcome any independently 
verifiable data that could inform the accuracy of our assumption 
regarding duplicative time units. The 33 percent time adjustment 
effectively assumes medical direction of three cases. We would consider 
any such data for future rulemaking.
     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)[supcaret] life of equipment)))) + maintenance)

Where:

minutes per year = maximum minutes per year if usage were continuous 
(that is, usage = 1); generally 150,000 minutes.
usage = 0.5 is the standard equipment utilization assumption; 0.75 
for certain expensive diagnostic imaging equipment (see 74 FR 61753 
through 61755 and section II.A.3. of the CY 2011 PFS final rule with 
comment period).
price = price of the particular piece of equipment.
interest rate = sliding scale (see proposal below)
life of equipment = useful life of the particular piece of 
equipment.
maintenance = factor for maintenance; 0.05.

The interest rate we have previously used was proposed and finalized 
during rulemaking for CY 1998 PFS (62 FR 33164). In the CY 2012 
proposed rule (76 FR 42783), we solicited comment regarding reliable 
data on current prevailing loan rates for small businesses. In response 
to that request, the AMA RUC recommended that rather than applying the 
same interest rate across all equipment, CMS should consider a 
``sliding scale'' approach which varies the interest rate based on the 
equipment cost, useful life, and SBA (Small Business Administration) 
maximum interest rates for different categories of loan size and 
maturity. The maximum interest rates for SBA loans are as follows:
     Fixed rate loans of $50,000 or more must not exceed Prime 
plus 2.25 percent if the maturity is less than 7 years, and Prime plus 
2.75 percent if the maturity is 7 years or more.
     For loans between $25,000 and $50,000, maximum rates must 
not exceed Prime plus 3.25 percent if the maturity is less than 7 
years, and Prime plus 3.75 percent if the maturity is 7 years or more.
     For loans of $25,000 or less, the maximum interest rate 
must not exceed Prime plus 4.25 percent if the maturity is less than 7 
years, and Prime plus 4.75 percent, if the maturity is 7 years or more.

The current Prime rate is 3.25 percent.
    Based on that recommendation, for CY 2013, we proposed to use a 
``sliding scale'' approach based on the current SBA maximum interest 
rates for different categories of loan size (price of the equipment) 
and maturity (useful life of the equipment). Additionally, we proposed 
to update this assumption through annual PFS rulemaking to account for 
fluctuations in the Prime rate and/or changes to the SBA's formula to 
determine maximum allowed interest rates.
    Comment: Both MedPAC and the AMA RUC supported the proposal. MedPAC 
stated:

    We support CMS's proposal to use more accurate interest rate 
information because this will improve the accuracy of practice expense 
payment rates and redistribute dollars from overvalued codes to 
undervalued codes.
    The AMA RUC commented:
    The RUC appreciates that CMS intends to adopt the RUC 
recommendation of implementing a ``sliding scale'' for the interest 
rate utilized in computing equipment costs.
    Other commenters, also supported the proposal. However, while 
physician organizations that represent specialties that provide medical 
equipment intensive services and medical equipment manufacturers 
generally acknowledged that the interest rate used in the calculation 
had not been updated in over 12 years, they did not support the 
specific proposed update approach. These commenters assertions 
included: The proposal is ``overly complicated'' to administer since 
the interest rates vary by loan size and maturity, and interest rates 
can fluctuate; the SBA loan program is designed to encourage loans to 
small businesses so the SBA rates are below market rates unrelated to 
the cost of capital for physician practices; the proposed methodology 
may be inconsistent with the statute since it does not reflect relative 
resources; CMS should factor in the opportunity cost for practices that 
pay cash for the equipment (a weighted average cost of capital (WACC) 
approach) using WACC measures available in the private sector; CMS 
should transition this policy given the investments in equipment that 
have already been made; CMS should use a multiyear average of the Prime 
rate rather than the most recent Prime rate in the calculation; and, 
CMS should only update the interest rate every few years to help ensure 
more stable practice expenses.
    Response: We agree with MedPAC, the AMA RUC, and the commenters who 
supported our proposed approach for the interest rate calculation. Our 
proposed approach recognizes that the goal of the practice expense 
methodology is to calculate, as accurately as possible given the 
available data sources, the relative resources required to furnish 
services that are paid under the physician fee schedule. To continue to 
use an 11 percent interest rate assumption in the calculation of the 
equipment portion of the practice expense RVUs when this rate does not 
reflect a market rate would unnecessarily distort this relativity. We 
are unaware of, nor did commenters suggest, a readily available and 
transparent data source that specifically provides nationally 
representative data on the typical interest rates charged to physicians 
when obtaining financing for medical equipment. We believe that the use 
of the SBA maximum loan rates leads to a more reasonable estimate of 
relative resource used across the fee schedule and, consistent with the 
MedPAC comment, that the continued use of an 11 percent interest rate 
would inappropriately skew physician fee schedule relativity towards 
equipment intensive services.
    Additionally, we disagree that the maximum SBA loan rates are not 
sufficient as an assumption for the rate at which a typical physician 
practice would obtain financing, nor did the commenters offer 
nationally representative data indicating that this is the case.
    We agree with commenters that, in an ideal world, the interest rate 
assumption used in the equipment calculation would explicitly factor in 
the opportunity costs for practices that pay cash for the equipment (a 
WACC approach) and not just the cost of financing. However, as with the 
interest rates typically charged to physicians for medical equipment 
financing, we are unaware of any nationally representative data source 
that would provide the opportunity cost for physician practices 
deciding on purchasing medical equipment. Some commenters suggested we 
use proprietary WACC measures designed for industry and company stock 
valuations. We do not believe it would be appropriate to use 
proprietary measures in this calculation, nor do we believe that 
measures developed to value the stock prices of individual medical 
equipment companies or the medical device industry are necessarily 
applicable to the opportunity costs of

[[Page 68903]]

typical medical practices. Also, we do not agree that the opportunity 
cost of a physician practice purchase of medical equipment, if known or 
estimable, would exceed the SBA maximum loan rates.
    We also do not believe that our proposal is overly complicated to 
administer. The Prime rate is readily available, as are the SBA loan 
maximums. As such, we believe our proposal is a very transparent 
approach. We stated that we would update the rate through our annual 
PFS rulemaking process. In response to comments on this aspect of our 
proposal, we are clarifying that we generally intend to update the 
interest rate calculation through future rulemaking when we broadly 
update one or more of the other direct practice expense inputs, such as 
pricing or labor wage rates, to maintain relatively between the 
practice expense components. Given that we do not anticipate updating 
the interest rate assumption every year, we do not believe it is 
necessary to use a rolling average in the calculation. Periodic updates 
using the most recent Prime rate will balance commenters' desire for 
stability in the PE RVUs with the need to maintain appropriate 
relativity under the PFS. We also do not believe a transition is 
appropriate in this situation. We believe it is important to update the 
interest rate assumptions to appropriately adjust the relativity of 
equipment in relation to other PE inputs and the relation of equipment 
intensive services to other services on the PFS.
    In summary, we are finalizing without modification our proposal to 
use a ``sliding scale'' approach based on the current SBA maximum 
interest rates for different categories of loan size (price of the 
equipment) and maturity (useful life of the equipment). We will update 
the interest rate assumption through PFS rulemaking to account for 
fluctuations in the Prime rate and/or changes to the SBA's formula to 
determine maximum allowed interest rates. We are clarifying that we 
generally intend to update the interest rate calculation through future 
rulemaking only in years when we broadly update one or more of the 
other direct practice expense inputs. Accordingly, we anticipate 
updating the interest rate calculation less frequently than annually.
    The effects of this policy on direct equipment inputs are reflected 
in the CY 2013 direct PE input database, available on the CMS Web site 
under the downloads for the CY 2013 PFS final rule with comment period 
at http://www.cms.gov/PhysicianFeeSched/. Additionally, we note that 
the PE RVUs included in Addendum B reflect this policy.
BILLING CODE 4120-01-P

[[Page 68904]]

[GRAPHIC] [TIFF OMITTED] TR16NO12.000


[[Page 68905]]


[GRAPHIC] [TIFF OMITTED] TR16NO12.001


[[Page 68906]]


[GRAPHIC] [TIFF OMITTED] TR16NO12.002


[[Page 68907]]


BILLING CODE 4120-01-C
3. Changes to Direct PE Inputs for Specific Services
    In this section, we discuss other specific CY 2013 proposals and 
changes related to direct PE inputs for specific services. The changes 
we proposed and are finalizing are included in the final rule 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 www.cms.gov/PhysicianFeeSched/. We note that we address 
comments on the interim direct PE inputs established in the CY 2012 PFS 
final rule with comment period in section II.M. of this final rule with 
comment period.
a. Equipment Minutes for Interrogation Device Evaluation Services
    It has come to our attention that the pacemaker follow-up system 
(EQ138) associated with two interrogation device management service 
codes does not have minutes allocated in the direct PE input database. 
Based on our analysis of these services, we believed that 10 minutes 
should be allocated to the equipment for each of the following CPT 
codes: 93294 (Interrogation device evaluation(s) (remote), up to 90 
days; single, dual, or multiple lead pacemaker system with interim 
physician analysis, review(s) and report(s)), and 93295 (Interrogation 
device evaluation(s) (remote), up to 90 days; single, dual, or multiple 
lead implantable cardioverter-defibrillator system with interim 
physician analysis, review(s) and report(s)). Therefore, the direct PE 
input database was modified to allocate 10 minutes to the pacemaker 
follow-up system for CPT codes 93294 and 93295.
    Comment: One commenter expressed support for this modification.
    Response: We appreciate the support for the modification and will 
maintain the allocated equipment minutes in the final direct PE input 
database.
b. Clinical Labor for Pulmonary Rehabilitation Services (HCPCS Code 
G0424)
    It has come to our attention that the direct PE input database 
includes 15 minutes of clinical labor time in the nonfacility setting 
allocated for a CORF social worker/psychologist (L045C) associated with 
HCPCS code G0424 (Pulmonary rehabilitation, including exercise 
(includes monitoring), one hour, per session, up to two sessions per 
day). Based on our analysis of this service, we believed that these 15 
minutes should be added to the 15 minutes currently allocated to the 
Respiratory Therapist (L042B) associated with this service. Therefore, 
we proposed to modify the direct PE input database to allocate 15 
additional minutes to the Respiratory Therapist (L042B) (for a total of 
30 minutes) and to delete the CORF social worker/psychologist (L045C) 
associated with HCPCS code G0424.
    Comment: One commenter supported the modification as accurate and 
fair. Another commenter suggested that the appropriate clinical staff 
time for the code should be 60 minutes since the code describes an hour 
long session. Furthermore, the same commenter expressed opposition to 
reassigning the 15 minutes to the Respiratory Therapist because the 
rate per minute of the Respiratory Therapist is lower than the rate per 
minute of the CORF social worker/psychologist and the change, however 
modest, may potentially reduce the PE RVUs for the service.
    Response: We appreciate the support for the modification and 
understand the commenter's concerns. We recognize that for many 
services with code descriptors that include procedure time assumptions, 
the number of clinical labor minutes allocated during the service 
period corresponds to the time as described by the code. However, as we 
explained in the CY 2011 PFS final rule with comment period (75 FR 
73299), because pulmonary rehabilitation services reported under HCPCS 
code G0424 can be furnished either individually or in groups, we 
believe that 30 minutes of respiratory therapist time would be more 
appropriate for valuing the typical pulmonary rehabilitation service. 
We also recognize that reclassifying the direct PE input labor category 
from CORF social worker/psychologist to Respiratory Therapist for 15 
minutes will reduce the direct labor costs used in calculating PE RVUs 
for the service. However, we continue to believe that the Respiratory 
Therapist is the most appropriate labor category to include as a direct 
PE input for this service.
    After consideration of the comments we received, we are finalizing 
the modification of the direct PE labor inputs for this service to 
allocate 15 additional minutes to the Respiratory Therapist (L042B) 
(for a total of 30 minutes) and to delete the CORF social worker/
psychologist (L045C) associated with HCPCS code G0424.
c. Transcranial Magnetic Stimulation Services
    For CY 2011, the CPT Editorial Panel converted Category III CPT 
codes 0160T and 0161T to Category I status (CPT codes 90867 
(Therapeutic repetitive transcranial magnetic stimulation (TMS) 
treatment; initial, including cortical mapping, motor threshold 
determination, delivery and management), and 90868 (Therapeutic 
repetitive transcranial magnetic stimulation (TMS) treatment; 
subsequent delivery and management, per session)), which were 
contractor priced on the PFS. For CY 2012, the CPT Editorial Panel 
modified CPT codes 90867 and 90868, and created CPT code 90869 
((Therapeutic repetitive transcranial magnetic stimulation (TMS) 
treatment; subsequent motor threshold re-determination with delivery 
and management.) In the CY 2012 PFS final rule with comment period, we 
established interim final values based on refinement of RUC-recommended 
work RVUs, direct PE inputs, and malpractice risk factor crosswalks for 
these services (76 FR 73201).
    Subsequent to the development of interim final PE RVUs, it came to 
our attention that the application of our usual PE methodology resulted 
in anomalous PE values for these services. As we explain in section 
II.A.2.c.2 of this final rule with comment period, for a given service, 
we use the direct costs associated with a service (clinical staff, 
equipment, and supplies) and the average percentage that direct costs 
represent of total costs (based on survey data) across the specialties 
that furnish the service to determine an initial indirect allocator.
    For services almost exclusively furnished by one specialty, the 
average percentage of indirect costs relative to direct costs would 
ordinarily be used to determine the initial indirect allocator. For 
specialties that typically incur significant direct costs relative to 
indirect costs, the initial indirect allocator for their services is 
generally lower than for the specialties that typically incur lower 
direct costs relative to indirect costs. Relative to direct costs, the 
methodology generally allocates a greater proportion of indirect PE to 
services furnished by psychiatrists, for example, than to services 
furnished by specialties that typically incur significant direct costs, 
such as radiation oncologists. In the case of TMS, however, the direct 
costs incurred by psychiatrists reporting the codes far exceed the 
direct costs typical to any other service predominantly furnished by 
psychiatrists. This drastic difference in the direct costs of TMS 
relative to most other services furnished by psychiatrists, results in 
anomalous PE values since code-level indirect PE allocation relies on 
typical resource costs for the specialties that furnish the service. In 
other words, the amount of indirect PE allocated to TMS services is

[[Page 68908]]

based on the proportion of indirect expense to direct expense that is 
typical of other psychiatric services, and is not on par with other 
services that require similar investments in capital equipment and 
high-cost, disposable supplies.
    Historically, we have contractor-priced (meaning our claims 
processing contractors develop payment rates) for services with 
resource costs that cannot be appropriately valued within the generally 
applicable PE methodology used to price services across the PFS. 
Because there is no mechanism to develop appropriate payment rates for 
these services within our current methodology, we proposed to 
contractor price these codes for CY 2013.
    Comment: One commenter objected to the proposal to contractor price 
these codes for CY 2013 and suggested that CMS should establish PE RVUs 
using the generally applicable PE methodology and must endeavor in 
ensuing rulemaking to revise the methodology to refine any values the 
agency views as ``anomalous.'' The commenter also questioned CMS's 
assumption that the direct costs for psychiatrists who furnish these 
services ``far exceed'' the direct costs for psychiatrists who do not 
furnish these services. The commenter stated that CMS made this 
assessment without any empirical support and that CMS needs to conduct 
a survey or obtain other data from psychiatrists before drawing any 
conclusions regarding the appropriateness of Medicare payment rates on 
this basis.
    Response: We understand the commenter's objections, but as we 
explained in the proposal, we do not believe that there is a mechanism 
within the current methodology that allows us to develop appropriate 
payment rates for these services. We agree with the commenter that it 
may be appropriate to consider potential changes to the practice 
expense methodology to accommodate changing circumstances of medical 
practice. We do not agree with the commenter, however, that we have no 
means to pay appropriately for services when we recognize areas where 
the practice expense methodology is inadequate and that we must 
establish national RVUs based on that methodology, even when it does 
not accommodate the unique circumstances of particular services. 
Instead, we believe that in outlier cases, contractor pricing allows 
Medicare to pay more appropriately for particular services furnished to 
beneficiaries.
    In our proposal, we pointed out that the direct costs incurred by 
psychiatrists reporting the codes far exceed the direct costs typical 
to any other service predominantly furnished by psychiatrists. The 
commenter objected to this assertion and claimed it was made without 
any empirical support. We made that assertion based on comparing the 
direct practice expense input costs for transcranial magnetic 
stimulation services and the current direct practice expense input 
costs in the direct PE database for services predominantly furnished by 
the specialty based on Medicare claims data. In our examination of 20 
frequently billed psychiatry services (where greater than half of the 
Medicare allowed services were reported by psychiatrists), the total 
direct costs (clinical labor, disposable medical supplies, or medical 
equipment) in the direct PE input database summed to under $10 for all 
but 3 of these 20 services. Examples of these services include CPT 
codes 90807 (Individual psychotherapy, insight oriented, behavior 
modifying and/or supportive, in an office or outpatient facility, 
approximately 45 to 50 minutes face-to-face with the patient; with 
medical evaluation and management services), 90862 (Pharmacologic 
management, including prescription, use, and review of medication with 
no more than minimal medical psychotherapy), and 90845 
(Psychoanalysis). For the three where the direct PE input costs summed 
to greater than $10, HCPCS code M0064 (Brief office visit for the sole 
purpose of monitoring or changing drug prescriptions used in the 
treatment of mental psychoneurotic and personality disorders), and CPT 
codes 90865 (Narcosynthesis for psychiatric diagnostic and therapeutic 
purposes (eg, sodium amobarbital (Amytal) interview)), and 90870 
(Electroconvulsive therapy (includes necessary monitoring)), the 
service with the highest direct cost sum was $32.24. In contrast, the 
transcranial magnetic stimulation services treatment delivery (CPT code 
90867) included direct PE inputs that summed to direct costs of 
$145.19. The disparity between the TMS direct costs and the direct 
costs in other frequent psychiatry codes was the basis for our 
assertion that the direct costs for this service far exceeded the 
direct costs typical to any other service predominantly furnished by 
psychiatrists. Thus, we continue to believe our decision to contractor 
price these codes is the proper one.
    Comment: Another commenter requested that CMS use the existing 
methodology to price the codes or contractor price the codes. This 
commenter also urged CMS to consider alternate sources of data for 
resource costs as they become available, or to make appropriate future 
refinements to the practice expense methodology.
    Response: We appreciate the commenter's support for our proposal as 
a suitable means of pricing the services. We will consider appropriate 
means to develop national prices for these services in the context of 
potential changes to the practice expense methodology and the 
availability of new data sources.
    After consideration of these public comments, we are finalizing our 
proposal to contractor price CPT codes 90867, 90868, and 90869 for CY 
2013.
d. Spinal Cord Stimulation Trial Procedures in the Nonfacility Setting
    Stakeholders have recently brought to our attention that CPT code 
63650 (Percutaneous implantation of neurostimulator electrode array, 
epidural) is frequently furnished in the physician office setting but 
is not priced in that setting. 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. However, because these 
services are being furnished in the nonfacility setting, we believed 
that CPT code 63650 should be reviewed to establish appropriate 
nonfacility inputs. We proposed to review CPT code 63650 and requested 
recommendations from the AMA RUC and other public commenters on the 
appropriate physician work RVUs (as measured by time and intensity), 
and facility and nonfacility direct PE inputs for this service. We 
understand that disposable leads comprise a significant resource cost 
for this service and are currently separately reportable to Medicare 
for payment purposes when the service is furnished in the physician 
office setting. Disposable medical supplies are not considered 
prosthetic devices paid under the Durable Medical Equipment, 
Prosthetic/Orthotic, and Supplies (DMEPOS) fee schedule and generally 
are incorporated as nonfacility direct PE inputs to PE RVUs. We sought 
comment on establishing nonfacililty PE RVUs for CPT code 63650.
    Comment: Several commenters expressed concerns regarding the 
possibility of establishing nonfacility PE RVUs for this service based 
on the assumption that the nonfacility PFS payment rate would be lower 
than the rate paid by the Medicare hospital outpatient prospective 
payment system

[[Page 68909]]

(OPPS). These commenters stated that the supply, personnel, and 
administration costs are higher in the non-facility setting than in the 
facility setting and that current Medicare payment for L8680 under the 
DMEPOS fee schedule offsets the difference in costs between the 
facility and nonfacility setting. Many of these commenters also stated 
that it is more cost effective for the Medicare program for these 
services to be furnished in the nonfacility setting. These commenters 
also stated that it is more convenient for patients to receive this 
service in the nonfacility setting, so that Medicare should not 
implement nonfacility payment rates because doing so might discourage 
practitioners from furnishing the service in the nonfacility setting.
    Response: We understand the commenters' interest in ensuring that 
Medicare beneficiaries retain access to the service in the nonfacility 
setting. We do not agree with the commenters' underlying assumption 
that developing accurate payment rates for the service in the 
nonfacility setting will necessarily deter practitioners from 
furnishing the service to Medicare beneficiaries outside the facility 
setting. Additionally, we do not know how to reconcile the 
contradictory contentions of many individual commenters that the costs 
of furnishing the services in the nonfacility setting are greater so 
that payment rates should be higher, but furnishing services there 
would still be more cost effective for Medicare.
    Comment: One commenter supported the proposal to create nonfacility 
RVUs for this service since it would reduce overutilization of the 
service and lower the likelihood of fraud.
    Response: We appreciate the support for the proposal, and we 
generally agree that developing accurate payment rates encourages 
appropriate utilization.
    Comment: One commenter stated that CMS should continue to provide 
payment for HCPCS code L8680 until non-facility PE inputs for CPT code 
63650 including the leads have been developed.
    Response: We appreciate the commenter's concerns. We would continue 
a mechanism to provide payment for the disposable leads used in 
furnishing the service while we develop non-facility PE inputs. We also 
agree that once a practice expense payment reflects these disposable 
leads, that a separate payment mechanism would no longer be necessary.
    Comment: The AMA RUC agreed that the direct practice expense inputs 
for the service should be reviewed to establish appropriate inputs in 
both the facility and nonfacility setting.
    After consideration of the comments we received regarding our 
proposal to establish nonfacility PE RVUs for CPT code 63650 
(Percutaneous implantation of neurostimulator electrode array, 
epidural), we continue to believe that it would be appropriate to do so 
since these services are being furnished in the nonfacility setting. 
The AMA RUC expects to review the direct PE inputs for this service 
during CY 2013. We anticipate receiving recommendations from the AMA 
RUC for the CY 2014 PFS, and we request comments from other 
stakeholders regarding the appropriate direct PE inputs for this 
service

B. Potentially Misvalued Codes Under the Physician Fee Schedule

1. Valuing Services Under the PFS
    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.'' 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 II.B.1.b. and II.B.1.c. 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)(1)(C) of the Act defines the malpractice component as ``the 
portion of the resources used in furnishing the service that reflects 
malpractice expenses in furnishing the service.'' Clause (ii) and 
clause (iii) of section 1848 (c)(2)(C) of the Act specify that PE and 
malpractice expense RVUs shall be determined based on the relative PE/
malpractice expense resources involved in furnishing the service.
    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 1848(c)(2)(K) to the Act requires the 
Secretary to periodically identify potentially misvalued services using 
certain criteria and to review and make appropriate adjustments to the 
relative values for those services. Section 1848(c)(2)(L) of the Act 
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.B.1.a. of this final rule with comment 
period, each year we develop and propose appropriate adjustments to the 
RVUs, taking into account the recommendations provided by the American 
Medical Association Specialty Society Relative Value Scale Update 
Committee (AMA RUC), the Medicare Payment Advisory Commission (MedPAC), 
and others. For many years, the AMA RUC has provided us with 
recommendations on the appropriate relative values for new, revised, 
and potentially misvalued PFS services. We review these recommendations 
on a code-by-code basis and consider these recommendations in 
conjunction with the recommendations of other public commenters, and 
with analyses of data sources, such as claims data, to inform the 
decision-making process as authorized by the law. We may also consider 
analyses of physician time, work RVUs, or direct PE inputs using other 
data sources, such as Department of Veteran Affairs (VA) National 
Surgical Quality Improvement Program (NSQIP), the Society for Thoracic 
Surgeons (STS), and the Physician Quality Reporting Initiative (PQRI) 
databases. In addition to considering the most recently available data, 
we also assess the results of physician surveys and specialty 
recommendations submitted to us by the AMA RUC. We conduct a clinical 
review to assess the appropriate RVUs in the context of contemporary 
medical practice. We note that section 1848(c)(2)(A)(ii) of the Act 
authorizes the use of extrapolation and other techniques to determine 
the RVUs for physicians' services for which specific data are not 
available, in addition to taking into account the

[[Page 68910]]

results of consultations with organizations representing physicians. In 
accordance with section 1848(c) of the Act, we determine appropriate 
adjustments to the RVUs, explain the basis of these adjustments, and 
respond to public comments in the PFS proposed and final rules.
2. Identifying, Reviewing, and Validating the RVUs of Potentially 
Misvalued Services on 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 PFS, 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 as physicians build experience 
furnishing that service. Services can also become overvalued when PEs 
decline. This can happen when the costs of equipment and supplies fall, 
or when equipment is used more frequently than is estimated in the PE 
methodology, reducing its cost per use. Likewise, services can become 
undervalued when physician work increases or PEs 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 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 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 PEs;
     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 PFS (the so-called `Harvard-valued codes'); and
     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 any RVU 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 PFS.
    In addition to these requirements, section 3003(b)(1) of the Middle 
Class Tax Relief and Job Creation Act of 2012 (MCTRJCA) (Pub. L. 112-
96), requires that the Secretary conduct a study that examines options 
for bundled or episode-based payment to cover physicians' services 
currently paid under the PFS under section 1848 of the Act for one or 
more prevalent chronic conditions or episodes of care for one or more 
major procedures. In conducting the study, the Secretary shall consult 
with medical professional societies and other relevant stakeholders. 
Additionally, the study shall include an examination of related private 
payer payment initiatives. This section also requires that not later 
than January 1, 2013, the Secretary submit to certain committees of the 
Congress a report on the study. The report shall include 
recommendations on suitable alternative payment options for services 
paid under the PFS and on associated implementation requirements.
    Bundling is one method for aligning incentives for hospitals, post-
acute care providers, physicians, and other practitioners to partner 
closely across all specialties and settings that a patient may 
encounter to improve the patient's experience of care. The typical 
goals of developing an effective bundled payment system are to improve 
quality, reduce costs, and promote efficiency. Current work on bundling 
services paid under the PFS to date has been limited to targeting 
specific codes and sets of codes and repackaging those codes into 
``bundles.'' As detailed above, through the potentially misvalued codes 
initiative we are currently identifying for review codes that are 
frequently billed together and codes with low relative values billed in 
multiples. Many of the codes identified through these screens have been 
referred to the CPT Editorial Panel for the development of a 
comprehensive or bundled code, and several bundled codes have already 
been created and valued. However, we believe that we now need to move 
beyond this ``repackaging'' of codes and examine the potential of a 
larger bundled payment within the PFS. In response to section 
3003(b)(1) of the MCTRJCA, we have consulted with medical professional 
societies, private payers, healthcare system administrators, and other 
stakeholders; met with other CMS staff involved in other bundling 
initiatives; and performed an extensive literature review. 
Additionally, we have had representatives of specialty groups such as 
radiation oncologists volunteer to work with us to create a bundled 
payment for their services. If we were to engage in a bundling project 
for radiation therapy, we would want to do more than provide a single 
episode payment for the normal course of radiation therapy that 
aggregates the sum of the individual treatments. Radiation therapy has 
many common side effects that can vary based on the type of cancer the 
patient has and how it is being treated. Common side effects associated 
with radiation therapy include fatigue, skin problems, eating problems, 
blood count changes, emotional issues such as depression, etc* * * If 
we were to engage in a bundling project that includes radiation 
therapy, we would be interested in exploring whether it could also 
include treating and managing the side effects

[[Page 68911]]

that result from radiation therapy in addition to the radiation therapy 
itself. Such an episode-based payment would allow Medicare to pay for 
the full course of the typical radiation therapy as well as the many 
medical services the patient may be receiving to treat side effects.
    We will continue to examine options for bundled or episode-based 
payments and will include our recommendations and implementation 
options in our report to the Congress. Following completion of this 
report, we will look forward with interest to the view of stakeholders 
that are interested in testing some of these concepts within the PFS.
b. Progress in Identifying and Reviewing Potentially Misvalued Codes
    In accordance with our statutory mandate, we have 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. In the current process, we 
identify potentially misvalued codes for review, and request 
recommendations from the AMA RUC and other public commenters on revised 
work RVUs and direct PE inputs for those codes. The AMA RUC, through 
its own processes, identifies potentially misvalued codes for review, 
and through our public nomination process for potentially misvalued 
codes established in the CY 2012 PFS final rule, other individuals and 
stakeholder groups submit nominations for review of potentially 
misvalued codes as well.
    Since CY 2009, as a part of the annual potentially misvalued code 
review and Five-Year Review processes, we have reviewed over 1,000 
potentially misvalued codes to refine work RVUs and direct PE inputs. 
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, listed above. A more detailed 
discussion of the extensive prior reviews of potentially misvalued 
codes is included in the CY 2012 PFS final rule with comment period (76 
FR 73052 through 73055).
    In the CY 2012 final rule with comment period, under the 
potentially misvalued codes category of ``Other codes determined to be 
appropriate by the Secretary,'' we finalized our proposal to review a 
list of the highest PFS expenditure services, by specialty, that had 
not been recently reviewed (76 FR 73059 through 73068). In the CY 2012 
final rule with comment period we also finalized policy to consolidate 
the periodic reviews of physician work and PE at the same time (76 FR 
73055 through 73958), and established a process for the annual public 
nomination of potentially misvalued services to replace the Five-Year 
review process (76 FR 73058 through 73059). Below we discuss the CY 
2013 PFS proposals that support our continuing efforts to appropriately 
identify, review, and adjust values for potentially misvalued codes.
c. Validating RVUs of Potentially Misvalued Codes
    In addition to identifying and reviewing potentially misvalued 
codes, section 1848(c)(2)(L) of the Act 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 also include validation of the pre-, post-, and intra-
service time components of work. The Secretary is directed, as part of 
the validation, 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) and CY 2012 PFS 
proposed rule (76 FR 42790), we solicited public comments on possible 
approaches, methodologies, and data sources that we should consider for 
a validation process. A summary of the comments along with our 
responses are included in the CY 2011 PFS final rule with comment 
period (75 FR 73217) and the CY 2012 PFS final rule with comment period 
(77 FR 73054 through 73055). In September 2012 we entered into two 
contracts to assist us in validating RVUs of potentially misvalued 
codes; the implementation details for these contracts are currently 
under development. Contractors will explore models for the validation 
of physician work under the PFS, both for new and existing services. We 
plan to discuss these models further in future rulemaking.
d. Improving the Valuation of the Global Surgical Package
(1) Background
    We applied the concept of payment for a global surgical package 
under the PFS at its inception on January 1, 1992 (56 FR 59502). For 
each global surgical procedure, we establish a single payment, which 
includes payment for a package of all related services typically 
furnished by the surgeon furnishing the procedure during the global 
period. Each global surgery is paid on the PFS as a single global 
surgical package. Each global surgical package payment rate is based on 
the work necessary for the typical surgery and related pre- and post-
operative work. The global period may include 0, 10, or 90 days of 
post-operative care, depending on the procedure. For major procedures, 
those with a 90-day global period, the global surgical package payment 
also includes services typically furnished the day prior to the day of 
surgery.
    Some global surgical packages have been valued by adding the RVU of 
the surgical procedure and all pre- and post-operative evaluation and 
management (E/M) services included in the global period. Others have 
been valued using magnitude estimation, in which case the overall RVU 
for the surgical package was determined without factoring in the 
specific RVUs associated with the E/M services in the global period. 
The number and level of E/M services identified with a global surgery 
payment are based on the typical case. Even though a surgical package 
may have been developed with several E/M services included, a physician 
is not required to furnish each pre- or post-operative visit to bill 
for the global surgical package.
    Similar to other bundled services on the PFS, when a global surgery 
code is billed, the bundled pre- and post-operative care is not 
separately payable; surgeons or other physicians billing a surgical 
procedure, cannot separately bill for the E/M services that are 
included in the global surgical package.
(2) Measuring Post-Operative Work
    The use of different methodologies for valuing global surgical 
packages since 1992 has created payment rates that reflect a wide range 
of E/M services within the post-operative period. This is especially 
true among those with 90-day global periods. More recently reviewed 
codes tend to have fewer E/M services in the global period, and the 
work RVUs of those E/M services are often

[[Page 68912]]

accounted for in the value for the global surgical package. The values 
of global surgical packages reviewed less recently frequently do not 
appear to include the full work RVUs of each E/M service in the global 
surgical package, and the numbers of E/M services included in the post-
operative period can be inconsistent within a family of procedures.
    In 2005, the HHS Office of Inspector General (OIG) examined whether 
global surgical packages are appropriately valued. In its report on eye 
and ocular surgeries, ``National Review of Evaluation and Management 
Services Included in Eye and Ocular Adnexa Global Surgery Fees for 
Calendar Year 2005'' (A-05-07-00077), the OIG reviewed a sample of 300 
eye and ocular surgeries, and counted the actual number of face-to-face 
services in the surgeons' medical records to establish whether the 
surgeon furnished post-operative E/M services. The OIG findings show 
that surgeons typically furnished fewer E/M services in the post-
operative period than were identified with the global surgical package 
payment for each procedure. A smaller percentage of surgeons furnished 
more E/M services than were identified with the global surgical package 
payment. The OIG could only review the number of face-to-face services 
and was not able to review the level of the E/M services that the 
surgeons furnished due to a lack of documentation in surgeons' medical 
records. The OIG concluded that the RVUs for the global surgical 
package are too high because they include the work of E/M services that 
are not typically furnished within the global period for the reviewed 
procedures.
    Following the 2005 report, the OIG continued to investigate E/M 
services furnished during the global surgical period. In May 2012, the 
OIG published a report titled ``Musculoskeletal Global Surgery Fees 
Often Did Not Reflect the Number of Evaluation and Management Services 
Provided'' (A-05-09-00053). For this investigation, the OIG sampled 300 
musculoskeletal global surgeries and again found that, for the majority 
of sampled surgeries, physicians furnished fewer E/M services than were 
identified as part of the global period for that service. Once again, a 
smaller percentage of surgeons furnished more E/M services than were 
identified with the global surgical package payment. The OIG concluded 
that the RVUs for the global surgical package are too high because they 
include the work of E/M services that are not typically furnished 
within the global period for the reviewed procedures.
    In both reports, the OIG recommended that we adjust the number of 
E/M services identified with the global surgical payments to reflect 
the number of E/M services that are actually being furnished. Under the 
PFS, we do not ask surgeons to detail the component bundled services on 
their claim when billing for the global surgical package as we do 
providers furnishing bundled services under other Medicare payment 
systems. Since it is not necessary for a surgeon to identify the level 
or CPT code of the E/M services actually furnished during the global 
period, there is very limited documentation on the frequency or level 
of post-operative services. Without sufficient documentation, a review 
of the medical record cannot accurately determine the number or level 
of E/M services furnished in the post-operative period. This is an area 
of concern, and is discussed in more detail later in this section.
    As noted above, section 1848(c)(2)(K) of the Act, which codified 
and expanded the potentially misvalued codes initiative that CMS had 
begun, requires that the Secretary identify and review potentially 
misvalued services with an emphasis on several categories, and 
recognizes the Secretary's discretion to identify additional 
potentially misvalued codes. Several of the categories of potentially 
misvalued codes support better valuation of global surgical package 
codes. We have made efforts to prioritize the review of RVUs for 
services on the PFS that have not been reviewed recently or for 
services where there is a potential for misuse. One of the priority 
categories for review of potentially misvalued codes is services that 
have not been subject to review since the implementation of the PFS 
(the so-called ``Harvard-valued codes''). In the CY 2009 PFS proposed 
rule, we requested that the AMA RUC engage in an ongoing effort to 
review the remaining Harvard-valued codes, focusing first on the high-
volume codes (73 FR 38589). For the Fourth Five-Year Review (76 FR 
32410), we requested that the AMA RUC review services that have not 
been reviewed since the original implementation of the PFS with 
utilization greater than 30,000 (Harvard-valued--Utilization > 30,000). 
In the CY 2013 PFS proposed rule, we proposed to review Harvard-valued 
services with annual allowed charges that totaled at least $10,000,000 
(Harvard-valued--Allowed charges >=$10,000,000), and requested 
recommendations from the AMA RUC and other public commenters on 
appropriate values for these services (77 FR 44741).
    Of the more than 1,000 identified potentially misvalued codes, just 
over 650 are surgical services with a global period of 0, 10, or 90 
days. We have completed our review of 450 of these potentially 
misvalued surgical codes. As we stated in the CY 2013 PFS proposed 
rule, these efforts are important, but we believe the usual review 
process does not go far enough to assess whether the valuation of 
global surgical packages reflects the number and level of post-
operative services that are typically furnished. To support our 
statutory obligation to identify and review potentially misvalued 
services and to respond to the OIG's concern that global surgical 
package payments are misvalued, we believe that we should gather more 
information on the E/M services that are typically furnished with 
surgical procedures. Information regarding the typical work involved in 
surgical procedures with a global period is necessary to evaluate 
whether certain surgical procedures are appropriately valued. While the 
AMA RUC reviews and recommends RVUs for services on the PFS, we 
complete our own assessment of those recommendations, and may adopt 
different RVUs. However, for procedures with a global period, the lack 
of detail in claims data and documentation restrict our ability to 
review and assess the appropriateness of their RVUs.
    In the CY 2013 proposed rule, we requested comments on methods of 
obtaining accurate and current data on E/M services furnished as part 
of a global surgical package. We stated that we were especially 
interested in and invited comments on a claims-based data collection 
approach that would include reporting E/M services furnished as part of 
a global surgical package, as well as other valid, reliable, 
generalizable, and robust data to help us identify the number and level 
of E/M services typically furnished in the global surgical period for 
specific procedures.
    The following is summary of the comments we received regarding the 
methods of obtaining accurate and current data on E/M services 
furnished as part of a global surgical package proposal.
    Comment: Several commenters stated that the global payment 
methodology has restricted CMS' ability to audit the accuracy of the 
current value of services as well as the accuracy of the AMA RUC 
recommendations for services with a global period. Many commenters 
offered recommendations on how CMS could validate the current global 
surgical packages or obtain accurate and current data on E/M services 
furnished as a part

[[Page 68913]]

of the global surgical package. Some commenters recommended that CMS 
establish auditable documentation requirements for inpatient and 
outpatient post-operative visits, and many believed that these 
auditable post-operative visit notes should follow E/M documentation 
guidelines. Other commenters suggested that CMS adjust all surgical 
services to a 0-day global period, require surgeons to bill post-
operative E/M services separately for payment purposes, and subject 
those billings to the same coding and documentation standards and 
audits to which other practitioners are already subject. Several 
commenters noted that CMS could validate the global surgical packages 
with the hospital Diagnosis-Related Group (DRG) length of stay data, 
and that CMS could explore the use of surgical specialties' registries 
to collect data on services furnished within the global period. 
Commenters also suggested that CMS could draw upon the OIG's approach 
and review the medical record for a statistically valid sample of 
claims and then extrapolate those results to clinically similar 
families of codes. One commenter suggested that CMS could establish G-
codes through which a large sample of surgeons might report the number 
and intensity of post-operative visits.
    In response to our request for comments on methods of obtaining 
accurate and current data on E/M services furnished as part of a global 
surgical package, some commenters stated that they believe post-
operative work is appropriately surveyed, vetted and valued by the AMA 
RUC during its ongoing reviews of surgical procedures, and therefore, 
claims-based reporting is unnecessary in order to verify that the 
number of visits assigned to global surgical procedures is accurate. 
Some commenters stated that if CMS has concerns with a specific code, 
or group of codes, regarding the number of E/M visits valued within the 
physician work RVU, CMS should work with the AMA RUC to review these 
services. One commenter noted that there are 4,258 CPT codes on the PFS 
with a global period, but that only 271 of these CPT codes are billed 
more than 10,000 times annually, and most of the 271 CPT codes have 
been reviewed by CMS and the AMA RUC since 2005.
    Response: We thank the commenters for their recommendations on this 
important issue. We will carefully weigh all comments received as we 
consider how best to measure the number and level of visits that occur 
during the global period.
    In addition to the broader comments on measuring post-operative 
work, we also received a comment from the AMA RUC noting that the 
hospital and discharge management services included in the global 
period for many surgical procedures may have been inadvertently removed 
from the time file in 2007. With its comment letter, the AMA RUC sent 
us a revised time file with updated post-operative visits for the 
services that may be incorrectly displayed with zero visits. We are 
reviewing this file, and if appropriate, we intend to propose 
modifications to the physician time file in the CY 2014 PFS proposed 
rule. We note that should time have been removed from the physician 
time file inadvertently, it would not have affected the physician work 
RVUs or direct practice expense inputs for these services. It would 
have a small impact on the indirect allocation of practice expense at 
the specialty level, which we will review when we explore this 
potential time file change.
3. CY 2013 Identification and Review of Potentially Misvalued Services
a. Public Nomination of Potentially Misvalued Codes
    In the CY 2012 PFS final rule, we finalized a public nomination 
process for potentially misvalued codes (76 FR 73058). Under the 
previous Five-Year Reviews for PE and work, we invited the public 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 established a process by which the 
public can submit codes, along with documentation supporting the need 
for review, on an annual basis. Stakeholders may nominate potentially 
misvalued codes for review 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. Supporting 
documentation for codes nominated for the annual review of potentially 
misvalued codes may include 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; and 
physician time.
     Evidence of an anomalous relationship between the code 
being proposed for review and other codes.
     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.
    Under this newly established process, 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 evaluate the 
supporting documentation and assess whether the submitted codes appear 
to be potentially misvalued codes appropriate for review under the 
annual process. In the following year's PFS proposed rule, we publish 
the list of nominated codes, and propose -which nominated codes will be 
reviewed as potentially misvalued. We encourage the public to submit 
nominations for potentially misvalued codes in the 60-day comment 
period following the publication of this CY 2013 PFS final rule with 
comment period.

[[Page 68914]]



    Table 4--CPT Codes Nominated as Potentially Misvalued for CY 2013
                               Rulemaking
------------------------------------------------------------------------
         CPT Code            Short descriptor          CMS Action
------------------------------------------------------------------------
33282....................  Implant pat-active   Establish nonfacility
                            ht record.           inputs, and review the
                                                 work, facility and
                                                 nonfacility inputs
                                                 together. Not
                                                 considered a
                                                 potentially misvalued
                                                 code.
33284....................  Remove pat-active    Establish nonfacility
                            ht record.           inputs, and review the
                                                 work, facility and
                                                 nonfacility inputs
                                                 together. Not
                                                 considered a
                                                 potentially misvalued
                                                 code.
36819....................  Av fuse uppr arm     Review as a potentially
                            basilic.             misvalued code.
36825....................  Artery-vein          Review as a potentially
                            autograft.           misvalued code.
53445....................  Insert uro/ves nck   Interim Final in CY
                            sphincter.           2012, Final for CY
                                                 2013. Comments
                                                 addressed in section
                                                 II.M.2.a. of this CY
                                                 2013 PFS final rule
                                                 with comment period.
77336....................  Radiation physics    Review as a potentially
                            consult.             misvalued code.
94762....................  Measure blood        Adopt direct PE
                            oxygen level.        revisions discussed
                                                 below on an interim
                                                 final basis for CY
                                                 2013.
28820....................  Amputation of toe..  Last reviewed for CY
                                                 2012. No further review
                                                 required at this time.
28825....................  Partial amputation   Last reviewed for CY
                            of toe.              2012. No further review
                                                 required at this time.
35188....................  Repair blood vessel  Last reviewed for CY
                            lesion.              2012. No further review
                                                 required at this time.
35612....................  Artery bypass graft  Last reviewed for CY
                                                 2012. No further review
                                                 required at this time.
35800....................  Explore neck         Last reviewed for CY
                            vessels.             2012. No further review
                                                 required at this time.
35840....................  Explore abdominal    Last reviewed for CY
                            vessels.             2012. No further review
                                                 required at this time.
35860....................  Explore limb         Last reviewed for CY
                            vessels.             2012. No further review
                                                 required at this time.
43283....................  Lap esoph            Last reviewed for CY
                            lengthening.         2012. No further review
                                                 required at this time.
43327....................  Esoph fundoplasty    Last reviewed for CY
                            lap.                 2012. No further review
                                                 required at this time.
43328....................  Esoph fundoplasty    Last reviewed for CY
                            thor.                2012. No further review
                                                 required at this time.
43332....................  Transab esoph hiat   Last reviewed for CY
                            hern rpr.            2012. No further review
                                                 required at this time.
43333....................  Transab esoph hiat   Last reviewed for CY
                            hern rpr.            2012. No further review
                                                 required at this time.
43334....................  Transthor diaphrag   Last reviewed for CY
                            hern rpr.            2012. No further review
                                                 required at this time.
43335....................  Transthor diaphrag   Last reviewed for CY
                            hern rpr.            2012. No further review
                                                 required at this time.
43336....................  Thorabd diaphr hern  Last reviewed for CY
                            repair.              2012. No further review
                                                 required at this time.
43337....................  Thorabd diaphr hern  Last reviewed for CY
                            repair.              2012. No further review
                                                 required at this time.
43338....................  Esoph lengthening..  Last reviewed for CY
                                                 2012. No further review
                                                 required at this time.
47563....................  Laparo               Last reviewed for CY
                            cholecystectomy/     2012. No further review
                            graph.               required at this time.
49507....................  Prp i/hern init      Last reviewed for CY
                            block >5 yr.         2012. No further review
                                                 required at this time.
49521....................  Rerepair ing hernia  Last reviewed for CY
                            blocked.             2012. No further review
                                                 required at this time.
49587....................  Rpr umbil hern       Last reviewed for CY
                            block > 5 yr.        2012. No further review
                                                 required at this time.
49652....................  Lap vent/abd hernia  Last reviewed for CY
                            repair.              2012. No further review
                                                 required at this time.
49653....................  Lap vent/abd hern    Last reviewed for CY
                            proc comp.           2012. No further review
                                                 required at this time.
49654....................  Lap inc hernia       Last reviewed for CY
                            repair.              2012. No further review
                                                 required at this time.
49655....................  Lap inc hern repair  Last reviewed for CY
                            comp.                2012. No further review
                                                 required at this time.
60220....................  Partial removal of   Last reviewed for CY
                            thyroid.             2012. No further review
                                                 required at this time.
60240....................  Removal of thyroid.  Last reviewed for CY
                                                 2012. No further review
                                                 required at this time.
60500....................  Explore parathyroid  Last reviewed for CY
                            glands.              2012. No further review
                                                 required at this time.
95800....................  Slp stdy unattended  Last reviewed for CY
                                                 2012. No further review
                                                 required at this time.
------------------------------------------------------------------------

    In the 60 days following the release of the CY 2012 PFS final rule 
with comment period, we received nominations and supporting 
documentation for review of the codes listed above in Table 4. A total 
of 36 CPT codes were nominated. The majority of the nominated codes 
were codes for which we finalized RVUs in the CY 2012 PFS final rule. 
That is, the RVUs were interim in CY 2011 and finalized for CY 2012, or 
proposed in either the Fourth Five-Year Review of Work or the CY 2012 
PFS proposed rule and finalized for CY 2012. In the CY 2013 proposed 
rule, we noted that under this annual public nomination process it 
would be highly unlikely that we would determine that a nominated code 
is appropriate for review under the potentially misvalued codes 
initiative if it had been reviewed in the years immediately preceding 
its nomination since we believe that the best information on the level 
of physician work and PE inputs already would have been available 
through that recent review. We stated that, nonetheless, we would 
evaluate the supporting documentation for each nominated code to 
ascertain whether the submitted information demonstrated that the code 
is potentially misvalued.
    CPT codes 33282 (Implantation of patient-activated cardiac event 
recorder) and 33284 (Removal of an implantable, patient-activated 
cardiac event recorder) were nominated for review as potentially 
misvalued codes. The requestor stated that CPT codes 33282 and 33284 
are misvalued in the nonfacility setting because these CPT codes 
currently are only priced in the facility setting even though 
physicians furnish these services in the office setting. The requestor 
asked that we establish appropriate payment for the services when 
furnished in a physician's office. Specifically, the requestor asked 
that CMS establish nonfacility PE RVUs for these services. In the CY 
2013 proposed rule, we stated that we do not consider the lack of 
pricing in a particular setting as an indicator of a potentially 
misvalued code. However, given that these services are now furnished in 
the nonfacility setting, we believe that CPT codes 33282 and 33284 
should be reviewed to establish appropriate nonfacility inputs. We 
noted, as did the requestor, that the valuation of a service under the 
PFS in a particular setting does not address whether those services and 
the setting in which they are furnished are medically reasonable and 
necessary for a patient's medical needs and condition. We proposed to 
review CPT codes 33282 and 33284 and requested recommendations from the 
AMA RUC and other public commenters on the appropriate physician work 
RVUs (as measured by time and intensity), and facility and nonfacility 
direct PE inputs for these services.
    Like CPT codes 33282 and 33284, stakeholders requested that we 
establish appropriate payment for CPT code 63650 (Percutaneous 
implantation of neurostimulator electrode array, epidural) when 
furnished in an office

[[Page 68915]]

setting. In the CY 2013 proposed rule, we noted that this request was 
not submitted as a potentially misvalued code nomination. However, 
given that these services are now furnished in the nonfacility setting, 
we stated that we believed CPT code 63650 should be reviewed to 
establish appropriate nonfacility inputs. Please see section III.A.3 
(Changes to Direct Inputs for Specific Services) for a discussion of 
spinal code stimulation trial procedures in the nonfacility setting.
    The following is a summary of the comments we received in response 
to our proposal to review the physician work, facility, and nonfacility 
direct PE inputs for CPT codes 33282 and 33284.
    Comment: Several commenters did not support our proposal to review 
CPT codes 33282 and 33284. Commenters stated that the very low 
utilization in the nonfacility setting does not justify a review of the 
codes for nonfacility PE inputs. One commenter noted that physicians 
are not interested in furnishing these services in the nonfacility 
setting due to concerns for patient safety. Commenters recommended that 
we not consider establishing nonfacility PE RVUs for these CPT codes 
until additional studies indicate a clinical need to furnish these 
services in the nonfacility setting. Additionally, commenters stated 
that they do not believe it is necessary to review physician work and 
PE in the facility setting, as that was not the concern that the 
stakeholder brought forward. The AMA RUC stated that it continues to 
support the current work RVUs and facility PE inputs for these 
services.
    Another commenter recommended that CMS finalize the proposal to 
revalue CPT codes 33282 and 33284 in order to establish nonfacility PE 
RVUs. The commenter stated that the lack of nonfacility PE RVUs 
prevents physicians from furnishing these services in the office for 
select patients for whom this setting of care is safe and appropriate. 
This commenter recommended that CMS maintain the existing work RVUs, 
and focus the revaluation on the nonfacility PE inputs. The commenter 
requested that CMS remain flexible in its approach to nominated codes 
and allow for more expeditious review of codes by not requiring full 
provider surveys.
    Response: After reviewing the comments received, we are finalizing 
our proposal to review the physician work, and facility and nonfacility 
direct PE inputs for CPT codes 33282 and 33284. We acknowledge that we 
received very few Medicare claims for these services in the nonfacility 
setting in CY 2011; nonetheless, we believe it is appropriate to 
consider the relative resources involved in furnishing this service in 
the nonfacility setting. We reiterate that the valuation of a service 
under the PFS in a particular setting does not address whether those 
services and the setting in which they are furnished are medically 
reasonable and necessary for a patient's medical needs and condition.
    We acknowledge that commenters support the current work and 
facility RVUs, however, it is our policy generally to review the 
physician work, facility, and nonfacility direct PE inputs for each 
service together to ensure consistency in the inputs used to value the 
service. Based on information provided by the requestor and the 2011 
nonfacility utilization for this code, we believe it is appropriate to 
review this service for nonfacility PE inputs. As explained above, we 
intend to review the work and facility inputs as well. Additionally, we 
note that the physician work and facility PE inputs for these two 
services have not been reviewed in over a decade, so we believe it is 
reasonable to assess whether the inputs on which the current payment 
rates are based accurately reflect the resources involved in furnishing 
these services today. Accordingly, we are finalizing our proposal to 
review the physician work, and facility and nonfacility direct practice 
expense inputs for CPT codes 33282 and 33284, and request comments on 
the appropriate physician work, and facility and nonfacility direct 
practice expense inputs for these services.
    Traditionally, we have received recommendations from the AMA RUC on 
the appropriate physician work, PE, and malpractice inputs for services 
CMS plans to review and revalue. However, we understand that the AMA 
RUC may not issue recommendations for all codes under review by CMS. In 
addition to requesting recommendations from the AMA RUC on services we 
intend to review, we request and encourage recommendations on these 
services from other public commenters as well. We acknowledge the 
requestor's comment that CMS remain flexible in its approach to 
nominated codes and not require full practitioner surveys for CPT codes 
33282 and 33284. We understand that practitioner surveys regarding 
work, malpractice, and PE are not always available, practical, or 
reliable. We encourage commenters to submit the best data available on 
the appropriate valuation and inputs for the services under review, 
including the information listed above under supporting documentation 
for the nomination of potentially misvalued codes.
    In the CY 2013 proposed rule, we stated that we did not consider 
CPT codes 36819 (Arteriovenous anastomosis, open; by upper arm basilic 
vein transposition) and 36825 (Creation of arteriovenous fistula by 
other than direct arteriovenous anastomosis (separate procedure); 
autogenous graft) to be potentially misvalued because these codes were 
last reviewed and valued for CY 2012 and the supporting documentation 
did not provide sufficient evidence to demonstrate that the codes 
should be reviewed as potentially misvalued for CY 2013 or CY 2014. The 
following is a summary of the comments we received in response to our 
proposal not to review CPT codes 36819 and 36825 as potentially 
misvalued codes.
    Comment: One commenter reiterated its belief that CPT codes 36819 
and 36825 are potentially misvalued because the work RVUs finalized by 
CMS in CY 2012 place these services out of rank order with services 
that involve similar resources. To support this position, the commenter 
provided a list showing these services relative to all services with a 
similar global period, intra-service time, and work RVU. The commenter 
also restated the rationale previously submitted to CMS when it 
nominated these services as potentially misvalued. The commenter 
requested that CMS reconsider the work RVUs of these two services.
    Response: After reviewing the comments received and conducting a 
clinical review of CPT codes 36819 and 36825 alongside similar 
services, we agree with the commenter that these services may be out of 
rank order and are potentially misvalued. Therefore, we are modifying 
our proposal to not review CPT codes 36819 and 36825 as potentially 
misvalued codes. We will review CPT codes 36819 and 36825 along with 
their code families, which include CPT codes 36818 through 36821 and 
CPT codes 36825 through 36830, as potentially misvalued. We thank 
commenters for the additional supporting documentation provided, and 
request additional comments on the appropriate physician work and 
direct PE inputs for these services.
    CPT code 53445 (Insertion of inflatable urethral/bladder neck 
sphincter, including placement of pump, reservoir, and cuff) was 
nominated for review as a potentially misvalued code. CPT code 53445 
was identified through the site-of-service anomaly potentially 
misvalued code screen for CY 2008. We completed our review and 
established RVUs for this

[[Page 68916]]

code on an interim basis for CY 2012 subject to public comment. In the 
CY 2013 proposed rule, we stated that we would consider the supporting 
documentation submitted under the potentially misvalued code nomination 
process for CPT code 53445 as comments on the CY 2012 interim final 
value, and would address the comments in the CY 2013 PFS final rule 
with comment period when we address the final value of the CPT code. A 
summary of the comments received on CPT code 53445 and our response to 
those comments is included in section II.M.2 of this final rule with 
comment period.
    CPT code 77336 (Continuing medical physics consultation, including 
assessment of treatment parameters, quality assurance of dose delivery, 
and review of patient treatment documentation in support of the 
radiation oncologist, reported per week of therapy) was nominated for 
review as a potentially misvalued code. The requestor stated that CPT 
code 77336 is misvalued because changes in the technique for furnishing 
continuing medical physics consultations have resulted in changes to 
the knowledge required, time, and effort expended, and complexity of 
technology associated with the tasks performed by the physicist and 
other staff. Additionally the requestor stated that the direct PE 
inputs no longer accurately reflect the resources used to deliver this 
service and may be undervalued. CPT code 77336 was last reviewed for CY 
2003. In the CY 2013 proposed rule, we stated that after evaluating the 
detailed supporting information that the commenter provided, we 
believed there may have been changes in technology and other PE inputs 
since we last reviewed the service, and that further review is 
warranted. As such, we proposed to review CPT code 77336 as potentially 
misvalued and requested recommendations from the AMA RUC and other 
public commenters on the direct PE inputs for this service and for the 
other services within this family of CPT codes.
    The following is a summary of the comments we received in response 
to our proposal to review CPT code 77336 as potentially misvalued.
    Comment: Commenters supported the CMS proposal to review CPT code 
77336 and urged CMS to finalize it. The AMA RUC stated that it would 
review this service and provide recommendations to CMS on its 
valuation. Several commenters reiterated their rationale for why they 
believe CPT code 77336 is potentially misvalued and provided supporting 
documentation. Additionally, commenters indicated that the American 
Society for Physicists in Medicine (AAPM) would submit information on 
practice expense inputs and other data to support the revaluation of 
this CPT code, and expressed appreciation that CMS is willing to 
consider data and input from professional medical societies that do not 
participate in the AMA RUC process.
    Response: After reviewing the comments received, we continue to 
believe that changes in technology may have altered the direct practice 
expense inputs associated with CPT code 77336 and are finalizing our 
proposal to review this service as potentially misvalued. We thank 
commenters for the supporting documentation provided, and request 
additional comments on the appropriate direct PE inputs for this 
service, as well as any other services that may be within this family 
of CPT codes.
    CPT code 94762 (Noninvasive ear or pulse oximetry for oxygen 
saturation; by continuous overnight monitoring (separate procedure)) 
was nominated for review as a potentially misvalued code. Requestors 
stated that CPT code 94762 is misvalued because the time currently 
allocated to the various direct PE inputs does not accurately reflect 
current practice. Requestors also stated that independent diagnostic 
testing facilities are not appropriately accounted for in the current 
indirect PE methodology. In the CY 2013 proposed rule, we stated that, 
in response to these stakeholder concerns, we reviewed the PE inputs 
for CPT code 94762, which was last reviewed for CY 2010. We believed 
that CPT code 94762 is misvalued, and we proposed changes to the PE 
inputs for CY 2013. We stated that, following clinical review, we 
believed that the current time allocated to clinical labor and supplies 
appropriately reflects current practice. However, we believed that 480 
minutes (8 hours) of equipment time for the pulse oximetry recording 
slot and pulse oximeter with printer are more appropriate for this 
overnight monitoring procedure code. As such, we proposed this 
refinement to the direct PE inputs for CPT code 94762 for CY 2013. 
These proposed adjustments were reflected in the CY 2013 proposed 
direct PE input database, available on the CMS Web site under the 
downloads for the CY 2013 PFS final rule with comment period at http://www.cms.gov/PhysicianFeeSched/.
    The following is a summary of the comments received regarding the 
proposed direct PE adjustments to CPT code 94762.
    Comment: Many commenters agreed with CMS' proposal to refine the 
equipment minutes for this service to 480 minutes. One commenter 
suggested that CMS should increase the proposed allocation of minutes 
to account for the time that the equipment is unavailable for use 
because the patient has yet to return it to the office.
    Response: We appreciate the support for the proposal. We believe 
that the appropriate allocation of minutes for the equipment is 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. However, we also note that the equipment cost per 
minute calculation incorporates a utilization rate assumption that 
appropriately accounts for the time the equipment cannot be used 
because it is being transported to and from the office or between 
patients. Therefore, we are not revising our proposed adjustment to the 
equipment time.
    Comment: Several commenters supported the proposed allocation of 
minutes to the equipment and also submitted invoices and other evidence 
for updating the direct PE inputs for the service. The AMA RUC and 
others submitted information to update the pulse oximeter and the 
recording software used in the service. The information submitted by 
the AMA RUC reflects a pulse oximeter priced at $1,418 and recording 
software priced at $990. Other commenters submitted various disposable 
supplies that might be used to furnish the service, including varying 
types of batteries, oximeter cables, and wristbands that might be used 
when furnishing this service.
    Response: We appreciate the updated information furnished to us by 
stakeholders and other commenters. While we generally urge stakeholders 
to submit such price update requests through the process for updating 
supply and equipment prices we established for CY 2011, because we made 
a proposal specifically related to the equipment minutes allocated for 
this procedure, we believe it would be appropriate to consider the 
supplies and equipment price inputs associated with the service in 
conjunction with the proposal to change the equipment minutes. Based on 
the invoice information we received from commenters, we will update the 
price of the `pulse oximetry recording software (prolonged monitoring)' 
(EQ212) and include a new equipment item ``Pulse Oximeter 920 M Plus'' 
priced at $1,418 as equipment inputs for

[[Page 68917]]

the code. In reviewing the requested supply items to include, we 
believe that it would be appropriate to include 6 AA batteries (SK095) 
as a disposable supply for the service as well as incorporate a new 
item, a disposable oximeter cable, priced at $11.08.
    Based on these comments and our clinical review, we are adopting 
these direct PE inputs, including our adjusted allocation of equipment 
minutes, on an interim basis for CY 2013. These values are reflected in 
the CY 2013 PFS direct PE input database available under downloads for 
the CY 2013 PFS final rule with comment period on the CMS Web site at: 
http://www.cms.gov/PhysicianFeeSched/PFSFRN/list.asp#TopOfPage. We also 
note that the PE RVUs included in Addenda B and C reflect these interim 
direct PE inputs.
    In the CY 2013 proposed rule, we stated that we did not consider 
the nominated codes that were last reviewed and valued for CY 2012 to 
be potentially misvalued because the supporting documentation did not 
provide sufficient evidence to demonstrate that the codes should be 
reviewed as potentially misvalued for CY 2013 or CY 2014. The 
supporting documentation for these services generally mirrored the 
public comments previously submitted, to which CMS has already 
responded. Below is a summary of the comments we received in response 
to our proposal to not review the CPT codes listed above in Table 4 not 
discussed above.
    Comment: We received a few limited comments on the nominated codes 
not previously discussed above, however, like the code nominations, the 
comments and supporting documentation for these services mirrored the 
public comments previously submitted, to which CMS has already 
responded.
    Response: Having received no new information on the CPT codes 
listed in Table 4 not previously discussed, we are finalizing our 
proposal not to review those services as potentially misvalued.
b. Potentially Misvalued Code Lists
    As mentioned above, in the last several annual PFS proposed rules 
we have identified lists of potentially misvalued codes for review. We 
believe it is imperative that we continue to identify new lists of 
potentially misvalued codes for review to appropriately identify, 
review, and adjust values for potentially misvalued codes for CY 2013.
(1) Review of Harvard-Valued Services With Medicare Allowed Charges of 
$10,000,000 or More
    For many years, we have been reviewing `Harvard-valued' CPT codes 
through the potentially misvalued code initiative. The RVUs for 
Harvard-valued CPT codes have not been reviewed since they were 
originally valued in the early 1990s at the beginning of the PFS. While 
the principles underlying the relative value scale have not changed, 
over time the methodologies we use for valuing services on the PFS have 
changed, potentially disrupting the relativity between the remaining 
Harvard-valued codes and other codes on the PFS. At this time, nearly 
all CPT codes that were Harvard-valued and had Medicare utilization of 
over 30,000 allowed services per year have been reviewed. In the CY 
2013 PFS proposed rule, we proposed to review Harvard-valued services 
with annual Medicare allowed charges of $10 million or greater. The CPT 
codes meeting these criteria have relatively low Medicare utilization 
(as we have reviewed the services with utilization over 30,000), but 
account for significant Medicare spending annually and have never been 
reviewed. In the CY 2013 proposed rule, we noted that several of the 
CPT codes meeting these criteria have already been identified as 
potentially misvalued through other screens and were scheduled for 
review for CY 2013. We also recognized that other codes meeting these 
criteria had been referred by the AMA RUC to the CPT Editorial Panel. 
We stated that, in these cases, we were not proposing re-review of 
these already identified services, but for the sake of completeness, we 
included those codes as a part of this category of potentially 
misvalued services. In our proposal, we recognized that the relatively 
low Medicare utilization for these services may make gathering 
information on the appropriate physician work and direct PE inputs 
difficult. We requested recommendations from the AMA RUC and other 
public commenters, and stated that we appreciate efforts expended to 
provide RVU and input recommendations to CMS for these lower volume 
services. Because survey sample sizes could be small for these lower 
volume services, we encouraged the use of valid and reliable 
alternative data sources and methodologies when developing recommended 
values. In sum, we proposed to review Harvard-valued CPT codes with 
annual allowed charges of $10 million or more as a part of the 
potentially misvalued codes initiative. In the CY 2013 proposed rule, 
we stated that the following codes met the criteria for this screen and 
proposed to review these CPT codes as potentially misvalued services.

 Table 5--Proposed Harvard-Valued CPT Codes With Annual Allowed Charges
                              >=$10,000,000
------------------------------------------------------------------------
               CPT Code                         Short descriptor
------------------------------------------------------------------------
13152 *..............................  Repair of wound or lesion.
27446................................  Revision of knee joint.
29823................................  Shoulder arthroscopy/surgery.
36215 **.............................  Place catheter in artery.
36245 **.............................  Ins cath abd/l-ext art 1st.
43264 **.............................  Endo cholangiopancreatograph.
50360................................  Transplantation of kidney.
52353 *..............................  Cystouretero w/lithotripsy.
64450 *..............................  N block other peripheral.
64590................................  Insrt/redo pn/gastr stimul.
66180................................  Implant eye shunt.
67036................................  Removal of inner eye fluid.
67917................................  Repair eyelid defect.
92286 **.............................  Internal eye photography.
92982 *..............................  Coronary artery dilation.
95860 *..............................  Muscle test one limb.
------------------------------------------------------------------------
* Scheduled for CY 2012 AMA RUC Review.
** Referred by the AMA RUC to the CPT Editorial Panel.

    The following is summary of the comments we received in response to 
our proposal to review Harvard-valued CPT codes with annual allowed 
charges of $10 million or more as a part of the potentially misvalued 
codes initiative.
    Comment: Comments on this proposal were specific to the CPT codes 
we proposed to review under this potentially misvalued code screen. A 
few commenters noted that CPT code 64590 (Insertion or replacement of 
peripheral or gastric neurostimulator pulse generator or receiver, 
direct or inductive coupling) does not have annual allowed charges that 
meet the threshold of $10 million and stated that the code should be 
removed from the list. These commenters requested that CMS reexamine 
this list to ensure all codes meet the specified criteria. Other 
commenters pointed out that certain codes on the list are already 
scheduled for review by the medical specialty societies and the AMA 
RUC, and that some codes are scheduled for deletion by the CPT 
Editorial Panel. The AMA RUC stated that it would discuss the list of 
codes that meet the criteria for this screen and would determine the 
next steps in the AMA RUC's review of these services.
    Response: After reviewing the comments received, and reexamining 
the Medicare claims data, we agree with commenters that CPT code 64590 
does not have annual Medicare allowed charges of $10 million or 
greater, nor do CPT codes 29823 (Arthroscopy,

[[Page 68918]]

shoulder, surgical; debridement, extensive) and 95860 (Needle 
electromyography; 1 extremity with or without related paraspinal 
areas). In compiling the list, we inadvertently included allowed 
charges incurred in the ambulatory surgical center setting. We thank 
commenters for bringing this to our attention. Therefore, we have 
removed these three services from the proposed list of CPT codes that 
are Harvard-value with annual allowed charges of $10 million or 
greater.
    In the CY 2013 proposed rule, we noted that several codes that met 
the criteria for this potentially misvalued code screen were currently 
under review for CY 2013 and others were scheduled for review by the 
CPT Editorial Panel. CPT codes 13152 (Repair, complex, eyelids, nose, 
ears and/or lips; 2.6 cm to 7.5 cm), 52353 (Cystourethroscopy, with 
ureteroscopy and/or pyeloscopy; with lithotripsy (ureteral 
catheterization is included)), 64450 (Injection, anesthetic agent; 
other peripheral nerve or branch), 92286 (Special anterior segment 
photography with interpretation and report; with specular endothelial 
microscopy and cell count), and 95860 (Needle electromyography; 1 
extremity with or without related paraspinal areas) were reviewed for 
CY 2013. A discussion of the interim final values for those services is 
in section III.M.3. of this final rule with comment period. CPT code 
92982 (Percutaneous transluminal coronary balloon angioplasty; single 
vessel) has been deleted by the CPT Editorial Panel for CY 2013. We 
have updated the list of CPT codes meeting this potentially misvalued 
code screen to show the review status of the codes, and to remove the 
three CPT codes mentioned above that do not meet the parameters of the 
screen. We are finalizing the list of Harvard-valued CPT codes with 
annual allowed charges of $10 million or more in Table 6, and for CY 
2014, we will review the services not already reviewed. We request 
public comments on the appropriate work RVUs and direct practice 
expense inputs for these services.

                   Table 6--Harvard-Valued CPT Codes With Annual Allowed Charges >=$10,000,000
----------------------------------------------------------------------------------------------------------------
            CPT code                  Short descriptor                          Review status
----------------------------------------------------------------------------------------------------------------
13152..........................  Repair of wound or lesion.  Interim Final for CY 2013.
27446..........................  Revision of knee joint....  Review for CY 2014.
36215..........................  Place catheter in artery..  Review for CY 2014.
36245..........................  Ins cath abd/l-ext art 1st  Review for CY 2014.
43264..........................  Endo                        Review for CY 2014.
                                  cholangiopancreatograph.
50360..........................  Transplantation of kidney.  Review for CY 2014.
52353..........................  Cystouretero w/lithotripsy  Interim Final for CY 2013.
64450..........................  N block other peripheral..  Interim Final for CY 2013.
66180..........................  Implant eye shunt.........  Review for CY 2014.
67036..........................  Removal of inner eye fluid  Review for CY 2014.
67917..........................  Repair eyelid defect......  Review for CY 2014.
92286..........................  Internal eye photography..  Interim Final for CY 2013.
92982..........................  Coronary artery dilation..  Deleted for CY 2013.
----------------------------------------------------------------------------------------------------------------

 (2) Review of Services With Stand Alone PE Procedure Time
    Improving the accuracy of procedure time assumptions used in PFS 
ratesetting continues to be a high priority of the potentially 
misvalued codes initiative. Procedure time is a critical measure of the 
resources typically used in furnishing particular services to Medicare 
beneficiaries, and procedure time assumptions are an important 
component in the development of work and PE RVUs. Discussions in the 
academic community have indicated that certain procedure times used for 
PFS ratesetting are overstated (McCall, N., J. Cromwell, et al. (2006). 
``Validation of physician survey estimates of surgical time using 
operating room logs.'' Med Care Res Rev 63(6): 764-777. Cromwell, J., 
S. Hoover, et al. (2006). ``Validating CPT typical times for Medicare 
office evaluation and management (E/M) services.'' Med Care Res Rev 
63(2): 236-255. Cromwell, J., N. McCall, et al. (2010). ``Missing 
productivity gains in the Medicare physician fee schedule: where are 
they?'' Med Care Res Rev 67(6): 236-255.) MedPAC and others have 
emphasized the importance of using the best available procedure time 
information in establishing accurate PFS payment rates. (MedPAC, Report 
to the Congress: Aligning Incentives in Medicare, June 2010, p. 230)
    In recent years, CMS and the AMA RUC have taken steps to consider 
the accuracy of available data regarding procedure times used in the 
valuation of the physician work component of PFS payment. Generally, 
the AMA RUC derives estimates of physician work time from survey 
responses, and the AMA RUC reviews and analyzes those responses as part 
of its process for developing a recommendation for physician work. 
These procedure time assumptions are also used in determining the 
appropriate direct PE input values used in developing nonfacility PE 
RVUs. Specifically, physician intra-service time serves as the basis 
for allocating the appropriate number of minutes within the service 
period to account for the time used in furnishing the service to the 
patient. The number of intra-service minutes, or occasionally a 
particular proportion thereof, is allocated to both the clinical staff 
that assists the physician in furnishing the service and to the 
equipment used by either the physician or the staff in furnishing the 
service. This allocation reflects only the time the beneficiary 
receives treatment and does not include resources used immediately 
prior to or following the service. Additional minutes are often 
allocated to both clinical labor and equipment resources in order to 
account for the time used for necessary preparatory tasks immediately 
preceding the procedure or tasks typically performed immediately 
following it. For codes without physician work, the procedure times 
assigned to the direct PE inputs for such codes assume that the 
clinical labor performs the procedure. For these codes, the number of 
intra-service minutes assigned to clinical staff is independent and not 
based on any physician intra-service time assumptions. Consequently, 
the procedure time assumptions for these kinds of services have not 
been subject to all of the same mechanisms recently used by the AMA RUC 
and physician community in providing recommendations to CMS, and by CMS 
in the valuation of the physician work component of PFS payment. These

[[Page 68919]]

independent clinical labor time assumptions largely determine the RVUs 
for the procedure. To ensure that procedure time assumptions are as 
accurate as possible across the Medicare PFS, we believe that codes 
without physician work should be examined with the same degree of 
scrutiny as services with physician work.
    For CY 2012, a series of radiation treatment services were reviewed 
as part of the potentially misvalued code initiative. Among these were 
intensity modulated radiation therapy (IMRT) delivery services and 
stereotactic body radiation therapy (SBRT) delivery services reported 
with CPT codes 77418 (Intensity modulated treatment delivery, single or 
multiple fields/arcs, via narrow spatially and temporally modulated 
beams, binary, dynamic MLC, per treatment session) and 77373 
(Stereotactic body radiation therapy, treatment delivery, per fraction 
to 1 or more lesions, including image guidance, entire course not to 
exceed 5 fractions), respectively. CPT code 77418 (IMRT treatment 
delivery) had been identified as potentially misvalued based on 
Medicare utilization data that indicated both fast growth in 
utilization and frequent billing with other codes. We identified this 
code as potentially misvalued in the CY 2009 PFS proposed rule (73 FR 
38586). CPT code 77373 (SBRT treatment delivery) had been identified as 
potentially misvalued by the RUC as a recently established code 
describing services that use new technologies. There is no physician 
work associated with either of these codes since other codes are used 
to bill for planning, dosimetry, and radiation guidance. Both codes are 
billed per treatment session. Because the physician work associated 
with these treatments is reported using codes distinct from the 
treatment delivery, the primary determinant of PE RVUs for these codes 
is the number of minutes allocated for the procedure time to both the 
clinical labor (radiation therapist) and the resource-intensive capital 
equipment included as direct PE inputs.
    In the CY 2012 PFS final rule with comment period, we received and 
accepted without refinement PE recommendations from the AMA RUC for 
these two codes. (We received the recommendation for CPT code 77418 
(IMRT treatment delivery) too late in 2010 to be evaluated for CY 2011 
and it was therefore included in the CY 2012 rulemaking cycle.) The AMA 
RUC recommended minor revisions to the direct PE inputs for the code to 
eliminate duplicative clinical labor, supplies, and equipment to 
account for the frequency with which the code was billed with other 
codes. For CPT code 77373 (SBRT treatment delivery), the RUC 
recommended no significant changes to the direct PE inputs.
    Subsequent to the publication of the final rule, the AMA RUC and 
other stakeholders informed CMS that the direct PE input recommendation 
forwarded to CMS for IMRT treatment delivery (CPT code 77418) 
inadvertently omitted seven equipment items typically used in 
furnishing the service. These items had been used as direct PE inputs 
for the code prior to CY 2012. There is broad agreement among 
stakeholders that these seven equipment items are typically used in 
furnishing the services described by CPT code 77418. We were unable to 
reincorporate the items for CY 2012. These omitted items are listed in 
Table 7. In consideration of the comments from the AMA RUC and other 
stakeholders, we proposed to include the seven equipment items omitted 
from the RUC recommendation for CPT code 77418. These proposed 
adjustments were reflected in the CY 2013 proposed direct PE input 
database, available on the CMS Web site under the downloads for the CY 
2013 PFS proposed rule with comment period at http://www.cms.gov/PhysicianFeeSched/. We note that the proposed PE RVUs included in 
Addendum B reflected the proposed updates.

 Table 7--Equipment Inputs Omitted From RUC Recommendation for CPT Code
                     77418 (IMRT Treatment Delivery)
------------------------------------------------------------------------
          Equipment code                    Equipment description
------------------------------------------------------------------------
ED011.............................  computer system, record and verify.
ED035.............................  video camera.
ED036.............................  video printer, color (Sony medical
                                     grade).
EQ139.............................  intercom (incl. master, pt
                                     substation, power, wiring).
ER006.............................  IMRT physics tools.
ER038.............................  isocentric beam alignment device.
ER040.............................  laser, diode, for patient
                                     positioning (Probe).
------------------------------------------------------------------------

    It has come to our attention that there are discrepancies between 
the procedure time assumptions used in establishing nonfacility PE RVUs 
for these services and the procedure times made widely available to 
Medicare beneficiaries and the general public. Specifically, the direct 
PE inputs for IMRT treatment delivery (CPT code 77418) reflect a 
procedure time assumption of 60 minutes. These procedure minutes were 
first assigned to the code for CY 2002 based on a recommendation from 
the AMA RUC indicating that the typical treatment time for the IMRT 
patient was 40 to 70 minutes. The most recent RUC recommendation that 
CMS received for CY 2012 rulemaking supported the procedure time 
assumption of 60 minutes.
    Information available to Medicare beneficiaries and the general 
public indicates that IMRT sessions typically last between 10 and 30 
minutes. For example, the American Society for Radiation Oncology 
(ASTRO) publishes a patient fact sheet that explains that for all 
external beam radiation therapy, including IMRT, ``treatment is 
delivered in a series of daily sessions, each about 15 minutes long.'' 
[``Radiation Therapy for Prostate Cancer: Facts to Help Patients Make 
an Informed Decision'' available for purchase at www.astro.org/MyASTRO/Products/Product.aspx?AstroID=6901.] This fact sheet is intended for 
patients with prostate cancer, the typical diagnosis for Medicare 
beneficiaries receiving IMRT. Similarly, the American College of 
Radiology (ACR) and the Radiological Society of North America (RSNA) 
co-sponsor a Web site for patients called http://radiologyinfo.org that 
states that IMRT ``treatment sessions usually take between 10 and 30 
minutes.''
    The direct PE inputs for SBRT treatment delivery (CPT code 77373) 
reflect a procedure time assumption of 90 minutes. These procedure 
minutes were first assigned to the code for CY 2007 based on a 
recommendation from the AMA RUC. The most recent RUC recommendation 
that CMS received for CY 2012 rulemaking supported continuing that 
procedure time assumption.
    In 2012, information available to Medicare beneficiaries and the 
general public states that SBRT treatment typically lasts no longer 
than 60 minutes. For example, the American College of Radiology (ACR) 
and the Radiological Society of North America (RSNA) Web site, http://radiologyinfo.org, states that SBRT ``treatment can take up to one 
hour.''
    Given the importance of the procedure time assumption in the 
development of RVUs for these services, using the best available 
information is critical to ensuring that these services are valued 
appropriately. We believe medical societies and practitioners strive to 
offer their cancer patients accurate information regarding the IMRT or 
SBRT treatment experience. Therefore, we believe that the typical 
procedure time for IMRT delivery is between 10 and 30 minutes and that 
the

[[Page 68920]]

typical procedure time for SBRT delivery is under 60 minutes. The 
services are currently valued using procedure time assumptions of 60 
and 90 minutes, respectively. We believe these procedure time 
assumptions, distinct from necessary preparatory or follow-up tasks by 
the clinical labor, are outdated and need to be updated using the best 
information available.
    While we generally have not used publicly available resources to 
establish procedure time assumptions, we believe that the procedure 
time assumptions used in setting payment rates for the Medicare PFS 
should be derived from the most accurate information available. In the 
case of these services, we believe that the need to reconcile the 
discrepancies between our existing assumptions and more accurate 
information outweighs the potential value in maintaining relativity 
offered by only considering data from one source. We proposed to adjust 
the procedure time assumption for IMRT delivery (CPT code 77418) to 30 
minutes. We proposed to adjust the procedure time assumption for SBRT 
delivery (CPT code 77373) to 60 minutes. These procedure time 
assumptions reflect the maximum number of minutes reported as typical 
in publicly available information. We note that in the case of CPT code 
77418, the `accelerator, 6-18 MV' (ER010) and the `collimator, 
multileaf system w-autocrane' (ER017) are used throughout the procedure 
and currently have no minutes allocated for preparing the equipment, 
positioning the patient, or cleaning the room. Since these clinical 
labor tasks are associated with related codes typically reported at the 
same time, we also proposed to allocate minutes to these equipment 
items to account for their use immediately before and following the 
procedure. All of these proposed adjustments are reflected in the CY 
2013 proposed direct PE input database, available on the CMS Web site 
under the downloads for the CY 2013 PFS final rule with comment period 
at http://www.cms.gov/PhysicianFeeSched/. We also note that the 
proposed PE RVUs included in Addendum B reflect the proposed updates. 
We requested recommendations from the AMA RUC and other public 
commenters on the direct PE inputs for these services.
    While we recognize that using these procedure time assumptions will 
result in payment reductions for these particular services, we believe 
such changes are necessary to appropriately value these services. 
Recent attention from popular media sources like the Wall Street 
Journal (online.wsj.com/article/SB10001424052748703904804575631222900534954.html December 7, 2010) and 
the Washington Post (www.washingtonpost.com/wp-dyn/content/article/2011/02/28/AR2011022805378.html) February 28, 2011 has encouraged us to 
consider the possibility that potential overuse of IMRT services may be 
partially attributable to financial incentives resulting from 
inappropriate payment rates. In its 2010 Report to Congress, MedPAC 
referenced concerns that financial incentives may influence how cancer 
patients are treated. In the context of the growth of ancillary 
services in physicians' offices, MedPAC recommended that improving 
payment accuracy for discrete services should be a primary tool used by 
CMS to mitigate incentives to increase volume (Report to Congress: 
Aligning Incentives in Medicare, June 2010, p. 225). We note that in 
recent years, PFS nonfacility payment rates for IMRT treatment delivery 
have exceeded the Medicare payment rate for the same service paid 
through the hospital Outpatient Prospective Payment System (OPPS), 
which includes packaged payment for image guidance also used in 
treatment delivery. We believe that such high-volume services that are 
furnished in both nonfacility and facility settings are unlikely to be 
more resource-intensive in freestanding radiation therapy centers or 
physicians' offices than when furnished in facilities like hospitals 
that generally incur higher overhead costs, maintain a 24 hour, 7 day 
per week capacity, are generally paid in larger bundles, and generally 
furnish services to higher acuity patients than the patients who 
receive services in physicians' offices or freestanding clinics. Given 
that the OPPS payment rates are based on auditable data on hospital 
costs, we believe the relationship between the OPPS and nonfacility PFS 
payment rates reflects inappropriate assumptions within the current 
direct PE inputs for CPT code 77418. The AMA RUC's most recent direct 
PE input recommendations reflect the same procedure time assumptions 
used in developing the recommendations for CY 2002. However, we believe 
that using procedure time assumptions that reflect the maximum times 
reported as typical to Medicare beneficiaries will improve the accuracy 
of those inputs and the resulting nonfacility payment rates.
    We received many comments regarding our proposal to change the 
direct PE inputs for CPT codes 77418 and 77373 based on amended 
procedure time assumptions and consideration of the comments from the 
AMA RUC and other stakeholders to include the seven equipment items 
omitted from the previous AMA RUC recommendation for CPT code 77418. 
The following is summary of the comments we received and our responses 
to those comments.
    Comment: Several commenters agreed with CMS' proposal to add the 
equipment items omitted from the AMA RUC recommendation for CPT code 
77418 to the code.
    Response: We appreciate the support for that aspect of the 
proposal.
    Comment: Many commenters disagreed with CMS' proposal to adjust the 
procedure time assumptions for these services. Some of these commenters 
stated that 35 minutes was a more appropriate estimate, but none 
presented alternative sources of objective information for determining 
accurate procedure time assumptions. Many commenters objected to CMS' 
proposal on the basis that the agency used publicly available 
information to adjust procedure times assumptions instead of basing its 
proposal on information developed through the AMA RUC process. These 
commenters stated that CMS should not finalize its proposed procedure 
time assumptions for one of four reasons: publicly available procedure 
time information does not consider the time resources required prior to 
or following the procedure, that educational information for patients 
is an inappropriate data source because such material is not subject to 
the same degree of scrutiny by the medical community as the information 
presented to the AMA RUC, that CMS only has the authority to review or 
revalue PFS services through the AMA RUC process, or that time has been 
universally inflated by the AMA RUC so that using more accurate time 
assumptions in setting the RVUs for these services would distort their 
value relative to other PFS services.
    Response: We appreciate the commenters' interest in CMS using the 
best available data to identify the time resources required to furnish 
services to Medicare beneficiaries. We address commenters' objections 
to using these patient education materials in the comment summaries and 
response paragraphs that follow.
    Comment: Many commenters stated that patient education materials 
are not an appropriate source of data because the procedure times 
conveyed through such materials may not fully account for the time 
spent positioning the patient for treatment, performing safety checks 
or the work that occurs before and after treatment. Several commenters 
explicitly stated that it is highly likely

[[Page 68921]]

that the patient education materials describe only the time the patient 
is on the treatment table.
    Response: We understand that the procedure times cited in the 
patient education materials may not include the full time for preparing 
the equipment, positioning the patient or other necessary work required 
prior to or following the procedure. The procedure time assumptions 
used in developing direct PE inputs only account for a portion of the 
service period minutes allocated to the clinical labor or the equipment 
direct PE inputs. For example, in our proposal to reduce procedure time 
assumptions for CPT code 77418, we allocated an additional seven 
minutes to the equipment beyond the procedure time assumption for 
additional tasks. These minutes reflect the standard minutes usually 
recommended by the RUC for these tasks. For example, for CY 2013 the 
AMA RUC recommended these minutes for direct PE inputs for CPT code 
31231 (Nasal endoscopy, diagnostic, unilateral or bilateral (separate 
procedure), CPT code 52287 (Cystourethroscopy with injection(s) for 
chemodenervation of the bladder), CPT code 65800 (Paracentesis of 
anterior chamber of eye (separate procedure); with diagnostic 
aspiration of aqueous), and CPT code 11311 (Shaving of epidermal or 
dermal lesion, single lesion, face ears, eyelid, nose, lips, mucous 
membrane; lesion diameter 0.6 to 1.0 cm).
    We also note that the direct PE inputs for codes describing imaging 
guidance services that are typically reported at the same time-include 
minutes for the radiation therapist to prepare the room, position the 
patient, and clean the room. Similarly, the proposed direct PE inputs 
for CPT code 77373 incorporate clinical labor and equipment minutes 
that exceed the minutes assumed for the procedure itself: 24 minutes of 
additional nurse time, 24 minutes of additional time for the radiation 
therapist, and 15 additional minutes for the medical physicist for pre-
service and post-service tasks. On the basis of these tasks, the 
equipment associated with the code has also been allocated 24 minutes 
beyond the procedure time assumption for pre-service and post-service 
work. Therefore, we do not agree with commenters who suggested that our 
proposed revisions are inappropriate because the procedure time 
reported in the patient education materials may underestimate the 
procedure time assumptions used in developing direct PE inputs. 
Instead, we believe that the typical procedure time described in the 
patient education material is generally equivalent to the minutes 
incorporated in the service period for performing the procedure. We 
already have incorporated additional minutes of clinical labor time 
into the direct PE inputs for both CPT codes 77418 and 77373 to account 
for tasks like preparing the equipment and cleaning the room in 
addition to the minutes allocated for the procedure time assumptions. 
This reflects the direct PE inputs used for most services, where we 
allocate minutes to clinical labor and medical equipment for 
preparatory or follow-up tasks in addition to the equipment time 
allocated based on the procedure time assumption. While many commenters 
stated that the procedure times reported in the publicly available 
information do not include necessary preparatory or follow-up tasks, we 
received no comments with specific objections to the number of minutes 
allocated for such tasks in conjunction with our proposal.
    Comment: The AMA RUC and some medical specialty societies expressed 
opposition to CMS using patient education materials in the process of 
setting Medicare payment rates. These commenters claimed that such 
information is not evaluated by the same standards applied to the 
extant data used as part of the AMA RUC process, so that CMS' use of 
these materials is ill-conceived.
    Response: As we stated previously, we believe medical societies and 
practitioners strive to offer their cancer patients accurate 
information regarding the IMRT or SBRT treatment experience. We believe 
that such information, especially for high-volume services, is more 
likely to reflect typical treatment times than information proffered 
solely for the purpose of developing payment rates. While many 
commenters objected in principle to the validity of the patient 
education materials, we do not believe that medical specialty societies 
and providers of care would broadly inform their patients that IMRT 
treatment would last between 10 and 30 minutes per session if the 
typical treatment session actually lasted for one hour or that SBRT 
treatment would last for no more than one hour if it typically takes 90 
minutes.
    Comment: Many commenters claimed that CMS has the responsibility to 
conduct a comprehensive, empirical review of those procedure time 
assumptions utilizing the AMA RUC if CMS has concerns with those 
assumptions.
    Response: We agree that AMA RUC review and recommendations are one 
important component in constructing payment rates under the physician 
fee schedule. While we do not agree with the commenters' statement that 
CMS has a responsibility to conduct all reviews of potentially 
misvalued codes through the AMA RUC process exclusively, we note the 
AMA RUC reviewed both CPT codes 77418 and 77373 as recently as 2010. 
Both of these services had been identified under our potentially 
misvalued code initiative. As noted above, the AMA RUC recommended 
minor revisions to the direct PE inputs for the code to eliminate 
duplicative clinical labor, supplies, and equipment to account for the 
frequency with which the code was billed with other codes. For CPT code 
77373 (SBRT treatment delivery), the AMA RUC recommended no significant 
changes to the direct PE inputs. We note that in response to this 
proposal, the AMA RUC has recently informed us that since there is no 
physician work associated with these codes, it has asked the relevant 
specialty society to conduct a survey for clinical staff time, in order 
to ensure accurate procedure times.
    Comment: Some commenters stated that CMS should only consider the 
accuracy of these procedure time assumptions relative to the procedure 
time estimates for other services. Some of these commenters claimed 
that procedure time assumptions for services across the PFS are 
inflated so that CMS should not use procedure time assumptions for 
these services that are also exaggerated.
    Response: We appreciate the commenters' concerns with maintaining 
the relativity of time used in developing relative value units. We 
understand that procedure times may be overestimated for some other PFS 
services. While we agree that maintaining the resource relativity of 
services within the payment system is very important, we also believe 
that there is no practical means for CMS or stakeholders to engage in a 
complete simultaneous review of time assumptions across all payable 
codes. As such, we must evaluate times (and other factors) and make 
adjustments in smaller increments when we find that adjustments are 
warranted. We strive to maintain relativity by reviewing all RVU 
components for a code or reviewing all codes within families where 
appropriate. Furthermore, we believe that our proposal to use more 
accurate procedure time assumptions for these services should be 
considered in the context of broader efforts to improve the accuracy of 
PFS relative values, where time is a significant component of 
developing relative values.
    Since MedPAC's March 2006 Report to the Congress, CMS has 
implemented a potentially misvalued codes initiative

[[Page 68922]]

and has taken significant steps to identify and address potentially 
misvalued codes, including establishing physician times that accurately 
reflect the resources involved in furnishing the service. For example, 
CMS has reduced the physician times for services that were originally 
valued in the inpatient setting but now are frequently performed in the 
outpatient setting, services that are frequently performed together or 
in multiple units, and services billed on the same day as an E/M 
service. Furthermore, in addition to our proposal to review services 
with stand-alone procedure time, in this CY 2013 PFS final rule with 
comment period, we also discuss recommendations on how best to 
accurately measure post-operative work in the global surgical period, 
and finalize several proposals to adjust times for services with 
anomalous times in the physician time file. Moreover, in September 
2012, we entered into two contracts to assist us in validating RVUs of 
potentially misvalued codes, which may include the validation of 
physician time elements.
    Additionally, we do not agree with the commenters' assertion that 
if time is distorted across the PFS, it is likely to be distorted with 
consistent proportionality. While the distortions may be relatively 
consistent for surveys taken at similar times or data gathered through 
similar methods, the procedure time assumptions used in developing 
practice expense inputs have not originated from consistent sources. 
The 60 minute procedure time assumption for IMRT treatment delivery, 
for example, was originally developed based on a specialty society 
survey for CY 2002.
    Through our misvalued codes initiative and other efforts, we strive 
to prioritize and review values for codes each year and work toward 
achieving greater calibration of values across the PFS over time.
    Comment: MedPAC commented that CMS should implement its proposal to 
reduce the time estimates for these codes based on the credible 
evidence presented in the proposed rule. The commission stated further 
that if stakeholders object to these changes, they should provide 
objective, valid evidence to CMS that the agency's proposed time 
estimates are too low. Furthermore, the commission expressed concerns 
about using physician surveys to develop time estimates since physician 
medical societies have a financial stake in the process. Therefore, 
MedPAC recommended that the AMA RUC should seek evidence other than the 
surveys conducted by specialty societies and that CMS may need to 
regularly collect data on service time and other variables to establish 
more accurate RVUs for practice expense and physician work.
    Response: We appreciate MedPAC's support for the proposal. We agree 
that there are many means to measure time other than through survey 
methodology, and we are open to considering robust data on procedure 
time from many sources.
    Comment: Many commenters objected to CMS' proposal to update the 
procedure time assumptions used in determining the direct PE inputs for 
these services since CMS did not propose corresponding updates to other 
direct PE inputs for the services.
    Response: We appreciate the commenters' interest in CMS' use of the 
most accurate and up-to-date information in establishing practice 
expense RVUs for these services. We note that we recently received 
direct PE input recommendations from the AMA RUC for these services and 
used them to establish interim final direct PE inputs for CY 2012. We 
also note that in the CY 2011 PFS final rule (75 FR 73205 through 
73207) we established a public process for updating prices for supplies 
and equipment used as direct PE inputs. Prior to making our CY 2013 
proposal regarding procedure times for the IMRT and SBRT codes, we had 
received no requests to update prices for the inputs associated with 
these codes.
    Comment: Several commenters submitted specific information 
regarding appropriate input revisions for CPT codes 77418 and 77373. 
Several commenters (including the AMA RUC) suggested that IMRT 
treatment requires two radiation therapists, working simultaneously, to 
furnish the service safely. Others suggested that the linear 
accelerator (ER010) and collimator (ER017) used as direct PE inputs for 
CPT code 77418 IMRT treatment are no longer typical. These commenters 
submitted evidence, consisting of a collection of paid invoices, that 
demonstrated that the typical accelerator used in IMRT includes the 
functionality of the collimator and should be priced at $ 2,641,783 and 
that the price of the ``laser, diode, for patient positioning (Probe)'' 
(ER040) should be $18,160. Several commenters also noted that two 
equipment items included in many other radiation treatment codes, the 
radiation treatment vault (ER056) and water chiller (ER065) ought to be 
included in the equipment inputs for IMRT and SBRT treatment delivery. 
Finally, several commenters suggested that the equipment items used in 
these treatment delivery services require practitioners to purchase 
maintenance and service contracts in addition to the price of the 
equipment itself.
    Response: We appreciate all the submitted information to assist us 
in conducting a comprehensive update of the appropriate direct PE 
inputs for these services. We agree with the commenters that we should 
use the best information available in developing direct PE inputs for 
PFS services. Based on this information, we believe it would be 
appropriate to include two radiation therapists as direct PE inputs for 
CPT code 77418. We also believe it would be appropriate to update the 
current accelerator and collimator equipment inputs used in CPT code 
77418 based on the invoices provided to us by commenters. While we 
generally urge stakeholders to submit such requests through the process 
we established for CY 2011, because we made a proposal specifically 
related to the equipment minutes allocated for these procedures, we 
believe it would be appropriate to consider the associated equipment 
and prices. We have observed that some other radiation treatment codes 
incorporate the water chiller and radiation treatment vault as direct 
PE inputs. We believe it would be appropriate to incorporate the water 
chiller as an equipment item into the IMRT and SBRT treatment delivery 
codes for the sake of consistency with the other radiation treatment 
codes. However, we question whether it is fully consistent with the 
principles underlying the PFS PE methodology to continue to classify 
the radiation treatment vault as medical equipment (a direct cost) 
since it is difficult to distinguish the cost of the construction of 
the vault from the cost of the construction of the building. The 
submitted architectural invoices for vault construction illustrate the 
difficulty in making that distinction. Furthermore, the typical 
circumstances of the vault's use are unclear, especially regarding 
whether or not the vault may be servicing multiple patients at the same 
time. However, we do not believe that it would be appropriate to remove 
the radiation treatment vault as a direct input for all PFS services 
for CY 2013. We expect to address the status of the radiation treatment 
vault as a direct PE input during CY 2014 rulemaking. For CY 2013, we 
believe that it would be appropriate to include the radiation treatment 
vault for CPT codes 77373 and 77418 to align the code with the similar 
radiation treatment delivery codes. In terms of the maintenance and 
service contract costs submitted to us by commenters, we remind 
stakeholders

[[Page 68923]]

that we have generally not considered such costs as direct costs 
attributable to furnishing services to individual Medicare 
beneficiaries and that our standard equipment cost per minute 
calculation includes a maintenance factor that adequately incorporates 
such costs in amortizing the cost of the equipment itself.
    Comment: A few commenters suggested that CMS should re-price the 
capital equipment associated with CPT code 77373. However, none of 
these commenters submitted invoices.
    Response: We urge commenters to submit invoices and other evidence 
appropriate for pricing the capital equipment used in SBRT delivery as 
part of our public process for updating supply and equipment prices. We 
direct interested stakeholders to the CY 2011 PFS final rule (75 FR 
73205-73207) for information regarding that process. We also note that 
as we explained in the CY 2012 PFS final rule with comment period (76 
FR 73214), we could not accept the invoices accompanying the AMA RUC's 
recommendation for CPT Code 77373 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 prices 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. Were 
we to receive updated invoices through the process established during 
CY 2012 that did not include embedded costs that we would not accept as 
part of the cost of the equipment, we would consider those invoices in 
rulemaking for CY 2014.
    Comment: Many commenters suggested that reductions in Medicare 
payment rates for these services would put serious financial strain on 
community radiation oncology practices, and result in significant 
negative impact on patient access to life-saving cancer treatment, 
particularly in rural communities. One commenter provided the results 
of an informal study that suggested that if the proposed RVUs become 
effective for CY 2013, many providers will stop providing charity care, 
lay off staff, limit hours of operation, refrain from purchasing new 
equipment, limit or stop accepting Medicare patients, or consolidate or 
close practice locations.
    Response: We appreciate and share commenters' concerns regarding 
Medicare beneficiaries' access to care for radiation treatment 
services. While we share these concerns in general, we believe that 
accurately valuing services promotes Medicare beneficiaries' access to 
many different kinds of important services paid under the PFS, 
including radiation treatment. We continue to be interested in 
information related to beneficiaries' access to these kinds of 
services, and we will monitor for evidence of such problems. We would 
welcome being alerted to access problems, should they arise. At 
present, we do not have reason to believe that the proposed changes in 
procedure time assumptions, in conjunction with other corresponding 
updates in the direct PE inputs for these services, will jeopardize 
access to care for Medicare beneficiaries. We note that the final PE 
RVUs for these services, based on direct PE inputs updated with 
information provided by commenters, are significantly greater than 
those reflected in the proposed rule. We also note that the specialty-
level impact of this final rule with comment period is significantly 
reduced relative to the policy as proposed. We direct interested 
readers to the section VIII.C. of this final rule with comment period 
regarding the specialty-level impacts of this and other finalized 
policies.
    Comment: Many commenters objected to CMS' assumptions that the 
services would be more costly for facilities such as hospital 
outpatient departments that generally have Emergency Medical Treatment 
and Labor Act (EMTALA) obligations and standby capacity than for free-
standing centers or offices. These commenters stated that the cost 
structure and the services furnished in freestanding and hospital 
outpatient settings are the same. These commenters stated that, while 
outpatient hospital departments may have to maintain standby capacity, 
they do not typically furnish IMRT 24 hours per day, seven days a week 
nor do the radiation oncology departments of hospitals generally 
furnish radiation treatment to higher acuity patients than the patients 
who receive services in physicians' offices or freestanding clinics.
    Several other commenters suggested that the payment decrease 
expected to result from this proposal will force patients into the more 
expensive hospital setting and patients will be steered toward 
treatment options that result in greater financial returns. These 
commenters stated that this migration will increase costs both to the 
Medicare program and to patients through higher co-insurance payments. 
Others suggested that significant differences between nonfacility PFS 
and OPPS payment are likely to result in consolidation of free-standing 
cancer centers and hospitals that will reduce competition, inhibit 
access to care, and undermine focused care for cancer patients.
    Response: As we stated in the proposal, we continue to believe that 
high-volume services, such as IMRT, that are widely furnished in both 
nonfacility and facility settings are highly unlikely to be more 
resource-intensive in freestanding radiation therapy centers or 
physicians' offices than when furnished in facilities like hospitals. 
We agree with commenters that the direct costs of furnishing the 
service may be similar, but we continue to believe that hospitals are 
likely to incur additional indirect costs. For example, hospitals incur 
greater costs for maintaining the capacity to furnish services 7 days 
per week, 24 hours per day, even if IMRT delivery is not typically 
furnished during all of those hours. As we have already noted, the 
disparity between OPPS and PFS payment is even greater than a direct 
comparison of the payment rates would suggest. OPPS payment for CPT 
code 77148 includes packaged payment for image guidance, which is 
almost always furnished and billed with CPT code 77418. The PFS 
continues to make separate payment for several forms of image guidance.
    We understand commenters' concerns regarding the inadvertent impact 
that financial incentives may make on the usual site of service for 
particular services. We believe that utilizing the most accurate cost 
inputs possible is a reasonable approach to mitigating the impact of 
such potential incentives.
    As a result of the comments we received regarding our proposal to 
change the procedure time assumptions used in determining direct PE 
inputs for CPT codes 77418 and 77373, we are finalizing our proposals 
to adjust the procedure time assumption for IMRT delivery (CPT code 
77418) to 30 minutes and to adjust the procedure time assumption for 
SBRT delivery (CPT code 77373) to 60 minutes. These codes continue to 
include clinical labor time for preparatory and follow-up tasks in 
addition to revisions to the procedure times. Based on comments 
received regarding additional updates to the direct PE inputs for these 
services, we are also adjusting other direct PE inputs for these 
services on an interim final basis for CY 2013. Based on comments 
received on our proposal, we are incorporating a second radiation 
therapist for CPT code 77418. The second therapist will be allocated 30 
minutes of service period time, consistent with the first. Furthermore, 
we are incorporating a new equipment

[[Page 68924]]

item called ``IMRT accelerator'' to replace the linear accelerator 
(ER010) and collimator (ER017) used as current direct PE inputs for CPT 
code 77418. Based on the evidence submitted by commenters, the new 
equipment item will be priced at $2,641,783 in the direct PE input 
database. Additionally, we are incorporating the radiation treatment 
vault (ER056) and water chiller (ER065) as direct PE inputs for both 
CPT codes 77418 and 77373. We are also updating the price of the 
``laser, diode, for patient positioning (Probe)'' (ER040) from $7,678 
to $18,160. We are adopting these direct PE inputs on an interim basis 
for CY 2013 and these values are reflected in the CY 2013 PFS direct PE 
input database. That database is available under downloads for the CY 
2013 PFS final rule with comment period on the CMS Web site at: http://www.cms.gov/PhysicianFeeSched/PFSFRN/list.asp#TopOfPage. We also note 
that the PE RVUs included in Addenda B and C reflect these interim 
direct PE inputs.
    These two IMRT and SBRT treatment delivery codes are PE only codes 
and are fairly unique in that the resulting RVUs are largely comprised 
of resources for staff and equipment based on the minutes associated 
with clinical labor. There are several other codes on the PFS 
established through the same methodology. As we previously stated, we 
believe that the procedure time assumptions for these kinds of services 
have not been subject to all of the same mechanisms recently used by 
CMS in the valuation of the physician work component of PFS payment. In 
light of observations about publicly available procedure times for CPT 
codes 77418 (IMRT treatment delivery) and 77373 (SBRT treatment 
delivery) and public awareness of potential adverse financial 
incentives associated with IMRT treatment delivery in particular, we 
believe that similar codes may be potentially misvalued.
    Therefore, consistent with the requirement in section 
1848(c)(2)(K)(ii) of the Act to examine other codes determined to be 
appropriate by the Secretary, we proposed to review and make 
adjustments to CPT codes with stand-alone procedure time assumptions 
used in developing nonfacility PE RVUs. These procedure time 
assumptions are not based on physician time assumptions. We prioritized 
for review CPT codes that have annual Medicare allowed charges of 
$100,000 or more, include direct equipment inputs that amount to $100 
or more, and have PE procedure times of greater than 5 minutes. We did 
not propose to include in this category services with payment rates 
subject to the OPPS cap (as specified in the statute under section 
1848(b)(4) of the Act and listed in Addendum G to this proposed rule) 
or services with PE minutes established through code descriptors. (For 
example, an overnight monitoring code might contain 480 minutes of 
monitoring equipment time to account for 8 hours of overnight 
monitoring.) The CPT codes meeting these criteria appear in Table 8. We 
recognized that there are other CPT codes that are valued in the same 
manner. We may consider evaluating those services as potentially 
misvalued codes in future rulemaking.
    For the services in Table 8, we requested recommendations from the 
AMA RUC and other public commenters on the appropriate direct PE inputs 
for these services. We encourage the use of valid and reliable 
alternative data sources when developing recommended values, including 
electronic medical records (with personally-identifiable information 
redacted) and other independent data sources. We note that many of the 
CPT codes in Table 8 have been identified through other potentially 
misvalued code screens and have been recently reviewed. Given our 
concerns with the inputs for the recently reviewed IMRT and SBRT direct 
PE inputs discussed above, we believe it is necessary to re-review 
other recently reviewed services with stand-alone PE procedure time.

          Table 8--Services with Stand-Alone PE Procedure Time
------------------------------------------------------------------------
               CPT code                         Short descriptor
------------------------------------------------------------------------
77280................................  Set radiation therapy field.
77285................................  Set radiation therapy field.
77290................................  Set radiation therapy field.
77301................................  Radiotherapy dose plan imrt.
77338................................  Design mlc device for imrt.
77372................................  Srs linear based.
77373................................  Sbrt delivery.
77402................................  Radiation treatment delivery.
77403................................  Radiation treatment delivery.
77404................................  Radiation treatment delivery.
77406................................  Radiation treatment delivery.
77407................................  Radiation treatment delivery.
77408................................  Radiation treatment delivery.
77409................................  Radiation treatment delivery.
77412................................  Radiation treatment delivery.
77413................................  Radiation treatment delivery.
77414................................  Radiation treatment delivery.
77416................................  Radiation treatment delivery.
77418................................  Radiation tx delivery imrt.
77600................................  Hyperthermia treatment.
77785................................  Hdr brachytx 1 channel.
77786................................  Hdr brachytx 2-12 channel.
77787................................  Hdr brachytx over 12 chan.
88348................................  Electron microscopy.
------------------------------------------------------------------------

    Comment: Several commenters objected to our proposal to review 
these codes. Some of these commenters objected to the premise that the 
procedure time assumptions for these services have not been subject to 
the same scrutiny as for services with procedure time assumptions tied 
directly to physician time. One of these commenters explained that the 
AMA RUC process of reviewing direct practice expense inputs involves 
three main levels of expert panel review: specialty society expert 
panel review and attestation of the data provided; RUC Practice Expense 
Subcommittee review; and full RUC member review. Other commenters 
suggested that many of the identified services have procedure time 
assumptions related to physician time and therefore should be removed 
from the list. Another commenter claimed that services with 
professional and technical components should be removed from the list 
since services with professional components ought not to be considered 
``stand-alone.'' Another commenter suggested that CPT code CPT Code 
77600 should be removed from the list since few -TC claims had been 
submitted. One commenter claimed that the AMA RUC had extensive 
discussions regarding the procedure time assumptions used in developing 
direct PE inputs for some of the codes, so that those codes should be 
removed from the list.
    Response: As we stated in the proposal, we believe that the 
procedure time assumptions used in developing direct PE inputs for 
these services have not been subject to the same rigor as other 
recently-reviewed services. Procedure time assumptions developed and 
validated by a series of expert panels have not generally been subject 
to the same scrutiny as the times developed through survey data or data 
gathered through electronic health records, for example. We identified 
the services by calling the services ``stand-alone PE procedure time,'' 
because they are services that include significant amounts of time 
resources allocated outside of physician time. We understand that some 
of these codes may be ``technical only'' codes and that in other cases 
these codes are used in reporting both the professional and technical 
component using the -TC or -26 modifiers, but we do not believe the 
divergent reporting mechanisms would mean that any services should be 
removed from the list. For CPT code 77600, we note that while few 
services were reported with the -TC modifier, many more services were 
billed globally in the nonfacility setting, so we continue to believe 
that the procedure time assumption that determines the inputs used in 
valuing the technical

[[Page 68925]]

component of the payment remains relevant for prioritization.
    While we assume that the AMA RUC deliberated on the procedure time 
assumptions used in developing the direct PE input recommendations for 
these services, we do not believe that extensive committee discussions 
would mitigate the need for more extensive review of these services as 
potentially misvalued since the assumptions that were developed through 
discussion could benefit from the objective data of many kinds.
    Comment: MedPAC supported CMS's proposal to review these services. 
However, it expressed concern that CMS exempted imaging services that 
are subject to the OPPS cap from this review. MedPAC pointed out that 
the procedure time assumptions used in several high-priced and high-
expenditure imaging codes have not been reviewed by the AMA RUC since 
2002 or 2003 and may be too high. MedPAC also noted that recent 
advances in CT and MRI machines have made it possible to scan patients 
faster and that even practitioners who are using older equipment could 
be performing studies in less time as they become more familiar with 
the procedures and equipment.
    Response: We appreciate MedPAC's support for this proposal. We 
agree that the procedure time assumptions used in imaging codes subject 
to the OPPS cap may be inaccurate or outdated. We did not propose to 
prioritize review of these procedure time assumptions since the 
services are subject to the OPPS payment caps, but we will consider the 
appropriate means for reviewing the procedure time assumptions for 
those services in future rulemaking.
    Based on the comments we received, we are finalizing our proposal 
to review and make adjustments to CPT codes with stand-alone procedure 
time assumptions used in developing nonfacility PE RVUs.
c. Services With Anomalous Time
    Each year when we publish the PFS proposed and final rules, we 
publish on the CMS Web site several files that support annual PFS 
ratesetting. One of these supporting files is the physician time file, 
which lists the physician time associated with the HCPCS codes on the 
PFS. The physician time file associated with the CY 2013 PFS final rule 
with comment period is available on the CMS Web site under the 
downloads for the CY 2013 PFS final rule with comment period at http://www.cms.gov/PhysicianFeeSched/.
    As we stated in the CY 2013 PFS proposed rule, in our review of 
potentially misvalued codes and their inputs, we became aware of 
several HCPCS codes that have anomalous times in our physician time 
file. Physician work is a measure of physician time and intensity, so 
there should be no services that have payable physician work RVUs but 
no time in the physician time file, and there should be no payable 
services with time in the physician time file and no physician work 
RVUs. For CY 2013 we proposed to make the physician time file changes 
detailed below to address these anomalous time file entries.
(1) Review of Services With Physician Work and No Listed Physician Time
    CPT code 94014 (Patient-initiated spirometric recording per 30-day 
period of time; includes reinforced education, transmission of 
spirometric tracing, data capture, analysis of transmitted data, 
periodic recalibration and physician review and interpretation) has a 
physician work RVU of 0.52 and for CY 2012 was listed with 0 physician 
time. CPT code 94014 is a global service that includes CPT code 94015 
(Patient-initiated spirometric recording per 30-day period of time; 
recording (includes hook-up, reinforced education, data transmission, 
data capture, trend analysis, and periodic recalibration)) (the 
technical component), and CPT code 94016 (Patient-initiated spirometric 
recording per 30-day period of time; physician review and 
interpretation only) (the professional component). We stated that we 
believe it is appropriate for the physician time of CPT code 94014 to 
match the physician time of the code's component professional service--
CPT code 94016. As such, for CPT code 94014 for CY 2013, we proposed to 
assign 2 minutes of pre-service evaluation time, and 20 minutes of 
intra-service time, which matches the times associated with CPT code 
94016.
    HCPCS codes G0117 (Glaucoma screening for high risk patients 
furnished by an optometrist or ophthalmologist) and G0118 (Glaucoma 
screening for high risk patient furnished under the direct supervision 
of an optometrist or ophthalmologist) both have physician work RVUs 
(0.45, and 0.17, respectively), but neither code was included in the CY 
2012 physician time file. HCPCS codes G0117 and G0118 have a PFS 
procedure status indicator of T indicating that these services are only 
paid if there are no other services payable under the PFS billed on the 
same date by the same provider.
    In the CY 2002 PFS final rule (66 FR 55274), we crosswalked the 
physician work of HCPCS code G0117 from CPT code 99212 (Level 2 office 
or other outpatient visit, established patient), and we crosswalked the 
physician work of HCPCS code G0118 from CPT code 99211 (Level 1 office 
or other outpatient visit, established patient). Based on these 
finalized physician work crosswalks, we proposed to assign HCPCS code 
G0117 physician times matching CPT code 99212, and HCPCS code G0118 
physician times matching CPT code 99211. Specifically, we proposed 2 
minutes of pre-service time, 10 minutes of intra-service time, and 4 
minutes of immediate post-service time for HCPCS code G0117, and 5 
minutes of intra-service time, and 2 minutes of immediate post-service 
time for HCPCS code G0118.
    HCPCS code G0128 (Direct (face-to-face with patient) skilled 
nursing services of a registered nurse provided in a comprehensive 
outpatient rehabilitation facility, each 10 minutes beyond the first 5 
minutes) currently has a physician work RVU (0.08), but was not listed 
in the CY 2012 physician time file. In the CY 2013 proposed rule we 
stated that, after review of this HCPCS code, we do not believe that 
HCPCS code G0128 describes a service that includes physician work. Time 
for a registered nurse to furnish the service is included in the PE for 
the code. As such, for CY 2013, we proposed to remove the physician 
work RVU for HCPCS code G0128. HCPCS code G0128 continues to have PE 
and malpractice expense RVUs.
    HCPCS codes 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

[[Page 68926]]

footwear; and (3) patient education), and 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 (that is, 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) have physician work RVUs of 0.88, 
0.45, and 0.50, respectively, but were not listed in the CY 2012 
physician time file. HCPCS codes G0245, G0246, and G0247 have a 
procedure status indicator of R on the PFS indicating that coverage of 
these services is restricted.
    In the CY 2003 PFS final rule (67 FR 79990), we crosswalked the 
physician work of HCPCS code G0245 from CPT code 99202 (Level 2 office 
or other outpatient visits, new patient), we crosswalked the physician 
work of HCPCS code G0246 from CPT code 99212, and we crosswalked the 
physician work of HCPCS code G0257 from CPT code 11040 (Debridement; 
skin; partial thickness). Based on these finalized physician work 
crosswalks, we proposed to assign HCPCS code G0245 physician times 
matching CPT code 99202, HCPCS code G0246 physician times matching CPT 
code 99212, and HCPCS code G0247 physician times matching CPT code 
11040. Specifically, for HCPCS code G0245 we proposed 2 minutes of pre-
service time, 15 minutes of intra-service time, and 5 minutes of 
immediate post-service time. For HCPCS code G0246 we proposed 2 minutes 
of pre-service time, 10 minutes of intra-service time, and 4 minutes of 
immediate post-service time. For HCPCS code G0247 we proposed 7 minutes 
of pre-service time, 10 minutes of intra-service time, and 7 minutes of 
immediate post-service time.
    HCPCS code G0250 (Physician review, interpretation, and patient 
management of home INR (International Normalized Ratio) testing for 
patient with either mechanical heart valve(s), chronic atrial 
fibrillation, or venous thromboembolism who meets Medicare coverage 
criteria; testing not occurring more frequently than once a week; 
billing units of service include 4 tests) has a physician work RVU of 
0.18 but was not listed in the CY 2012 physician time file. HCPCS code 
G0250 has a procedure status indicator of R on the PFS indicating that 
coverage of this service is restricted. In the CY 2003 final rule (67 
FR 79991), we assigned HCPCS code G0250 a work RVU of 0.18, which 
corresponds to the work RVU of CPT code 99211. While we did not 
articulate this as a direct crosswalk in the CY 2003 final rule, after 
clinical review we believe that HCPCS code G0250 continues to require 
similar work as CPT code 99211, and should have the same amount of 
physician time as CPT code 99211. As such, we proposed to assign HCPCS 
code G0250 the same physician time as CPT code 99211. Specifically, for 
HCPCS code G0250 we proposed 5 minutes of intra-service time and 2 
minutes of immediate post-service time.
    During our annual review of new, revised, and potentially misvalued 
CPT codes, the assessment of physician time used to furnish a service 
is an important part of the clinical review when determining the 
appropriate work RVU for a service. However, the time in the physician 
time file is not used to automatically adjust the physician work RVUs 
outside of that clinical review process. As such, the proposed addition 
of physician time to the HCPCS codes discussed above will have no 
impact on the current physician work RVUs for these services.
    The time data in the physician time file is used in the PE 
methodology described in section II.A.2. In creating the indirect 
practice cost index (IPCI), 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 furnished by the specialty. The proposed addition of 
physician time to the HCPCS codes discussed above will affect the 
aggregate pools of indirect PE at the specialty level. However because 
the services discussed above have low utilization and low total time, 
the impact of the physician time changes on the IPCI is negligible, and 
likely would have a modest impact if any on the PE RVUs at the 
individual code level.
    Below is a summary of the comments we received on our proposed 
changes for PFS services with physician work and no listed time in the 
physician time file.
    Comment: Commenters agreed with our proposed time changes for these 
services. The AMA RUC noted that historically the AMA RUC has not 
provided work or time recommendations for HCPCS G-codes, but that they 
will update the AMA RUC database to reflect these new physician time 
components.
    Response: We thank commenters for their input on the times 
associated with these services. We are finalizing our proposals without 
modification. These proposed adjustments are reflected in the physician 
time file associated with this CY 2013 final rule with comment period, 
available on the CMS Web site under the downloads for the CY 2013 PFS 
final rule with comment period at http://www.cms.gov/PhysicianFeeSched/.
(2) Review of Services With No Physician Work and Listed Time in the 
Physician Time File
    There are a number of services that have no physician work RVUs, 
yet include time in the physician time file. Many of these services are 
not payable under the PFS or are contractor priced services where the 
physician time is not used to nationally price the services on the PFS. 
We did not propose to remove the physician time from the time file for 
these services as the time has no effect on the calculation of RVUs for 
the PFS. However, there are several CPT codes, listed in Table 9, that 
are payable under the PFS and have no physician work RVUs yet include 
time in the physician time file. We proposed to remove the physician 
time from the time file for these seven CPT codes.

  Table 9--Payable CPT Codes With Physician Time and No Physician Work
------------------------------------------------------------------------
                                                          CY 2012 Total
      CPT Code             Short        PFS Procedure    physician time
                         descriptor         status          (minutes)
------------------------------------------------------------------------
22841...............  Insert spine     B (Bundled, not                 5
                       fixation         separately
                       device.          payable).
51798...............  Us urine         A (Active,                      9
                       capacity         payable).
                       measure.
95990...............  Spin/brain pump  A (Active,                     40
                       refill & main.   payable).
96904...............  Whole body       R (Restricted                  80
                       photography.     coverage).
96913...............  Photochemothera  A (Active,                     90
                       py uv-a or b.    payable).
97545...............  Work hardening.  R (Restricted                 120
                                        coverage).

[[Page 68927]]

 
97602...............  Wound(s) care    B (Bundled, not                36
                       non-selective.   separately
                                        payable).
------------------------------------------------------------------------

    As mentioned above and as discussed in section II.A.2. of this 
final rule with comment period, to create the IPCI used in the PE 
methodology, we calculated 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. As we stated in the CY 2013 PFS 
proposed rule, the proposed removal of physician time from the CPT 
codes discussed above will affect the aggregate pools of indirect PE at 
the specialty level. However because the services discussed above have 
low utilization and/or low total time, the impact of the physician time 
changes on the IPCI is negligible, and likely will have a modest impact 
if any on the PE RVUs at the individual code level.
    Below is a summary of the comments we received on our proposed 
changes for PFS services with no physician work and listed time in the 
physician time file.
    Comment: Commenters agreed with our proposal to remove the time 
listed in the physician time file for CPT codes 22841 (Internal spinal 
fixation by wiring of spinous processes (List separately in addition to 
code for primary procedure)), 95990 (Refilling and maintenance of 
implantable pump or reservoir for drug delivery, spinal (intrathecal, 
epidural) or brain (intraventricular), includes electronic analysis of 
pump, when performed;), 96904 (Whole body integumentary photography, 
for monitoring of high risk patients with dysplastic nevus syndrome or 
a history of dysplastic nevi, or patients with a personal or familial 
history of melanoma), and 96913 (Photochemotherapy (Goeckerman and/or 
PUVA) for severe photoresponsive dermatoses requiring at least 4-8 
hours of care under direct supervision of the physician (includes 
application of medication and dressings)). Commenters noted that CPT 
code 51798 (Measurement of post-voiding residual urine and/or bladder 
capacity by ultrasound, non-imaging) likely had time listed in the 
physician time file because the AMA RUC had recommended work RVUs for 
the service however CMS assigned only practice expense. Similarly, 
commenters noted that CPT code 97602 (Removal of devitalized tissue 
from wound(s), non-selective debridement, without anesthesia (eg, wet-
to-moist dressings, enzymatic, abrasion), including topical 
application(s), wound assessment, and instruction(s) for ongoing care, 
per session) likely had time included in the physician time final 
because the AMA RUC HCPAC recommended work RVUs for the service, 
however CMS assigned CPT code 97602 a bundled procedure status. 
Commenters noted that CPT code 97545 (Work hardening/conditioning; 
initial 2 hours) has a restricted procedure status, but inherently 
involves 2 hours of work, and requested that CMS maintain the time 
entry in the physician time file for this service to assist other 
payers and stakeholder in making payment policy decisions.
    Response: We thank commenters for their input on the times 
associated with these services. After reviewing the comments, we are 
finalizing our proposal to remove the time from the physician time file 
for CPT codes 22841, 51798, 95990, 96913, and 97602. We will maintain 
the time entry in the physician time file for CPT code 97545, as 
requested; while this CPT code has a restricted procedure status 
indicator, it is still payable in some circumstances. CPT code 96904 
also has a restricted procedure status indicator and is payable in some 
circumstances. For consistent treatment of these two CPT codes, we will 
also maintain the time entry in the physician time file for CPT code 
96904. These adjustments are reflected in the physician time file 
associated with this CY 2013 PFS final rule with comment period, 
available on the CMS Web site under the downloads for the CY 2013 PFS 
final rule with comment period at http://www.cms.gov/PhysicianFeeSched/.
4. Expanding the Multiple Procedure Payment Reduction Policy
    Medicare has long employed multiple procedure payment reduction 
(MPPR) policies to adjust payment to more appropriately reflect reduced 
resources involved with furnishing services that are frequently 
furnished together. Under these policies, we reduce payment for the 
second and subsequent services within the same MPPR category furnished 
in the same session or same day. These payment reductions reflect 
efficiencies that typically occur in either the practice expense (PE) 
or professional work or both when services are furnished together. With 
the exception of a few codes that are always reported along with 
another code, the Medicare PFS values services independently to 
recognize relative resources involved when the service is the only one 
furnished in a session. While our general policy for MPPRs precedes the 
Affordable Care Act, MPPRs address the fourth category of potentially 
misvalued codes identified in section 1848(c)(2)(K) of the Act which is 
``multiple codes that are frequently billed in conjunction with 
furnishing a single service'' (see 75 FR 73216).
    For CY 2013, we proposed to continue our work to recognize resource 
efficiencies when certain services are furnished together. We proposed 
to apply an MPPR to the technical component (TC) of certain 
cardiovascular and ophthalmology diagnostic tests. As discussed in the 
CY 2012 final rule with comment period (76 FR 73079), we are also 
proceeding with applying the current MPPR policy for imaging services 
to services furnished in the same session by physicians in the same 
group practice.
a. Background
    Medicare has a longstanding policy to reduce payment by 50 percent 
for the second and subsequent surgical procedures furnished to the same 
beneficiary by a single physician or physicians in the same group 
practice on the same day, largely based on the presence of efficiencies 
in the PE and pre- and post-surgical physician work. Effective January 
1, 1995, the MPPR policy, with this 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, for CY 2006 PFS, we 
extended the MPPR policy to the TC of certain

[[Page 68928]]

diagnostic imaging procedures furnished on contiguous areas of the body 
in a single session (70 FR 70261). This MPPR policy recognizes that for 
the second and subsequent imaging procedures furnished in the same 
session, there are some efficiencies in clinical labor, supplies, and 
equipment time. In particular, certain clinical labor activities and 
supplies are not duplicated for subsequent imaging services in the same 
session and, because equipment time and indirect costs are allocated 
based on clinical labor time, we also reduced those 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 and only applied to procedures furnished in a single session 
involving contiguous body areas within a family of codes, not across 
families. Additionally, the MPPR policy originally applied to TC-only 
services and to the TC of global services, but not to professional 
component (PC) services.
    There have been several revisions to this policy since it was 
originally adopted. Under the current imaging MPPR policy, full payment 
is made for the TC of the highest paid procedure, and payment for the 
TC is reduced by 50 percent for each additional procedure subject to 
this MPPR policy. 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 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 this new OPPS payment cap, we decided in the 
PFS final rule with comment period for CY 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 BN provision. Effective July 1, 2010, section 1848(b)(4)(C) of the 
Act increased 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. Section 1848(c)(2)(B)(v)(IV) of the Act exempted the 
reduced expenditures attributable to this further change from the PFS 
BN provision.
    In the July 2009 U.S. Government Accountability Office (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 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 
procedures furnished to the same beneficiary in the same session, 
regardless of the imaging modality, and is not limited to contiguous 
body areas.
    As we noted in the CY 2011 PFS final rule with comment period (75 
FR 73228), while section 1848(c)(2)(B)(v)(VI) of the 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 BN adjustment, it does not apply to 
reduced expenditures attributable to our policy change regarding 
additional code combinations across code families (noncontiguous body 
areas) that are subject to BN under the PFS. The complete list of codes 
subject to the CY 2011 MPPR policy for diagnostic imaging services is 
included in Addendum F.
    As a further step in applying the provisions of section 
1848(c)(2)(K) of the Act, on 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. As we explained in the CY 
2011 PFS final rule with comment period (75 FR 73232), the therapy MPPR 
does not apply to contractor-priced codes, bundled codes, and add-on 
codes. The complete list of codes subject to the MPPR policy for 
therapy services is included in Addendum H.
    This MPPR for therapy services was first proposed in the CY 2011 
proposed rule (75 FR 44075) as 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 beneficiary in a 
single day. It applies to services furnished by an individual or group 
practice or ``incident to'' a physician's service. 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 beneficiary 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 (PPTRA) (Pub. L. 111-286) revised the payment reduction 
percentage from 25 percent to 20 percent for therapy services for which 
payment is made under a fee schedule under section 1848 of the Act 
(which are services furnished

[[Page 68929]]

in office settings, or non-institutional services). The payment 
reduction percentage remains at 25 percent for therapy services 
furnished in institutional settings. Section 4 of the PPTRA exempted 
the reduced expenditures attributable to the therapy MPPR policy from 
the PFS BN provision. Under our current policy as amended by the PPTRA, 
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.
    This MPPR policy applies to multiple units of the same therapy 
service, as well as to multiple different ``always therapy'' services, 
when furnished to the same beneficiary on the same day. The MPPR 
applies when multiple therapy services are billed on the same date of 
service for one beneficiary 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 
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 that are 
furnished in the office setting and paid under the PFS, as well as 
institutional services that are furnished by outpatient hospitals, home 
health agencies, comprehensive outpatient rehabilitation facilities 
(CORFs), and other entities that are paid for outpatient therapy 
services at rates based on the PFS.
    In its June 2011 Report to Congress, MedPAC highlighted continued 
growth in ancillary services subject to the in-office ancillary 
services exception. The in-office ancillary exception to the general 
prohibition under section 1877 of the Act as amended by the Ethics in 
Patient Referrals Act, also known as the Stark law, allows physicians 
to refer Medicare beneficiaries for designated health services, 
including imaging, radiation therapy, home health care, durable medical 
equipment, clinical laboratory tests, and physical therapy, to entities 
with which they have a financial relationship under specific 
conditions. MedPAC recommended that we apply a MPPR to the PC of 
diagnostic imaging services furnished by the same practitioner in the 
same session as one means to curb excess self-referral for these 
services. The GAO already had made a similar recommendation in its July 
2009 report.
    In continuing to apply the provisions of section 1848(c)(2)(K) of 
the Act regarding potentially misvalued codes that result from 
``multiple codes that are frequently billed in conjunction with 
furnishing a single service,'' in the CY 2012 final rule (76 FR 73071), 
we expanded 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 applied (see Addendum F). Thus, this 
MPPR policy now applies to the PC and the TC of certain diagnostic 
imaging codes. Specifically, we expanded the payment reduction 
currently applied to the TC to apply also to the PC of the second and 
subsequent advanced imaging services furnished by the same physician 
(or by two or more physicians in the same group practice) to the same 
beneficiary in the same session on the same day. However, in response 
to public comments, in the CY 2012 PFS final rule with comment period, 
we adopted a 25 percent payment reduction to the PC component of the 
second and subsequent imaging services.
    Under this policy, full payment is made for the PC of the highest 
paid advanced imaging service, and payment is reduced by 25 percent for 
the PC for each additional advanced imaging service furnished to the 
same beneficiary in the same session. This policy 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, but with some efficiencies in the intraservice 
period.
    This policy 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 
1848(c)(2)(K) of the Act. This policy is also consistent both with our 
longstanding policy on surgical and nuclear medicine diagnostic 
procedures, under which we apply a 50 percent payment reduction to 
second and subsequent procedures. Furthermore, it was responsive to 
continued concerns about significant growth in imaging spending, and to 
MedPAC (March 2010 and June 2011) and GAO (July 2009) recommendations 
regarding the expansion of MPPR policies under the PFS to account for 
additional efficiencies.
    In the CY 2012 proposed rule (76 FR 42812), we also invited public 
comment on the following MPPR policies under consideration. We noted 
that 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 furnished in the same session. Such an 
approach could define imaging consistent with our existing definition 
of imaging for purposes of the statutory cap on PFS 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 
when multiple services are furnished together. 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 BN 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.
    Such an 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 intraservice period, when multiple services 
are furnished together. 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 BN 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

[[Page 68930]]

encounter. 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 
when multiple services are furnished together. The approach would apply 
to approximately 700 HCPCS codes, including the approximately 560 HCPCS 
codes that are currently subject to the OPPS cap. The savings would be 
redistributed to other PFS services as required by the statutory PFS BN 
provision.
b. MPPR Policy Clarifications
(1) Apply the MPPR to Two Nuclear Medicine Procedures
    As indicated previously, effective January 1, 1995, we implemented 
an MPPR for six nuclear medicine codes. Under the current policy, full 
payment is made for the highest paid procedure, and payment is reduced 
by 50 percent for the second procedure furnished to the same 
beneficiary on the same day. As noted in the CY 2013 proposed rule (77 
FR 44748), due to a technical error, the MPPR is not being applied to 
CPT codes 78306 (Bone imaging; whole body) when followed by CPT code 
78320 (Bone imaging; SPECT). We will apply the MPPR to these procedures 
effective January 1, 2013. We received the following comment on this 
provision:
    Comment: A commenter indicated that continuing to apply and extend 
the MPPR for nuclear medicine procedures is unwarranted and 
inconsistent with CMS' aim to improve payment accuracy. The commenter 
noted that decisions made in 1995 were based on qualitative assessments 
rather than on rigorous data analysis. The commenter believes that with 
the wealth of data now available, and improved techniques in data 
analysis, careful evaluation of the applicability of the MPPR for all 
six nuclear medicine procedures is merited.
    Response: We acknowledge the commenter's concerns, but we neither 
proposed discontinuing the MPPR on nuclear medicine procedures, nor 
extending it to new codes. Rather, we noted that the MPPR under current 
policy was, for technical reasons, not being applied to CPT code 78306 
(Bone imaging; whole body) when followed by CPT code 78320 (Bone 
imaging; SPECT), and provided notification that the MPPR would be 
applied effective January 1, 2013. Accordingly, we are finalizing this 
technical correction effective for services furnished on or after 
January 1, 2013.
(2) Apply the MPPR to the PC and TC of Advanced Imaging Procedures to 
Physicians in the Same Group Practice
    As indicated in the CY 2012 final rule (76 FR 73077-73079), we 
finalized a policy to apply the MPPR to the PC and TC of the second and 
subsequent advanced imaging procedures furnished to the same 
beneficiary in the same session by a single physician or by multiple 
physicians in the same group practice. Due to operational limitations, 
we did not apply this MPPR to multiple physicians in the same group 
practice during CY 2012. In addition, after we issued the CY 2012 final 
rule with comment period, some commenters stated that they had not 
commented on the application of the MPPR to physicians in the same 
group practice because that policy was not explicit in the CY 2012 
proposed rule discussion expanding the MPPR for advanced imaging to the 
PC. As noted in the CY 2013 proposed rule (77 FR 44748), we have 
resolved the operational problems and, therefore, for services 
furnished on or after January 1, 2013 we will apply the MPPR to both 
the PC and the TC of advanced imaging procedures to multiple physicians 
in the same group practice (same group NPI). Under this policy, the 
MPPR will apply when one or more physicians in the same group practice 
furnish services to the same beneficiary, in the same session, on the 
same day. This policy is consistent with other PFS MPPR policies for 
surgical and therapy procedures and, effective January 1, 2013, for 
diagnostic cardiovascular and ophthalmology procedures. We continue to 
believe that the typical efficiencies achieved when the same physician 
is furnishing multiple procedures also accrue when different physicians 
in the same group furnish multiple procedures involving the same 
beneficiary in the same session. While we agree with commenters that 
most physicians would not change the way they practice in order to 
avoid application of the MPPR, we believe application of the imaging 
MPPR to physicians in the same group practice will ensure that there is 
no financial incentive for physicians in a group practice to change 
their behavior to split imaging interpretation services for a 
beneficiary among different physicians in the group. It is our 
intention to apply this and future MPPRs to services furnished by one 
or more physicians in the same group unless we determine for a specific 
MPPR that the efficiencies associated with an individual physician 
furnishing multiple procedures do not extend to multiple physicians in 
the same group practice. We received the following comments on this 
provision:
    Comment: Most commenters opposed applying the MPPR on diagnostic 
imaging to physicians in the same group practice, specifically to the 
PC. While many commenters acknowledged minimal efficiencies in the PC 
of second and subsequent procedures when furnished by the same 
physician, they maintained that no such efficiencies exist when 
furnished by multiple physicians.
    Commenters maintained that CMS assumes efficiencies exist, but has 
not presented any clinical evidence or comprehensive resource use 
analysis to justify claims of efficiency. Commenters do not believe 
that substantial economy of time or of effort exist. According to 
commenters, each physician who reviews a beneficiary's imaging results 
must review the beneficiary's medical history, examine the imaging 
results, make diagnoses, draft a report, and enter communications with 
other physicians in the beneficiary's medical chart. Commenters note 
that none of these actions would take less time or effort when 
performed by a second physician in the same practice. Commenters do not 
believe this proposal reflects the true costs incurred by a practice 
when multiple physicians furnish advanced imaging services to the same 
beneficiary on the same day. Another commenter noted that cognitive 
medicine, such as diagnostic imaging cannot have global efficiencies, 
as every observer needs to independently investigate, collect data, 
formulate an educated opinion, and furnish a professional assessment.
    Commenters maintained that clinical best practice dictates that the 
images are read by subspecialized, fellowship-trained radiologists, 
trained to read specific body parts. For example, they stated, 
radiologists are trained to read either breast, musculoskeletal, body, 
neurology or oncology images. Commenters indicated that the proposal 
would penalize or disincentivize practices from having the most 
appropriate radiologist read the study, which may subject beneficiaries 
to undue risks.
    Commenters also noted that beneficiaries suffering from life-
threatening conditions such as trauma, heart attacks, and cancer often 
require multiple imaging scans to accurately and fully assess extent of 
injury and monitor disease progression and/or any improvements in 
condition. This is not uncommon in an urban hospital serving high 
acuity beneficiaries. Commenters maintained that as the complexity of 
the

[[Page 68931]]

beneficiary case increases, the likelihood that multiple scans and/or 
series will be needed in a given day increases, and thus the number of 
physicians needed to review multiple scans and/or regions of the body 
in a series of scans increases, requiring a variety of sub-specialty-
trained radiologists. Commenters concluded that the amount of work in 
the form of time, effort, and skill, does not diminish in this 
situation but rather has an additive effect, reflecting the clinical 
complexity of the beneficiary situation, not a duplication of efforts.
    A commenter noted that multi-modality images on a beneficiary are 
not always interpreted at the same time or by the same physician. 
According to the commenter, the beneficiary encounter that includes 
multiple TCs is not directly related to the performance of the PCs by 
the interpreting physician(s). The commenter indicated that through the 
use of teleradiology, the interpretations often take place at separate 
locations and by separate physicians. Finally, the commenter noted that 
this process allows differently specialized radiologists to interpret 
different images.
    A commenter maintained that CMS' reliance on both the July 2009 GAO 
report and the March 2010 MedPAC report to support its MPPR policies is 
fundamentally flawed because such sources do not appear to justify the 
proposals. The commenter noted that CMS also cites the June 2011 MedPAC 
report as further support for its MPPR application to the PC of 
diagnostic imaging services furnished by the same physician in the same 
session. The commenter indicated that the report's policy 
recommendation is for a multiple procedure payment reduction to the 
professional component of diagnostic imaging services furnished by the 
same practitioner in the same session. The commenter stated that it 
could be unfair to apply the MPPR to physicians who share a practice.
    A commenter recommended that CMS focus on applying the results of 
the Medicare Imaging Demonstration, and pursuing options to encourage 
use of appropriateness criteria, as the best solution to any problems 
of under or overutilization of imaging.
    Response: The policy of applying the imaging MPPR to physicians in 
the same group practice is consistent with other MPPR policies for 
surgical procedures and therapy services, and effective January 1, 
2013, for diagnostic cardiovascular and diagnostic ophthalmology 
procedures under the PFS. We continue to believe that the typical 
efficiencies achieved when the same physician is furnishing multiple 
procedures also accrue when different physicians in the same group 
furnish multiple procedures involving the same beneficiary. We believe 
that efficiencies exist in the parts of the service that deal directly 
with patients, such as gowning and obtaining consent, as well as in the 
interpretation, where the first completed interpretation is commonly 
available to the second interpreting physician at the point of 
interpretation. Although efficiencies may be less when one physician is 
remote, we still believe that efficiencies are within the ranges that 
will typically be seen across the many varied combinations of imaging 
services subject to the MPPR.
    We disagree that radiologists are routinely trained to only read 
organ specific or technology specific images. Radiologists receive 
broad training that allows them to provide services across multiple 
technologies and organ systems. Some may choose to more narrowly focus 
their practice, but in the typical radiology practice across the 
country, many radiologists continue to provide a broad range of imaging 
interpretation services.
    We agree with the commenter that higher complexity patients may 
require multiple scans. However, we disagree that this higher 
complexity negates the efficiencies that are seen with less complex 
patients. Duplication in technical component, such as greeting and 
gowning, would continue irrespective of patient complexity. Higher 
complexity patients, receiving multiple scans, provide greater support 
for the proposed MPPR policy changes. Since interpretation of an image 
builds on the clinical framework that the radiologist(s) develops for 
each patient as she reviews each scan, we believe that interpretation 
of multiple additional scans require diminishing marginal effort.
    Finally, while we agree with commenters that most physicians would 
not change the way they practice in order to avoid application of the 
MPPR, we believe application of the imaging MPPR to physicians in the 
same group practice will ensure that there is no financial incentive 
for physicians in a group practice to change their behavior to split 
imaging interpretation services for a beneficiary among different 
physicians in the group.
    It is our intention to apply this and future MPPR policies to 
services furnished by one or more physicians in the same group. Future 
modifications may be appropriate if we collect or are provided with 
data that indicates that the efficiencies associated with an individual 
physician furnishing multiple procedures do not extend to multiple 
physicians in the same group practice.
    We disagree that we have misinterpreted GAO and MedPAC policy 
recommendations. MedPAC's June 2011 recommendation for an MPPR on the 
professional component of imaging services is silent on application to 
the group practice, but since then, MedPAC has not opposed our proposal 
to apply the MPPR on the PC and TC of diagnostic imaging to physicians 
in the same group practice. Finally, the Medicare Imaging Demonstration 
is designed to test whether the use of decision support systems can 
improve quality of care by diminishing patient exposure to potentially 
harmful radiation caused by unnecessary over-utilization of advanced 
imaging services. The 2-year demonstration has recently completed its 
first year. The demonstration is a separate initiative and does not 
specifically address MPPR policy.
    Comment: Many commenters noted that administrative considerations 
prevented us from implementing this policy effective January 1, 2012. 
Commenters indicated that we have not provided a detailed explanation 
of how such administrative concerns were rectified.
    Response: Our administrative delay in implementing the policy did 
not involve the merits of the policy but the practicality of 
implementation. Medicare contractors were unable to make the necessary 
changes to their systems to effectively operationalize the policy for 
CY 2012. The necessary system changes have now been made in order for 
this policy to be operational beginning on January 1, 2013.
    Comment: Commenters expressed concern that using the NPI to define 
a group practice may be inaccurate. Commenters indicated that some 
diagnostic imaging practice members may belong to more than one NPI 
group; whereas other practitioners may be part of a smaller NPI group 
than their corporate structure would suggest. Commenters maintained 
that attempts to apply the MPPR to physicians in the same group 
practice using the NPI could lead to unfair application simply due to 
corporate governance issues. Additionally, commenters noted that 
radiologists in a group practice may also independently contract to 
furnish outside interpretations for other groups. Finally, commenters 
indicated that reliance on the NPI in these cases may lead to confusion 
and potential compliance concerns.
    Response: We have traditionally relied on the group NPI to identify

[[Page 68932]]

services furnished in the same group practice as a basis for group 
practice-level edits across the physician fee schedule. We plan to use 
the group NPI for applying the MPPR to advanced imaging services at the 
group practice level beginning in 2013. We appreciate commenter input 
on this issue and understand that physicians do not always furnish 
services within their group practice and that the group NPI may reflect 
several different organizational arrangements. Accordingly, we intend 
to further explore the issues the commenters raised regarding use of 
the group NPI to identify services furnished in the same group 
practice. For example, we could consider using a provider Tax 
Identification Number (TIN) as an alternative to the group NPI; 
however, we would need to determine whether this would create other 
operational problems. Medicare contractors would also require adequate 
time to make the necessary systems changes. We will consider these 
issues and make any changes in future rulemaking.
    Comment: Various commenters had the following concerns about the 
definition of a ``session'' and the use of modifier 59:
     Physicians use the 59 modifier appropriately to bypass the 
MPPR when multiple services are furnished to the same beneficiary in 
separate sessions on the same day. However, the 59 modifier is also 
used for the Correct Coding Initiative (CCI) edits, creating a conflict 
between the two different uses of the modifier. For example, if an MRA 
of the head and brain are furnished to the same beneficiary on the same 
day, it may be appropriate to report modifier 59 to bypass the CCI 
edit. However, the modifier 59 may also be interpreted to bypass the 
MPPR, which would not be appropriate if the services were furnished in 
the same session. They stated that this presents a quandary for both 
radiology practices and Medicare Administrative Contractors.
     CMS has provided no guidance on what constitutes a 
separate session for professional interpretation, other than ``scans 
interpreted at widely different times,'' leaving radiology practices 
vulnerable to differing interpretations by Medicare contractors, 
including Recovery Audit Contractors.
     Whether CMS' use of the word ``encounter'' is synonymous 
with ``session.''
     Multiple physicians furnishing the PC on different studies 
to the same beneficiary on the same day should constitute separate 
sessions by definition.
     Software programs in use for medical billing do not 
adequately capture interpretation times, and therefore, do not track 
whether the PC was performed in the same or different sessions and when 
the 59 modifier is appropriate. Commenters expressed concern that they 
will not be able to routinely identify when a Medicare beneficiary has 
had multiple imaging scans on the same day, especially if reports are 
generated in different locations, by different physicians, at different 
times of day. Radiology workflow systems triage studies to subspecialty 
radiologists who each separately interpret the studies and generate 
reports. Billing systems submit separate claims for each study. If two 
physicians read studies on the same beneficiary, coders and billing 
systems will have significant difficulty attaching the 59 modifier to 
the appropriate study, even if they are able to recognize that the 59 
modifier should be applied. Hospital-based radiologists rely on data 
feeds provided by their hospitals' information systems. These data-
feeds typically include beneficiary demographic information but not 
image interpretation times. Because they are unable to track the time 
of interpretation, coders and billers will be required to re-create the 
timing of interpretative sessions to determine whether or not the 
interpretation occurred in the same session.
     Radiologists in small practices, or rural hospitals and 
imaging facilities, are more likely to have only a few radiologists in 
the office. Frequently in small practices, there will be instances 
where beneficiaries have multiple advanced imaging services that are in 
clinically separate sessions, but interpreted by the individual members 
of the same small group of radiologists. It is not clear that there 
will be a way for coders, CMS contractors and auditors to understand 
and validate that these separate encounters constitute separate 
sessions.
     Contrary to CMS' claim, commenters expect there would be 
frequent circumstances requiring the use of the 59 modifier, that is, a 
distinct procedural service.
    Response: We are aware of the conflict between use of modifier 59 
for CCI edits and for purposes of bypassing the MPPR when multiple 
procedures are furnished. We are considering creating a new modifier 
for the MPPR to resolve this problem. In creating a new MPPR modifier, 
we would refine the definition of what constitutes a session. We 
believe that radiology imaging systems currently capture the time of 
each image and that image time can be provided to the interpreting 
radiologist(s). We also believe that radiology medical record systems 
currently capture the time of each professional comment or 
interpretation, and that the interpretation of the radiologist should 
contain any clinical information necessary to identify when a separate 
session has occurred. We believe that where billing systems currently 
do not capture this information in a readily usable form, that they 
will adapt to this policy and make this necessary billing information 
readily accessible to coders. Thus, we believe that coders will be able 
to determine when a separate session has occurred and will be able to 
append a 59 modifier (or new MPPR modifier for different session) to 
the claim line when such a modifier is justified.
    Alternatively, we may consider modifying the MPPR policy to apply 
to procedures furnished on the same day, rather than in the same 
session. This would resolve some of the operational difficulties with 
the use of ``session'' and conform to the policy for all other MPPRs. 
If we were to modify this MPPR to apply to procedures furnished on the 
same day rather than in the same session, we would do so through future 
rulemaking and subject to public comment.
    Comment: Commenters indicated that applying the MPPR for the PC of 
advanced imaging procedures to physicians in the same group practice 
would result in a payment reduction that would adversely affect both 
the quality of care and access to care.
    Response: We have no evidence to suggest any adverse impacts on 
either the quality of care or the access to care have resulted from the 
implementation of the MPPR to the TC of imaging in 2006 or the PC of 
imaging in 2012. We have no evidence that beneficiaries have been 
unable to obtain needed imaging, and we will continue to monitor access 
to care. MedPAC's analysis in its June 2011 report indicates there has 
been continued high annual growth in the use of imaging through 2009. 
Further, in the absence of any evidence of inadequate access or safety 
and quality concerns, declining growth in imaging services could be 
interpreted as a return to a more appropriate level of imaging 
utilization. Based on our experience with the MPPR on both the TC and 
PC of advanced diagnostic imaging services, we have no reason to 
believe that extending the imaging MPPR to physicians in the same group 
practice will have a negative impact on quality or access to care.

[[Page 68933]]

c. Proposed MPPR for the TC of Cardiovascular and Ophthalmology 
Services
    As noted above, we continue to examine whether it would be 
appropriate to apply MPPR policies to other categories of services that 
are frequently billed together, including the TC for diagnostic 
services other than advanced imaging services. For CY 2013, we examined 
other diagnostic services to determine whether there typically are 
efficiencies in the technical component when multiple diagnostic 
services are furnished together on the same day. We have conducted an 
analysis of the most frequently furnished code combinations for all 
diagnostic services using CY 2011 claims data. Of the several areas of 
diagnostic tests that we examined, we found that billing patterns and 
PE inputs indicated that multiple cardiovascular and ophthalmology 
diagnostic procedures, respectively, are frequently furnished together 
and that there is some duplication in PE inputs when this occurs. For 
cardiovascular diagnostic services, we reviewed the code pair/
combinations with the highest utilization in the CPT code ranges of 
75600 through 75893, 78414 through 78496, and 93000 through 93990. For 
ophthalmology diagnostic services, we reviewed the code pair/
combinations with the highest utilization in the CPT code ranges of 
76510 through 76529 and 92002 through 92371. The cardiovascular and 
ophthalmology diagnostic code combinations identified as most 
frequently billed together are listed in Tables 14 and 15.
    Under the resource-based PE methodology, specific PE inputs of 
clinical labor, supplies, and equipment are used to calculate PE RVUs 
for each individual service. When multiple diagnostic tests are 
furnished to the same beneficiary on the same day, most of the clinical 
labor activities and some supplies are not furnished twice. We have 
identified the following clinical labor activities that typically would 
not be duplicated for subsequent procedures:
     Greeting and gowning the patient.
     Preparing the room, equipment and supplies.
     Education and consent.
     Completing diagnostic forms.
     Preparing charts.
     Taking history.
     Taking vitals.
     Preparing and positioning the patient.
     Cleaning the room.
     Monitoring the patient.
     Downloading, filing, identifying and storing photos
     Developing film.
     Collating data.
     Quality Assurance documentation.
     Making phone calls.
     Reviewing prior X-rays, lab and echocardiograms.
    We analyzed the CY 2011 claims data for the most frequently billed 
cardiovascular and ophthalmology diagnostic code combinations to 
determine the level of duplication present when multiple services are 
furnished to the same beneficiary on the same day. Our MPPR 
determination excludes the clinical staff minutes associated with the 
activities that are not duplicated for subsequent procedures. For 
purposes of this analysis, we retained the higher number of minutes for 
each duplicated clinical activity, regardless of the code in the pair 
with which those clinical labor minutes were associated. For example, 
if code A and B had 6 and 3 minutes, respectively, of clinical labor 
for preparing and positioning the beneficiary, we removed 3 minutes. If 
code A and B had 2 and 4 minutes, respectively, of clinical labor for 
preparing room, equipment and supplies, we removed 2 minutes. The lower 
number of minutes was removed, regardless of the code. If one code had 
no minutes for a particular clinical labor activity, then no minutes 
were removed for that activity. Equipment time and indirect costs are 
allocated based on clinical labor time; therefore, these inputs were 
reduced accordingly. While we observed that some supplies are 
duplicated, we did not factor these into our calculations because they 
were low cost and had little impact on our estimate of the level of 
duplication for each code pair.
    When we removed the PE inputs for activities that are not 
duplicated, and adjusted the equipment time and indirect costs, we 
found support for payment reductions ranging from 8 to 57 percent for 
second and subsequent cardiovascular procedures (volume-adjusted 
average reduction across all code pairs of 25 percent); and payment 
reductions ranging from 9 to 62 percent for second and subsequent 
ophthalmology procedures (volume-adjusted average reduction across all 
code pairs of 32 percent). Because we found a relatively wide range of 
reductions by code pair, we believed that an across-the-board reduction 
of 25 percent for second and subsequent procedures (which is 
approximately the average reduction supported by our analysis) would be 
appropriate. In the CY 2013 proposed rule (77 FR 44748-44752), we 
proposed to apply an MPPR to TC-only services and to the TC portion of 
global services for the procedures listed in Tables 12 and 13. The MPPR 
would apply independently to second and subsequent cardiovascular 
services and to second and subsequent ophthalmology services. We 
proposed to make full payment for the TC of the highest priced 
procedure and to make payment at 75 percent (that is, a 25 percent 
reduction) of the TC for each additional procedure furnished by the 
same physician (or physicians in the same group practice, that is, the 
same group practice NPI) to the same beneficiary on the same day. We 
did not propose to apply an MPPR to the PC for cardiovascular and 
ophthalmology services at this time.
    We believe that the proposed MPPR percentage represents an 
appropriate reduction for the typical delivery of multiple 
cardiovascular and ophthalmology services on the same day. Because the 
reduction is based on discounting the specific PE inputs that are not 
duplicated for second and subsequent services, the proposal is 
consistent with our longstanding policies on surgical, nuclear medicine 
diagnostic procedures, and advanced imaging procedures, which apply a 
50 percent reduction to second and subsequent procedures, and our more 
recent policy on therapy services, which applies a 20 or 25 percent 
reduction depending on the setting.
    Furthermore, it is consistent with section 1848(c)(2)(K) of the 
Act, which 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.
    Finally, it is responsive to continued concerns about significant 
growth in spending on imaging and other diagnostic services, and to 
MedPAC (March 2010) and GAO (July 2009) recommendations regarding the 
expansion of MPPR policies under the PFS to account for additional 
efficiencies. Savings resulting from this proposal would be 
redistributed to other PFS services as required by the general 
statutory PFS BN provision.
    In summary, we proposed that for services furnished on or after 
January 1, 2013, we will apply the MPPR to nuclear medicine procedures 
to CPT code 78306 (Bone imaging; whole body) when followed by CPT code 
78320 (Bone imaging; SPECT). We will apply the MPPR to the PC and the 
TC of advanced imaging procedures when furnished by multiple physicians 
in the same group practice (same group NPI). Therefore, the MPPR will 
apply when

[[Page 68934]]

one or more physicians in the same group practice furnish services to 
the same beneficiary, in the same session, on the same day. Finally, we 
proposed to apply an MPPR to TC-only services and to the TC portion of 
global services for diagnostic cardiovascular and ophthalmology 
procedures. The reduction would apply independently to cardiovascular 
and ophthalmology services. We proposed to make full payment for the TC 
of the highest priced procedure and payment at 75 percent of the TC for 
each additional procedure furnished by the same physician (or 
physicians in the same group practice, that is, the same group practice 
NPI) to the same beneficiary on the same day.
    The following is a summary of the comments we received on this 
proposal to apply the MPPR to diagnostic cardiovascular and 
ophthalmology procedures:
    Comment: MedPAC supported the proposal to expand the MPPR to 
cardiovascular and ophthalmology diagnostic services. Furthermore, 
MedPAC encouraged CMS to examine whether there are efficiencies in 
physician work that occur when multiple tests are furnished in the same 
session that would justify applying the MPPR to the PC of these 
services. For example, when multiple tests are performed together, 
certain physician activities (such as reviewing the beneficiary's 
medical records and discussing the findings with the referring 
physician) are likely to occur only once.
    In the PFS proposed rule for CY 2012 (76 FR 42812-42813), CMS 
solicited comments on whether the MPPR should be applied to the TC of 
all diagnostic tests, rather than just imaging procedures. In response, 
MedPAC examined Part B claims data from 2010 to look for diagnostic 
tests that are frequently furnished more than once on the same day by 
the same physician for the same beneficiary. MedPAC found that several 
surgical pathology codes are frequently billed with more than one unit 
of service on the same date. For example, one-third of the claims for 
CPT code 88305 (Level IV, surgical pathology, gross and microscopic 
examination) contained more than one unit of service for that code. In 
addition, 57 percent of the claims for CPT code 88342 
(immunohistochemistry, each antibody) contained more than one unit of 
service for that code. In these cases, it appears that multiple 
specimens from the same beneficiary were examined at the same time by 
the same pathologist. MedPAC indicated that CMS should analyze whether 
there are efficiencies in practice expense or physician work that occur 
when multiple units of the same test are performed at the same time. If 
so, MedPAC suggested that CMS should consider applying the MPPR policy 
to these services or creating bundled codes that include multiple units 
of the same test. MedPAC noted that these services account for a 
substantial and growing amount of Medicare spending. In 2010, Medicare 
spent $1.3 billion on CPT code 88305 and $241 million on CPT code 
88342.
    MedPAC noted that it has recommended expanding the MPPR to both the 
TC and PC of all imaging services to account for efficiencies in 
practice expense and physician work that occur when multiple studies 
are furnished in the same session.
    A few additional commenters either agreed with the principle of 
applying the MPPR to cardiovascular and ophthalmology services or 
concurred with our findings that efficiencies exist when multiple 
diagnostic services are furnished on the same beneficiary on the same 
day. Those commenters agreed that the application of the MPPR to the 
additional cardiovascular and ophthalmic diagnostic procedures is an 
appropriate way to recognize such efficiencies.
    Response: We appreciate the support of MedPAC and other commenters 
for our proposal to apply the MPPR to cardiovascular and ophthalmology 
services. We agree that the MPPR is an appropriate mechanism to account 
for efficiencies when multiple procedures are furnished to the same 
beneficiary on the same day in order to ensure more accurate payments.
    Comment: Most commenters opposed applying the MPPR to the TC of 
diagnostic cardiovascular and ophthalmology services. Commenters 
maintained that the assumption that there is major duplication in 
clinical labor activities is false when two studies are done in the 
same session, and especially when these services are done in separate 
sessions on the same day. Commenters stated that CMS' methodology of 
eliminating the smaller number of minutes assigned to one code in the 
frequently performed together code pairs for clinical staff and 
equipment is not appropriate for pairs of services that are: (1) 
Furnished by different types of clinical staff, with different 
expertise and training (for example, radiology technologists and 
sonographers); (2) furnished in different types of rooms (for example, 
angiography suites and vascular ultrasound lab rooms); and (3) stocked 
with unique equipment. According to commenters, many of the clinical 
labor activities considered redundant are performed multiple times, at 
different times of day, and in different rooms.
    As examples, commenters referenced the sample payment reduction 
calculations in the proposed rule for cardiovascular and ophthalmology 
services. Concerning CPT code 93306 (transthoracic echocardiography) 
and CPT code 78452 (myocardial perfusion single-photon emission 
computed tomography (SPECT)), commenters noted that different 
physicians, each supported by separately specialized clinical staff 
perform the service in different rooms on two different types of 
equipment.
    Commenters indicated that clinical teams for each test 
independently greet and gown the patient, provide education, obtain 
consent, review previous exam results and studies and position the 
patient for the test. Commenters noted that the patient is positioned 
multiple times on different exam tables. According to commenters, two 
different clinical staff will independently review prior x-ray, 
laboratory, echocardiography studies, and other studies. Also, separate 
notes are made in the patient's records, different diagnostic forms are 
completed, and different quality assurance regulatory compliance 
information must be documented for each test. Commenters noted that two 
different rooms with different specialized equipment in two different 
parts of the facility are prepared and cleaned for the two unique and 
different services. Finally, two different machines are utilized by two 
differently credentialed support staff to acquire independent and 
unrelated clinical testing data.
    Concerning CPT code 92235 (Fluorescein Angiography) and CPT code 
92250 (Fundus Photography), commenters maintained that the proposal was 
based on an erroneous understanding of how services vary. Commenters 
noted that ophthalmic diagnostic tests are not equivalent to x-ray or 
fluoroscopic imaging, where the technician simply repositions the same 
device over a nearby area of the patient's body. Commenters noted that 
ophthalmic diagnostic tests range from imaging to psychophysical tests 
using a number of different technologies and instruments that require 
patient participation by responding to various stimuli to achieve an 
objective functional measurement of the anatomical structures within 
the eye. For such tests the patient must be taken to a second 
instrument and positioned, substantially reducing any redundancy in 
direct practice expenses.

[[Page 68935]]

    Another commenter indicated that visual field testing equipment, 
and other eye diagnostic equipment, do not share interfaces, space or 
patient information. The commenter noted that each machine requires 
independent input from the testing technician; including patient name, 
date, birth date, verification of the eye being tested, and there is no 
shared registration of data between the two services.
    According to the commenter, visual field testing requires a 
dedicated space and is typically not performed at the same time as 
other diagnostic tests. Patients need a quiet area away from other 
testing and patients to complete the test. Both eyes are tested, each 
with their own input and varying lenses that must be inserted into the 
equipment. The commenter maintained that these tests require 
substantial clinical staff time, patient instruction and interaction. 
Ophthalmology patients are typically elderly, often visually impaired 
and in need of mobility and positioning assistance in order to perform 
diagnostic eye testing. Finally, the commenter highlighted that the AMA 
RUC recently removed clinical staff time from some of the codes 
reviewed in our analysis.
    Commenters disagreed that diagnostic test resource utilization for 
multiple diagnostic tests is comparable to those required for multiple 
surgeries. Commenters noted that surgical procedures generally have a 
90-day global period where more than 50 percent of the payment is 
related to postoperative care. Commenters also noted that in large 
multi-specialty practice, technical resources are located in different 
physical locations.
    Commenters recommended that CMS conduct its study with a new 
methodology that takes into account both the frequency and the 
different types of clinical staff, and the different types of rooms 
involved in the services that are performed together on the same day.
    Finally, commenters noted that CMS' own analysis reveals payment 
reductions as low as 8 percent, indicating that a payment reduction of 
25 percent would be excessive for some of these services. A commenter 
expressed concern that taking this ``average'' approach would have the 
effect of discouraging cardiologists and ophthalmologists from 
performing certain low overhead diagnostic procedures as the payment 
will be far less than the practice costs. The commenter suggested that 
in previous cases the identified savings were closer to the mean on 
average and would not result in such dramatic effects. Other commenters 
recommended that the MPPR reduction percentage should be code-specific 
up to a maximum reduction of 25 percent.
    Response: We appreciate the many comments submitted on this 
proposal. However, we disagree with commenters' statements that there 
are minimal or no efficiencies in the TC of diagnostic cardiovascular 
and ophthalmology services.
    Concerning CPT code 93306 (transthoracic echocardiography) and CPT 
code 78452 (myocardial perfusion single-photon emission computed 
tomography (SPECT)) referenced by commenters, we agree that some 
cardiovascular centers might choose to employ two differently 
specialized technicians; that is, nuclear medicine and 
echocardiography; to allow two different clinical staff to 
independently perform the studies; and to locate the different 
specialized equipment in two different parts of the practice. However, 
we continue to believe that is not the typical cardiovascular center or 
practice. We believe that the typical cardiovascular center performing 
these diagnostic tests commonly cross-train technicians to perform both 
procedures and that a single cardiologist often performs both tests for 
a single patient. In addition, we continue to believe that much of the 
pre-service work such as greeting and gowning the patient and reviewing 
medical records and previous images is redundant. We believe that some 
of the equipment used in the top code pairs is portable and can be used 
in the treatment room or other diagnostic room. We also do not believe 
that multiple rooms dedicated to individual testing equipment is 
typical such that room preparation, greeting and gowning, and cleaning 
the room are never duplicated. Overall, commenters provided general 
descriptions of practices using multiple rooms and technicians to 
furnish these services, without sufficient information supporting a 
multiple room, dedicated clinical labor model as typical outside the 
facility setting. We would review generalizable, robust data 
demonstrating that an extensive practice model of multiple rooms 
dedicated to individual tests and distinct dedicated technicians 
trained is typical practice.
    Concerning CPT code 92235 (Fluorescein Angiography) and CPT code 
92250 (Fundus Photography), we acknowledge that these tests are not 
equivalent to other imaging procedures. However, we believe there are 
still efficiencies when furnished to the same patient due to some 
duplication of clinical labor. Concerning visual field testing, we 
agree that this is an interactive test, requiring the technician to 
teach the patient how to perform the test; however, the most intense 
instruction only occurs the first time a patient has visual field 
testing. Although not considered in our analysis, we also note that 
once a patient is diagnosed with glaucoma the patient usually undergo 
visual field testing for the rest of their life, and their familiarity 
with the test reduces the clinical labor associated with providing this 
service overtime. As for the other ophthalmology tests, we understand 
them to be mostly passive with minimal patient instruction.
    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 of the same type 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 diagnostic services, establishing new 
combined codes for each combination of advanced imaging scans is 
unwieldy and impractical. An MPPR policy reflects efficiencies in the 
aggregate, such as common patient history, application of multiple 
tests to the same anatomical structures by the same clinical labor, 
frequently with the same modality, for the same patient.
    As previously noted, we found support for payment reductions 
ranging from 8 to 57 percent for second and subsequent cardiovascular 
procedures (volume-adjusted average reduction across all code pairs of 
25 percent); and payment reductions ranging from 9 to 62 percent for 
second and subsequent ophthalmology procedures (volume-adjusted average 
reduction across all code pairs of 32 percent). Based on this analysis, 
and because we found a relatively wide range of reductions by code 
pair, we believed that an across-the-board reduction of 25 percent for 
second and subsequent procedures, which is approximately the average 
reduction supported by our analysis, would be appropriate. Based on 
subsequent public comments, we have conducted additional analysis on 
ophthalmology code pairs discussed below. In response to comment that 
this MPPR application to ophthalmic and cardiovascular diagnostic 
testing is not the same as the MPPR for global surgery,

[[Page 68936]]

we agree. We have provided our analysis for why we proposed a 25 
percent reduction on second and subsequent diagnostic tests rather than 
a 50 percent reduction. 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.
    Comment: A commenter noted that several ophthalmology codes 
included in our analysis have been reviewed by the AMA RUC within the 
last year, which resulted in the recommended removal of several minutes 
of clinical staff time for activities that the AMA RUC determined are 
also included within an accompanying office visit code. The commenter 
indicated that CMS' acceptance of the AMA RUC recommendation, as well 
as applying the MPPR, would effectively double the practice expense 
reductions. The codes reviewed by the AMA RUC for CY 2013 were: CPT 
codes 92081-92083 (Visual field examinations), CPT code 92235 
(Fluorescein angiography) and CPT code 92286 (Internal eye 
photography). As discussed above, commenters noted that visual field 
testing equipment and other eye diagnostic equipment do not share 
interfaces, space or patient information, that there is no shared 
information with other tests, that the tests required separate staff 
time and clinical instruction, and that visual field testing happens in 
a dedicated space away from other testing.
    The commenter requested that any ophthalmic tests that had their 
time reduced because of duplication with an office visit should be 
removed from the list of codes subject to the MPPR. Specifically, the 
commenter requested that the three visual field tests CPT codes 92081, 
92082 and 92083 and CPT code 92235 (Fluorescein angiography) and CPT 
code 92286 (Internal eye photography) for which minutes were reduced 
that were not reflected in the CMS analysis should be removed from the 
list. Additionally, the commenter indicated that CPT codes 92133, 92134 
and 92285 all had their clinical staff labor times previously reduced 
during the AMA RUC consideration and should not be included in the 
MPPR.
    Commenters also expressed concern about CPT codes that have 
recently been reviewed or are in the process of being reviewed under 
the various misvalued services screens. Commenters noted that these 
codes have already been subjected to a process where duplicative 
minutes have been reduced. Therefore, they requested that any codes for 
procedures where the AMA RUC has reviewed the PE inputs in the last 2 
years be removed from this proposed list of services.
    Response: Our original proposed rule analysis for the subject 
ophthalmology codes was based on the latest AMA RUC PE worksheets 
available at that time. The PE worksheets are the basis for the direct 
practice expense inputs used in the PE methodology. They delineate 
minutes of the clinical staff time, equipment, and supplies for each 
clinical labor activity, for each CPT code. We subsequently reviewed 
the CY 2013 PE worksheets for the subject codes, which appeared in many 
of the ophthalmology code combinations reviewed. The AMA RUC did not 
reduce clinical labor minutes for CY 2013 for two of the reviewed code 
pairs (76514 with 92286 and 92081 with 92285). The most significant 
change in clinical labor activities for the other reviewed code pairs 
was the reduction of time for preparing and positioning the patient 
from either 7 or 10 minutes to 2 minutes. Because we never reduced this 
activity by more than 2 minutes, the AMA RUC changes to this clinical 
labor activity had no effect on our calculation. In all cases, the 
subject codes are the highest paid codes in the code combination. The 
payment reductions range from 9 to 62 percent for second and subsequent 
ophthalmology procedures, noted in the proposed rule, remains 
unchanged. However, the volume-adjusted average reduction across all 
code pairs, originally calculated at 32 percent is revised to 22 
percent.
    We disagree that recently reviewed codes should be exempt from the 
MPPR. However, we agree that the analysis establishing an MPPR should 
be based on the most current practice expense data available, and that 
the recent clinical labor reductions made to the subject codes should 
be taken into account. Therefore, based on our revised analysis, we are 
reducing the final MPPR on ophthalmology services from 25 percent to 20 
percent to more accurately reflect the new data.
    Comment: Commenters expressed concern about the lack of 
transparency in the methodology and data sets used to develop the 
proposed MPPR. Commenters noted that CMS did not post basic data files 
on its Web site until August 10, 2012, less than 30 calendar days from 
the comment deadline. Commenters also indicated that the posted data 
did not enable them to understand the cuts or replicate the data used 
to form the basis of the proposed MPPR. Commenters believed that this 
unfairly hampered their ability to fully analyze the proposal. 
Commenters urged us not to implement this proposed policy until full 
access to the data used to develop the policy is provided.
    Response: We have provided full access to the data that we used to 
develop the policy. We have listed every code pair reviewed and every 
clinical labor activity considered for duplication. In addition, we 
provided a description of how the analysis was conducted, the range of 
reductions found and the adjusted average reduction determined for 
cardiovascular and ophthalmology services. We acknowledge that the PE 
worksheets were not made available simultaneously with the publication 
of the proposed rule. Upon receiving requests from various specialty 
groups to supplement the information we provided in the proposed rule, 
we posted the PE worksheets used in the analysis on our Web site. We 
posted these data in August 2012, approximately one month before the 
comment period ended. We believe the information provided in the 
proposed rule would have been sufficient to permit full consideration 
of our proposed policy, but agreed to provide greater detail to assist 
commenters in further evaluating the proposal.
    Comment: Commenters indicated that we stated in the proposed rule 
that the code pairs published the MPPR analysis are frequently billed 
together. However, the AMA RUC determined that only four of the 
cardiology pairs (CPT codes 93320-93325, 93320-93351, 93965-93970 and 
78452TC-93017), and only one ophthalmology code pair (CPT codes 92235 
and 92250), are typically reported together on the same date of 
service. Commenters stated that the computerized ophthalmic diagnostic 
imaging codes (92133 and 923134) were created in 2011 and were not 
included in this analysis.
    Commenters further noted that every other code pair is reported 
together at or below 40 percent of the time, with over half below 20 
percent. They stated that not only are these services not commonly 
billed together, they are not performed on contiguous body parts and 
are not always performed on the same type of equipment or even in the 
same room. Further, the services would sometimes be performed by 
different physicians in the same group practice.
    In addition, commenters indicated that a broader analysis of the 
claims data for all the analyzed codes pairs for cardiovascular and 
ophthalmology suggest that only roughly four percent of the code 
combinations are typically performed together on the same date of 
service. Given that these services are rarely performed on the same day

[[Page 68937]]

together, it is unreasonable to assume there would be efficiencies 
gained when these services are performed together.
    Commenters maintained that efficiencies in practice expense are 
potentially created only when the two services are similar, use the 
same instrument, and are commonly performed together. Commenters 
indicated, however, that for more low-volume code pairs, the practice 
will not have the same level of familiarity, including the office 
equipment set up, to conduct these services. Commenters further noted 
that the differences between these services are such that even if all 
these services were commonly billed together, physician staff could not 
provide noticeable efficiencies.
    Response: In the CY 2013 proposed rule (77 FR 44748), we indicated 
that we analyzed the CY 2011 claims data for the most frequently billed 
cardiovascular and ophthalmology diagnostic code combinations to 
determine the level of duplication present when multiple services are 
furnished to the same patient on the same day. For cardiovascular 
diagnostic services, we reviewed the code pair/combinations with the 
highest utilization in code ranges 75600 through 75893, 78414 through 
78496, and 93000 through 93990. For ophthalmology diagnostic services, 
we reviewed the code pair/combinations with the highest utilization in 
code ranges 76510 through 76529 and 92002 through 92371.
    The frequency of code combinations reviewed for cardiovascular 
services ranged from 260 to 207,573 and for ophthalmology services from 
4,193 to 553,502. Although utilization was low for some code 
combinations reviewed, we examined the top highest frequency code 
combinations for each of the five code groups examined (three for 
cardiovascular and two for ophthalmology). The frequency with which a 
code combination is furnished does not diminish the potential 
efficiencies in clinical labor activities that will occur when that 
code combination is furnished. All MPPR policies (surgery, diagnostic 
imaging and therapy) apply to all code combinations of procedures 
subject to the policy, regardless of the frequency that the code 
combination was furnished. Therefore, we believe it is appropriate to 
apply the MPPR regardless of the frequency which the code combination 
is billed. Applying the MPPR to code combinations furnished 
infrequently will have a minimal effect on overall payments for imaging 
services. Finally, we based our final recommended percent reduction on 
the volume-adjusted average reduction observed in our code pair 
analysis, which ensures that when the MPPR is applied, the reduction 
adjustment is more likely to reflect the actual reduction for the code 
pair. MPPR policies have been consistently applied to all multiple 
procedures and are not restricted to those with the highest frequency 
of billings.
    Comment: Commenters noted that the MPPR is partly designed to 
address the growth in imaging and diagnostic services, as noted by 
MedPAC. Commenters further noted that in recent years the rate of 
imaging growth for both Medicare and private payor patients has slowed 
considerably, and concluded that additional payment reductions are 
unwarranted and unnecessary. Commenters cited an article in the August 
2012 issue of Health Affairs further confirming this trend, noting that 
the growth rate of advanced diagnostic imaging slowed to single digits 
beginning in 2006. The study concluded that the use of MRI in Medicare 
slowed to an average 2.6 percent annual growth rate from 2006-2009. In 
addition, commenters maintained that 2008 and 2009 data from MedPAC and 
the AMA demonstrate that the rate of volume growth for diagnostic 
imaging services overall is now generally lower than the rate of growth 
for all other physicians' services. Commenters further maintained that 
the volume of all physicians' services grew by 3.6 percent in 2008 and 
2009 while the volume of diagnostic imaging services rose by 3.3 
percent in 2008 and 2.2 percent in 2009.
    Another commenter noted that ultrasound services have never 
experienced rapid growth, but rather, have experienced only moderate 
growth. The commenter cited GAO's September 2008 report to Congress 
that found that after the implementation of DRA cap, which for vascular 
ultrasound services resulted in reductions of greater than 40 percent, 
the disparity in utilization between ultrasound and expensive, advanced 
imaging modalities continued to grow. The commenter noted that this is 
reflected by the Congressional Budget Office's (CBO) December 2008 
recommendations to Congress in which it excluded ultrasound and other 
inexpensive imaging modalities from its policy recommendations on 
advanced imaging services. Commenters concluded that imaging has 
absorbed numerous payment reductions and that it is illogical to target 
procedures for reduction that do not demonstrate a pattern of rapid 
growth.
    Response: MedPAC's analysis in its June 2011 report indicates there 
has been continued annual growth in the use of imaging. While overall 
growth may be lower than it was in the last decade, declining growth in 
imaging services could be interpreted as a return to a more appropriate 
level of imaging utilization without any accompanying evidence of 
inadequate access or safety and quality concerns. As indicated 
previously, MedPAC has expressed support for the MPPR on diagnostic 
cardiovascular and ophthalmology services.
    Comment: A commenter noted that many of the code pair combinations 
identified by CMS for the MPPR on cardiovascular services are not 
cardiovascular services, specifically, CPT 75600-75893, 78414-78496, 
and 93000-93990. The commenter further noted that it is highly unlikely 
that these codes would be furnished to the same patient on the same day 
by the same physician. For example, the AMA RUC database indicates CPT 
code 93980 for penile vascular study was provided by cardiologists less 
than 1 percent of the time to Medicare patients in 2011. The commenter 
did not recommend removing the codes from the MPPR list because their 
presence produces no impact. However, the commenter indicated that the 
inclusion of codes unrelated to cardiovascular creates doubts about the 
thoroughness and validity of the analysis underlying the proposal.
    Response: In reviewing the group of codes that we refer to as 
cardiovascular services, we looked at services involving the heart and 
vessels, regardless of the specialty that furnishes them. For example, 
penile vascular services are vascular services. Whereas we would not 
expect a urologist to perform trans-esophageal echoes, nor would we 
expect a cardiologist to perform penile studies, we would not be 
surprised to find some generalists, or even general vascular surgeons, 
evaluating the penile vasculature along with, for example, the 
vasculature of the lower extremities. And even if, as the commenter 
suggested, it would be unlikely for certain codes to be billed by the 
same physician on the same day, then the MPPR simply would not apply.
    Comment: Commenters questioned how the MPPR on cardiovascular 
services would apply to remote monitoring CPT codes 93279-93296. 
Specifically, they indicated that it is unclear whether the date of 
service is: (1) The day the patient transmits their data; (2) the day 
the data is received in the physician's office for technician review, 
technical support and

[[Page 68938]]

distribution of results; or (3) the day the physician reviews the data; 
all of which may represent different dates of service. The commenters 
indicated that because there is no specific identification of the date 
of service within the CPT description, applying the MPPR is likely to 
create confusion among physicians. Commenters recommended that we 
either remove these codes from the list subject to the MPPR or issue 
instructions that specifically indicate how dates of service within the 
90-day monitoring period should be addressed.
    Another commenter noted that CPT codes 93293 (Transtelephonic 
rhythm strip pacemaker evaluation(s) single, dual, or multiple lead 
pacemaker system, includes recording with and without magnet 
application with analysis, review and report(s) by a physician or other 
qualified health care professional, up to 90 days), 93296 
(Interrogation device evaluation(s) (remote), up to 90 days; single, 
dual, or multiple lead pacemaker system or implantable cardioverter-
defibrillator system, remote data acquisition(s), receipt of 
transmissions and technician review, technical support and distribution 
of results), and 93299 (Interrogation device evaluation(s), (remote) up 
to 30 days; implantable cardiovascular monitor system or implantable 
loop recorder system, remote data acquisition(s), receipt of 
transmissions and technician review, technical support and distribution 
of results) describe the TC for remote interrogation of the devices, 
meaning that the patient is not physically present when the service is 
furnished. The commenter questioned how it is possible for efficiencies 
to exist in the rare circumstance these services were furnished on the 
same date as a cardiovascular diagnostic service. The commenter 
indicated that the inclusion of these codes demonstrates a lack of 
understanding of how diagnostic services are furnished to 
beneficiaries.
    Response: The appropriate date of service used to bill codes 
subject to the MPPR is the same as required by Medicare billing 
instructions. We note that codes in the range of CPT codes 92293 
through 92299 should be consistently treated regarding application of 
the MPPR. Since we did not propose to include all codes in this range 
for the MPPR, we have removed remote monitoring codes CPT codes 93293 
and 93296 from the list of procedures subject to the MPPR. We note that 
CPT code 93299 was not on the proposed list.
    Comment: A commenter noted that diagnostic ultrasound offers a 
number of important advantages compared to CT and MRI, in terms of 
safety and effectiveness. For example, ultrasound is non-invasive and 
offers real-time imaging, allowing for examinations of structures at 
rest and in motion and does not use ionizing radiation. Although not 
always a good substitute for other advanced imaging modalities, 
ultrasound is an effective diagnostic tool in many cases.
    The commenter further noted that, due to the relatively low payment 
rates for ultrasound procedures, they are one of the most cost-
effective diagnostic imaging modalities. The commenter indicated that 
analyses performed by GAO in 2008 and others have shown that lower cost 
imaging modalities such as ultrasound have declined in use relative to 
more expensive imaging modalities, negatively impacting the quality and 
cost of their health care.
    The commenter concluded that payment reductions to ultrasound 
services have threatened the ability to furnish such services. 
Therefore, the commenter requested removal of all ultrasound procedures 
from the list of procedures subject to the MPPR on cardiovascular 
services.
    Another commenter noted that the June 2011 MedPAC report focused on 
advanced diagnostic imaging services and supported increasing, rather 
than decreasing, the payments for ultrasound services. The commenter 
indicated that the report suggests reforming the Medicare fee-for-
service system to encourage the use of high-value services and 
discourage the use of low-value services. In describing what is meant 
by low-valued services, MedPAC points to situations where two services 
may be equally safe and effective, yet one is more expensive than the 
other. The commenter indicates that this is the situation with 
ultrasound as compared to other, more expensive imaging services. 
Finally, the commenter noted that the report suggested that services 
that can potentially harm patients, for example, overexposure to 
radiation, should be considered low-value. The commenter indicates that 
ultrasound, which is non-ionizing, poses less risk to patients than 
other modalities.
    Response: The MPPR on diagnostic imaging procedures has included 
CT, MRI and ultrasound since 2006. MedPAC, as noted in its comment 
above, has supported our previous MPPR proposals and has not 
recommended excluding ultrasound from MPPR on diagnostic cardiovascular 
and ophthalmology services. MPPR policies are resource-based. MPPR 
policies for the TC reduce payment in situations where there is overlap 
in resources employed in the delivery of multiple services, with 
comparable practice expense inputs, when those resources are only 
employed once. We do not apply the MPPR to ultrasound used in place of 
other modalities, only when it is used in addition to, other modalities 
in the same session. We do not expect the MPPR to encourage 
radiologists to forego ultrasound imaging in favor of advanced imaging 
modalities.
    Comment: Commenters noted that the AMA RUC and the CPT Editorial 
Panels have been working to combine services frequently billed together 
into comprehensive codes and to remove overlapping physicians' services 
from the payment rates. Commenters indicated that the effort to combine 
codes and reduce payment for duplicate services has been accelerated by 
CMS after the threshold for analyzing services billed together was 
reduced from 95 percent to 75 percent overlap.
    Commenters urged CMS to be mindful of this work and to fully take 
into account the AMA RUC review of the code pairs. Commenters found it 
contradictory for CMS to utilize the AMA RUC process and accept the PE 
payment principle, only to disregard the methodology in applying an 
MPPR; and suggested that duplication of work in services performed on 
the same date of service should be addressed at the individual code 
level rather than through an MPPR.
    Another commenter recommended that CMS ask the AMA RUC to review 
the codes and make code-specific recommendations and claimed that 
implementing payment reductions that are not specific does a disservice 
to the entire AMA RUC process and all of the physicians who are paid 
under the PFS.
    Commenters disputed the assumption that an MPPR is a valid and 
accurate mechanism to value services when performed on the same date of 
service. Commenters indicated that, historically, the AMA RUC has 
recognized that efficiencies can be gained when services are commonly 
performed by the same physician on the same date of service, but only 
when explicit criteria are met. The commenters indicated that the 
proposal fails to meet these criteria because the services are not 
commonly billed together, are not analogous services performed on 
contiguous body parts, and applies to both individual physicians and 
physicians in the same group practice.
    Commenters maintained that the vague justification for selecting 
particular codes in the CY 2013 rule stands in stark contrast to the 
AMA RUC. According to commenters, the AMA RUC process set a clear and

[[Page 68939]]

distinct threshold for analyzing codes billed together, that is, 75 
percent of the time. In contrast, according to commenters, the proposal 
fails to define ``frequently billed'' thus creating a substantial 
barrier to a clear comprehension of the MPPR expansion.
    Response: As we have indicated previously (76 FR 73077-73078), the 
MPPR is not intended to supersede the AMA RUC process of developing 
recommended values for services described by CPT codes. We continue to 
appreciate the work done by the AMA RUC and encourage the AMA RUC 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. 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 to the combined services. At the same time, the 
adoption of the MPPR for the TC of diagnostic cardiovascular and 
ophthalmology services will address duplications in the PE to ensure 
that Medicare payment for multiple diagnostic services better reflects 
the resources involved in providing those services.
    As noted previously, although less precise than creating new 
comprehensive codes to capture each unique combination of diagnostic 
services that could be performed together, we believe that an MPPR 
policy appropriately addresses efficiencies present when multiple 
diagnostic services are furnished together. Moreover, we believe it 
would be unwieldy and impractical to develop unique codes and values 
for the myriad of procedure combinations that could be furnished 
together. In addition, we believe that the expansion of the MPPR policy 
to the TC of diagnostic cardiovascular and ophthalmology services is 
consistent with both the GAO and MedPAC recommendations. Finally, we 
already have discussed information on the determination of frequently 
billed services in response to comments on this rule concerning the 
most frequently billed cardiovascular and ophthalmology diagnostic code 
combinations used in our analysis.
    Comment: A commenter indicated that the statutory authority cited 
by CMS for the proposed MPPR expansion and new MPPR policy only grants 
CMS the authority to modify the reimbursement for ``codes'' and does 
not provide CMS with the authority to implement multiple service 
reductions. The commenter maintains that Congress bestowed CMS with 
specific and limited authority to implement multiple service reductions 
in another part of the Act and that this confirms that Congress did not 
intend to provide the authority that CMS claims under the 
``misevaluation'' clause. The commenter stated that the misvalued codes 
section of the Act that addresses multiple services frequently billed 
together as potentially misvalued does not give CMS the authority to 
implement either of its proposed MPPR policies. The commenter did not 
believe that the codes are ``misvalued'' within the meaning of the 
statutory provision CMS cites, and maintains that CMS has effectively 
conceded this point, as it continues to use the existing relative value 
units (RVUs) for single services. The commenter maintains that CMS is 
not contending that the activities and items described in the RVUs are 
not, in fact, part of the service; but rather, CMS is attempting to 
effectively reset the conversion factor based on its assumption that 
costs can be saved in multiple procedure scenarios, but the statute 
does not permit CMS to institute multiple conversion factors. Another 
commenter merely suggested that there was inadequate legal basis for 
the proposal.
    Another commenter noted that payment rates for x-rays under the 
OPPS are significantly higher than payment rates under the PFS. The 
commenter indicated that application of the MPPR in a non-hospital 
setting will cause procedures to shift to the hospital setting. The 
commenter recommended paying the lower of (1) full payment under the 
OPPS rate for procedure with the higher fee, and 50 percent of the OPPS 
rate for the second procedure, or (2) full payment for both procedures 
under the PFS.
    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, especially given our authority to adopt 
ancillary policies under section 1848(c)(4). We also note that we have 
had several MPPR policies in place for many years before the enactment 
of section 1848(c)(2)(K) of the 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.'' Although some code pair combinations will occur 
infrequently, the codes subject to the MPPR are frequently found in 
groups of multiple codes that are billed in conjunction with furnishing 
a single service. Section 1848(c)(2)(K)(ii) of the Act specifies that 
we should examine not only individual codes, but also families of 
codes. We believe the MPPR policy contributes to fulfilling our 
statutory obligations under section 1848(c) of the Act by more 
appropriately valuing combinations of imaging services furnished to 
patients and paid under the PFS.
    As previously noted, Medicare has a long-standing policy of 
applying an MPPR to surgical procedures. While the various MPPRs have 
been adopted through notice and comment rulemaking as administrative 
actions, the Congress has acknowledged our authority to adopt MPPRs by 
directly modifying several of them, and by exempting the payment 
changes relating to several others from budget neutrality adjustment 
under the PFS. For example, section 5102(a) of the DRA exempted from 
the PFS budget neutrality adjustment the changes in expenditures 
resulting from the MPPR on the TC of diagnostic imaging. Section 
3135(b) of the Affordable Care Act increased the MPPR reduction 
percentage on the TC of diagnostic imaging from 25 to 50 percent. 
Sections 3 and 4 of the PPATRA decreased the MPPR reduction percentage 
on the PE of therapy services from 25 to 20 percent for therapy 
services furnished in office settings, and exempted from budget 
neutrality the change in expenditures resulting from the MPPR on 
therapy services from budget neutrality.
    We appreciate the commenter's suggestions concerning alternate 
payment methodologies, that is, payments based on the OPPS rate, and we 
will consider them further for possible rulemaking in the future.
    Comment: A commenter noted that the proposed list of cardiovascular 
procedures subject to the MPPR did not include the global services that 
have different procedure codes than the corresponding technical 
services, which are on the list. The commenter specifically mentioned 
CPT codes 93005, 93016, 93040, and 93224, representing global services 
for electrocardiograms, cardiac stress tests, rhythm 
electrocardiograms, and Holter monitors, respectively. Lastly, the 
commenter noted that, because such codes were not proposed for 
inclusion

[[Page 68940]]

in the MPPR, it would violate the Administrative Procedure Act to 
subject them to the MPPR through this final rule.
    Response: The commenter is correct that we had not specifically 
identified global services that have different CPT codes than the 
corresponding TC on the proposed cardiovascular MPPR code list. 
However, we indicated in the proposed rule (77 FR 44749) that the MPPR 
applies to TC services and the TC of global services. As such, it is 
consistent with the proposed policy (which we are finalizing in this 
final rule with comment period as described here), and not inconsistent 
with the Administrative Procedure Act, to include these codes on the 
list of codes to which the MPPR will apply. In response to the comment, 
we have added the following global services to the cardiovascular MPPR 
list: CPT code 93000 (Electrocardiogram complete); CPT code 93015 
(Cardiovascular stress test); CPT code 93040 (Rhythm ECG with report); 
CPT code 93224 (Ecg monit/reprt up to 48 hrs); CPT code 93268 (ECG 
record/review); and CPT code 93784 (Ambulatory BP monitoring). The 
technical portion(s) of such codes will be subject to the MPPR. We note 
that CPT code 93005 (Electrocardiogram tracing) is a TC service already 
on the list, and CPT code 93016 (Cardiovascular stress test) is a PC 
service not subject to the MPPR.
    Comment: Several commenters noted that the following add-on codes 
were included on the list of procedures subject to the MPPR on 
cardiovascular procedures: CPT code 75774 (Artery x-ray each vessel); 
CPT code 78496 (Heart first pass add-on); CPT code 93320 (Doppler echo 
exam heart); CPT code 93321 (Doppler echo exam heart); and CPT code 
93325 (Doppler color flow add-on). Commenters indicated that such codes 
have already been valued to reflect efficiencies.
    Response: We agree that these codes should not be subject to the 
MMPR and have removed them from the list. While three of these codes 
were included in our analysis, their inclusion had no effect on the 
results. For example, CPT codes 93320 and 93325 contain none of the 
clinical labor activities that might be duplicated. While duplicated 
clinical labor was noted in the code combinations including CPT code 
77774, it affected neither the payment reduction range of 8 to 57 
percent for second and subsequent procedures, nor, due to the extremely 
low utilization, the volume-adjusted average reduction across all code 
pairs of 25 percent.
    Comment: Commenters noted that it was unclear exactly how we 
adjusted the equipment minutes in calculating the MPPR reduction and 
requested additional details.
    Response: In general, the minutes allocated to particular direct PE 
equipment items are based on the amount of time clinical labor would 
use the equipment for a typical service. When the clinical labor 
minutes were reduced in our analysis, and those minutes had been used 
to allocate minutes to the equipment, we made corresponding reductions 
to the equipment minutes so that the equipment minutes matched the 
adjusted clinical labor times.
    Comment: One commenter expressed concern that because pediatric 
cardiologists assess multiple aspects of a patient's cardiovascular 
status, the MPPR on cardiovascular services has an unjust impact on 
pediatric cardiology practices in the diagnosis and treatment of 
congenital heart diseases. The commenter noted that the functional and 
structural assessment of these multiple aspects requires the pediatric 
cardiologist to perform multiple procedures on the pediatric patient. 
It also requires special training and more time than a non-congenital 
adult assessment. According to the commenter, an echocardiogram 
performed to evaluate for congenital heart disease includes multiple 
types of different procedures/assessments which require a unique level 
of skill, training, and time when compared to the adult non-congenital 
assessment.
    The commenter urged us to exclude the following codes from the MPPR 
on cardiovascular services: CPT codes 93303 and 93304 (Congenital 
transthoracic echocardiography); CPT code 93308 (Limited non-congenital 
code used for follow-up studies); and CPT codes 93320, 93321 and 93325 
(Spectral and Color Doppler). The commenter maintained that excluding 
these codes would have no demonstrable effect on Medicare utilization 
of cardiology services since cardiologists treating adult patients 
rarely bill the congenital echocardiography codes to Medicare. The 
commenter noted that because most adult non-congenital transthoracic 
echocardiography studies that are billed to Medicare have been bundled 
into CPT code 93306 (including non-congenital echocardiography CPT 
codes 93307, 93320 and 93325), the significant decrease in payment for 
the subject codes would disproportionately impact pediatric 
cardiologists.
    The commenter further noted that state Medicaid agencies and 
private sector health insurance payors use Medicare guidelines and RVU 
valuations to establish their own payment protocols. Therefore, the 
repercussions of these reductions will extend across all payor sources 
for pediatric cardiology practices and have a materially significant 
impact on the financial viability of many practices. Finally, the 
commenter indicated that the inclusion of the subject codes in the 
proposed MPPR would exacerbate the current shortage of available 
fellowship positions that recruit medical residents into pediatric 
cardiology, and will impair their ability to provide patient access to 
this life-saving specialty care, especially to medically underserved 
areas.
    Response: We appreciate the commenter's concerns as to the impact 
of this policy on pediatricians. While we recognize that 
echocardiography training for congenital cardiovascular abnormalities 
may be different from that for adults, we are not convinced that the 
MPPR does is not equally applicable to pediatric and adult 
cardiologists. The purpose of the MPPR policy is to account for the 
efficiencies inherent when multiple procedures are furnished together. 
We do not believe that those efficiencies differ significantly from 
diagnostic testing on adults versus pediatric patients for these code 
pairs.
    We considered the specific scenarios presented by the commenter's 
in the context of MPPR methodology and identified the same or similar 
efficiencies regardless of whether the multiple diagnostic procedures 
were targeted at abnormal flow in response to congenital structural 
abnormalities or were targeted at functional abnormalities in response 
to primary vascular disease. We also noted that, whereas practitioners 
who perform more services that are reported separately will be impacted 
more by the MPPR, practitioners who report more services that have 
recently been bundled together will have a similar impact due to the 
efficiencies that were considered by CMS in the valuation of those new 
bundled codes. Finally, we note that the codes are not specific to 
pediatric patients so it is not possible to exclude them for pediatric 
cardiologists alone.
    In response to the commenters concerns that other insurers may 
adopt our policies, we do not modify Medicare payment policy based on 
the fact that Medicaid and other payors may adopt such policies. We 
understand that other payors have their own unique payment systems and 
consider the appropriateness of CMS valuations in their decisions to 
accept, modify or ignore our payments. We continue to believe that the 
MPPR policy that we are

[[Page 68941]]

adopting in this final rule with comment period is appropriate for 
Medicare. Therefore, we are not excluding these codes from the MPPR.
    Comment: Several commenters maintained that the policy could result 
in the following unintended consequences:
     Create a disincentive for specialists to provide 
efficient, high quality and continuous care to their patients. Penalize 
the use of the appropriate sub-specialist, resulting in generalist 
physicians conducting multiple reads, leading to a degradation of 
diagnostic interpretation quality.
     Have a negative impact on investment in new advanced 
imaging technology and stifle innovation. New equipment offers more 
precise images and the addition of highly-trained personnel to a 
medical practice is integral to high quality patient care. Inhibit 
staff training and the addition of staff in a state of uncertainty.
     Lead to a forced reduction in necessary services, 
compromising patient access to life-saving diagnostic imaging services 
in all settings, including independent practices, community hospitals, 
and large academic medical centers.
     Drive more services out of physicians' offices and into 
more expensive hospital settings, fragment care, and increase patient 
costs.
     Reduce the efficiency of patient care and inconvenience 
patients because many would be scheduled for multiple procedures over 
multiple days instead of just one day. This would particularly 
disadvantage patients with serious medical conditions, such as multiple 
traumas, heart attacks, strokes, and cancer, who require frequent and 
multiple imaging.
     Disproportionally affect radiologists in academic medical 
centers who are often part of large group practices and who furnish 
care to a more complex patient population. These patients are often 
suffering from acute trauma or undergoing treatment for cancer and are 
more likely to have multiple examinations on the same day.
     Contradict the goal to focus more on preventive care, as 
diagnostic tests enable the early detection of potentially serious 
conditions.
    Response: We have no reason to believe that appropriately valuing 
services for payment under the PFS by revising payment to reflect 
duplication in the TC of diagnostic cardiovascular and ophthalmology 
multiple services would negatively impact quality of care, be counter-
productive to the goal of promoting preventive care, or limit patients' 
access to medically reasonable and necessary imaging services, or 
disproportionally affect certain groups. 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, the analysis in MedPAC's June 2011 report 
indicates there has been continued high annual growth in the use of 
imaging. Further, it is worth noting that, without any accompanying 
evidence of inadequate access or safety and quality concerns, declining 
growth in imaging services could be interpreted as a return to a more 
appropriate level of imaging utilization.
    For the ordering and scheduling of cardiovascular or ophthalmology 
services for Medicare beneficiaries, we require that Medicare-covered 
services be appropriate to beneficiary needs. We would not expect the 
adoption of an MPPR for the TC of diagnostic cardiovascular and 
ophthalmology services to result in services being furnished on 
separate days by one physician merely so that the physician 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 care for the beneficiary. We will monitor 
access to care and patterns of delivery for cardiovascular and 
ophthalmology services to beneficiaries, with particular attention 
focused on identifying any clinically inappropriate changes in timing 
of the delivery of such services.
    In summary, after consideration of the public comments received, we 
are adopting our CY 2013 proposal to apply an MPPR to the TC of 
diagnostic cardiovascular and ophthalmology services, with a 
modification to apply a 20 percent reduction for diagnostic 
ophthalmology services rather than the 25 percent reduction we had 
proposed. The reduction percentage for diagnostic cardiovascular 
services remains at 25 percent, as proposed. We continue to believe 
that efficiencies exist in the TC of multiple diagnostic cardiovascular 
and ophthalmology 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 2013 we are adopting an MPPR that 
applies a 25 percent reduction to the TC of second and subsequent 
diagnostic cardiovascular, and a 20 percent reduction to the TC of 
second and subsequent diagnostic ophthalmology services, furnished by 
the same physician (or physicians in the same group practice) to the 
same beneficiary, on the same day. In Table 10, we provide examples 
illustrating the current and CY 2013 payment amounts:

                                                 Table 10--Illustration of Current and CY 2013 Payments
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  Total current   Total CY 2013
                                                   Code 78452      Code 93306        payment         payment               Payment calculation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Sample Cardiovascular Payment Reduction *
--------------------------------------------------------------------------------------------------------------------------------------------------------
PC.............................................          $77.00          $65.00         $142.00         $142.00  no reduction.
TC.............................................          427.00          148.00          575.00          538.00  $427 + (.75 x $148).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Global.........................................          504.00          213.00          717.00          680.00  $142 + $427 + (.75 x $148).
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Code 92235      Code 92250   Total current   Total CY 2013  Payment calculation
                                                                                        payment         payment
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Sample Ophthalmology Payment Reduction *
--------------------------------------------------------------------------------------------------------------------------------------------------------
PC.............................................          $46.00          $23.00          $69.00          $69.00  no reduction.
TC.............................................           92.00           53.00          145.00          134.40  $92 + (.80 x $53).
Global.........................................          138.00           76.00          214.00          203.40  $69 + $92 + (.80 x $53).
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Dollar amounts are for illustrative purposes and do not reflect actual payment amounts.


[[Page 68942]]

    No changes have been made to the proposed list for diagnostic 
ophthalmology services. We have revised the proposed list for 
diagnostic cardiovascular services by removing codes deleted for CY 
2013, add-on codes, and remote monitoring codes, and adding global 
codes corresponding to technical-only codes already on the list:

 Table 11--Changes to the Proposed List of Procedures Subject to the MPPR on Diagnostic Cardiovascular Services
----------------------------------------------------------------------------------------------------------------
         Code                Descriptor              Added/deleted                         Reason
----------------------------------------------------------------------------------------------------------------
75650.................  Artery x-rays head   Deleted......................  Deleted for CY 2013.
                         & neck.
75660.................  Artery x-rays head   Deleted......................  Deleted for CY 2013.
                         & neck.
75662.................  Artery x-rays head   Deleted......................  Deleted for CY 2013.
                         & neck.
75665.................  Artery x-rays head   Deleted......................  Deleted for CY 2013.
                         & neck.
75671.................  Artery x-rays head   Deleted......................  Deleted for CY 2013.
                         & neck.
75676.................  Artery x-rays neck.  Deleted......................  Deleted for CY 2013.
75680.................  Artery x-rays neck.  Deleted......................  Deleted for CY 2013.
75685.................  Artery x-rays spine  Deleted......................  Deleted for CY 2013.
75774.................  Artery x-ray each    Deleted......................  Add-on Code.
                         vessel.
78496.................  Heart first pass     Deleted......................  Add-on Code.
                         add-on.
93000.................  Electrocardiogram    Added........................  Global Code.
                         complete.
93015.................  Cardiovascular       Added........................  Global Code.
                         stress test.
93040.................  Rhythm ECG with      Added........................  Global Code.
                         report.
93224.................  Ecg monit/reprt up   Added........................  Global Code.
                         to 48 hrs.
93268.................  ECG record/review..  Added........................  Global Code.
93293.................  Pm phone r-strip     Deleted......................  Remote monitoring code.
                         device eval.
93296.................  Pm/icd remote tech   Deleted......................  Remote monitoring code.
                         serv.
93320.................  Doppler echo exam    Deleted......................  Add-on Code.
                         heart.
93321.................  Doppler echo exam    Deleted......................  Add-on Code.
                         heart.
93325.................  Doppler color flow   Deleted......................  Add-on Code.
                         add-on.
93784.................  Ambulatory BP        Added........................  Global Code.
                         monitoring.
----------------------------------------------------------------------------------------------------------------

    The complete list of services subject to the MPPR for the TC of 
diagnostic cardiovascular and ophthalmology services is shown in 
Addendum X. The PFS budget neutrality provision is applicable to the 
new MPPR for the TC of diagnostic cardiovascular and ophthalmology 
services. Therefore, the estimated reduced expenditures for such 
services have been redistributed to increase payment for other PFS 
services. We refer readers to section VIII.C. of this final rule with 
comment period for further discussion of the impact of this policy.

  Table 12--Diagnostic Cardiovascular Services Subject to the Multiple
                       Procedure Payment Reduction
------------------------------------------------------------------------
                 Code                           Short descriptor
------------------------------------------------------------------------
75600................................  Contrast x-ray exam of aorta.
75605................................  Contrast x-ray exam of aorta.
75625................................  Contrast x-ray exam of aorta.
75630................................  X-ray aorta leg arteries.
75658................................  Artery x-rays arm.
75705................................  Artery x-rays spine.
75710................................  Artery x-rays arm/leg.
75716................................  Artery x-rays arms/legs.
75726................................  Artery x-rays abdomen.
75731................................  Artery x-rays adrenal gland.
75733................................  Artery x-rays adrenals.
75736................................  Artery x-rays pelvis.
75741................................  Artery x-rays lung.
75743................................  Artery x-rays lungs.
75746................................  Artery x-rays lung.
75756................................  Artery x-rays chest.
75791................................  Av dialysis shunt imaging.
75809................................  Nonvascular shunt x-ray.
75820................................  Vein x-ray arm/leg.
75822................................  Vein x-ray arms/legs.
75825................................  Vein x-ray trunk.
75827................................  Vein x-ray chest.
75831................................  Vein x-ray kidney.
75833................................  Vein x-ray kidneys.
75840................................  Vein x-ray adrenal gland.
75842................................  Vein x-ray adrenal glands.
75860................................  Vein x-ray neck.
75870................................  Vein x-ray skull.
75872................................  Vein x-ray skull.
75880................................  Vein x-ray eye socket.
75885................................  Vein x-ray liver.
75887................................  Vein x-ray liver.
75889................................  Vein x-ray liver.
75891................................  Vein x-ray liver.
75893................................  Venous sampling by catheter.
78428................................  Cardiac shunt imaging.
78445................................  Vascular flow imaging.
78451................................  Ht muscle image spect sing.
78452................................  Ht muscle image spect mult.
78453................................  Ht muscle image planar sing.
78454................................  Ht musc image planar mult.
78456................................  Acute venous thrombus image.
78457................................  Venous thrombosis imaging.
78458................................  Ven thrombosis images bilat.
78466................................  Heart infarct image.
78468................................  Heart infarct image (ef).
78469................................  Heart infarct image (3D).
78472................................  Gated heart planar single.
78473................................  Gated heart multiple.
78481................................  Heart first pass single.
78483................................  Heart first pass multiple.
78494................................  Heart image spect.
93000................................  Electrocardiogram complete.
93005................................  Electrocardiogram tracing.
93015................................  Cardiovascular stress test.
93017................................  Cardiovascular stress test.
93024................................  Cardiac drug stress test.
93025................................  Microvolt t-wave assess.
93040................................  Rhythm ECG with report.
93041................................  Rhythm ecg tracing.
93224................................  Ecg monit/reprt up to 48 hrs.
93225................................  Ecg monit/reprt up to 48 hrs.
93226................................  Ecg monit/reprt up to 48 hrs.
93229................................  Remote 30 day ecg tech supp.
93268................................  ECG record/review.
93270................................  Remote 30 day ecg rev/report.
93271................................  Ecg/monitoring and analysis.
93278................................  ECG/signal-averaged.
93279................................  Pm device progr eval sngl.
93280................................  Pm device progr eval dual.
93281................................  Pm device progr eval multi.
93282................................  Icd device prog eval 1 sngl.
93283................................  Icd device progr eval dual.
93284................................  Icd device progr eval mult.
93285................................  Ilr device eval progr.
93286................................  Pre-op pm device eval.

[[Page 68943]]

 
93287................................  Pre-op icd device eval.
93288................................  Pm device eval in person.
93289................................  Icd device interrogate.
93290................................  Icm device eval.
93291................................  Ilr device interrogate.
93292................................  Wcd device interrogate.
93303................................  Echo transthoracic.
93304................................  Echo transthoracic.
93306................................  Tte w/doppler complete.
93307................................  Tte w/o doppler complete.
93308................................  Tte f-up or lmtd.
93312................................  Echo transesophageal.
93314................................  Echo transesophageal.
93318................................  Echo transesophageal intraop.
93350................................  Stress tte only.
93351................................  Stress tte complete.
93701................................  Bioimpedance cv analysis.
93724................................  Analyze pacemaker system.
93784................................  Ambulatory BP monitoring.
93786................................  Ambulatory BP recording.
93788................................  Ambulatory BP analysis.
93880................................  Extracranial study.
93882................................  Extracranial study.
93886................................  Intracranial study.
93888................................  Intracranial study.
93890................................  Tcd vasoreactivity study.
93892................................  Tcd emboli detect w/o inj.
93893................................  Tcd emboli detect w/inj.
93922................................  Upr/l xtremity art 2 levels.
93923................................  Upr/lxtr art stdy 3+ lvls.
93924................................  Lwr xtr vasc stdy bilat.
93925................................  Lower extremity study.
93926................................  Lower extremity study.
93930................................  Upper extremity study.
93931................................  Upper extremity study.
93965................................  Extremity study.
93970................................  Extremity study.
93971................................  Extremity study.
93975................................  Vascular study.
93976................................  Vascular study.
93978................................  Vascular study.
93979................................  Vascular study.
93980................................  Penile vascular study.
93981................................  Penile vascular study.
93990................................  Doppler flow testing.
------------------------------------------------------------------------


   Table 13--Diagnostic Ophthalmology Services Subject to the Multiple
                       Procedure Payment Reduction
------------------------------------------------------------------------
                 Code                              Descriptor
------------------------------------------------------------------------
76510................................  Ophth us b & quant a.
76511................................  Ophth us quant a only.
76512................................  Ophth us b w/non-quant a.
76513................................  Echo exam of eye water bath.
76514................................  Echo exam of eye thickness.
76516................................  Echo exam of eye.
76519................................  Echo exam of eye.
92025................................  Corneal topography.
92060................................  Special eye evaluation.
92081................................  Visual field examination(s).
92082................................  Visual field examination(s).
92083................................  Visual field examination(s).
92132................................  Cmptr ophth dx img ant segmt.
92133................................  Cmptr ophth img optic nerve.
92134................................  Cptr ophth dx img post segmt.
92136................................  Ophthalmic biometry.
92228................................  Remote retinal imaging mgmt.
92235................................  Eye exam with photos.
92240................................  Icg angiography.
92250................................  Eye exam with photos.
92265................................  Eye muscle evaluation.
92270................................  Electro-oculography.
92275................................  Electroretinography.
92283................................  Color vision examination.
92284................................  Dark adaptation eye exam.
92285................................  Eye photography.
92286................................  Internal eye photography.
------------------------------------------------------------------------


                                           Table 14--Frequently Billed Diagnostic Cardiovascular Combinations
--------------------------------------------------------------------------------------------------------------------------------------------------------
           Code                  Descriptor           Code          Descriptor           Code          Descriptor          Code          Descriptor
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Code Range 75600-75893
--------------------------------------------------------------------------------------------------------------------------------------------------------
75710....................  Artery x-rays arm/leg.      75791  Av dialysis shunt
                                                               imaging.
75625....................  Contrast x-ray exam of      75716  Artery x-rays arms/
                            aorta.                             legs.
75625....................  Contrast x-ray exam of      75716  Artery x-rays arms/         75774  Artery x-ray each
                            aorta.                             legs.                              vessel.
75820....................  Vein x-ray arm/leg....      75827  Vein x-ray chest......
75625....................  Contrast x-ray exam of      75710  Artery x-rays arm/leg.
                            aorta.
75791....................  Av dialysis shunt           75827  Vein x-ray chest......
                            imaging.
75658....................  Artery x-rays arm.....      75791  Av dialysis shunt           75820  Vein x-ray arm/leg...      75827  Vein x-ray chest.
                                                               imaging.
75710....................  Artery x-rays arm/leg.      75774  Artery x-ray each
                                                               vessel.
75820....................  Vein x-ray arm/leg....      93931  Upper extremity study.
75791....................  Av dialysis shunt           75820  Vein x-ray arm/leg....
                            imaging.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Code Range 78414-78496
--------------------------------------------------------------------------------------------------------------------------------------------------------
78452....................  Ht muscle image spect       93306  Tte w/doppler complete
                            mult.
78452....................  Ht muscle image spect       93017  Cardiovascular stress
                            mult.                              test.
78452....................  Ht muscle image spect       93306  Tte w/doppler complete      93880  Extracranial study...
                            mult.
78452TC..................  Ht muscle image spect       93017  Cardiovascular stress
                            mult.                              test.
78452....................  Ht muscle image spect       93880  Extracranial study....
                            mult.

[[Page 68944]]

 
78452TC..................  Ht muscle image spect       93306  Tte w/doppler complete
                            mult.
78452....................  Ht muscle image spect       93017  Cardiovascular stress       93306  Tte w/doppler
                            mult.                              test.                              complete.
78451....................  Ht muscle image spect       93306  Tte w/doppler complete
                            sing.
78452TC..................  Ht muscle image spect     93306TC  Tte w/doppler complete
                            mult.
78452....................  Ht muscle image spect       93306  Tte w/doppler complete      93880  Extracranial study...      93978  Vascular study.
                            mult.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Code Range 93000-93990
--------------------------------------------------------------------------------------------------------------------------------------------------------
93306....................  Tte w/doppler complete      93880  Extracranial study....
93320....................  Doppler echo exam           93325  Lower extremity study.      93351  Stress tte complete..
                            heart.
93922....................  Upr/l xtremity art 2        93925  Lower extremity study.
                            levels.
93923....................  Upr/lxtr art stdy 3+        93925  Lower extremity study.
                            lvls.
93306TC..................  Tte w/doppler complete    93880TC  Extracranial study....
93880....................  Extracranial study....      93978  Vascular study........
93284....................  Icd device progr eval       93290  Icm device eval.......
                            mult.
93922....................  Upr/l xtremity art 2        93926  Lower extremity study.
                            levels.
93965....................  Extremity study.......      93970  Extremity study.......
93925....................  Lower extremity study.      93970  Extremity study.......
--------------------------------------------------------------------------------------------------------------------------------------------------------


                        Table 15--Frequently Billed Diagnostic Ophthalmology Combinations
----------------------------------------------------------------------------------------------------------------
          Code                 Descriptor          Code         Descriptor          Code         Descriptor
----------------------------------------------------------------------------------------------------------------
                                             Code Range 76510-76529
----------------------------------------------------------------------------------------------------------------
76514...................  Echo exam of eye          92133  Cmptr ophth img
                           thickness.                       optic nerve.
76514...................  Echo exam of eye          92083  Visual field              92133  Cmptr ophth img
                           thickness.                       examination(s).                  optic nerve.
76514...................  Echo exam of eye          92083  Visual field
                           thickness.                       examination(s).
76514...................  Echo exam of eye          92250  Eye exam with photos
                           thickness.
76514...................  Echo exam of eye          92083  Visual field              92250  Eye exam with
                           thickness.                       examination(s).                  photos.
76512...................  Ophth us b w/non-         92134  Cptr ophth dx img
                           quant a.                         post segmt.
76512...................  Ophth us b w/non-         92250  Eye exam with photos
                           quant a.
76514...................  Echo exam of eye          92286  Internal eye
                           thickness.                       photography.
76514...................  Echo exam of eye          92134  Cptr ophth dx img
                           thickness.                       post segmt.
76512...................  Ophth us b w/non-         92235  Eye exam with photos      92250  Eye exam with
                           quant a.                                                          photos.
----------------------------------------------------------------------------------------------------------------
                                             Code Range 92002-92371
----------------------------------------------------------------------------------------------------------------
92083...................  Visual field              92133  Cmptr ophth img
                           examination(s).                  optic nerve.
92235...................  Eye exam with photos      92250  Eye exam with photos
92083...................  Visual field              92250  Eye exam with photos
                           examination(s).
92083...................  Visual field              92134  Cptr ophth dx img
                           examination(s).                  post segmt.
92134...................  Cptr ophth dx img         92235  Eye exam with photos
                           post segmt.
92134...................  Cptr ophth dx img         92250  Eye exam with photos
                           post segmt.
92134...................  Cptr ophth dx img         92235  Eye exam with photos      92250  Eye exam with
                           post segmt.                                                       photos.
92250...................  Eye exam with photos      92285  Eye photography.....
92082...................  Visual field              92250  Eye exam with photos
                           examination(s).
92081...................  Visual field              92285  Eye photography.....
                           examination(s).
----------------------------------------------------------------------------------------------------------------

d. Procedures Subject to the OPPS Cap
    We are proposing to add the new codes in Table 16 to the list of 
procedures subject to the OPPS cap, effective January 1, 2013. Some of 
these codes are replacement codes for codes deleted for CY 2013. 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 their 
addition as procedures subject to the OPPS cap is open to public 
comment in this final rule with comment period.

[[Page 68945]]



     Table 16--Additions and Deletions to the List of Procedure Subject to the OPPS CAP on Imaging Services
----------------------------------------------------------------------------------------------------------------
                       Additions                                                Deletions
----------------------------------------------------------------------------------------------------------------
             Code                     Descriptor                      Code                     Descriptor
----------------------------------------------------------------------------------------------------------------
31620........................  Endobronchial us add-on.  71040........................  Contrast x-ray of
                                                                                         bronchi.
36221........................  Place cath thoracic       71060........................  Contrast x-ray of
                                aorta.                                                   bronchi.
36222........................  Place cath carotd/inom    75650........................  Artery x-rays head &
                                art.                                                     neck.
36223........................  Place cath carotd/inom    75660........................  Artery x-rays head &
                                art.                                                     neck.
36224........................  Place cath carotd art...  75662........................  Artery x-rays head &
                                                                                         neck.
36225........................  Place cath subclavian     75665........................  Artery x-rays head &
                                art.                                                     neck.
36226........................  Place cath vertebral art  75671........................  Artery x-rays head &
                                                                                         neck.
36227........................  Place cath xtrnl carotid  75676........................  Artery x-rays neck.
36228........................  Place cath intracranial   75680........................  Artery x-rays neck.
                                art.
43206........................  Esoph optical             75685........................  Artery x-rays spine.
                                endomicroscopy.
43252........................  Upper GI optical          75900........................  Intravascular cath
                                endomicroscopy.                                          exchange.
77080........................  DXA bone density axial..  75961........................  Retrieval broken
                                                                                         catheter.
77082........................  DXA bone density vert fx  77424........................  Intraoperative radiation
                                                                                         delivery.
78013........................  Thyroid imaging w/blood   78006........................  Thyroid imaging with
                                flow.                                                    uptake.
78014........................  Thyroid imaging w/blood   78007........................  Thyroid image mult
                                flow.                                                    uptakes.
78070........................  Parathyroid planar        78010........................  Thyroid imaging.
                                imaging.
78071........................  Parathyroid planar        78011........................  Thyroid imaging with
                                imaging w/o subtrj.                                      flow.
78072........................  Parathyroid imaging w/
                                spect & ct.
88375........................  Optical endomicroscopy
                                interp.
91110........................  GI tract capsule
                                endoscopy.
91111........................  Esophageal capsule
                                endoscopy.
92287........................  Internal eye photography
----------------------------------------------------------------------------------------------------------------

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, which amended 
section 1848(c) of the Act, 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 (75 
FR 73208), 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. 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 malpractice 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.
    As we indicated in the CY 2013 PFS proposed rule, we will continue 
our current approach for determining malpractice RVUs for new/revised 
codes. In section II.M.2. of this final rule with comment period, we 
have published a list of new/revised codes and the malpractice 
crosswalk(s) used for determining their malpractice RVUs. These 
malpractice RVUs for new/revised codes will be implemented for CY 2013 
on an interim final basis and the malpractice crosswalks are subject to 
public comment. We will respond to comments and finalize the 
malpractice crosswalks for the majority of these codes in the CY 2014 
PFS final rule with comment period.

D. Geographic Practice Cost Indices (GPCIs)

1. Background
    Section 1848(e)(1)(A) of the Act requires us to develop separate 
Geographic Practice Cost Indices (GPCIs) to measure resource cost 
differences among localities compared to the national average for each 
of the three fee schedule components (that is, work, practice expense 
(PE), and malpractice). While requiring that the PE and MP GPCIs 
reflect the full relative cost differences, section 1848(e)(1)(A)(iii) 
of the Act requires that the work GPCIs reflect only one-quarter of the 
relative cost differences compared to the national average. In 
addition, section 1848(e)(1)(G) of the Act sets a permanent 1.5 work 
GPCI floor for services furnished in Alaska beginning January 1, 2009, 
and section 1848(e)(1)(I) of the Act sets a permanent 1.0 PE GPCI floor 
for services furnished in frontier states 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 2011. The statute was 
amended by section 303 of the Temporary Payroll

[[Page 68946]]

Tax Cut Continuation Act of 2011 (TPTCCA) (Pub. L. 112-78) to extend 
the 1.0 floor for the work GPCIs through February 29, 2012. The statute 
was again amended by section 3004 of the Middle Class Tax Relief and 
Job Creation Act of 2012 (MCTRJCA) (P.L. 112-399) to extend the 1.0 
work floor for GPCIs throughout the remainder of CY 2012 (that is, for 
services furnished no later than December 31, 2012). During the 
development of the CY 2012 PFS final rule with comment period, neither 
TPTCCA nor MCTRJCA had been enacted and, because the work GPCI floor 
was set to expire at the end of 2011, the GPCIs published in Addendum E 
of the CY 2012 PFS final rule with comment period did not reflect the 
1.0 work floor. Following the enactment of the legislation, appropriate 
changes to the CY 2012 GPCIs to reflect the 1.0 work floor required by 
section 303 of the TPTCCA and section 3004 of the MCTRJCA.
    Since the 1.0 work GPCI floor provided in section 1848 (e)(1)(E) of 
the Act is set to expire prior to the implementation of the CY 2013 
updates to the PFS, the proposed CY 2013 work GPCIs and summarized 
geographic adjustment factors (GAFs) published in addendums D and E of 
this CY 2013 PFS proposed rule do not reflect the 1.0 work GPCI floor 
for CY 2013. As required by section 1848 (e)(1)(G) and section1848 
(e)(1)(I) of the Act, the 1.5 work GPCI floor for Alaska and the 1.0 PE 
GPCI floor for frontier states are applicable in CY 2013 and are 
reflected in addendums D and E.
    In the CY 2012 PFS final rule with comment period, we made several 
refinements to the GPCIs (76 FR 73081 through 73092), including 
revising the sixth GPCI update to reflect the most recent data, with 
modifications. Specifically, we finalized our proposal to change the 
GPCI cost share weights for CY 2012 to reflect the most recent rebased 
and revised Medicare Economic Index (MEI). As a result, the cost share 
weight for the work GPCI (as a percentage of the total) was changed 
from 52.466 percent to 48.266 percent, and the cost share weight for 
the PE GPCI was revised from 43.669 percent to 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 was changed from 12.209 percent to 10.223 percentage 
points (fixed capital with utilities), and the medical equipment, 
supplies, and other miscellaneous expenses component was changed from 
12.806 percent to 9.968 percentage points. In addition, we finalized 
the weight for purchased services at 8.095 percentage points, of which 
5.011 percentage points are adjusted for geographic cost differences. 
Lastly, the cost share weight for the malpractice GPCI was revised from 
3.865 percent to 4.295 percent. Table 17 displays the cost share 
weights that were finalized in the CY 2012 final rule with comment 
period. Note that the employee compensation; office rent; purchased 
services; and equipment supplies and other cost share weights sum to 
the total PE GPCI cost share weights of 47.439 percent.

      Table 17--Cost Share Weights Finalized in CY 2012 GPCI Update
------------------------------------------------------------------------
                                                            Cost share
                    Expense category                         weights %
------------------------------------------------------------------------
Work....................................................          48.266
Practice Expense........................................          47.439
  Employee Compensation.................................          19.153
  Office Rent...........................................          10.223
  Purchased Services....................................           8.095
  Equipment, Supplies, and Other........................           9.968
Malpractice Insurance...................................           4.295
------------------------------------------------------------------------

    We also finalized several other policies in the CY 2012 final rule 
with comment period including the use of 2006 through 2008 American 
Community Survey (ACS) two-bedroom rental data as a proxy for the 
relative cost difference in physician office rent. In addition, we 
created a purchased services index to account for labor-related 
services within the ``all other services'' and ``other professional 
expenses'' MEI components. In response to public commenters who 
recommended that we use Bureau of Labor Statistics (BLS) Occupational 
Employment Statistics (OES) data to capture the ``full range'' of 
occupations included in the offices of physician industry to calculate 
the nonphysician employee wage component (also referred to as the 
employee wage index) of the PE GPCI, we finalized a policy of using 100 
percent of the total wage share of nonphysician occupations in the 
offices of physicians' industry to calculate the nonphysician employee 
wage component of the PE GPCI.
2. Recommendations From the Institute of Medicine
    Concurrent with our CY 2012 rulemaking cycle, the Institute of 
Medicine released the final version of its first of two anticipated 
reports entitled ``Geographic Adjustment in Medicare Payment: Phase I: 
Improving Accuracy, Second Edition'' on September 28, 2011. This report 
included an evaluation of the accuracy of GAFs for the hospital wage 
index and the GPCIs, as well as the methodology and data used to 
calculate them. Several of the policies that we finalized in CY 2012 
rulemaking addressed recommendations contained in the Institute of 
Medicine's first report. Because we did not have adequate time to 
completely address the Institute of Medicine's Phase I report 
recommendations during CY 2012 rulemaking, we included a discussion in 
the CY 2013 proposed rule (77 FR 44756) about the recommendations that 
were not implemented or discussed in the CY 2012 final rule with 
comment period.
    As we anticipated in the CY 2013 proposed rule, the Institute of 
Medicine's second report, entitled ``Geographic Adjustment in Medicare 
Payment--Phase II: Implications for Access, Quality, and Efficiency,'' 
was released July 17, 2012. The Phase II report evaluates the effects 
of GAFs (hospital wage index and GPCIs) on the distribution of the 
healthcare workforce, quality of care, population health, and the 
ability to provide efficient, high value care. Once we have had an 
opportunity to fully evaluate the report and its recommendations we 
will respond to its recommendations in subsequent rulemaking.
3. GPCI Discussion for CY 2013
    CY 2013 is the final year of the sixth GPCI update and, because we 
will propose updates next year, we did not include any proposals 
related to the GPCIs for the CY 2013 PFS. In response to public 
inquiries about exceptions to the calculated GPCIs, we provided a brief 
discussion about the permanent 1.0 PE floor for frontier states, the 
1.5 work floor for Alaska, the GPCIs for the Puerto Rico payment 
locality, and the expiration of the GPCI 1.0 work floor required under 
section 1848 (e)(1)(E) of the Act. We also discussed recommendations 
from the first Institute of Medicine report that were not addressed 
during CY 2012 rulemaking in the CY 2013 proposed rule. We have 
included this discussion below.
a. Alaska Work Floor and PE GPCI Floor for Frontier States
    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. 
Therefore, the 1.5 work floor for Alaska will remain in effect in CY 
2013. In addition, section 1848(e) (1)(I) of the Act establishes 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,

[[Page 68947]]

beginning in CY 2011, we applied a 1.0 PE GPCI floor for physicians' 
services furnished in states determined to be frontier states. The 
following states met the statutory criteria to be considered frontier 
states for CY 2012: Montana, North Dakota, Nevada, South Dakota, and 
Wyoming. There are no changes to those states identified as frontier 
states for CY 2013.
b. GPCI Assignments for the Puerto Rico Payment Locality
    As noted in the CY 2013 proposed rule, we have received inquiries 
from representatives of the Puerto Rico medical community regarding our 
policies for determining the GPCIs for the Puerto Rico payment 
locality. While we did not make any proposals related to the GPCIs for 
Puerto Rico, in response to those inquiries, we provided the following 
discussion regarding the GPCIs assigned to the Puerto Rico payment 
locality. We anticipate recalculating all the GPCIs in the seventh GPCI 
update, currently anticipated to be implemented for CY 2014.
    As noted above, we are required by section 1848(e)(1)(A) of the Act 
to develop separate GPCIs to measure relative resource cost differences 
among localities compared to the national average for each of the three 
fee schedule components: Work, PE and malpractice expense. To calculate 
these GPCI values, we rely on three primary data sources. We currently 
use the 2006-2008 BLS OES data to calculate the work GPCI, the 
nonphysician employee wage component of PE GPCI, and the labor costs 
associated with the purchased services component of PE GPCI. We use 
2006-2008 ACS data to calculate the office rent component of the PE 
GPCI. Finally, we use 2006-2007 malpractice premium data to calculate 
the malpractice GPCI. For all localities, including Puerto Rico, we 
assume equipment, supplies, and other expenses are purchased in a 
national market and that the costs do not vary by geographic location. 
Therefore, we do not use data on the price of equipment, supplies, and 
expenses across localities in calculating PE GPCIs. With the exception 
of the malpractice GPCI, we have current data from the applicable 
sources allowing us to calculate the work and PE GPCIs for the Puerto 
Rico payment locality. The 2006-2008 BLS OES data and rental values 
derived from the 2006-2008 ACS indicate that the costs associated with 
operating a physician practice in Puerto Rico are the lowest among all 
payment localities.
    To calculate the malpractice GPCI for the various Medicare PFS 
localities, we collect malpractice insurance market share and premium 
data from state departments of insurance and from state rate filings. 
As discussed in our contractor's report (Final Report on the Sixth 
Update of the Geographic Practice Cost Index for the Medicare Physician 
Fee Schedule page. 41), for the fourth, fifth, and sixth GPCI updates 
we were not able to collect this data for the Puerto Rico payment 
locality. Therefore, we carried over the malpractice GPCI value of 
0.249 from previous GPCI updates when malpractice premium data were 
last available. It is important to note that we have a source for more 
current malpractice premium data for Puerto Rico for use in the 
upcoming seventh GPCI update. We are working with the relevant 
officials in Puerto Rico to acquire these data for use in future 
rulemaking.
    For a detailed discussion regarding the methodology used to 
calculate the various components of the Puerto Rico GPCIs, we referred 
readers to our contractor's report from November of 2010 entitled 
``Final Report on the Sixth Update of the Geographic Practice Cost 
Index for the Medicare Physician Fee Schedule'' available on our Web 
site at www.cms.gov/PhysicianFeeSched/downloads/GPCI_Report.pdf.
    In the CY 2013 proposed rule, we also encouraged comments from 
stakeholders regarding potential data sources that may be available for 
calculating the Puerto Rico malpractice GPCI.
    Comment: In response to our inquiry regarding potential sources for 
data that could be used in calculating a malpractice GPCI for Puerto 
Rico, we received numerous comments about the costs of practicing 
medicine in Puerto Rico. The commenters primarily expressed concern 
about the PE GPCI (with emphases on the rent component) and the 
malpractice GPCI. The commenters stated that the current GPCI values 
for Puerto Rico are low in comparison to other PFS localities and that 
this disparity may create incentives for doctors to move their 
practices to the continental United States. As a result, the commenters 
explained that access to both primary and specialty care for Medicare 
beneficiaries residing in Puerto Rico could be compromised. Several 
stakeholders provided a report on a comprehensive study entitled ``Cost 
of Medical Services in Puerto Rico.'' The report included results from 
a physician survey on the costs of operating a medical practice in 
Puerto Rico, including the cost for obtaining malpractice insurance. 
For example, the report included information about the leading 
malpractice insurers in Puerto Rico, the amount of malpractice 
insurance coverage typically purchased by physicians, and the cost of 
malpractice insurance by primary and specialty care providers. In 
addition to malpractice insurance costs, the report also included 
information on the cost of employees, contracted services, rent and 
utilities, medical equipment and supplies in Puerto Rico as well as 
information on the major concerns, demographics, and work patterns of 
the doctors currently practicing medicine in Puerto Rico and the 
doctors that have moved from Puerto Rico now practicing in the United 
States.
    Response: As noted in the proposed rule, we will be adjusting the 
GPCIs for CY 2014. Given that we did not make any proposals to modify 
the malpractice GPCI calculation methodology or values for CY 2013, it 
would not be appropriate to make changes to the GPCIs in this final 
rule. We appreciate the physician survey information on the cost of 
malpractice insurance. We will review the information submitted on the 
cost of obtaining malpractice insurance in Puerto Rico as we prepare 
for the seventh GPCI update. We would note that the GPCIs are based 
upon changes in the relative costs of obtaining malpractice insurance 
so any changes in the GPCI for Puerto Rico will be based not only on 
data reflecting the costs on Puerto Rico, but also those in other 
localities.
c. Expiration of GPCI Work Floor
    The work GPCIs are designed to capture the relative costs of 
physician labor by Medicare PFS locality. Previously, the work GPCIs 
were developed using the median hourly earnings from the 2000 Census of 
workers in seven professional specialty occupation categories that 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 work GPCIs would effectively make the indices dependent 
upon Medicare payments. As required by law, the work GPCIs reflect one 
quarter of the relative wage differences for each locality compared to 
the national average. The 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 BLS 
OES data as a replacement for the 2000 Census data.
    Although we did not propose any changes to the data or methodology 
used to calculate the work GPCI for CY

[[Page 68948]]

2013, we note that addenda D and E will reflect the expiration of the 
statutory 1.0 work GPCI floor which as noted above, is set to expire on 
December 31, 2012 in accordance with section 1848 (e)(1)(E) of the Act.
    Comment: A few commenters requested an extension of the 1.0 work 
GPCI floor stating that the statutorily-mandated work GPCI floor will 
expire on December 31, 2012.
    Response: As discussed above (and noted by the commenters) the 1.0 
work GPCI floor is set to expire on December 31, 2012 and we do not 
have authority to extend the 1.0 work GPCI floor beyond December 31, 
2012.
4. Institute of Medicine Phase I Report
a. Background
    At our request, the Institute of Medicine conducted 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) (hospital 
wage index) of the Act. These adjustments are designed to ensure 
Medicare payments reflect differences in input costs across geographic 
areas. The factors the Institute of Medicine evaluated include the 
following:
     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. healthcare marketplace, the 
Institute of Medicine also evaluated and considered 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 Institute of Medicine's first report entitled ``Geographic 
Adjustment in Medicare Payment, Phase I: Improving Accuracy'' evaluated 
the accuracy of geographic adjustment factors and the methodology and 
data used to calculate them. The recommendations included in the 
Institute of Medicine's Phase I report that relate to or would have an 
effect on the methodologies used to calculate the GPCIs and the 
configuration of Medicare PFS payment locality structure 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, PE, and liability 
insurance) and the categories within the PE (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 PE 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 CMS.
     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 PE office expenses should be geographically 
adjusted as part of the wage component of the PE. This report can be 
accessed on the Institute of Medicine 's Web site at www.iom.edu/Reports/2011/Geographic-Adjustment-in-Medicare-Payment-Phase-I-Improving-Accuracy.aspx.
    As previously noted in this section, the Institute of Medicine also 
considered the role of Medicare payments on matters such as the 
distribution of the healthcare workforce, population health, and the 
ability of providers to produce high-value, high-quality health care in 
its final report July 17, 2012. We were not able to evaluate the 
recommendations contained in the Institute of Medicine's Phase II 
report, in time for discussion in the proposed rule. The Phase II 
report can be accessed on the Institute of Medicine's Web site at 
www.iom.edu/Reports/2012/Geographic-Adjustment-in-Medicare-Payment-Phase-II.aspx.
b. Institute of Medicine Recommendations Implemented in CY 2012
    In the CY 2012 PFS final rule with comment period, we addressed 
three of the recommendations offered by the Institute of Medicine in 
its Phase I report. Specifically, the final CY 2012 GPCIs utilized the 
full range of nonphysician occupations in the employee wage calculation 
consistent with Institute of Medicine recommendation 5-4. Additionally, 
we created a new purchased service index to account for nonclinical 
labor related expenses similar to Institute of Medicine recommendation 
5-7. Lastly, we have consistently used national cost share weights to 
determine the appropriate weight attributed to each GPCI component, 
which is supported by Institute of Medicine recommendation 5-1 (76 FR 
73081 through 73092). In order to facilitate a public discussion 
regarding the Institute of Medicine's remaining Phase I 
recommendations, we provided a summary analysis of these 
recommendations in the CY 2013 proposed rule, which has also been 
included in this final rule with comment period below. We provided our 
technical analyses of the remaining Institute of Medicine Phase I 
recommendations in a report released on the PFS Web site at 
www.cms.gov/PhysicianFeeSched. Since we have not yet had an opportunity 
to review the recommendations in the Institute of Medicine's Phase II 
report, these analyses focus exclusively on the recommendations as 
presented in the Institute of Medicine's Phase I report.
c. Discussion of Remaining Institute of Medicine's Phase I 
Recommendations
(1) Institute of Medicine Recommendation Summaries
    (A) Institute of Medicine 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

[[Page 68949]]

statewide non-metropolitan statistical areas should serve as the basis 
for defining these labor markets. (Geographic Adjustment in Medicare 
Payment, Phase I: Improving Accuracy pages 2-1 thru 2-29)
(i) Locality Background
    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, and Virginia suburbs, Puerto Rico, and the Virgin Islands are 
additional localities that make up the remainder 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).
    Prior to 1992, Medicare payments for physicians' services were made 
under the reasonable charge system. Payments were based on the charging 
patterns of physicians. This resulted in large differences among types 
of services, geographic payment areas, and physician specialties. 
Recognizing this, the Congress replaced the reasonable charge system 
with the Medicare PFS in the Omnibus Budget Reconciliation Act (OBRA) 
of 1989, effective January 1, 1992. Payments under the fee schedule are 
based on the relative resources used in furnishing services and vary 
among areas as resource costs vary geographically as measured by the 
GPCIs.
    Payment localities were established under the reasonable charge 
system by local Medicare carriers based on their knowledge of local 
physician charging patterns and economic conditions. These localities 
changed little between the inception of Medicare in 1967 and the 
beginning of the PFS in 1992. As a result, a study was begun in 1994 
that resulted in a comprehensive locality revision, which was 
implemented in 1997 (61 FR 59494).
    The revised locality structure reduced the number of localities 
from 210 to the current 89 and the number of statewide localities 
increased from 22 to 34. The revised localities were based on locality 
resource cost differences as reflected by the GPCIs. A full discussion 
of the methodology can be found in the CY 1997 PFS final rule with 
comment period (61 FR 59494). The current 89 fee schedule areas are 
defined alternatively by state boundaries (for example, Wisconsin), 
metropolitan areas (for example, Metropolitan St. Louis, MO), portions 
of a metropolitan area (for example, Manhattan), or rest-of-state areas 
that exclude metropolitan areas (for example, Rest of Missouri). This 
locality configuration is used to calculate the GPCIs that are in turn 
used to calculate payments for physicians' services under the PFS.
    As was stated in the CY 2011 final rule with comment period (75 FR 
73261), we require that changes to the PFS locality structure be done 
in a budget neutral manner within a state. For many years, we have 
sought consensus for any locality changes among the professionals whose 
payments would be affected. We have also considered more comprehensive 
changes to locality configurations. In 2008, we issued a draft 
comprehensive report detailing four different locality configuration 
options (www.cms.gov/physicianfeesched/downloads/ReviewOfAltGPCIs.pdf). 
The alternative locality configurations in the report are described 
below.
     Option 1: CMS Core-Based Statistical Area (CBSA) Payment 
Locality Configuration: CBSAs are a combination of Office of Management 
and Budget (OMB's) Metropolitan Statistical Areas (MSAs) and their 
Micropolitan Statistical Areas. Under this option, MSAs would be 
considered as urban CBSAs. Micropolitan Statistical Areas (as defined 
by OMB) and rural areas would be considered as non-urban (rest of 
state) CBSAs. This approach would be consistent with the areas used in 
the Inpatient Prospective Payment System (IPPS) pre-reclassification 
wage index, which is the hospital wage index for a geographic area 
(CBSA or non-CBSA) calculated from submitted hospital cost report data 
before statutory adjustments reconfigure, or ``reclassify'' a hospital 
to an area other than its geographic location, to adjust payments for 
difference in local resource costs in other Medicare payment systems. 
Based on data used in the 2008 locality report, this option would 
increase the number of PFS localities from 89 to 439.
     Option 2: Separate High-Cost Counties from Existing 
Localities (Separate Counties): Under this approach, higher cost 
counties are removed from their existing locality structure, and they 
would each be placed into their own locality. This option would 
increase the number of PFS localities from 89 to 214, using a 5 percent 
GAF differential to separate high-cost counties.
     Option 3: Separate MSAs from Statewide Localities 
(Separate MSAs): This option begins with statewide localities and 
creates separate localities for higher cost MSAs (rather than removing 
higher cost counties from their existing locality as described in 
Option 2). This option would increase the number of PFS localities from 
89 to 130, using a 5 percent GAF differential to separate high-cost 
MSAs.
     Option 4: Group Counties Within a State Into Locality 
Tiers Based on Costs (Statewide Tiers): This option creates tiers of 
counties (within each state) that may or may not be contiguous but 
share similar practice costs. This option would increase the number of 
PFS localities from 89 to 140, using a 5 percent GAF differential to 
group similar counties into statewide tiers.
    For a detailed discussion of the public comments on the 
contractor's 2008 draft report detailing four different locality 
configurations, we refer readers to the CY 2010 PFS proposed rule (74 
FR 33534) and subsequent final rule with comment period (74 FR 61757). 
There was no public consensus on the options, although a number of 
commenters expressed support for Option 3 (separate MSAs from statewide 
localities) because the commenters believed this alternative would 
improve payment accuracy and could mitigate potential reductions to 
rural areas compared to Option 1 (CMS CBSAs).
    In response to some public comments regarding the third of the four 
locality options, we had our contractor conduct an analysis of the 
impacts that would result from the application of Option 3. Those 
results were displayed in the final locality report released in 2011. 
The final report, entitled ``Review of Alternative GPCI Payment 
Locality Structures--Final Report,'' may be accessed directly from the 
CMS Web site at www.cms.gov/PhysicianFeeSched/downloads/Alt_GPCI_Payment_Locality_Structures_Review.pdf.
(ii) Institute of Medicine Recommendations on PFS Locality Structure 
Discussion
    The Institute of Medicine recommends altering the current locality 
structure that was originally based on areas set by local contractors 
and, in 1996, reduced from 210 to current 89 using a systematic 
iterative methodology. Rather than using the current uniform fee 
schedule areas in adjusting for relative cost differences as compared 
to the national average, the Institute of Medicine recommends a three-
tiered system for defining fee schedule areas. In the first tier, the

[[Page 68950]]

Institute of Medicine proposes applying county-based fee schedule areas 
to calculate the employee wage component of the PE GPCI. Although the 
Institute of Medicine's report states that it recommends that 
``Metropolitan statistical areas and statewide non-metropolitan 
statistical areas should serve as the basis for defining these labor 
markets,'' the Institute of Medicine also recommends applying an out-
commuting adjustment, which would permit employee wage index values to 
vary by county. Since the employee wage index is one component of the 
PE GPCI, these values also would vary by county under the Institute of 
Medicine's proposal.
    To understand why the employee wage index would vary by county 
under the Institute of Medicine's recommendation, consider the three 
steps that would be required to calculate the employee wage index. The 
first step calculates the average hourly wage (AHW) for workers 
employed in each MSA or residual (rest of state) area. The wages of 
workers in each occupation are weighted by the number of workers 
employed in physicians' offices nationally. The second step applies a 
commuting-based smoothing adjustment to create area index wages for 
each county. The commuting-adjusted county index wages are equal to a 
weighted average of the AHW values calculated in the first step, where 
the weights are county-to-MSA out-commuting patterns. The Institute of 
Medicine's out-commuting-based weights equal the share of health care 
workers that live in a county where a physician's office is located who 
commute out of the county to work in a physician's office in each MSA. 
The third step sets each physician's employee index wage equal to the 
estimated area index wage (calculated in Step 2) of the county in which 
the physician's office is located. Because the out-commuting adjustment 
envisioned by the Institute of Medicine in the second step varies by 
county, the employee wage index value--and thus the PE GPCI as a 
whole--would also potentially vary by county depending on the smoothing 
option chosen. If implemented, the number of employee wage index 
payment areas could potentially increase from 89 to over 3,000.
    The Institute of Medicine's second tier of fee schedule areas would 
use an MSA-based approach. The Institute of Medicine proposes using the 
MSA-based system for the work GPCI, the office rent index and the 
purchased services index of the PE GPCI, and the MP GPCI. An MSA is 
made up of one or more counties, including the counties that contain 
the core urban area with a population of 50,000 or more, as well as 
surrounding counties that exhibit a high degree of social and economic 
integration (as measured by commuting patterns) with the urban core. 
MSAs are designed to be socially and economically integrated units 
based on the share of workers who commute to work within the urban core 
of each MSA. Implementing an MSA-based locality structure would expand 
the number of fee schedule areas from 89 to upwards of 400 plus 
additional MSAs for U.S. territories (for example, Virgin Islands, 
American Samoa, Guam, Northern Marianna Islands).
    In its third payment area tier, the Institute of Medicine proposes 
creating a national payment area for the ``equipment, supplies and 
other'' index. We currently do not adjust PEs associated with supplies 
and equipment since we believe they are typically purchased in a 
national market. Thus, this approach is equivalent to using a national 
fee schedule area to define this index. The Institute of Medicine 
proposes no change to the fee schedule area used to compute the 
``equipment, supplies and other'' index.
    Based on our contractor's analysis, there would be significant 
redistributive impacts if we were to implement a policy that would 
reconfigure the PFS localities based on the Institute of Medicine's 
three-tiered recommendation. Many rural areas would see substantial 
decreases in their corresponding GAF and GPCI values as higher cost 
counties are removed from current ``rest of state'' payment areas. 
Conversely, many urban areas, especially those areas that are currently 
designated as ``rest of state'' but reside within higher cost MSAs, 
would experience increases in their applicable GPCIs and GAFs.
    The localities used to calculate the GPCIs have been a subject of 
substantial discussion and debate since the implementation of the PFS. 
The intensity of those discussions has increased since the last 
comprehensive update to the locality structure in 1997. Physicians and 
other suppliers in areas such as Santa Cruz County, California and 
Prince William County, Virginia have expressed concern that the current 
locality structure does not appropriately capture economic and 
demographic shifts that have taken place since the last PFS locality 
update. On the other hand, rural practitioners have argued that 
revisions to the current PFS payment localities will reduce their 
payments and exacerbate the problems of attracting physicians and other 
practitioners to rural areas. In the past, we have also heard concerns 
from representatives of some statewide localities regarding the 
potential implications of adopting an alternative locality structure 
that would change their current statewide payment area (74 FR 33536).
    The Institute of Medicine stated in its Phase I report regarding 
its locality recommendation that, ``While the payment areas would stay 
the same for the HWI (hospital wage index), implementing this 
recommendation would mean that the GPCI payment areas would expand from 
89 to 441 areas, which would be a significant change. The impact of the 
change in payment areas will be assessed in the Phase II report.'' 
(``Geographic Adjustment in Medicare Payment: Phase I: Improving 
Accuracy, Second Edition'' on September 28, 2011 page 5-6.) Moreover, 
the Institute of Medicine's Phase II report will evaluate the effects 
of geographic adjustment factors on the distribution of the healthcare 
workforce, quality of care, population health, and the ability to 
provide efficient, high value care. Over the years, commenters that 
have opposed revisions to localities have claimed that changes to the 
PFS areas could have a significant impact on the ability of rural areas 
to attract physicians. Certainly, one of our major goals when we last 
comprehensively revised the Medicare PFS localities in 1996 was to 
avoid excessively large urban/rural payment differences (61 FR 59494). 
In 1996, we were hopeful that the revisions would improve access to 
care for rural areas (61 FR 59494). Some areas may have experienced 
both economic and demographic shifts since the last comprehensive 
locality update. Before moving forward with the Institute of Medicine's 
three-tiered locality recommendation, or any other potential locality 
revision, we would need to assess, and prepare to inform the public of, 
the impact of any change for all Medicare stakeholders. The Institute 
of Medicine's Phase II report, released July 17, 2012, contains an 
evaluation of many of these important factors including:
     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 for hospitals and other facilities to maintain an 
adequate and skilled workforce;
    ++ Patient access to providers and needed medical technologies;

[[Page 68951]]

    ++ Effect of adjustment factors on population health and quality of 
care; and
    ++ Effect of adjustment factors on the ability of providers to 
furnish efficient, high value care.
    To fully assess the broader public policy implications associated 
with the Institute of Medicine's locality recommendation, we must first 
fully assess and analyze the recommendations contained in the Institute 
of Medicine's Phase II report. Accordingly, we believe that it would be 
premature to make any statements about potential changes we would 
consider making to the PFS localities at this time. Any changes to PFS 
fee schedule areas would be made through future notice and comment 
rulemaking.
    In the event that we develop a specific proposal for changing the 
locality configuration during future rulemaking, we would provide 
detailed analysis on the impact of the changes for physicians in each 
county. We would also provide opportunities for public input (for 
example, Town Hall meetings or Open Door Forums), as well as 
opportunities for public comments afforded by the rulemaking process.
    While we did not propose to change the current locality 
configuration for CY 2013, we requested public comments regarding the 
Institute of Medicine's recommended three-tiered PFS payment locality 
definition. In addition, as stated above we, made our technical 
analyses of the Institute of Medicine locality recommendations, 
specific to the Phase I report, available on the CMS Web site at 
www.cms.gov/PhysicianFeeSched/.
    The following is a summary of the comments we received regarding 
the Institute of Medicine's recommended three-tiered PFS payment 
locality definition.
    Comment: We received several comments on the Institute of 
Medicine's recommendation for a three-tiered PFS payment locality 
definition. Commenters from rural areas opposed increasing the number 
of payment localities, as would happen under an MSA-based PFS locality 
structure, because it would redistribute payments from rural to urban 
areas. Additionally, commenters who opposed the Institute of Medicine's 
three-tiered locality approach argued that increasing the number of PFS 
payment localities would reduce their payment amounts and exacerbate 
problems of attracting physicians and other practitioners to rural 
areas.
    A few commenters supported the Institute of Medicine's 
recommendation to move toward an MSA-based locality configuration and 
urged us to make updating the PFS locality configuration a priority in 
CY 2013. Commenters supporting an MSA-based locality configuration 
contend that significant economic and demographic shifts have occurred 
since the last reconfiguration, making the current locality assignments 
outdated. One state medical association expressed disappointment that 
we did not propose an MSA-based locality structure for CY 2013. The 
commenter urged us ``to adopt a transition plan to update the PFS 
localities'' and stressed that the ``transition plan must take into 
account the negative impact on physicians practicing in rural areas and 
work to mitigate the reductions in these regions.''
    Response: We appreciate the comments received on the Institute of 
Medicine's recommendation to adopt an MSA-based approach for defining 
PFS localities. We will continue to evaluate the comments received on 
the Institute of Medicine's recommendations for revising the PFS 
locality structure, along with the impacts of such recommendations as 
discussed in the Phase II report.
    (B) Institute of Medicine Recommendation 2-2: Employee Wage Index 
of the PE GPCI. The data used to construct the hospital wage index and 
the physician geographic adjustment factor should come from all 
healthcare employers (Geographic Adjustment in Medicare Payment, Phase 
I: Improving Accuracy pages 2-1 thru 2-29) and 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. (Geographic Adjustment in 
Medicare Payment, Phase I: Improving Accuracy page 5-38.)
    The Institute of Medicine recommends altering the data used to 
calculate the employee wage index. Specifically, Institute of Medicine 
recommends using wage data for workers in the healthcare industry 
rather than wage data for workers across all-industries. Although all-
industry wage data has the largest sample size, the Institute of 
Medicine ``* * * is concerned that the [all-industry] sample does not 
represent physician offices.'' BLS OES occupation wage data by MSA, 
however, are not publicly available for the healthcare industry. Using 
healthcare-industry wages would require the use of confidential BLS OES 
data. While CMS could potentially secure access to the confidential BLS 
OES data, the general public may not be able to. Although the Institute 
of Medicine recommends that CMS secure an agreement with BLS to use the 
confidential wage data, the current employee wage index relies on 
publicly-available all-industry wage data.
    In the CY 2013 proposed rule we requested comments on the use of 
confidential employee wage index data rather than the publicly 
available all-industry wage data. However, we did not receive specific 
comments as to whether we should pursue the acquisition of confidential 
employee wage index data (as a replacement for the publically available 
all-industry wage data) for purposes of determining the employee wage 
index component of the PE GPCI.
    Regardless of whether healthcare-industry or all-industry wage data 
is used, the Institute of Medicine recommends following the current 
approach adopted by CMS in CY 2012 for calculating the employee wage 
index. This approach constructs the employee wage index as a weighted 
average of occupation wages for the full-range of occupations employed 
in physicians' offices, where the weights are equal to the fixed 
national weight based on the hours of each occupation employed in 
physicians' offices nationwide. We adopted this approach for 
calculating the GPCI employee wage index in the CY 2012 PFS final rule 
with comment period (76 FR 73088).
(C) Institute of Medicine Recommendation 5-2: Work GPCI Methodology
    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 (Geographic 
Adjustment in Medicare Payment, Phase I: Improving Accuracy page 5-36) 
and; Recommendation 5-3: CMS should consider an alternative method for 
setting the percentage of the work adjustment based on a systematic 
empirical process. (Geographic Adjustment in Medicare Payment, Phase I: 
Improving Accuracy pages 5-36 thru 5-37)
    The Institute of Medicine recommends replacing the current work 
GPCI methodology with a regression-based approach. We currently use 
three steps to calculate the work GPCI. These steps include:
    (1) Selecting the proxy occupations and calculating an occupation-
specific index for each proxy;
    (2) Assigning weights to each proxy-occupation index based on each 
occupation's share of total national wages to create an aggregate 
proxy-occupation index; and

[[Page 68952]]

    (3) Adjusting the aggregate proxy-occupation index by a physician 
inclusion factor to calculate the final work GPCI.
    By using this approach, the current methodology reduces the 
circularity problem that occurs when work GPCI values are based on 
direct measurements of physician earnings. Because physician earnings 
are made up of both wages and a return on investment from ownership of 
the physician practice, calculating the work GPCI using physician 
earnings information would assign areas where physician practices are 
more profitable higher work GPCI values. Although the Institute of 
Medicine recommends that we continue to use proxy occupations in the 
work GPCI methodology, its regression-based approach alters each of the 
three steps described above.
    To modify the first step, the Institute of Medicine recommends that 
we empirically evaluate the validity of seven proxy occupations we 
currently use. The current proxy occupations in the work GPCI are 
intended to represent highly educated, professional employee 
categories. Although the Institute of Medicine recommends re-evaluating 
the proxy occupations used in the work GPCI, it does not define 
specific criteria to use for this purpose.
    To modify the second step, the Institute of Medicine recommends 
using a regression-based approach to weight the selected proxy 
occupation indices based on their correlation with physician earnings. 
This Institute of Medicine proposal would replace the current approach 
where occupations are weighted by the size of their share of total 
national wages. Such an approach presumes that wages for proxy 
occupations are not related to physician profits.
    Finally, the Institute of Medicine proposes an empirically-based 
approach to determine the inclusion factor for work. The inclusion 
factor for work refers to section 1848(e)(1)(A)(iii) of the Act 
requiring that the work GPCI reflect only 25 percent of the difference 
between the relative value of physicians' work effort in each locality 
and the national average of such work effort. Therefore, under current 
law, only one quarter of the measured regional variation in physician 
wages is incorporated into the work GPCI. The Institute of Medicine 
recommends calculating an inclusion factor based on the predicted 
values of the regression described above. Under the Institute of 
Medicine's approach, the inclusion factor is larger when the proxy 
occupations have a higher correlation with physicians' earnings and 
smaller when the proxy occupations have a lower correlation with 
physicians' earnings. We note that using such an empirical approach to 
weight the proxy occupation indices and to estimate the inclusion 
factor requires the identification of a viable source of physician wage 
information in addition to the wage information of proxy occupations to 
accurately measure regional variation in physician wages.
    We requested comments on the Institute of Medicine's 
recommendations to revise the work GPCI methodology.
    The following is a summary of the comments we received regarding 
the Institute of Medicine's recommendations to revise the work GPCI 
methodology.
    Comment: A few commenters stated that the physician work GPCI 
should not be adjusted at all for geographic cost differences. However, 
the same commenters stated that if geographic payments adjustments must 
be applied under the PFS, the current proxy occupations used for 
calculating the work GPCI should be replaced with actual physician 
salary survey data to determine the true cost (market price) of 
physician labor. To that end, the commenters suggested that third 
parties who hire physicians, for example hospitals, would be a good 
source for obtaining ``market based'' physician salary data. 
Additionally, one commenter encouraged us to work with the AMA and the 
Medical Group Management Association (MGMA) to evaluate the validity of 
the current proxy occupational data sources and to determine methods 
for gathering reliable physician cost data.
    Response: We appreciate the comments received on the Institute of 
Medicine's recommendations to revise the work GPCI methodology. We will 
continue to evaluate the comments received on the methodology used for 
determining the physician work GPCI in preparation for the seventh 
update to the GPCIs, which is scheduled to be implemented in CY 2014. 
We also look forward to the MedPAC study on this issue, which is 
required under section 3004 of the MCTRJCA. This study will assess 
whether any geographic adjustment to physician work is appropriate and, 
if so, what the level should be and where it should be applied.
    (D) Institute of Medicine Recommendation 5-6: Office Rent Component 
of PE GPCI. A new source of information should be developed to 
determine the variation in the price of commercial office rent per 
square foot. (Geographic Adjustment in Medicare Payment, Phase I: 
Improving Accuracy pages 5-38 thru 5-39)
    The Institute of Medicine recommends the development of a new 
source of data to determine the variation in the price of commercial 
office rent per square foot. However, the Institute of Medicine does 
not explicitly recommend where the data should come from or how it 
should be collected. Before coming to this recommendation, the 
Institute of Medicine identified and evaluated several public and 
commercially available sources of data to determine whether an accurate 
alternative is available to replace the residential rent data currently 
used as a proxy to measure regional variation in physicians' cost to 
rent office space in the PE GPCI; these sources include rental data 
from the U.S. Department of Housing and Urban Development, American 
Housing Survey, General Services Administration, Basic Allowance for 
Housing (U.S. Department of Defense), U.S. Postal Service, MGMA (MGMA), 
and REIS, Inc. The Institute of Medicine concluded that these sources 
had substantial limitations, including lack of representativeness of 
the market in which physicians rent space, small sample size, low 
response rates, and sample biases. Although we agree that a suitable 
source for commercial office rent data would be preferable to the use 
of residential rent data in our PE office rent methodology, we have 
still been unable to identify an adequate commercial rent source that 
sufficiently covers rural and urban areas.
    We will continue to evaluate possible commercial rent data sources 
for potential use in the office rent calculation. To that end, we 
encouraged public commenters to notify us of any publicly available 
commercial rent data sources, with adequate data representation of 
urban and rural areas that could potentially be used in the calculation 
of the office rent component of PE. However, we did not receive 
comments on specific data sources for commercial rent for purposes of 
determining the office rent component of the PE GPCI.
    Comment: We received several comments that were not within the 
scope of the CY 2013 proposed rule. For example, a few commenters 
expressed concerns about the methodology used for determining the CY 
2012 GPCI values and the impact of the current PFS locality 
configuration on specific PFS localities.
    Response: We appreciate the comments regarding the methodology used 
for determining the CY 2012 GPCI values and the impact they have on

[[Page 68953]]

specific PFS localities. As discussed above, we did not make any 
proposed changes to the GPCI calculation methodology or values for CY 
2013. Therefore, it would not be appropriate to consider making new 
adjustments to the GPCI values for a specific locality without 
providing the public an opportunity to comment. We will consider the 
commenters' suggestions as we implement the seventh GPCI update 
anticipated in CY 2014.
Result of Evaluation of Comments
    We appreciate the comments received on the Institute of Medicine's 
recommendations regarding the PFS locality structure and the data 
sources and methodology used to calculate GPCI values. We will consider 
the commenters' suggestions as we continue to evaluate options for 
reconfiguring the PFS locality structure and as we implement the 
seventh update to the GPCIs scheduled for CY 2014. We also look forward 
to conducting a full review and assessment of the Institute of 
Medicine's additional PFS locality recommendations (as discussed in 
their Phase II report), as well as the MedPAC study on the physician 
work GPCI under the PFS that is required by section 3004 of the 
MCTRJCA.

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 furnished. 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 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 furnished to an eligible 
telehealth individual notwithstanding the fact that the individual 
practitioner furnishing 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. Under the BIPA, originating sites 
were 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;

[[Page 68954]]

     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 
(DSMT); and
     Smoking cessation services.
    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 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 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 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 
telehealth services to one of two categories. In the November 28, 2011 
Federal Register (76 FR 73102), we finalized revisions to criteria that 
we use to review requests in the second category. The two categories 
are:
     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 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. In reviewing these 
requests, we look for evidence indicating that the use of a 
telecommunications system in delivering the candidate telehealth 
service produces clinical benefit to the patient. Submitted evidence 
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 does 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

[[Page 68955]]

(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.
    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 (with a minimum of 1 hour of in-person instruction to ensure 
effective injection training), and smoking cessation services.
    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 2012 will be 
considered for the CY 2014 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 www.cms.gov/telehealth/.
3. Submitted Request and Other Additions to the List of Telehealth 
Services for CY 2013
    We received a request in CY 2011 to add alcohol and/or substance 
abuse and brief intervention services as Medicare telehealth services 
effective for CY 2013. The following presents a discussion of this 
request, and our proposals for additions to the CY 2013 telehealth 
list.
a. Alcohol and/or Substance Abuse and Brief Intervention Services
    The American Telemedicine Association submitted a request to add 
alcohol and/or substance abuse and brief intervention services, 
reported by CPT codes 99408 (Alcohol and/or substance (other than 
tobacco) abuse structured screening (for example, AUDIT, DAST), and 
brief intervention (SBI) services; 15 to 30 minutes) and 99409 (Alcohol 
and/or substance (other than tobacco) abuse structured screening (for 
example, AUDIT, DAST), and brief intervention (SBI) services; greater 
than 30 minutes) to the list of approved telehealth services for CY 
2013 on a category 1 basis.
    We note that we assigned a status indicator of ``N'' (Noncovered) 
to CPT codes 99408 and 99409 as explained in the CY 2008 PFS final rule 
with comment period (72 FR 66371). At the time, we stated that because 
Medicare only provides payment for certain screening services with an 
explicit benefit category, and these CPT codes incorporate screening 
services along with intervention services, we believed that these codes 
were ineligible for payment under the PFS. We continue to believe that 
these codes are ineligible for payment under PFS and, additionally, 
under the telehealth benefit. We do not believe it would be appropriate 
to make payment for claims using these CPT codes for the services 
furnished via telehealth, but not when furnished in person. Because CPT 
codes 99408 and 99409 are currently assigned a noncovered status 
indicator, and because we continue to believe this assignment is 
appropriate, we did not propose adding these CPT codes to the list of 
Medicare Telehealth Services for CY 2013.
    However, we created two parallel G-codes for 2008 that allow for 
appropriate Medicare reporting and payment for alcohol and substance 
abuse assessment and intervention services that are not furnished as 
screening services, but that are furnished in the context of the 
diagnosis or treatment of illness or injury. The codes are HCPCS code 
G0396 (Alcohol and/or substance (other than tobacco) abuse structured 
assessment (for example, AUDIT, DAST) and brief intervention, 15 to 30 
minutes) and HCPCS code G0397, (Alcohol and/or substance (other than 
tobacco) abuse structured assessment (for example, AUDIT, DAST) and 
intervention greater than 30 minutes). Since these codes are used to 
report comparable alcohol and substance abuse services under certain 
conditions, we believed that it would be appropriate to consider the 
ATA's request as it applies to these services when appropriately 
reported by the G-codes. The ATA asked that CMS consider this request 
as a category 1 addition based on the similarities between these 
services and 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). We agree that the interaction 
between a practitioner and a beneficiary receiving alcohol and 
substance abuse assessment and intervention services is similar to 
their interaction in smoking cessation services. We also believe that 
the interaction between a practitioner and a beneficiary receiving 
alcohol and substance abuse assessment and intervention services is 
similar to the assessment and intervention elements of CPT code 96152 
(health and behavior intervention, each 15 minutes, face-to-face; 
individual), which also is currently on the telehealth list.
    Therefore, we proposed to add HCPCS codes G0396 and G0397 to the 
list of telehealth services for CY 2013 on a category 1 basis. 
Consistent with this proposal, we also proposed to revise our 
regulations at Sec.  410.78(b) and Sec.  414.65(a)(1) to include 
alcohol and substance abuse assessment and intervention services as 
Medicare telehealth services.
b. Preventive Services
    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. 
As we stated in the CY 2012 proposed rule (76 FR 42826), we believe 
that the category 1 criteria not only streamline our review process for 
publically requested services that fall into this category, the 
criteria also expedite our ability to identify codes for the telehealth 
list that resemble those services already on this list.
    During CY 2012, CMS added coverage for several preventive services 
through the national coverage determination (NCD) process as authorized 
by section 1861(ddd) of the Act. These services add to Medicare's 
existing portfolio of preventive services that are now

[[Page 68956]]

available without cost sharing under the Affordable Care Act. We 
believe that for several of these services, the interactions between 
the furnishing practitioner and the beneficiary are similar to services 
currently on the list of Medicare telehealth services. Specifically, we 
believe that the assessment, education, and counseling elements of the 
following services are similar to existing telehealth services:
     Screening and behavioral counseling interventions in 
primary care to reduce alcohol misuse, reported by HCPCS codes G0442 
(Annual alcohol misuse screening, 15 minutes) and G0443 (Brief face-to-
face behavioral counseling for alcohol misuse, 15 minutes).
     Screening for depression in adults, reported by HCPCS code 
G0444 (Annual Depression Screening, 15 minutes).
     Screening for sexually transmitted infections (STIs) and 
high-intensity behavioral counseling (HIBC) to prevent STIs, reported 
by HCPCS code G0445 (High-intensity behavioral counseling to prevent 
sexually transmitted infections, face-to-face, individual, includes: 
education, skills training, and guidance on how to change sexual 
behavior, performed semi-annually, 30 minutes).
     Intensive behavioral therapy for cardiovascular disease, 
reported by HCPCS code G0446 (Annual, face-to-face intensive behavioral 
therapy for cardiovascular disease, individual, 15 minutes).
     Intensive behavioral therapy for obesity, reported by 
HCPCS code G0447 (Face-to-face behavioral counseling for obesity, 15 
minutes).
    We believe that the interactions between practitioners and 
beneficiaries receiving these services are similar to individual KDE 
services reported by HCPCS code G0420 (Face-to-face educational 
services related to the care of chronic kidney disease; individual, per 
session, per one hour), individual MNT 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), and HBAI reported by CPT code 96150 (Health and 
behavior assessment (for example, health-focused clinical interview, 
behavioral observations, psychophysiological monitoring, health-
oriented questionnaires), each 15 minutes face-to-face with the 
patient; initial assessment); CPT code 96151 (Health and behavior 
assessment (for example, health-focused clinical interview, behavioral 
observations, psychophysiological monitoring, health-oriented 
questionnaires), each 15 minutes face-to-face with the patient re-
assessment); CPT code 96152 (Health and behavior intervention, each 15 
minutes, face-to-face; Individual); CPT code 96153 (Health and behavior 
intervention, each 15 minutes, face-to-face; Group (2 or more 
patients)); CPT code 96154 (Health and behavior intervention, each 15 
minutes, face-to-face; family (with the patient present)), all services 
that are currently on the telehealth list.
    Therefore, we proposed to add HCPCS codes G0442, G0443, G0444, 
G0445, G0446, and G0447 to the list of telehealth services for CY 2013 
on a category 1 basis. We note that all coverage guidelines specific to 
the services would continue to apply when these services are furnished 
via telehealth. For example, when the national coverage determination 
requires that the service be furnished to beneficiaries in a primary 
care setting, the qualifying originating telehealth site must also 
qualify as a primary care setting. Similarly, when the national 
coverage determination requires that the service be furnished by a 
primary care practitioner, the qualifying primary distant site 
practitioner must also qualify as primary care practitioner. For more 
detailed information on coverage requirements for these services, we 
refer readers to the Medicare National Coverage Determinations Manual, 
Pub. 100-03, Chapter 1, Section 210, available at http://www.cms.gov/manuals/downloads/ncd103c1_Part4.pdf. 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 preventive services as Medicare 
telehealth services.
    Comment: All commenters expressed support for CMS' proposals to add 
alcohol and/or substance abuse structured assessment and brief 
intervention services and the several preventive services established 
through the national coverage determination (NCD) process to the list 
of Medicare telehealth services for CY 2013. One commenter stated 
particular support for CMS' approach to ensure that coverage guidelines 
continue to apply when these services are furnished via telehealth and 
expressed the intention to support CMS' efforts to help educate 
practitioners about these preventive telehealth services newly 
available in 2013. Another commenter stated that the proposal to add 
these services to this list was an integral step forward for 
telehealth, but that the current breadth and level of services covered 
under the telehealth benefit is inadequate to support more robust 
telehealth capabilities sought by some practitioners.
    Response: We appreciate the broad support for the proposed 
additions to the list of Medicare telehealth services and the efforts 
of stakeholders to ensure that practitioners are educated about the 
addition of these services to the list of Medicare telehealth services. 
We believe that the delivery of services via telehealth can help reduce 
barriers to health care access faced by some beneficiaries, and we 
remind all interested stakeholders that we are currently soliciting 
public requests to add services to the list of Medicare telehealth 
services. To be considered during PFS rulemaking for CY 2014, these 
requests must be submitted and received by December 31, 2012 or the 
close of the comment period for this final rule with comment period. 
Each request to add 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. 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 www.cms.gov/telehealth/.
    After consideration of the public comments received, we are 
finalizing our CY 2013 proposal to add HCPCS codes G0396, G0397, G0442, 
G0443, G0444, G0445, G0446, and G0447 to the list of telehealth 
services for CY 2013 on a category 1 basis. We note that all coverage 
guidelines specific to the services will continue to apply when these 
services are furnished via telehealth. For example, when the national 
coverage determination requires that the service be furnished to 
beneficiaries in a primary care setting, the telehealth originating 
site must also qualify as a primary care setting under the terms of the 
national coverage determination. Similarly, when the national coverage 
determination requires that the service be furnished by a primary care 
practitioner, the distant site practitioner who furnishes the 
telehealth service must also qualify as primary care practitioner under 
the terms of the national coverage

[[Page 68957]]

determination. For more detailed information on coverage requirements 
for these services, we refer readers to the Medicare National Coverage 
Determinations Manual, Pub. 100-03, Chapter 1, Section 210, available 
at www.cms.gov/manuals/downloads/ncd103c1_Part4.pdf. Consistent with 
this proposal, we are also revising our regulations at Sec.  410.78(b) 
and Sec.  414.65(a)(1) to include alcohol and/or substance abuse 
structured assessment and intervention services and the preventive 
services as Medicare telehealth services.
4. Technical Correction To Include Emergency Department Telehealth 
Consultations in Regulation
    In the CY 2012 PFS final rule with comment period (76 FR 73103), we 
finalized 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. However, 
we did not amend the description of the services within the regulation 
at Sec.  414.65(a)(1)(i). Therefore, we proposed to make a technical 
revision to our regulation at Sec.  414.65(a)(1)(i) to reflect 
telehealth consultations furnished to emergency department patients in 
addition to hospital and SNF inpatients.
    We received no comments regarding our proposal to make this 
technical revision. Therefore, we are finalizing our proposal to make a 
technical revision to our regulation at Sec.  414.65(a)(1)(i) to 
reflect telehealth consultations furnished to emergency department 
patients in addition to hospital and SNF inpatients.
5. 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 2013 is 0.8 
percent. Therefore, for CY 2013, the payment amount for HCPCS code 
Q3014 (Telehealth originating site facility fee) is 80 percent of the 
lesser of the actual charge or $24.43. The Medicare telehealth 
originating site facility fee and MEI increase by the applicable time 
period is shown in Table 18.

 Table 18--The Medicare Telehealth Originating Site Facility Fee and MEI
                 Increase by the Applicable Time Period
------------------------------------------------------------------------
                                   MEI
         Facility  fee          increase              Period
------------------------------------------------------------------------
$20.00........................       N/A  10/01/2001-12/31/2002
$20.60........................      3.0%  01/01/2003-12/31/2003
$21.20........................      2.9%  01/01/2004-12/31/2004
$21.86........................      3.1%  01/01/2005-12/31/2005
$22.47........................      2.8%  01/01/2006-12/31/2006
$22.94........................      2.1%  01/01/2007-12/31/2007
$23.35........................      1.8%  01/01/2008-12/31/2008
$23.72........................      1.6%  01/01/2009-12/31/2009
$24.00........................      1.2%  01/01/2010-12/31/2010
$24.10........................      0.4%  01/01/2011-12/31/2011
$24.24........................      0.6%  01/01/2012-12/31/2012
$24.43........................      0.8%  01/01/2013-12/31/2013
------------------------------------------------------------------------

F. 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) 
provided payment to independent laboratories furnishing the technical 
component (TC) of physician pathology services to fee-for-service 
Medicare beneficiaries who are inpatients or outpatients of a covered 
hospital for a 2-year period beginning on January 1, 2000. This section 
was subsequently 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), section 3104 of the Affordable Care 
Act (Pub. L. 111-148), section 105 of the Medicare and Medicaid 
Extenders Act of 2010 (MMEA) (Pub. L. 111-309), section 305 of the 
Temporary Payroll Tax Cut Continuation Act of 2011 (Pub. L. 112-78) and 
section 3006 of the Middle Class Tax Relief and Job Creation Act of 
2012 (Pub. L. 112-96) to continue payment to independent laboratories 
furnishing the technical component (TC) of physician pathology services 
to fee-for-service Medicare beneficiaries who are inpatients or 
outpatients of a covered hospital for various time periods. As 
discussed in detail below, Congress most recently acted to continue 
this payment through June 30, 2012. 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 or global 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 the

[[Page 68958]]

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. Section 105 of the MMEA extended 
the payment through CY 2011. Subsequent to the publication of the CY 
2012 PFS final rule with comment period, section 305 of the Temporary 
Payroll Tax Cut Continuation Act of 2011 extended the payment through 
February 29, 2012 and section 3006 of the Middle Class Tax Relief and 
Job Creation Act of 2012 extended the payment through June 30, 2012.
2. Revisions to Payment for TC of Certain Physician Pathology Services
    In the CY 2012 PFS final rule with comment period, we finalized our 
policy that an independent laboratory may not bill the Medicare 
contractor for the TC of physician pathology services furnished after 
December 31, 2011, to a hospital inpatient or outpatient (76 FR 73278 
through 73279, 73473). As discussed above, subsequent to publication of 
that final rule with comment period, Congress acted to continue payment 
to independent laboratories through June 30, 2012. Therefore, the 
policy that we finalized in the CY 2012 PFS final rule with comment 
period was superseded by statute for 6 months. To be consistent with 
the statutory changes and our current policy, we proposed conforming 
changes to Sec.  415.130(d) such that we continued payment under the 
PFS to independent laboratories furnishing the TC of physician 
pathology services to fee-for-service Medicare beneficiaries who are 
inpatients or outpatients of a covered hospital on or before June 30, 
2012 (77 FR 44763). Independent laboratories may not bill the Medicare 
contractor for the TC of physician pathology services furnished after 
June 30, 2012, to a hospital inpatient or outpatient. We received no 
public comments on the proposed conforming changes so we are finalizing 
the revisions to Sec.  415.130(d) without modification.

G. Therapy Services

1. Outpatient Therapy Caps for CY 2013
    Section 1833(g) of the Act applies annual, per beneficiary, 
limitations (therapy caps) on expenses considered incurred for 
outpatient therapy services under Medicare Part B. There is one therapy 
cap for outpatient occupational therapy (OT) services and another 
separate therapy cap for physical therapy (PT) and speech-language 
pathology (SLP) services combined. Although therapy services furnished 
in an outpatient hospital setting have been exempt from the application 
of the therapy caps, section 3005(b) of the MCTRJCA amended section 
1833(g) of the Act to include therapy services furnished in an 
outpatient hospital setting in the therapy caps. This provision is in 
effect from October 1, 2012 through December 31, 2012.
    The therapy cap amounts are updated each year based on the Medicare 
Economic Index (MEI). The annual change in the therapy cap amount for 
CY 2013 is computed by multiplying the cap amount for CY 2012 by the 
MEI for CY 2013 and rounding to the nearest $10. This amount is added 
to the CY 2012 cap, which is $1,880, to obtain the CY 2013 cap amount. 
The MEI for CY 2013 is 0.8 percent, resulting in a therapy cap amount 
for CY 2013 of $1,900.
    An exceptions process to the therapy caps has been in effect since 
January 1, 2006. Since originally authorized by section 5107 of the 
Deficit Reduction Act (DRA), which amended section 1833(g)(5) of the 
Act, the exceptions process for the therapy caps has been extended 
through subsequent legislation (MIEA-TRHCA, MMSEA, MIPPA, the 
Affordable Care Act, MMEA, and TPTCCA). Last amended by section 3005 of 
the MCTRJCA, the Agency's authority to provide for an exception process 
to therapy caps expires on December 31, 2012. To request an exception 
to the therapy caps, therapy suppliers and providers use the KX 
modifier on claims for services after the beneficiary's services for 
the year have exceeded the therapy cap. Use of the KX modifier 
indicates that the services are reasonable and necessary and that there 
is documentation of medical necessity in the beneficiary's medical 
record.
    Section 3005 of the MCTRJCA also required two additional changes to 
Medicare policies for outpatient therapy services. Effective for 
services furnished from October 1 through December 31, 2012, after a 
beneficiary's incurred expenses for PT and SLP services combined exceed 
the threshold of $3,700 during the calendar year, section 1833(g)(5)(C) 
of the Act, as amended by 3005(a)(5) of the MCTRJCA, requires that we 
apply a manual medical review process as part of the therapy caps 
exceptions process. Similar to the therapy caps, there is a separate 
$3,700 threshold for OT services. All requests for exceptions to the 
therapy caps for services after the $3,700 threshold is reached are 
subject to manual medical review. The manual medical review process is 
being phased in over a 3-month period. Unlike the therapy caps, 
exceptions are not automatically granted for therapy services above the 
$3,700 threshold based upon the therapist's determination that they 
services are reasonable and necessary. To request an exception to the 
therapy caps for services after the threshold is reached, the provider 
sends a request for an exception to the Medicare contractor. The 
contractor then uses the coverage and payment requirements contained 
within Pub. 100-02, Medicare Benefit Policy Manual, section 220 and 
applicable medical review guidelines, and any relevant local coverage 
determinations to make decisions as to whether an exception is approved 
for the services. For more information on the manual medical review 
process, go to www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medical-Review/TherapyCap.html.
2. Claims-Based Data Collection Strategy for Therapy Services
a. Introduction
    Section 3005(g) of the MCTRJCA requires CMS to implement, beginning 
on January 1, 2013, ``* * * a claims-based data collection strategy 
that is designed to assist in reforming the Medicare payment system for 
outpatient therapy services subject to the limitations of section 
1833(g) of the Act. Such strategy shall be designed to provide for the 
collection of data on patient function during the course of therapy 
services in order to better understand patient condition and 
outcomes.''
b. History/Background
    In 2011, more than 8 million Medicare beneficiaries received 
outpatient therapy services, including

[[Page 68959]]

physical therapy (PT), occupational therapy (OT), and speech-language-
pathology (SLP). Medicare payments for these services exceeded $5.8 
billion. Between 1998-2008, Medicare expenditures for outpatient 
therapy services increased at a rate of 10.1 percent per year while the 
number of Medicare beneficiaries receiving therapy services only 
increased by 2.9 percent per year. Although a significant number of 
Medicare beneficiaries benefit from therapy services, the rapid growth 
in Medicare expenditures for these services has long been of concern to 
the Congress and the Agency. To address this concern, efforts have been 
focused on developing Medicare payment incentives that encourage 
delivery of reasonable and necessary care while discouraging 
overutilization of therapy services and the provision of medically 
unnecessary care. A brief review of these efforts is useful in 
understanding our policy for CY 2013.
(1) Therapy Caps
    Section 4541 of the Balanced Budget Act of 1997 (Pub. L. 105-33) 
(BBA) amended section 1833(g) of the Act to impose financial 
limitations on outpatient therapy services (the ``therapy caps'' 
discussed above) in an attempt to limit Medicare expenditures for 
therapy services. Prior to the BBA amendment, these caps had applied to 
services furnished by therapists in private practice, but the BBA 
expanded the caps effective January 1, 1999, to include all outpatient 
therapy services except those furnished in hospital outpatient 
departments. Since that time, the Congress has amended the statute 
several times to impose a moratorium on the application of the caps or 
has required us to implement an exceptions process for the caps. The 
therapy caps have only been in effect without a moratorium or an 
exceptions process for less than 2 years. (See the discussion about the 
therapy cap exceptions process above.) Almost from the inception of the 
therapy caps, Congress and the Agency have been exploring potential 
alternatives to the therapy caps.
(2) Multiple Procedure Payment Reduction (MPPR)
    In the CY 2011 PFS final rule with comment period (75 FR 73232-
73242), we adopted a MPPR of 25 percent applicable to the practice 
expense (PE) component of the second and subsequent therapy services 
furnished to a beneficiary when more than one of these services is 
furnished in a single session. This reduction applies to nearly 40 
therapy service codes. (For a list of therapy service codes to which 
this policy applies, see Addendum H.) The Physician Payment and Therapy 
Relief Act of 2010 (PPATRA) subsequently revised the reduction to 20 
percent for the second and subsequent therapy services furnished to a 
beneficiary in an office setting, leaving the 25 percent reduction in 
place for therapy services furnished to a beneficiary in institutional 
settings. We adopted this MPPR as part of our directive under section 
1848(c)(2)(K) of the statute, as added by section 3134(a) of the 
Affordable Care Act, to identify and evaluate potentially misvalued 
codes. By taking into consideration the expected efficiencies in direct 
PE resources that occur when services are furnished together, this 
policy results in more appropriate payment for therapy services. 
Although we did not adopt this MPPR policy specifically as an 
alternative to the therapy caps, paying more appropriately for 
combinations of therapy services that are commonly furnished in a 
single session reduces the number of beneficiaries impacted by the 
therapy caps in a given year. For more details on the MPPR policy, see 
section II.B.4. of this final rule with comment period.
(3) Studies Performed
    The therapy cap is a uniform dollar amount that sets a limit on the 
total value of services furnished unrelated to the specific services 
furnished or the beneficiary's condition or needs. A uniform cap does 
not deter unnecessary care or encourage efficient practice for low 
complexity beneficiaries. In fact, it may even encourage the provision 
of services up to the level of the cap. Conversely, a uniform cap 
without an exceptions process restricts necessary and appropriate care 
for certain high complexity beneficiaries. Recognizing these 
limitations in a uniform dollar value cap, we have been studying 
therapy practice patterns and exploring ways to refine payment for 
these services as an alternative to therapy caps.
    On November 9, 2004, the Secretary delivered the Report to 
Congress, as required by the BBA as amended by the BBRA, ``Medicare 
Financial Limitations on Outpatient Therapy Services.'' This report 
included two utilization analyses. Although these analyses provided 
details on utilization, neither specifically identified ways to improve 
therapy payment. In the report, we indicated that further study was 
underway to assess alternatives to the therapy caps. The report and the 
analyses are available on the CMS Web site at www.cms.gov/TherapyServices/.
    Since 2004, we have periodically updated the utilization analyses 
and posted other reports on the CMS Web site. These reports highlighted 
the expected effects of limiting services in various ways and presented 
plans to collect data about beneficiary condition, including functional 
limitations, using available tools. Through these efforts, we have made 
progress in identifying the types of outpatient therapy services that 
are billed to Medicare, the demographics of the beneficiaries who 
utilize these services, the HCPCS codes used to bill the services, the 
allowed and paid amounts of the services, the providers of these 
services, the therapy utilization patterns among states in which the 
services are furnished, and the type of practitioner furnishing 
services.
    From these and other analyses in our ongoing research effort, we 
have concluded that without the ability to define the services that are 
typically needed to address specific clinical cohorts of beneficiaries 
(those with similar risk-adjusted conditions), it is not possible to 
develop payment policies that encourage the delivery of reasonable and 
necessary services while discouraging the provision of services that do 
not produce a clinical benefit. Although there is widespread agreement 
that beneficiary condition and functional limitations are critical to 
developing and evaluating an alternative payment system for therapy 
services, a system for collecting such data uniformly does not exist. 
Currently diagnosis information is available from Medicare claims. 
However, we believe that the diagnosis on the claim is a poor predictor 
for the type and duration of therapy services required. Additional work 
is needed to develop an appropriate system for classifying clinical 
cohorts to determine therapy needs.
    A 5-year CMS project titled ``Development of Outpatient Therapy 
Payment Alternatives'' (DOTPA) is expected to provide some of this 
information. The purpose of the DOTPA project is to identify a set of 
measures that we could collect routinely and reliably to support the 
development of payment alternatives to the therapy caps. Specifically, 
the measures being collected are assessed for administrative 
feasibility and usefulness in identifying beneficiary need for 
outpatient therapy services and the outcomes of those services. The 
data collection processes have just been completed and a final DOTPA 
report is expected in late CY 2013. In addition to developing 
alternatives to the therapy caps, the DOTPA project reflects our 
interest in

[[Page 68960]]

value-based purchasing by identifying components of value, namely, the 
beneficiary need and the effectiveness of therapy services. Although we 
expect DOTPA to provide meaningful data and practical information to 
assist in developing improved methods of paying for appropriate therapy 
services, it is unlikely that this one project alone will provide 
adequate information to implement a new payment system for therapy. 
This study combined with data from a wider group of Medicare 
beneficiaries would enhance our ability to develop alternative payment 
policy for outpatient therapy services.
(c) System Description and Requirements
(1) Overview
    Section 3005(g) of MCTRJCA requires CMS to implement a claims-based 
data collection strategy on January 1, 2013 to gather information on 
beneficiary function and condition, therapy services furnished, and 
outcomes achieved. This information will be used in assisting us in 
reforming the Medicare payment system for outpatient therapy services. 
By collecting data on beneficiary function over an episode of therapy 
services, we hope to better understand the Medicare beneficiary 
population who uses therapy services, how their functional limitations 
change as a result of therapy services, and the relationship between 
beneficiary functional limitations and furnished therapy.
    The long-term goal is to develop an improved payment system for 
Medicare therapy services. The desired payment system would pay 
appropriately and similarly for efficient and effective services 
furnished to beneficiaries with similar conditions and functional 
limitations that have potential to benefit from the services furnished. 
Importantly, such a system would not encourage the furnishing of 
medically unnecessary or excessive services. At this time, the data on 
Medicare beneficiaries' use and outcomes from therapy services from 
which to develop an improved system does not exist. This data 
collection effort is the first step towards collecting the data needed 
for this type of payment reform. Once the initial data have been 
collected and analyzed, we expect to identify gaps in information and 
determine what additional data would be needed to develop a new payment 
policy. Without a better understanding of the diversity of 
beneficiaries receiving therapy services and the variations in type and 
volume of treatments provided, we lack the information to develop a 
comprehensive strategy to map the way to an improved payment policy. 
While this claims-based data collection is only the first step in a 
long-term effort, it is an essential step.
    In the CY 2013 proposed rule, we proposed to implement section 
3005(g) of MCTRJCA by requiring that claims for therapy services 
include nonpayable G-codes and modifiers. Through the use of these 
codes and modifiers, we proposed to capture data on the beneficiary's 
functional limitations (a) At the outset of the therapy episode, (b) at 
specified points during treatment and (c) at discharge from the 
outpatient therapy episode of care. In addition, the therapist's 
projected goal for functional status at the end of treatment would be 
reported on the first claim for services and periodically throughout an 
episode of care.
    Specifically, as proposed, G-codes would be used to identify what 
type of functional limitation is being reported and whether the report 
is on the current status, projected goal status or discharge status. 
Modifiers would indicate the severity/complexity of the functional 
limitation being tracked. The difference between the reported 
functional status at the start of therapy and projected goal status 
represents any progress the therapist anticipates the beneficiary would 
make during the course of treatment/episode of care. We proposed that 
these reporting requirements would apply to all therapy claims, 
including those for services above the therapy caps and those that 
include the KX modifier (described above).
    By tracking any changes in functional limitations throughout the 
therapy episode of care and at discharge, we would have information 
about the therapy services furnished and the outcomes of such services. 
The ICD-9 diagnosis codes reported on the claim form would provide some 
information on the beneficiary's condition.
    We proposed that these claims-based data collection requirements 
would apply to services furnished under the Medicare Part B outpatient 
therapy benefit and PT, OT, and SLP services under the Comprehensive 
Outpatient Rehabilitation Facilities (CORF) benefit. We also proposed 
to include therapy services furnished personally and ``incident to'' 
the services of physicians or nonphysician practitioners (NPPs). As we 
explained in the proposed rule, this broad applicability would include 
therapy services furnished in hospitals, critical access hospitals 
(CAHs), skilled nursing facilities (SNFs), CORFs, rehabilitation 
agencies, home health agencies (when the beneficiary is not under a 
home health plan of care), and in private offices of therapists, 
physicians and NPPs.
    When used in this section ``therapists'' means all practitioners 
who furnish outpatient therapy services, including physical therapists, 
occupational therapists, and speech-language pathologists in private 
practice and those therapists who furnish services in the institutional 
settings, physicians and NPPs (including, physician assistants (PAs), 
nurse practitioners (NPs), clinical nurse specialists (CNSs), as 
applicable.) The term ``functional limitation'' generally encompasses 
both the terms ``activity limitations'' and ``participation 
restrictions'' as described by the International Classification of 
Functioning, Disability and Health (ICF). (For information on ICF, see 
www.who.int/classifications/icf/en/ and for specific ICF nomenclature 
(including activity limitations and participation restrictions), see 
http://apps.who.int/classifications/icfbrowser/.
    The CY 2013 proposal was based upon an option for claims-based data 
collection that was developed as part of the Short Term Alternatives 
for Therapy Services (STATS) project under a contract with CMS, which 
provided three options for alternatives to the therapy caps that could 
be considered in the short-term before completion of the DOTPA project. 
In developing options, the STATS project drew upon the analytical 
expertise of CMS contractors and the clinical expertise of various 
outpatient therapy stakeholders to consider policies and available 
claims data. The options developed were:
     Capturing additional clinical information regarding the 
severity and complexity of beneficiary functional impairments on 
therapy claims in order to facilitate medical review and at the same 
time gather data that would be useful in the long term to develop a 
better payment mechanism;
     Introducing additional claims edits regarding medical 
necessity to reduce overutilization; and
     Adopting a per-session bundled payment, the amount of 
which would vary based on beneficiary characteristics and the 
complexity of evaluation and treatment services furnished in a therapy 
session.
    Although we did not propose to adopt any of these alternatives at 
that time, we discussed and solicited public comments on all aspects of 
these options during the CY 2011 rulemaking. (See 75 FR 40096 through 
40100 and 73284 through 73293.) In developing the CY 2013 claims-based 
data collection proposal, we used the feedback received from the CY 
2011 rulemaking.

[[Page 68961]]

    We noted in the proposal that the proposed claims-based data 
collection system using G-codes and severity modifiers builds upon 
current Medicare requirements for therapy services. Section 410.61 
requires that a therapy plan of care (POC) be established for every 
beneficiary receiving outpatient therapy services. This POC must 
include: the type, amount, frequency, and duration of services to be 
furnished to each beneficiary, the diagnosis and the anticipated goals. 
Section 410.105(c) contains similar requirements for services furnished 
in the CORF setting. We have long encouraged therapists, through our 
manual provisions, to express the POC-required goals for each 
beneficiary in functional terms and require that goals be based on 
measureable assessments or objective data and relate to identified 
functional impairments. See Pub 100-02, Chapter 15, Section 220.1.2. We 
also noted that the evaluation and the goals developed as part of the 
POC would be the foundation for the initial reporting under the 
proposed system.
    The following is a summary of the comments we received regarding 
the general approach proposed in the CY 2013 PFS proposed rule to 
require nonpayable G-codes and modifiers on therapy claims to implement 
the new statutory requirement.
    Comment: Most commenters supported a new payment system for therapy 
services and recognized that data would be a critical factor in the 
development of such a system. Others recognized that the statute 
required CMS to implement a claims-based data collection system and 
therefore addressed comments to the specific elements rather than the 
overall requirement. Many commenters expressed concerns that the data 
we would be collecting under the proposed system would not provide 
adequate data for us to develop a new payment system. Many commenters 
also expressed concern that the system would not provide the means for 
therapists to adequately convey why some beneficiaries needed more 
treatment. Toward this end, commenters suggested that we include a way 
to risk adjust the data or collect more beneficiary information. Some 
commenters suggested that we establish additional G-codes to report the 
beneficiary's complexity, such as whether their condition is of low, 
moderate, or high complexity. These G-codes would represent the 
multiple variables that affect a beneficiary's condition and response 
to therapy, such as age, comorbidities, prognosis, patient safety 
considerations, and current clinical presentation. One association 
indicated that it is working on an alternative payment system that will 
define and use three levels of complexity. Many commenters pointed out 
that the data we proposed to collect could only provide information on 
the progress an individual beneficiary made and was not valid for 
analyzing payment alternatives.
    Response: We agree with commenters that the data collected under 
this system will not alone provide all the information that CMS needs 
to develop, analyze and implement an alternative payment system. We 
agree with the commenters that factors such as the patient's overall 
condition, including age, comorbidities, etc. are likely to affect the 
response to therapy; and we further agree that being able to analyze 
the data collected on such variables would enhance the usefulness of 
our data. Although we agree with the commenters' that it could be 
beneficial to include additional data elements to reflect the patient's 
condition and the complexity of the case, a meaningful system to use in 
classifying a beneficiary's complexity does not currently exist. As 
experience is gained with this new system, we expect that through 
future notice and comment rulemaking we will be able to enhance the 
system.
    Comment: Many commenters commented on the administrative burden 
that therapists would incur if the proposed system was implemented. 
Some commented that the administrative burden would be particularly 
significant for physical therapists in private practice who often 
submit claims after each therapy visit. Commenters labeled the proposal 
``improper,'' ``unreasonable,'' and ``overly burdensome.'' Other 
commenters indicated that the proposed process would not be burdensome 
stating that the functional assessment tools they use were ``perfectly 
suited to comply with CMS rule for data collection points, so we 
anticipate little or no burden in complying with the collection of 
function at intake, predicting discharge function at intake, during 
care and at discharge from care.'' In addition to the many commenters 
who noted the additional work that would be required to comply with 
this system, one commenter suggested that we also add a billable G-code 
to pay therapists for the additional work that this proposal would 
require.
    Response: While we recognize that complying with these new 
reporting requirements will impose an additional burden on therapists, 
we believe that having available additional data on the therapy 
services furnished and the beneficiaries who receive them is critical 
to development of an alternative payment system for therapy services. 
Although we acknowledge that there would be work and some additional 
effort in complying with these reporting requirements, we believe that 
the additional burden is minimal. We designed our proposal to mesh 
closely with information that therapists already include in the medical 
record. The proposal would merely require that the information be 
translated into the new G-codes and modifiers, and included in 
additional lines on the same claims that would otherwise be submitted. 
We do not believe this reporting requirement would significantly 
increase the resources required to furnish therapy services.
    Comment: A couple of commenters suggested that we abandon our G-
code/modifier proposal and use diagnosis codes in its place. One 
recognized that CMS's assertion that diagnosis codes on the claims do 
not provide the data that we need was valid when only the principal 
diagnosis is used, but stated that if we relied upon principal and 
secondary diagnosis we could obtain the additional information 
regarding the patient's clinical condition and functional limitations. 
The commenter provided the example of when hemiparesis was coded as the 
secondary diagnosis. Some suggested that when the ICD-10 system is 
implemented the diagnosis codes would provide better information.
    Response: We continue to believe that diagnosis codes, even when 
secondary diagnoses are included, do not provide the information on 
functional limitations that the statute requires us to collect. In the 
example the commenter provided, use of the diagnosis code 
``hemiparesis,'' would only tell us that the beneficiary needs therapy 
due to a paralysis or weakness on one side of his or her body caused by 
a stroke or other brain trauma, but not the extent of the beneficiary's 
functional limitation. With regard to use of ICD-10, the statute 
requires us to implement a functional reporting system by January 1, 
2013 so we cannot wait for ICD-10 system to implement the reporting 
requirements.
    Comment: One commenter requested to be exempted from these 
reporting requirements because the organization furnishes such a small 
amount of Part B outpatient therapy services. Another noted that 
``Given that this policy may affect HOPDs only for 3 months, CMS should 
consider ways to impose minimal administrative burden on HOPDs to 
implement this policy.'' One commenter sought assurance that CAHs

[[Page 68962]]

were included in this data collection effort.
    Response: As we indicated in the proposed rule, our goal is to have 
data on the complete range of therapy services for which payment is 
made based on the PFS for use in assessing and developing potential 
alternative payment systems for those services. This is important since 
any new payment system would likely apply to all those therapy services 
that are currently paid at rates under the PFS. To meet this goal, we 
proposed that the reporting requirements apply to all providers and 
suppliers of outpatient therapy services and CORFs. We note that the 
proposed policy would apply to hospital outpatient department services, 
even if such services are not subject to the therapy caps after 
December 31, 2012, and to services furnished in CAHs. We are finalizing 
without change the proposed policy to apply the reporting requirements 
to hospitals, SNFs, rehabilitation agencies, CORFs, home health 
agencies (when the beneficiary is not under a home health plan of care) 
and private offices.
    Comment: Several commenters raised concerns about a new payment 
system based upon the data collected without a standardized tool, 
stating that such data would not provide reliable information on which 
to develop an alternative payment system. Additionally, some commenters 
believed the invalid data would be used to create a payment system 
based upon functional limitations.
    Response: At this time we are not making any changes in the 
existing payment methodology for therapy services, except that 
therapists will have to comply with the reporting requirements to 
receive payment for furnished therapy services. Therapists will 
continue to be paid in CY 2013 under the existing payment methodology, 
which includes the therapy caps. We will closely monitor and implement 
any enacted legislation that would amend the current statutory 
provisions, including any amendment to extend the therapy cap 
exceptions process. At this time we are broadly considering options for 
a revised payment system for therapy services and do not have any 
preconceived ideas as to what such a system would like or what it would 
be based upon. The purpose of the data collection proposal described in 
the CY 2013 PFS proposed rule is to meet the statutory requirement and 
begin to gather data that will be used, along with other data and 
information that we have, to develop and analyze potential alternative 
payment systems. It is likely that changes will be made in the data 
collected as we gain experience with this system. Therapists and others 
concerned with Medicare payment for therapy services should not draw 
conclusions about any future payment system for therapy services based 
upon the claims-based data that we proposed to collect. The claims-
based data is only one set of information that will be used and it is 
only a beginning step in gathering the information that we would need 
to consider in developing a revised payment system for therapy 
services.
    Comment: Some commenters suggested that the ``preamble language 
implies that improvement is a requirement for ongoing Medicare 
coverage.'' One commenter suggested that the preamble language 
``implies that a measurable improvement in a beneficiary's functional 
limitation is required during an episode of therapy services.'' Others 
expressed concern that some beneficiaries, such as those with spinal 
cord injuries, will be denied coverage because they improve too slowly.
    Response: We did not intend for the preamble language to raise 
concern about changing coverage conditions for beneficiaries who need 
therapy services. As noted above, the purpose of the claims-based data 
collection system is simply to gather data, and we did not propose, nor 
are we implementing, any changes to coverage or payment policy for 
therapy services other than to require that therapists comply with the 
reporting requirements to receive payment for therapy services they 
furnish. Under existing IOM requirements, therapists have to establish 
a long-term goal for beneficiaries receiving therapy. What is new under 
this system is that at the outset of treatment, the therapist will need 
to report on the claim the projected goal for treatment using modifiers 
that describe the percentage of impairment. For beneficiaries who are 
not expected to improve, such as those receiving maintenance therapy, 
the same modifier would be used for current status and for projected 
goal status. It is possible for some beneficiaries that while 
improvement is expected, it is expected to be limited, and thus it will 
also be reported using the same modifiers. To emphasize, the collection 
of these data elements will not affect a beneficiary's coverage of 
therapy services.
    Comment: Some commenters expressed concerns about how this proposal 
would affect individuals suffering from lymphedema. Commenters stated 
that some clients experience both pain and swelling while others seem 
to have only swelling of a limb. Successful management of a beneficiary 
with lymphedema involves bandaging, compression and skin care 
instruction, manual lymph drainage, decongestive therapy, manual lymph 
drainage instruction, and exercise. These services take lots of 
valuable practitioner time to perform correctly as does instructing 
caregivers. While lymphedema impacts function to a point of mild to 
severe disability, many commenters told us that lymphedema severity/
complexity is very difficult to quantify and show significant 
functional improvements in the lymphatic system when many of these 
improvements are in skin integrity, cellular health and lymphatic flow. 
Other commenters stated that the patient's functional limitations due 
to lymphedema (restricted motion and/or mobility) can range from 
profound to minimal. But all lymphedema patients, including those 
proficient in self-care who have minimal functional limitations, are at 
great risk for developing cellulitis or other major medical 
complications from sustained tissue congestion of the lymphatic system. 
With ongoing or periodic management, as appropriate, therapy services 
can successfully prevent these medical crises. Many commenters 
expressed concern that coverage for therapy services relating to 
lymphedema would be denied as a result of this proposal. Others 
questioned which functional limitation to use for lymphedema patients.
    Response: As noted earlier, we did not propose to change coverage 
policy or to use the claims-based data reporting system to determine 
which beneficiaries are entitled to therapy services. Instead, our 
proposal would require those furnishing care to provide certain 
information about the beneficiary and his or her expected response to 
therapy. We are reiterating in this final rule with comment period that 
the proposed claims-based data collection system makes no changes in 
our therapy coverage policies.
    With regard to how those treating beneficiaries should comply with 
the data collection system, we expect therapists to report the G-code 
for the functional limitation that most closely relates to the 
functional limitation being treated. As a result of comments on the 
proposed rule, we are clarifying in this final rule with comment period 
that if the therapy services being furnished are not intended to treat 
a functional limitation, the therapist should use the G-code for 
``other'' and the modifier representing zero.
    Comment: Several commenters suggested that significant education 
will

[[Page 68963]]

be required for therapists to comply with this required reporting.
    Response: We are publishing in this final rule with comment period 
the claims-based reporting requirements that must be met in order to 
receive payment for therapy services. We will also use our usual 
methods for providing additional information, including revising 
relevant sections of the IOM, publishing Medicare Learning Network 
(MLN) Matters articles; presentations on Open Door Forums, and 
conducting National Provider Calls on the new requirements. We urge 
therapist to use these tools to assure that they have the information 
they need to comply with these new requirements.
(2) Nonpayable G-Codes on Beneficiary Functional Status
    We proposed that therapists would report G-codes and modifiers on 
Medicare claims for outpatient therapy services. We discussed and 
sought comment on two types of G-codes in the proposed rule--generic 
and categorical. Table 19 shows the proposed generic G-codes and Table 
20 shows the categorical codes discussed in the proposed rule.

     Table 19--Proposed Nonpayable G-Codes for Reporting Functional
                               Limitations
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Functional limitation for primary functional limitation:
    Primary Functional limitation, Current status at initial       GXXX1
     treatment/episode outset and at reporting intervals.....
    Primary Functional limitation, Projected goal status.....      GXXX2
    Primary Functional limitation, Status at therapy               GXXX3
     discharge or end of reporting...........................
Functional limitation for a secondary functional limitation
 if one exists:
    Secondary Functional limitation, Current status at             GXXX4
     initial treatment/outset of therapy and at reporting
     intervals...............................................
    Secondary Functional limitation, Projected goal status...      GXXX5
    Secondary Functional limitation, Status at therapy             GXXX6
     discharge or end of reporting...........................
Provider attestation that functional reporting not required:
    Provider confirms functional reporting not required......      GXXX7
------------------------------------------------------------------------

    The proposed G-codes differ from the three separate pairs of G-
codes discussed in the CY 2011 PFS rulemaking. The CY 2011 discussion 
included these three pairs of G-codes, all of which reflect specific 
ICF terminology:
     Impairments of Body Functions and/or Impairments of Body 
Structures;
     Activity Limitations and Participation Restrictions; and
     Environmental Factors Barriers.

Each pair contained a G-code to represent the beneficiary's current 
functional status and another G-code to represent the beneficiary's 
projected goal status. Each claim would have required all three sets of 
G-codes. Like the G-codes we proposed for CY 2013, the G-codes 
discussed in the CY 2011 PFS rulemaking would have been used with 
modifiers to reflect the severity/complexity of each element.
    In the CY 2013 PFS proposed rule, we indicated that we were not 
proposing to use these specific G-codes because we found them to be 
potentially redundant and confusing. Instead we chose to use G-codes to 
define ``functional limitations'' synonymously with the ICF terminology 
``activity limitations and participation restrictions.'' We noted that 
requiring separate reporting on three elements would have imposed a 
greater burden on therapists without providing a meaningful benefit in 
the value of the data provided. We added that because environmental 
barriers as discussed in CY 2011 are contextual, we did not believe 
collecting information on them would contribute to developing an 
improved payment system.
    To create the select categories of G-codes discussed in the 
proposed rule (See Table 20) we used the two most frequently reported 
functional limitations in the DOTPA project by each of the three 
therapy disciplines. We noted that should we decide to use a system 
with category-specific reporting, we would expect to develop specific 
nonpayable G-codes for select categories of functional limitations in 
the final rule. We explained that if one of the select categories of 
functional limitations describes the functional limitation being 
reported, that G-code set would be used to report the current, 
projected goal, and discharge status of the beneficiary. When reporting 
a functional limitation not described by one of categorical G-codes, 
one of the generic G-codes previously described would be used.

    Table 20--Select Categories of G-Codes Discussed in Proposed Rule
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Walking & Moving Around
    Walking & moving around functional limitation, current         GXXX8
     status at time of initial therapy treatment/episode
     outset and reporting intervals..........................
    Walking & moving around functional limitation, projected       GXXX9
     goal status, at initial therapy treatment/outset and at
     discharge from therapy..................................
    Walking & moving around functional limitation, discharge       GXX10
     status, at discharge from therapy/end of reporting on
     limitation..............................................
Changing & Maintaining Body Position
    Changing & maintaining body position functional                GXX11
     limitation, current status at time of initial therapy
     treatment/episode outset and reporting intervals........
    Changing & maintaining body position functional                GXX12
     limitation, projected goal status at initial therapy
     treatment/outset and at discharge from therapy..........
    Changing & maintaining body position functional                GXX13
     limitation, discharge status at discharge from therapy/
     end of reporting on limitation..........................
Carrying, Moving & Handling Objects
    Carrying, moving & handling objects functional                 GXX14
     limitation, current status at time of initial therapy
     treatment/episode outset and reporting intervals........
    Carrying, moving & handling objects functional                 GXX15
     limitation, projected goal status at initial therapy
     treatment/outset and at discharge from therapy..........

[[Page 68964]]

 
    Carrying, moving & handling objects functional                 GXX16
     limitation, discharge status at discharge from therapy/
     end of reporting on limitation..........................
Self Care (washing oneself, toileting, dressing, eating,
 drinking)
    Self care functional limitation, current status at time        GXX17
     of initial therapy treatment/episode outset and
     reporting intervals.....................................
    Self care functional limitation, projected goal status at      GXX18
     initial therapy treatment/outset and at discharge from
     therapy.................................................
    Self care functional limitation, discharge status at           GXX19
     discharge from therapy/end of reporting on limitation...
Communication: Reception (spoken, nonverbal, sign language,
 written)
    Communication: Reception functional limitation, current        GXX20
     status at time of initial therapy treatment/episode
     outset and reporting intervals..........................
    Communication: Reception functional limitation, projected      GXX21
     goal status at initial therapy treatment/outset and at
     discharge from therapy..................................
    Communication: Reception functional limitation, discharge      GXX22
     status at discharge from therapy/end of reporting on
     limitation..............................................
Communication: Expression (speaking, nonverbal, sign
 language, writing)
    Communication: Expression functional limitation, current       GXX23
     status at time of initial therapy treatment/episode
     outset and reporting intervals..........................
    Communication: Expression functional limitation,               GXX24
     projected goal status at initial therapy treatment/
     outset and at discharge from therapy....................
    Communication: Expression functional limitation,               GXX25
     discharge status at discharge from therapy/end of
     reporting on limitation.................................
------------------------------------------------------------------------

    We sought input from therapists on categories of functional 
limitations, such as those described in this section. We specifically 
requested comments regarding the following questions: Would data 
collected on categories of functional limitations provide more 
meaningful data on therapy services than that collected through use of 
the generic G-codes in our proposal? Should we choose to implement a 
system that is based on at least some select categories of functional 
limitation, which functional limitations should we collect data on in 
2013? Is it more, less or the same burden to report on categories of 
functional limitations or generic ones? The categories of functional 
limitations described above are based on the ICF categories, but these 
ICF categories also have subcategories. Should we use subcategories for 
reporting? Are there specific conditions not covered by these ICF 
categories? Would we need to have G-codes for the same categories of 
secondary limitations? We sought public comment on whether these 
proposed G-codes allow adequate reporting on beneficiary's functional 
limitations. We also noted that we would particularly appreciate 
receiving specific suggestions for any missing elements.
    The following is a summary of the comments we received on the G-
codes, generic and categorical, whether these proposed G-codes allow 
adequate reporting on beneficiary's functional limitations, and 
specific suggestions for any missing elements.
    Comment: Two commenters disagreed with our proposal to develop new 
G-codes and instead encouraged us to use the three pairs of G-codes 
(activities and participation restrictions, impairments to body 
functions/structures and environmental barriers) from the STATs project 
to report functional limitations. These commenters agreed that adding 
these domains might be more burdensome, but one commenter suggested 
that without these data elements we would likely miss integral 
beneficiary data in relation to health and wellness benefits, such as 
increased muscle function, improved quality of life, decreased 
depression, improved bowel/bladder function, improved respiratory 
function, improved autonomic function and improved circulation. Another 
commenter specifically agreed with our decision to use only the one 
ICF-defined G-code from the STATS for activity impairments and 
participation restrictions. They noted that it would be potentially 
redundant and confusing to adopt the two additional G-codes for body 
functions/structures and environmental barriers and noted that these 
other two categories would ``provide the agency with little meaningful 
data.'' One commenter suggested that if we adopted this additional 
reporting we could minimize the additional burden by eliminating goal 
reporting.
    Response: We appreciate the views of these commenters about which 
ICF categories to capture in our G-code data collection. We continue to 
believe that the reporting of functional limitations will be less 
confusing and more defined with the G-codes as described in our 
proposal for activity impairments/participation restrictions. As we 
move forward with functional reporting in following years, we may 
revisit the addition of other categories.
    Comment: Commenters had divergent views on the categorical and 
generic G-codes. Many found the proposed system complicated, burdensome 
and stated that it would not provide the data we sought. Some 
criticized the categorical codes as being too broadly defined and 
stated that this will lead to confusion as to what areas of impairment 
are being reported. For example, one commenter stated, ``The suggested 
categories are very broad and, in our view, will lead to confusion 
regarding which areas of impairment would be reported for certain 
therapy activities.'' One commenter opposed the use of generic G-codes 
saying that data from these codes would be ``useless.'' On the other 
hand, we received much support for the proposed G-codes. Many 
commenters supported the use of categorical G-codes codes saying their 
use will provide more useful information than the generic ones. One 
commenter stated, ``We believe having therapists report on these 
categories will provide CMS with more useful information than generic 
reporting on a functional limitation.'' Many favored use of the 
categorical G-codes in addition to using ``generic'' or ``other'' codes 
only for functional limitations that did not fit in one of the 
categorical ones. Several commenters gave us specific guidance, 
recommending that instead of the generic G-codes, we add an ``other'' 
G-code to the categorical codes for functional limitations that don't 
fit into one of the defined categories.
    Response: Based upon the comments we received suggesting that we 
use the categorical codes, but include an ``other'' category to use 
when one of the categorical codes does not apply, we are modifying our 
proposal to adopt categorical G-codes to define functional limitations 
and including within the categorical G-codes ``other'' G-codes to use 
when one of the more specific categorical codes does not apply. In 
addition to this change, as discussed below, we are replacing the two 
SLP categorical codes with eight new ones to better reflect the 
diversity of services

[[Page 68965]]

furnished. Table 21 provides a complete list of the codes that will be 
available for reporting functional limitations. With regard to the 
commenters' concern that the categories are too broad and this will 
lead to confusion as to what is being reported, we acknowledge that the 
categories are broad, but disagree that the use of broad categories 
will result in confusion. Instead, we believe that the result will be 
the collection of data that includes information on broadly defined 
functional limitations. Without more specific input and greater support 
from the commenters, we do not believe we should create these in this 
final rule with comment period. Moreover, we believe it is important to 
gain experience with a limited number of codes in this new reporting 
system before we vastly expand the number of codes that are used. We 
sought comment on ways to better define the categories and where we 
received specific suggestions for additional G-codes that were 
sufficiently developed, such as those for SLP (explained below), we 
included them in our final set of G-codes. We anticipate that we will 
continue to refine the categories through future notice and comment 
rulemaking as we get more information and experience with this system.
    Comment: Several commenters pointed out that there were many 
functional limitations for which there was not a categorical G-code. 
The American Speech-Language and Hearing Association pointed out the 
lack of appropriate SLP categories and suggested that we take advantage 
of the experience that has been gained through the use of its system 
for collecting data on functional limitations in this area. 
Specifically, they urged us to assign G-codes to the top seven reported 
functional communication measures used in National Outcomes Measurement 
System (NOMS). This commenter stated that, using this system, we would 
be able to collect ``consistent'' and ``meaningful'' ratings across all 
settings nationally.
    Others told us that there were many conditions and situations that 
our system did not address and that some of these beneficiaries did not 
exhibit functional limitations that could be easily measured or 
reported. They cited, as examples, beneficiaries seen for lymphedema 
management, wound care, wheelchair assessment/fitting, cognitive 
impairments, and incontinence training.
    Response: We agree with commenters that the G-codes discussed in 
the proposed rule did not go far enough in addressing SLP functional 
limitations. After consideration of the comments, we also agree that 
adoption of the most frequently used NOMS measures would be the best 
way to address this issue and would significantly improve our system in 
several ways. By using a system familiar to many speech-language 
pathologists, the quality of our data collection will be enhanced and 
the burden on those reporting will be less. We agree that it is 
reasonable to incorporate categories that are more specific, when 
appropriate, and note that this is an opportunity to align with 
existing measurement systems.
    Accordingly, we are replacing the two of the categorical codes 
relating to SLP with seven categorical codes and one ``other'' code for 
SLP. (See Table 21.) The seven categorical codes mirror the seven most 
frequently reported NOMS categories and should be used when 
appropriate. For all other SLP treatments, the ``SLP Other'' category 
should be used.
    For functional limitations not defined by the specific categorical 
codes and for therapy services that are not addressing a particular 
functional limitation; the ``other'' G-codes should be used. As we 
begin collecting data in this initial year, we will continue to assess 
the need for additional G-codes, refinement of existing ones, and 
examine ways to address those situations for which beneficiaries do not 
have functional limitations.
    We have addressed in this final rule with comment period those 
areas for which we have adequate information to do so at this time and 
for which an additional burden will not be created. We will continue to 
refine this system through further notice and comment rulemaking in 
future years.
    Comment: We received mixed feedback in response to our request for 
comment regarding the use of the ICF subcategories. Some commenters 
noted that adding more subcategories would result in too many codes and 
only add to the confusion. At least one other commenter supported 
subcategory reporting, but did not suggest which subcategories we 
should use.
    Response: Given the comments received, we will not be implementing 
reporting by subcategories at this time. Once the system is 
operational, we will reassess whether subcategory reporting is 
necessary to provide the data that we need.
    Comment: Some commenters interpreted our proposal to limit each 
therapy discipline to using only the two codes that represented the top 
two reported functional limitations for that discipline and suggested 
that we allow therapists to use any appropriate functional limitation.
    Response: We agree with commenters that therapists should be able 
to use any appropriate functional limitation. In the proposed rule, we 
indicated that we developed the 6 categorical codes to correspond with 
the two most commonly reported functional limitations for each of the 
three therapy disciplines. However, this was only a way of identifying 
the functional limitations for which we needed codes. To be clear, 
therapists are to use the most appropriate categorical G-code that 
describes the functional limitation that is the primary reason for 
treatment without restriction by discipline.
    Comment: A few commenters urged us to clarify that therapists using 
Patient Inquiry by Focus on Therapeutic Outcomes, Inc (FOTO), or 
another measurement system that provides a composite functional status 
score, did not need to report on secondary limitations.
    Response: In assessing this comment, we recognized the need to 
clarify how composite functional scores should be reported. We are 
clarifying that a composite score should be reported using G8990 (Other 
physical or occupational primary functional limitation, current status, 
at therapy episode outset and at reporting intervals), G8991(Other 
physical or occupational primary functional limitation, projected goal 
status, at therapy episode outset, at reporting intervals, and at 
discharge or to end reporting) and G8992 (Other physical or 
occupational primary functional limitation, discharge status, at 
discharge from therapy or to end reporting). Should there be the 
occasion to report on a second condition after the reporting on the 
first had ended, the therapist would use the G-code set for ``other 
subsequent'' functional limitation, G8993-G8896.
(3) Number of Functional Limitations on Which Reporting Occurs
    We proposed that, using a set of G-codes with appropriate 
modifiers, the therapist would report the beneficiary's primary 
functional limitation defined as the most clinically relevant 
functional limitation at the time of the initial therapy evaluation and 
the establishment of the POC. The projected goal would also be reported 
at this time. At specified intervals during treatment, claims would 
also include the current functional status and the goal functional 
status, which would not typically change during therapy, except as 
described below. On the final claim for an episode of care, the 
therapist would report the status at this time for this functional 
limitation and the goal status.

[[Page 68966]]

    Early results from the DOTPA project suggest that most 
beneficiaries have more than one functional limitation at treatment 
outset. In fact, only 21 percent of the DOTPA assessments reported just 
one functional limitation. Slightly more than half (54 percent) 
reported two, three or four functional limitations.
    To the extent that the DOTPA finding is typical, the therapist may 
need to make a determination as to which functional limitation is 
primary for reporting purposes. In cases where this is unclear, the 
therapist may choose the functional limitation that is most clinically 
relevant to a successful outcome for the beneficiary, the one that 
would yield the quickest and/or greatest mobility, or the one that is 
the greatest priority for the beneficiary. In all cases, this primary 
functional limitation should reflect the predominant limitation that 
the furnished therapy services are intended to address.
    We sought comment on specific issues regarding reporting data on a 
secondary limitation. Specifically, we requested comments regarding 
whether reporting on secondary functional limitations should be 
required or optional.
    The following is a summary of the comments we received on the 
percentage of Medicare therapy beneficiaries with more than one 
functional limitation at the outset of therapy and whether reporting on 
secondary functional limitations should be required or optional.
    Comment: The responses on the number of functional limitations 
being treated showed a wide variation. One commenter treating 
beneficiaries with spinal cord injuries indicated that 100 percent had 
more than one functional limitation, with an average of 10 functional 
limitations. Another respondent told us that 50 percent of SLP patients 
have two or more functional limitations. Another respondent indicated 
that nearly 98 percent of patients seen by therapists using FOTO were 
surveyed for only one condition. Most commenters recommended that 
therapists be required to report only one functional limitation, 
especially as we are just beginning to require functional reporting. 
The commenters stated that it would be burdensome and would pose 
clinical challenges to require reporting both a primary and secondary 
functional limitation. Others suggested that it would be costly, time 
intensive and burdensome to report numerous secondary functional 
limitations. Some stated that reporting on only one functional 
limitation would not capture sufficient information since treatment of 
multiple functional limitations is interrelated and treatment for these 
occurs simultaneously, not sequentially. Some commenters suggested 
allowing the optional reporting of a second or third functional 
limitation. Some commenters questioned how functional reporting would 
be handled when the beneficiary was being treated by more than one 
discipline or when a substitute therapist treats a beneficiary.
    Response: In response to comments, we have decided to limit 
reporting to one functional limitation at this time. Recognizing that 
therapists treat the patient as a whole and work on more than one 
functional limitation at a time, we believe that limiting reporting in 
this way will make it less burdensome in the situations involving more 
than one functional limitation. Although many commenters favored the 
option of reporting on additional functional limitations when 
appropriate, we believe that allowing additional optional reporting 
would not produce consistent or useful data on beneficiaries who have 
more than one functional limitation that is being treated, and could 
potentially complicate the use of the data we collect for the 
development of future therapy payment policy. As we seek to improve 
reporting in future years, we may reconsider whether to permit or 
require reporting on additional functional limitations. We note that 
this is a new reporting system designed to gather data on the changes 
in beneficiary function throughout an episode of care. We are not 
expecting therapists to change the way they treat patients because of 
our reporting requirements.
    We also explained that in situations where treatment continues 
after the treatment goal is achieved and reporting ended on the primary 
functional limitation, reporting will be required for another 
functional limitation. Thus, reporting on more than one functional 
limitation may be required for some patients, but not simultaneously. 
Instead, once reporting on the primary functional limitation is 
complete, the therapist will begin reporting on a subsequent functional 
limitation using another set of G-codes. If this additional functional 
limitation is not described by one of the specific categorical codes, 
one of the three ``other'' codes should be used depending on the 
circumstances.
    In response to the comments, we are making several modifications in 
the G-codes that we proposed, as noted in the responses to comments 
above. To summarize, the G-codes, and their long descriptors, that will 
be used for reporting functional limitations of beneficiaries are 
listed in Table 21. There are 11 G-codes that describe categorical 
functional limitation, including seven for SLP services, and three more 
general G-codes for functional limitations that do not fit within one 
of the 11 categories. The general categorical codes would be used when 
none of the specific categories apply or when an assessment tool is 
used that yields a composite score that combines several or many 
functional measures, such as is done with the FOTO Patient Inquiry 
tool, for example. Two of these general G-code sets are to be used for 
``other'' PT and OT services and one for ``other'' SLP services. In 
addition, we deleted the requirement to report a G-code to signal that 
no reporting was required and thus deleted the G-code that would have 
been used for this. (For discussion about the comments on this G-code 
and our decision to remove this reporting requirement, see section 
II.F.2.(b).(6).) Therapists would use the code that best describes the 
functional limitation that is primary to the therapy plan of care.

   Table 21--G-Codes for Claims-Based Functional Reporting for CY 2013
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                    Mobility: Walking & Moving Around
------------------------------------------------------------------------
G8978....................  Mobility: walking & moving around functional
                            limitation, current status, at therapy
                            episode outset and at reporting intervals.
G8979....................  Mobility: walking & moving around functional
                            limitation, projected goal status, at
                            therapy episode outset, at reporting
                            intervals, and at discharge or to end
                            reporting.
G8980....................  Mobility: walking & moving around functional
                            limitation, discharge status, at discharge
                            from therapy or to end reporting.
------------------------------------------------------------------------
                  Changing & Maintaining Body Position
------------------------------------------------------------------------
G8981....................  Changing & maintaining body position
                            functional limitation, current status, at
                            therapy episode outset and at reporting
                            intervals.

[[Page 68967]]

 
G8982....................  Changing & maintaining body position
                            functional limitation, projected goal
                            status, at therapy episode outset, at
                            reporting intervals, and at discharge or to
                            end reporting.
G8983....................  Changing & maintaining body position
                            functional limitation, discharge status, at
                            discharge from therapy or to end reporting.
------------------------------------------------------------------------
                   Carrying, Moving & Handling Objects
------------------------------------------------------------------------
G8984....................  Carrying, moving & handling objects
                            functional limitation, current status, at
                            therapy episode outset and at reporting
                            intervals.
G8985....................  Carrying, moving & handling objects
                            functional limitation, projected goal
                            status, at therapy episode outset, at
                            reporting intervals, and at discharge or to
                            end reporting.
G8986....................  Carrying, moving & handling objects
                            functional limitation, discharge status, at
                            discharge from therapy or to end reporting.
------------------------------------------------------------------------
                                Self Care
------------------------------------------------------------------------
G8987....................  Self care functional limitation, current
                            status, at therapy episode outset and at
                            reporting intervals.
G8988....................  Self care functional limitation, projected
                            goal status, at therapy episode outset, at
                            reporting intervals, and at discharge or to
                            end reporting.
G8989....................  Self care functional limitation, discharge
                            status, at discharge from therapy or to end
                            reporting.
------------------------------------------------------------------------
                Other PT/OT Primary Functional Limitation
------------------------------------------------------------------------
G8990....................  Other physical or occupational primary
                            functional limitation, current status, at
                            therapy episode outset and at reporting
                            intervals.
G8991....................  Other physical or occupational primary
                            functional limitation, projected goal
                            status, at therapy episode outset, at
                            reporting intervals, and at discharge or to
                            end reporting.
G8992....................  Other physical or occupational primary
                            functional limitation, discharge status, at
                            discharge from therapy or to end reporting.
------------------------------------------------------------------------
              Other PT/OT Subsequent Functional Limitation
------------------------------------------------------------------------
G8993....................  Other physical or occupational subsequent
                            functional limitation, current status, at
                            therapy episode outset and at reporting
                            intervals.
G8994....................  Other physical or occupational subsequent
                            functional limitation, projected goal
                            status, at therapy episode outset, at
                            reporting intervals, and at discharge or to
                            end reporting.
G8995....................  Other physical or occupational subsequent
                            functional limitation, discharge status, at
                            discharge from therapy or to end reporting.
------------------------------------------------------------------------
                               Swallowing
------------------------------------------------------------------------
G8996....................  Swallowing functional limitation, current
                            status at time of initial therapy treatment/
                            episode outset and reporting intervals.
G8997....................  Swallowing functional limitation, projected
                            goal status, at initial therapy treatment/
                            outset and at discharge from therapy.
G8998....................  Swallowing functional limitation, discharge
                            status, at discharge from therapy/end of
                            reporting on limitation.
------------------------------------------------------------------------
                              Motor Speech
------------------------------------------------------------------------
G8999....................  Motor speech functional limitation, current
                            status at time of initial therapy treatment/
                            episode outset and reporting intervals.
G9157....................  Motor speech functional limitation, projected
                            goal status at initial therapy treatment/
                            outset and at discharge from therapy.
G9158....................  Motor speech functional limitation, discharge
                            status at discharge from therapy/end of
                            reporting on limitation.
------------------------------------------------------------------------
                      Spoken Language Comprehension
------------------------------------------------------------------------
G9159....................  Spoken language comprehension functional
                            limitation, current status at time of
                            initial therapy treatment/episode outset and
                            reporting intervals.
G9160....................  Spoken language comprehension functional
                            limitation, projected goal status at initial
                            therapy treatment/outset and at discharge
                            from therapy.
G9161....................  Spoken language comprehension functional
                            limitation, discharge status at discharge
                            from therapy/end of reporting on limitation.
------------------------------------------------------------------------
                       Spoken Language Expression
------------------------------------------------------------------------
G9162....................  Spoken language expression functional
                            limitation, current status at time of
                            initial therapy treatment/episode outset and
                            reporting intervals.
G9163....................  Spoken language expression functional
                            limitation, projected goal status at initial
                            therapy treatment/outset and at discharge
                            from therapy.
G9164....................  Spoken language expression functional
                            limitation, discharge status at discharge
                            from therapy/end of reporting on limitation.
------------------------------------------------------------------------
                                Attention
------------------------------------------------------------------------
G9165....................  Attention functional limitation, current
                            status at time of initial therapy treatment/
                            episode outset and reporting intervals.
G9166....................  Attention functional limitation, projected
                            goal status at initial therapy treatment/
                            outset and at discharge from therapy.
G9167....................  Attention functional limitation, discharge
                            status at discharge from therapy/end of
                            reporting on limitation.
------------------------------------------------------------------------
                                 Memory
------------------------------------------------------------------------
G9168....................  Memory functional limitation, current status
                            at time of initial therapy treatment/episode
                            outset and reporting intervals.
G9169....................  Memory functional limitation, projected goal
                            status at initial therapy treatment/outset
                            and at discharge from therapy.
G9170....................  Memory functional limitation, discharge
                            status at discharge from therapy/end of
                            reporting on limitation.
------------------------------------------------------------------------

[[Page 68968]]

 
                                  Voice
------------------------------------------------------------------------
G9171....................  Voice functional limitation, current status
                            at time of initial therapy treatment/episode
                            outset and reporting intervals.
G9172....................  Voice functional limitation, projected goal
                            status at initial therapy treatment/outset
                            and at discharge from therapy.
G9173....................  Voice functional limitation, discharge status
                            at discharge from therapy/end of reporting
                            on limitation.
------------------------------------------------------------------------
                     Other SLP Functional Limitation
------------------------------------------------------------------------
G9174....................  Other speech language pathology functional
                            limitation, current status at time of
                            initial therapy treatment/episode outset and
                            reporting intervals.
G9175....................  Other speech language pathology functional
                            limitation, projected goal status at initial
                            therapy treatment/outset and at discharge
                            from therapy.
G9176....................  Other speech language pathology functional
                            limitation, discharge status at discharge
                            from therapy/end of reporting on limitation.
------------------------------------------------------------------------

(4) Severity/Complexity Modifiers
    We proposed that for each functional G-code used on a claim, a 
modifier would be required to report the severity/complexity for that 
functional limitation. We proposed to adopt a 12-point scale to report 
the severity or complexity of the functional limitation involved. The 
proposed modifiers are listed in Table 22.

                      Table 22--Proposed Modifiers
------------------------------------------------------------------------
                                                Impairment limitation
                 Modifier                      restriction  difficulty
------------------------------------------------------------------------
XA........................................  0%.
XB........................................  Between 1-9%.
XC........................................  Between 10-19%.
XD........................................  Between 20-29%.
XE........................................  Between 30-39%.
XF........................................  Between 40-49%.
XG........................................  Between 50-59%.
XH........................................  Between 60-69%.
XI........................................  Between 70-79%.
XJ........................................  Between 80-89%.
XK........................................  Between 90-99%.
XL........................................  100%.
------------------------------------------------------------------------

    We noted that there are many valid and reliable measurement and 
assessment tools that therapists use to inform their clinical decision-
making and to quantify functional limitations, including the four 
assessment tools we discussed in CY 2011 PFS rulemaking that produce 
functional scores--namely, the Activity Measure--Post Acute Care (AM-
PAC) tool, the FOTO Patient Inquiry, OPTIMAL, and NOMS. We list these 
four tools as recommended for use by therapists, though not required, 
in the outpatient therapy IOM provision of the Benefits Policy Manual, 
Chapter 15, Section 220.3C ``Documentation Requirements for Therapy 
Services.'' We suggested that the scores from these and other 
measurement tools already in use by therapists that produce numerical 
or percentage scores be mapped or crosswalked to the proposed 12-point 
severity modifier scale.
    In assessing the ability of therapists to provide the required 
severity information regardless of what assessment tool or combination 
of tools they use, if any, we considered the comments received on the 
CY 2011 PFS proposed rule discussion. These indicated that we needed 
greater granularity in our severity scale so that the changes in 
functional limitation over the course of therapy could be more 
accurately reflected. Specifically, most commenters on the CY 2011 
proposed rule favored the 7-point scale over the 5-point ICF-based 
scale. They indicated that they preferred a scale with more severity 
levels and equal increments since it would allow the therapist to 
document smaller changes that many therapy beneficiaries make towards 
their goals.
    Believing that neither the 5- or 7-point scales would be adequate 
for this reporting system, we developed and proposed a 12-point scale 
that we believed was an enhancement over the 7-point scale. We thought 
it addressed concerns that those commenting on the CY 2011 options had 
raised regarding the 7-point scale. We thought that a more sensitive 
rating scale (one with more increments) had the advantage of 
demonstrating the progress of beneficiaries with conditions that 
improve slowly, such as those recovering from strokes or with spinal 
cord injuries. In addition, we believed that the proposed scale's 10-
percentage point increments would make it easier for therapists to 
convert composite and overall scores from assessment instruments or 
other measurement tools to this scale.
    The following is a summary of the comments we received regarding 
our proposal for a 12-point scale to capture the severity/complexity of 
beneficiaries' functional limitations.
    Comment: Several commenters stated that not all tests and 
measurement tools that therapists use could be easily crosswalked to 
any single numerical scale, stating that, for example, some tests and 
measures of functional limitations use ordinal scales. Further, the 
scores from some tests that are not linear or proportional to each 
other are not easily translatable to the 12-point scale. Some 
commenters pointed out the problems of developing a single score when 
more than one tool is used. Some commenters noted that there are a wide 
variety of therapy measurement tools that are used to inform clinical 
decision making and these are not measures that typically produce a 
functional assessment. Further, these commenters told us that combining 
the results of multiple measures make it extremely difficult to 
quantify beneficiary function and, as such, said it will be very 
difficult to crosswalk this type of information to a severity scale. 
And, many of these commenters expressed concerns about how therapist 
will implement the use of our severity/complexity modifier scale; they 
noted that much education is needed for therapists to understand the 
selection of a severity modifier. One commenter questioned whether 
aggregated subjective and objective data would be valid or usable by 
CMS.
    Response: It is essential that the data reported on functional 
limitations be grouped using the same numeric scale. Moreover, we 
believe that is easier for those reporting data on functional 
limitations to use ranges of percentages rather than the absolute 
values. We acknowledge that therapists will incur some challenges when 
initially adopting our system as they learn how to translate the 
information obtained through various tests and measures to a particular 
modifier scale. However, as therapists gain experience in doing so, we 
anticipate that these translations will become easier and a normal part 
of their evaluative and treatment processes. Moreover, we are hopeful 
that forthcoming modifications from tool sponsors or others will make 
it easier for therapists to report the functional

[[Page 68969]]

limitations measured by these tools, such as modifying the tool so the 
results match the Medicare severity/complexity scale or issuing 
instructions or guidance on translating the results to the Medicare 
severity/complexity scale. We also expect that some translation tools 
are likely to become available. We are hopeful that forthcoming 
guidance and translation tools from tool sponsors and others will 
clarify some of translation questions therapists have regarding the 
Medicare severity scale. Given that it is essential for our purposes to 
have a severity/complexity scale, we are adopting one in this final 
rule. With regard to education, CMS will make information about the 
severity/complexity scale, as well as other aspects of our new system, 
widely available to therapists. It will be incumbent upon individual 
therapists to learn how to translate the score from a singular 
assessment tool or the combined results from multiple tests/measures 
along with other information regarding their patient's functional 
limitation to the Medicare scale. Finally, we acknowledge that a system 
that combines objective and subjective data is not ideal. However, at 
this time it appears that there is not an alternative. We will continue 
to refine and improve this system.
    Comment: Some commenters offered alternative suggestions to the use 
of a severity/complexity scale. Several commenters suggested that we 
use the secondary diagnoses on claims instead. Others suggested 
capturing the medical complexity of a beneficiary using other 
indicators, such as E/M codes or co-morbidities.
    Response: We appreciate these suggestions. While we are able to 
collect secondary diagnosis data from claims, we know from prior 
studies that diagnoses alone cannot predict the amount of therapy 
services needed. We do not believe that diagnoses and comorbidities 
measure functional limitations, which the statute requires us to 
collect. Nor do we believe using existing or therapy-specific E/M codes 
would provide the data on functional limitations that we are seeking to 
collect. We do, however, believe that these elements may provide 
additional data that could contribute to our analysis of payment 
alternatives. As we consider refinements to the claims-based data 
collection system in future years we will consider these additional 
data elements.
    Comment: Commenters had differing views on the use of the proposed 
12-point scale to convey the severity of the beneficiary's functional 
limitations. Those supporting the use of the proposed 12-point scale 
stated that it was more sensitive and so better reflected change in a 
beneficiary's functional limitation. For example, commenters using FOTO 
said that they would not have problems adopting our proposed 12-point 
scale because they receive a composite score from FOTO, based on the 
patient's functional survey results, which can be easily mapped as a 
percentage of overall beneficiary function. Other commenters suggested 
that the 12-point scale we proposed was too complicated and had too 
many levels. Some of these commenters also stated that therapists were 
not familiar with such a scale. Several commenters believed that we 
should modify the 12-point scale to a 10-point one by eliminating the 
separate modifiers for zero and 100 percent because they believed it 
would be more recognizable and easier for therapists to use. Many 
suggested that we use the 7-point scale discussed in the CY 2011 
rulemaking. A couple of these commenters thought that this 7-point 
scale was a valid and reliable one. Another commenter added that a 7-
point scale is used by many outcome tools, such as NOMS, although no 
other examples of a tool using a 7-point scale were provided. One 
commenter was opposed to a severity/complexity scale but suggested that 
if one was used, it should be a 5- or 7-point scale.
    Response: After reviewing the comments, it is clear to us that, 
given the diversity of views among therapy professionals, the range in 
functional limitations being measured, the variability of beneficiary 
conditions being treated and the plethora of assessment tools and 
instruments being used, the translation of functional information to 
any scale used is likely to require adjustments by some therapists. 
Although we proposed a 12-point scale as we thought it would be easier 
to use and provided more sensitivity, a majority of commenters favored 
the 7-point scale over the 12-point scale. After consideration of the 
many comments on the use of a 12-point scale, we have determined that a 
7-point scale as preferred by commenters will provide appropriate data 
for our analysis. Accordingly, are finalizing the 7-point scale in 
Table 23.
    Comment: Some commenters read our proposal to require that 
therapists use one of the IOM-recommended assessment tools, and thought 
that we should allow therapists to assign a severity/complexity 
modifier using their clinical judgment when a functional assessment 
tool is not used. Other commenters noted that physical and occupational 
therapists typically use multiple measurement tools during the 
evaluative process to inform clinical decision making; and, that 
clinical judgment is needed to combine these results to determine a 
functional limitation percentage. One commenter pointed out that the 
IOM outpatient coverage guidelines recommend, but do not mandate, the 
use of standardized measurement instruments and sought guidance as to 
how the modifier scale would apply to a therapist who satisfies 
documentation guidelines but does not use a standardized measurement 
instrument that produces a global functional score.
    Response: We appreciate commenters' concerns that our proposed 
policy would require therapists to use a functional assessment tool to 
determine the overall degree of functional impairment. This was not our 
intent. However, when one of the four functional assessment instruments 
is not utilized, we require as part of our IOM Documentation 
Guidelines, that the therapist documents using objective measures the 
beneficiary's physical functioning. We are also aware that use of one 
of the four functional instruments is not widespread; and that physical 
and occupational therapists typically use multiple objective tests and 
measures to establish and compare a beneficiary's physical function and 
progress throughout the therapy episode. As such, we recognize that a 
therapist's judgment is critical in determining how to best measure 
their patient's functional impairment and how to assimilate the various 
necessary objective findings to ascertain a certain percentage of 
function that can be translated to the Medicare severity scale. Our 
requirements for documenting the beneficiary's functional status were 
established prior to this data collection effort, and the primary 
purpose for measuring functional impairment continues to aid the 
therapist in furnishing therapy services. Our data collection system is 
designed to collect data that is developed in the evaluative process 
and assessed throughout the course of treatment, not to prescribe how 
or what measures therapists use to assess functional impairment or 
deliver services. Accordingly, it is acceptable for therapists to use 
their professional judgment in the selection of the appropriate 
modifier. Our IOM provisions already assert that when assessing the 
level of functional impairment, the therapist uses his/her professional 
judgments in addition to the objective measures and accepted 
methodologies that are recognized in the

[[Page 68970]]

therapy community and in professional practice guidelines.
    Because there will be many cases for which one single functional 
measurement tool is not available or clinically inappropriate, 
therapists can use their clinical judgment in the assignment of the 
appropriate modifier. Therapists will need to document in the medical 
record how they made the modifier selection so that the same process 
can be followed at succeeding assessment intervals.
    Comment: Many commenters evaluated our proposed 12-point scale as 
if it was itself to be used as an assessment tool, rather than simply a 
scale to report results of assessments. Some of these commenters also 
warned us that the 12-point scale could not give us valid and reliable 
data to use as an alternative payment system for therapy services 
unless a single assessment tool were used.
    Response: We appreciate the views expressed by the many commenters. 
However, the 12-point scale was not intended to be used as an 
assessment tool. Rather, it was intended to be used to express the 
beneficiary's functional limitation in terms of a percentage of 100 
total points so that there is a uniform scale for the degree of 
functional limitation. In other words, the scale that is used to report 
the degree of impairment would not affect the validity of the data. The 
reported data are as valid and reliable as the assessment tool or 
instrument (at times in combination with the therapist's judgment) that 
was used to develop the score. We also realize that there are 
limitations to the data that we will collect, in part because it is not 
all derived from one consistent, assessment tool.
    Comment: Commenters noted that pain is a clinical complexity that 
is factored in when the beneficiary and therapist plan the course of 
treatment, but is not factored in to the proposed scale.
    Response: We believe that the commenter meant that pain is a 
definite limiter of function and is difficult to measure and hard to 
quantify. However, we believe that pain and the functional limitations 
that it engenders can be captured by our severity scale. There are many 
valid and reliable measures that a therapist can use to quantify the 
functional limitations of painful conditions.
    In response to the comments, we are adopting the following 7-point 
severity/complexity scale to report the severity of the beneficiary's 
functional impairment, which is based upon the scale developed as part 
of the STATs project.

           Table 23--Severity/Complexity Modifiers for CY 2013
------------------------------------------------------------------------
                                                Impairment limitation
                 Modifier                            restriction
------------------------------------------------------------------------
CH........................................  0 percent impaired, limited
                                             or restricted.
CI........................................  At least 1 percent but less
                                             than 20 percent impaired,
                                             limited or restricted.
CJ........................................  At least 20 percent but less
                                             than 40 percent impaired,
                                             limited or restricted.
CK........................................  At least 40 percent but less
                                             than 60 percent impaired,
                                             limited or restricted.
CL........................................  At least 60 percent but less
                                             than 80 percent impaired,
                                             limited or restricted.
CM........................................  At least 80 percent but less
                                             than 100 percent impaired,
                                             limited or restricted.
CN........................................  100 percent impaired,
                                             limited or restricted.
------------------------------------------------------------------------

 (4) Assessment Tools
    In the proposed rule we noted that therapists frequently use 
assessment tools to quantify beneficiary function. FOTO and NOMS are 
two such assessment tools in the public domain that can be used to 
determine a score for an assessment of beneficiary function. Therapists 
could use the score produced by such instruments to select the 
appropriate modifier for reporting the beneficiary's functional status. 
Although we recommend the use of four of these functional assessment 
instruments to determine beneficiary functional limitation in the IOM, 
we did not propose to require the use of a particular functional 
assessment tool to determine the severity/complexity modifier. We 
explained our reasons for not doing so in the proposed rule saying 
``Some tools are proprietary, and others in the public domain cannot be 
modified to explicitly address this data collection project. Further, 
this data collection effort spans several therapy disciplines. 
Requiring a specific instrument could create burdens for therapists 
that would have to be considered in light of any potential improvement 
in data accuracy, consistency and appropriateness that such an 
instrument would generate.'' We noted that we might reconsider this 
decision once we have more experience with claims-based data collection 
on beneficiary function associated with furnished therapy services. We 
sought public comment on the use of assessment tools. In particular, we 
were interested in feedback regarding the benefits and burdens 
associated with use of a specific tool to assess beneficiary functional 
limitations. We requested that those favoring a requirement to use a 
specific tool provide information on the preferred tool and describe 
why the tool is preferred.
    The following is a summary of the comments we received regarding 
the use of assessment tools and the benefits and burdens associated 
with use of a specific tool to assess beneficiary functional 
limitations.
    Comment: Many commenters appreciated that we recognized the need to 
use consistent and objective measurement tools to quantify beneficiary 
function. All commenters who addressed assessment tools agreed that 
there is not currently a single assessment tool that would meet the 
diverse needs of beneficiaries receiving therapy services, and most did 
not recommend requiring the use of a single tool. However, many 
commenters stated we would be ineffective in reaching our data 
collection goals without prescribing some rules about assessing 
function; and thus suggested alternatives due to concerns of 
consistency and validity of the data. MedPAC noted that collecting data 
without a tool ``would generate large amounts of data, and not provide 
clear information on the patients' limitations or functional status.'' 
MedPAC elaborated that variations among the assessment methods used by 
therapists ``would potentially impede the utility of such data for 
policymakers.''
    Commenters found the following potential drawbacks to our proposal 
to allow therapists to choose the assessment tool(s) (or use their 
professional judgment) to determine the complexity/severity modifier. 
Commenters stated that the current proposal would collect individual 
level data that is not comparable among groups of beneficiaries or 
providers. Commenters also stated that gathering data on beneficiary 
condition, functional limitation, and progression necessitates the use 
of one standardized collection tool by all therapists. One commenter 
revealed that the same beneficiary could obtain widely distinct 
modifier scores depending on the tool used. Further, a commenter 
acknowledged that there are over 400 different measurement tools used 
by physical therapists, many of which only measure one domain of 
function. Additionally, another commenter urged us to provide more 
instruction on how each tool interfaces with the complexity/severity 
scale and provide crosswalks and guidance for each tool to promote 
consistency in the data collected.

[[Page 68971]]

    Commenters suggested the following alternatives to our proposal to 
address the potential drawbacks they identified. Commenters supported 
endorsing a small number of standardized tools with proven validity, 
reliability, and responsiveness that would be distinct for each therapy 
discipline. The American Speech-Language and Hearing Association (ASHA) 
urged we adopt NOMS and a 7-point severity scale specifically for SLP 
to recognize the distinctiveness of the discipline and record 
meaningful outcomes for SLP beneficiaries. Many commenters supported 
the use of FOTO stating that it measures a broad scope of conditions 
reliably, results in a composite score, and creates little undue burden 
to report. Those commenters also stated that FOTO is already the tool 
of choice for their respective providers.
    Two commenters suggested developing a list of approved tools for 
specific beneficiary populations and settings. Another commenter 
suggested assigning G-codes to specific assessment tools so that the 
data could be compared. As a future alternative, a few commenters 
proposed developing core items that could be used in any tool to 
standardize data collection. MedPAC suggested that ``CMS consider 
developing an instrument that collects the necessary information that 
would allow Medicare to categorize beneficiaries by condition and 
severity in order to pay appropriately'' and pointed to the ``Reason 
for Therapy'' form used in the DOTPA study as a starting point, noting 
that it is ``concise, easy to assess and document for clinicians, and 
collects information on function and limitations across three therapy 
disciplines.''
    Response: We continue to recommend the use of four functional 
assessment tools to determine beneficiaries' functional limitations. In 
addition, when these tools are not used, we require the use of 
objective measures to document the functional status of beneficiaries. 
We continue to believe that no one tool currently meets the needs of 
all three therapy disciplines; and, therefore, we are not requiring the 
use of any one specific assessment tool, or even the use of any 
assessment tool. We acknowledge that because of the use of the variety 
and kinds of assessment tools and other measurement instruments, 
including the use of a therapist's professional judgment, the value of 
the data we collect under this system will have limitations. However, 
we believe that the data we gather will assist us in taking a first 
step towards an improved payment system.
    We appreciate the comments providing information on the benefits of 
using specific tools, such as NOMS and FOTO. However, at this time we 
do not believe that they are sufficiently widely used to require the 
use of one of these tools. In this final rule with comment period, we 
are not requiring the use of a specific assessment tool. We are 
continuing to encourage, but not require, the use of assessment tools 
in the IOM.
    We did, however, adopt G-codes and a modifier scale for SLP that 
are consistent with NOMS so it is possible to move to a standardized 
tool for SLP in the future. We will consider the possibility using 
coding to identify the specific functional assessment tool used in 
subsequent refinements. As noted above, therapists can also use their 
professional judgment in determining the percentage of functional 
limitations in conjunction with objective data from evaluations and 
assessments and the subjective reports from beneficiaries.
(5) Reporting Projected Goal Status
    We proposed that the therapist's projected goal for the 
beneficiary's functional status at the end of treatment would be 
reported on the first claim for services, periodically throughout an 
episode of care, and at discharge from therapy.
    The following is a summary of the comments regarding goal 
reporting.
    Comment: Of those commenting on goal status, most objected to the 
collection of goal data, particularly during the first year of data 
collection. Commenters noted that reporting on goals was not specified 
as part of the claims-based data collection effort required by MCTRJCA. 
Some stated that it would be a significant practice change to report 
goal data, involving changes to medical documentation, electronic 
health records, and billing processes. Commenters stated the 
identification and reporting of goals raised several clinical issues, 
such as the variability in goals among therapists, the need to change 
goals over the course of treatment, and the fact that therapists often 
set several goals (for example, short and long-term goals) for each 
beneficiary. Others noted that using goal data to classify a group of 
beneficiaries would be flawed because therapists create goals specific 
to the individual. One commenter noted that if goals influence payment, 
therapists could set the goal low or high to induce ongoing therapy and 
therefore the data would not be useful. As a result of these factors, 
many commenters believed data reporting on therapy goals would not 
provide reliable and useful information. In addition, a number of 
commenters stated that the proposal did not clearly express the intent 
of collecting goal data and many commenters expressed concerns about 
how we would use this data. Some commenters suggested that we clarify 
that the functional status data would be used only to track a 
beneficiary's progression rather than for any other purposes, such as 
making comparisons across beneficiaries, therapists, or settings. 
Several commenters expressed concern that the reporting of goals 
implied an improvement standard and that care would be denied to 
beneficiaries who improved slowly or not at all. Alternatively, one 
commenter supported our proposal for reporting of a projected goal, as 
well as periodic updates of the beneficiary status in the context of 
that goal.
    Response: We understand the commenters' concerns about the 
complexity and intricacies of goal reporting. However, we currently 
require in the Benefit Policy Manual (Chapter 15, section 220.1.2) that 
long-term treatment goals be developed for the entire episode of care. 
Further, we specify that the projected goals should be measurable and 
pertain to identified functional limitations, and that these goals also 
need to be documented in the medical record. Since many of these goal 
requirements already exist, the additional work imposed by this 
requirement would be for the therapist to establish the percentage of 
functional limitation for projected for this goal at the end of the 
therapy episode and translate the goal to the G-code/modifier scale. We 
understand that the claims-based reporting is a change for therapists; 
however, these adjustments in operations will yield meaningful 
information on beneficiary functional status. We appreciate the 
recommendation to delay goal reporting for a year, but we believe that 
it is important to include goal data to gather a complete description 
of a beneficiary's functional status.
    At this time, we intend to use the projected goal to have an 
understanding of therapists' ability to project the likely progress a 
beneficiary will make. We ultimately may employ these data to help us 
develop proposals to improve payment for therapy services, but do not 
anticipate using the goal data for purposes of payment or coverage 
decisions. In cases where the therapist does not expect improvement, 
such as for those individuals receiving maintenance therapy, the 
reported projected goal status will be the same as current status. We 
appreciate that commenters raised concerns about

[[Page 68972]]

potential ambiguity of the description of the proposal on progress and 
outcomes but, given as we have clarified in this final rule with 
comment period, goal reporting does not establish an improvement 
standard. In fact, it allows the therapist to state at the outset the 
expectations. We understand there will be wide variability in goals. 
Since these goals are used in beneficiary treatment, as well as for 
reporting, we do not expect therapists to establish goals purely to 
make themselves look better. Recognizing the limitations of the 
collected goal data, we still believe it will be useful to us. 
Therefore, we are finalizing our requirement for reporting of goal G-
codes on the claims form along with the related severity modifier for 
that goal.
(6) Reporting Frequency
    We proposed to require claims-based reporting in conjunction with 
the initial service at the outset of a therapy episode, at established 
intervals during treatment, and at discharge. As proposed, the number 
of G-codes required on a particular claim would have varied from one to 
four, depending on the circumstances. We provided the following (Table 
24) graphic example of which codes would have been used for periodic 
reporting. This example represents a therapy episode of care occurring 
over an extended period, such as might be typical for a beneficiary 
receiving therapy for the late effects of a stroke. We chose to use an 
example with a much higher than average number of treatment days in 
order to show a greater variety of reporting scenarios.
[GRAPHIC] [TIFF OMITTED] TR16NO12.003

     Outset. As proposed, the first reporting of G-codes and 
modifiers would occur when the outpatient therapy episode of care 
begins. This would typically be the date of service when the therapist 
furnishes the evaluation and develops the required plan of care (POC) 
for the beneficiary. At the outset, the therapist would use the G-codes 
and modifiers to report a current status and a projected goal for the 
primary functional limitation. We indicated in the proposal that if a 
secondary functional limitation would need to be reported, the same 
information would be reported using G-codes and associated modifiers 
for the secondary functional limitation.
    The following is a summary of comments on the frequency of 
reporting at the outset.
    Comment: All commenters that addressed frequency of reporting 
agreed that reporting should occur at the outset of the therapy episode 
of care. Although commenters agreed with reporting at the outset, many 
recommended removing the requirement to report the projected goal 
status. (Comments on reporting projected goal status are discussed 
above.)
    Response: We are finalizing the requirement to report current 
status and projected goal status at the outset of therapy.
     Every 10 Treatment Days or 30 Calendar Days, Whichever Is 
Less. We proposed to require reporting once every 10 treatment days or 
at least once during each 30 calendar days, whichever time period is 
shorter. As we explained in the proposed rule, the first treatment day 
for purposes of reporting would be the day that the initial visit takes 
place. The date the episode of care begins, typically at the 
evaluation, even when the therapist does not furnish a separately 
billable procedure in addition to the evaluation on this day,

[[Page 68973]]

would be considered treatment day one, effectively beginning the count 
of treatment days or calendar days for the first reporting period.
    A treatment day is defined as a calendar day in which treatment 
occurs resulting in a billable service. Often a treatment day and a 
therapy ``session'' (or ``visit'') may be the same, but the two terms 
are not interchangeable. For example, a beneficiary might receive 
certain services twice a day, although this is a rare clinical 
scenario, these two different sessions (or visits) on the same day by 
the same discipline are counted as one treatment day.
    We explained that the proposal would require that on the claim for 
service on or before the 10th treatment day or the 30th calendar day 
after treatment day one, the therapist would only report the G-code and 
the appropriate modifier to show the beneficiary's current functional 
status at the end of this reporting period under the proposal. We added 
that the next reporting period begins on the next treatment day and 
that the time period between the end of one reporting period and the 
next treatment day does not count towards the 30-calendar day period. 
On the claim for services furnished on this date, the therapist would 
report both the G-code and modifier showing the current functional 
status at this time along with the G-code and modifier reflecting the 
projected goal that was identified at the outset of the therapy 
episode. This process would continue until the beneficiary concludes 
the course of therapy treatment.
    Further, we proposed that on a claim for a service that does not 
require specific reporting of a G-code with modifier (that is, on a 
claim for therapy services within the time period for which reporting 
is not required), GXXX7 would be used. By using this code, the 
therapist would be confirming that the claim does not require specific 
functional reporting. This is the only G-code that we proposed to be 
reported without a severity modifier.
    As we noted in the proposed rule, we proposed the 10/30 frequency 
of reporting to be consistent with our existing timing requirements for 
progress reports. These timing requirements are included in the 
Documentation Requirements for Therapy Services (see Pub. 100-02, 
Chapter 15, Section 220.3, Subsection D). By making these reporting 
timeframes consistent with Medicare's other requirements, therapists 
who are already furnishing therapy services to Medicare outpatients 
would have a familiar framework for successfully adopting our new 
reporting requirement. In addition to reflecting the Medicare required 
documentation for progress reports, we believe that this simplifies the 
process and minimizes the new burden on therapists since many therapy 
episodes would be completed by the 10th treatment day. In 2008, the 
average number of days in a therapy episode was 9 treatment days for 
SLP, 11 treatment days for PT, and 12 treatment days for OT. Under the 
proposal, when reporting on two functional limitations, the therapist 
would report the G-codes and modifiers for the second condition in the 
manner described above. In other words, at the end of the reporting 
period as proposed, two G-codes would be reported to show current 
functional status--one for the primary (GXXX1) and one for the 
secondary (GXXX4) limitation. Similarly as proposed, at the beginning 
of the reporting period four G-codes would be reported. GXXX1 and GXXX4 
would be used to report current status for the primary and secondary 
functional limitations, respectively; and, GXXX2 and GXXX5 would be 
used to report the goal status for the primary and secondary functional 
limitations, respectively.
    We noted that the proposal required that the same reporting periods 
be used for both the primary and secondary functional limitation. We 
added that the therapist can accomplish this by starting them at the 
same time or if the secondary functional limitation is added at some 
point in treatment, the primary functional limitation's reporting 
period must be re-started by reporting GXXX1 and GXXX2 at the same time 
the new secondary functional limitation is added using GXXX4 and GXXX5.
    Further, for those therapy treatment episodes lasting longer 
periods of time, the periodic reporting of the G-codes and associated 
modifiers would reflect any progress that the beneficiary made toward 
the identified goal. In summary, we proposed to require the reporting 
of G-codes and modifiers at episode outset (evaluation or initial 
visit), and once every 10th treatment day or at least every 30 calendar 
days, whichever time period is less, and at discharge.
    We noted that we believed it was important that the requirements 
for this reporting system be consistent with the requirements for 
documenting any progress in the medical record as specified in our 
manual. Given the current proposal for claims-based data collection, we 
believe it is an appropriate time to reassess the manual requirements. 
We sought comment on whether it would be appropriate to modify the 
periodicity of the progress report requirement in the IOM to one based 
solely on the number of treatment days, such as six or ten. We noted 
that if a timing modification was made for progress reporting, a 
corresponding change would be made in the functional reporting 
interval.
    The following is a summary of the comments we received on our 
proposal to require reporting every 10 treatment days or 30 calendar 
days, whichever is less, and whether it would be appropriate to modify 
the progress report requirement in the IOM to one based solely on the 
number of treatment days, such as six or ten, and the clinical impact 
of such a change.
    Comment: Although many commenters appreciated our effort to align 
the claims-based reporting with existing requirements for a progress 
report, several commenters requested that we recognize the significant 
time burden of the new reporting frequency and that we ameliorate some 
of the burden with a simplification of the existing manual requirement. 
Commenters in favor of reporting every 10 treatment days explained that 
using treatment days as compared to calendar days is more easily 
programmed into software systems and in accord with certain therapist's 
billing practices. A couple of other commenters supported reporting 
every 30 calendar days as this accommodates therapists working in 
settings where claims are required to be submitted on a monthly basis, 
such as hospitals, rehabilitation agencies and SNFs. Several commenters 
objected to the periodic reporting and suggested that reporting only at 
the outset and at discharge of therapy would be sufficient to capture a 
beneficiary's functional progression. A few of those commenters were 
okay with the proposed 10 treatment day or 30 calendar day reporting 
timeframe, if periodic claims reporting is necessary.
    A few commenters urged us to eliminate the requirement for 
functional status reporting at the visit subsequent to the progress 
report because a beneficiary's status probably would remain the same 
unless there is a significant gap between visits.
    We received many comments concerning the reporting of GXXX7; which 
we proposed to be used to indicate that the therapist confirms 
functional reporting not required. These commenters stated that the 
reporting of GXXX7, which is required for claims with dates of services 
when a functional status measure is not collected, would be unnecessary 
and burdensome, especially for daily billers. They urged us to require 
reporting only when a functional status is required to be reported. 
Further commenters stated

[[Page 68974]]

that there was no purpose for this G-code.
    Response: Based on the public comments, we are making several 
changes. We believe that reporting every 10 treatment days would be 
less burdensome for therapists than the proposed 10 treatment days/30 
calendar days. We believe a 10\-\treatment day reporting period is 
straightforward for therapists to track, allows for better monitoring 
of changes in functional status, and is more easily adopted within our 
current claims processing systems. Therefore, we are finalizing the 
requirement that G-codes and associated modifiers are reported at least 
once every 10 treatment days and we will modify the IOM to establish 
the same timing requirement for progress reports. By making this 
change, we no longer need the therapist to report functional status at 
the visit subsequent to the end of a reporting period to signal the 
beginning of a new reporting period. So in response to comments, we 
have eliminated the requirement to report data at the start of a new 
reporting period.
    After assessing the comments, we agree that reporting a G-code 
(GXXX7) to tell us that no reporting is required would not provide 
meaningful data and would pose an additional burden for therapists and 
therapy providers. When proposed, we believed it would be convenient 
for therapists to use the code to indicate that this was a claim for 
therapy services that did not require the functional reporting because 
it would assist them in complying with the reporting requirements and 
would assist us in enforcing them. When we reassessed the issue based 
on feedback from commenters, it was clear that the ``no report due'' 
code would not aid us in enforcing the requirements as we would still 
have to verify that claims with the proposed GXXX7 were in fact claims 
that did not require reporting. Since commenters pointed out that not 
only would it not assist them, but would in fact burden them, we have 
decided not to include this code. Accordingly, we are also modifying 
our proposal to remove the requirement to report a ``no report due'' 
code on claims when functional reporting is not due, such as between 
the first and the tenth day of service. We expect these changes will 
significantly reduce the frequency of required reporting during a 
therapy episode and believe they will appropriately simplify the 
claims-based reporting system.
     Discharge. In addition, we proposed to require reporting 
of the G-code/modifier functional data for the current status and for 
the goal at the conclusion of treatment so that we have a complete set 
of data for the therapy episode of care. Requiring the reporting at 
discharge mirrors the IOM requirement of a discharge note or summary. 
This set of data would reveal any functional progress or improvement 
the beneficiary made toward the projected therapy goal during the 
entire therapy episode. Specifically, information on the beneficiary's 
functional status at the time of discharge shows whether the 
beneficiary made progress towards or met the projected therapy goal. As 
we noted in the proposed rule, the imposition of this reporting 
requirement does not justify scheduling an additional and perhaps 
medically unnecessary final session in order to measure the 
beneficiary's function for the sole purpose of reporting.
    Although collection of discharge data is important in achieving our 
goals, we recognize that data on functional status at the time therapy 
concludes is sometimes likely to be incomplete for some beneficiaries 
receiving outpatient therapy services. The DOTPA project has found this 
to be true. There are various reasons as to why the therapist would not 
be able to report functional status using G-codes and modifiers at the 
time therapy ends. Sometimes, beneficiaries may discontinue therapy 
without alerting their therapist of their intention to do so; simply 
because they feel better; they can no longer fit therapy into their 
life, work, or social schedules; a physician told them further therapy 
was not necessary; or their transportation is unavailable. Whatever the 
reason, there would be situations where the therapy ends without the 
planned discharge visit taking place. In these situations, we said that 
we would not require the reporting at discharge. However, we encourage 
therapists to include discharge reporting whenever possible on the 
final therapy claim for services.
    Since the therapist is typically reassessing the beneficiary during 
the therapy episode, the data critical to the severity/complexity of 
the functional measure may be available even when the final therapy 
session does not occur. In these instances, the G-codes and modifiers 
appropriate to discharge should be reported when the final claim for 
therapy services has not already been submitted.
    We sought feedback on how often the therapy community finds that 
beneficiaries discontinue therapy without the therapist knowing in 
advance that it is the last treatment session and other situations in 
which the discharge data would not be available for reporting.
    The following is a summary of the comments we received regarding 
the proposal to require reporting of the G-code/modifier functional 
data at the conclusion of treatment so that we have a complete set of 
data for the therapy episode of care.
    Comment: In addition to outset reporting, a majority of commenters 
supported claims-based reporting at discharge of the therapy episode of 
care. With regard to the number of beneficiaries who stop therapy 
services without notice, the responses varied from about 12 percent for 
beneficiaries being treated for a spinal cord injury to 26 percent of 
patients with orthopedic conditions in a large system of outpatient 
therapy clinics. Many commenters who supported discharge reporting 
recommended that if the beneficiary misses his or her last visit, the 
therapist should be exempt from reporting the functional status at 
discharge. Another commenter believed, however, that having a separate 
G-code in each set to report discharge status is unnecessary; the 
commenter further stated that the last reported current status and goal 
status G-codes could be used to represent the end of treatment.
    Response: Although we recognize that there may be some challenges 
with discharge reporting, this information is important for our 
purposes to complete the data set for each therapy episode; and, thus, 
we are maintaining the requirement. We do not agree with the commenter 
who suggested that we could simply use the last reported current status 
to represent the status at discharge since this may not be an accurate 
representation of the beneficiary's status at the time of discharge. 
However, in those cases where this functional status is derived from a 
patient survey, for example, FOTO, Am-PAC or OPTIMAL, and the survey is 
routinely sent to the patient who misses his/her final treatment, the 
therapist should report this data once subsequently gained, on the 
final bill for services unless the bill for the last treatment day has 
already been submitted. There are instances where not reporting the 
discharge status would make it impossible for us to distinguish the 
start of the reporting for a new or subsequently-reported functional 
limitation or the treatment for a new therapy episode in the data. We 
are finalizing our proposal to require discharge reporting (except in 
cases where therapy services are discontinued by the beneficiary prior 
to the planned discharge visit) using the discharge G-code, along with 
the goal status G-code, to indicate the end of a therapy episode or to 
signal the end of reporting on one

[[Page 68975]]

functional limitation, while further therapy is necessary for another 
one.
     Significant Change in Beneficiary Condition. We proposed 
that, in addition to reporting at the intervals discussed above, the G-
code/modifier measures would be required to be reported when a formal 
and medically necessary re-evaluation of the beneficiary results in an 
alteration of the goals in the beneficiary's POC. This could result 
from new clinical findings, an added comorbidity, or a failure to 
respond to treatment. We noted that this reporting affords the 
therapist the opportunity to explain a beneficiary's failure to 
progress toward the initially established goal(s) and permits either 
the revision of the severity status of the existing goal or the 
establishment of a new goal or goals. Under the proposal, the therapist 
would be required to begin a new reporting period when submitting a 
claim containing a CPT code for an evaluation or a re-evaluation. This 
functional reporting of G-codes, along with the associated modifiers, 
could be used to show an increase in the severity of functional 
limitations; or, they could be used to reflect the severity of newly 
identified functional limitations as delineated in the revised plan of 
care.
    The following is a summary of the comments we received regarding 
the proposal that in addition to reporting at the intervals discussed 
above, the G-code and related modifier would be required to be reported 
when a formal and medically necessary re-evaluation of the beneficiary 
results in an alteration of the goals in the beneficiary's POC.
    Comment: One commenter recommended that instead of requiring 
periodic reporting throughout a therapy episode that we require it only 
at the time of a re-evaluation. This commenter believed that capturing 
the functional information using G-codes within the treatment episode 
is burdensome and reporting at the time of the progress report would 
put unnecessary emphasis on a therapist capturing a change in a 
beneficiary's assessment.
    Response: We did not receive comments objecting to claims-based 
reporting at the time that a re-evaluation code is billed for PT or OT 
or a subsequent or second evaluation code is billed for SLP. Therefore, 
we are finalizing the requirement for functional reporting when a 
formal and medically necessary re-evaluation, for PT or OT, or a second 
or repeat SLP evaluation of the beneficiary is furnished. We are 
requiring claims-based reporting in conjunction with the evaluation at 
the outset of therapy, on or before each 10th treatment day throughout 
therapy, and at therapy discharge (except in cases where therapy 
services are unexpectedly discontinued by the beneficiary prior to the 
planned discharge visit and the necessary information is not available) 
or to signal the end of reporting on one functional limitation. On a 
claim, two G-codes would be required depending on the reporting 
interval. Table 25 shows a revised example of which codes are used for 
specified reporting under our final policy. We should note that this 
example utilizes the mobility functional limitation G-codes, G8978-
G8980 for ``walking and moving around'' and the ``Other or Primary'' G-
codes, G8990-G8992 and is for illustrative purposes only. This table 
not only shows how the final reporting works but by comparing it to the 
table showing the same details for reporting under the proposed policy 
one can see how much less reporting is required. Any of the other 
functional limitation G-code sets listed in Table 21 would also be 
applicable here.

[[Page 68976]]

[GRAPHIC] [TIFF OMITTED] TR16NO12.004

    In summary, we maintain that claims-based reporting should occur at 
the outset of therapy episode, on or before every 10 treatment days 
throughout the course of therapy, and at the time of discharge from 
therapy. Additionally, functional reporting is also required at the 
time the beneficiary's condition changes significantly enough to 
clinically warrant a re-evaluation such that a HCPCS/CPT code for a re-
evaluation or a repeat evaluation is billed.
(7) Documentation
    We proposed to require that documentation of the information used 
for reporting under this system must be included in the beneficiary's 
medical record. As proposed, the therapist would need to track in the 
medical record the G-codes and the corresponding severity modifiers 
that were used to report the status of the functional limitations at 
the time reporting was required. Including G-codes and related 
modifiers in the medical record creates an auditable record, assists in 
improving the quality of data CMS collects, and allows therapists to 
track assessment and functional information. In the proposed rule, we 
provided the example of a situation where the therapist selects the 
mobility functional limitation of ``walking and moving'' as the primary 
functional limitation and determines that at therapy outset the 
beneficiary has a 60 percent limitation and sets the goal to reduce the 
limitation to 5 percent. We noted that the therapist uses GXXX1-XH to 
report the current status of the functional impairment and GXXX2-XB to 
report the goal. Additionally, we said that the therapist should note 
in the beneficiary's medical record that the functional limitation is 
``walking and moving'' and document the G-codes and severity modifiers 
used to report this functional limitation on the claim for therapy 
services.
    The following is a summary of comments we received concerning our 
documentation requirements.
    Comment: Some commenters suggested that the proposal would impose 
significant additional documentation and claims reporting requirements. 
Further, one commenter objected to the requirement to include 
information in the medical record on the G-codes and modifiers used for 
billing as it would be highly unusual and time intensive to do so. 
Another commenter supported our proposal, agreeing that documentation 
of the information used for reporting under this system must be 
included in the beneficiary's medical record.
    Response: We disagree with the commenters' statements that the 
required documentation is overly burdensome. In fact, by maintaining 
the G-code descriptor and related modifier in the medical record, 
therapists may find it easier to link treatment and reporting. 
Additionally, to enforce the reporting requirements on the claims, 
documentation in the medical record is required. In cases where the 
therapist uses other information in addition to certain measurement 
tools in order to assess functional impairment, he or she would also 
want to document the relevant information used to determine the overall 
percentage of functional limitation to select the severity modifier. In 
instances where it becomes necessary for a different therapist to 
furnish the therapy services, the substitute therapist can look in the 
beneficiary's medical record to note previous G-codes and related 
modifiers

[[Page 68977]]

reported. We are finalizing the proposed requirement that the G-codes 
and related modifiers must be documented in the beneficiary's medical 
record.
(8) Claims Requirements
    In the proposed rule, we noted that except for the addition of the 
proposed G-codes and the associated modifiers, nothing in this proposal 
would modify other existing requirements for submission of therapy 
claims. We noted in the proposed rule that, in addition to the new G-
codes and modifiers used for the claims-based data collection system, 
the therapy modifiers--GO, GP, and GN, would still be required on 
claims to indicate that the therapy services are furnished under an OT, 
PT, or SLP plan of care, respectively; and, therefore, we are 
designating these nonpayable G-codes as ``always therapy.'' We noted in 
the proposed rule that institutional claims for therapy services would 
require that a charge be included on the service line for each one of 
these G-codes used in the required functional reporting. We also noted 
that this charge would not be used for payment purposes and would not 
affect processing. Further, we noted claims for professional services 
do not require that a charge be included for these nonpayable G-codes, 
but that reporting a charge for the nonpayable G-codes would not affect 
claims processing. To illustrate this policy, for each nonpayable G-
code on the claim, that line of service would also need to contain one 
of the severity modifiers, the corresponding GO, GP, or GN therapy 
modifier to indicate the respective OT, PT, or SLP therapy discipline 
and related POC; and the date of service it references. For each line 
on the institutional claim submitted by hospitals, SNFs, rehabilitation 
agencies, CORFs and HHAs, a charge of one penny, $0.01, can be added. 
For each line on the professional claim submitted by private practice 
therapists and physician/NPPs, a charge of $0.00 can be added. We 
believe that many therapists submitting professional claims are already 
submitting nonpayable G-code quality measures under the PQRS and will 
be familiar with the parameters of nonpayable G-codes on claims for 
Medicare services.
    Finally, we noted that Medicare does not process claims that do not 
include a billable service. As a result, reporting under this claims-
based data collection system would need to be included on the same 
claim as a furnished service that Medicare covers.
    We did not receive any comments specifically on the claims 
requirements so we are finalizing these as proposed.
(9) Implementation Date
    In accordance with section 3005(g) of the MCTRJCA, we proposed to 
implement these data reporting requirements on January 1, 2013. We 
recognized that with electronic health records and electronic claims 
submission, therapists might encounter difficulty in including this new 
data on claims. To accommodate those that may experience operational or 
other difficulties with moving to this new reporting system and to 
assure smooth transition, we proposed a testing period from January 1, 
2013 until July 1, 2013. We noted that we would expect that all those 
billing for outpatient therapy services would take advantage of this 
testing period and would begin attempting to report the new G-codes and 
modifiers as close to January 1, 2013, as possible, in preparation for 
required reporting beginning on July 1, 2013. Taking advantage of this 
testing period would help to minimize potential problems after July 1, 
2013, when claims without the appropriate G-codes and modifiers would 
be returned unpaid.
    The following is a summary of comments we received concerning our 
implementation of the new system on January 1, 2013 with enforcement 
beginning after July 1, 2013.
    Comment: Given the statutory deadline, most commenters acknowledged 
that the new program needed to be implemented on January 1, 2013. Many 
commenters supported the proposed testing period. They indicated that a 
testing period was needed to train therapists, change documentation 
practices, modify electronic health records systems, educate billing 
contractors, and adjust billing systems. However, numerous commenters 
expressed concern that 6 months is an insufficient and unrealistic 
amount of time to transition to the new data reporting requirements. 
Commenters requested that we recognize the significant time and 
financial burden of the new reporting requirement and that we alleviate 
these concerns with delayed enforcement. Commenters requested a longer 
period to make software adjustments and educate therapists on the new 
reporting and frequency of documentation requirements. Further, 
commenters believed that we, in the limited time period, did not 
recognize the potential capital changes that would be necessary or 
allow for the typical process for acquiring funds. Commenters proposed 
various alternatives, which included extending the testing period to 9 
or 12 months. A few suggested that we delay implementation of the 
mandate until the completion of the DOTPA study. As an alternative to 
nationwide data reporting, a few commenters suggested we consider 
testing the requirement under a pilot program in a small sample of the 
country, allowing us to analyze preliminary data and draw conclusions 
regarding the effectiveness of reporting through non-payable G-codes 
and modifiers before it is implemented nationwide.
    Response: We are required by law to implement the claims-based data 
collection strategy on January 1, 2013. Our contractors and systems 
will be able to accept and process claims for therapy services with 
functional information at this time. We recognize that therapists may 
need time to adjust their claims processing to accommodate these 
additional codes but, we believe the necessary changes can be 
accomplished well within the 8 months between the time this final rule 
with comment period is issued and the end of the testing period. We do 
not believe a small pilot as suggested by some commenters would meet 
the statutory requirement to implement as of January 1, 2013 a claims-
based data collection strategy to assist in reforming outpatient 
therapy services. Nor would it meet our needs to gather data to assist 
in developing potential alternative payment systems for therapy 
services. We are finalizing an implementation date of January 1, 2013 
with a 6-month testing period such that claims that do not comply with 
the data reporting requirements will be returned beginning July 1, 
2013.
(10) Compliance Required as a Condition for Payment and Regulatory 
Changes
    To implement the claims-based data collection system required by 
MCTRJCA and described above, we proposed to amend the regulations 
establishing the conditions for payment governing outpatient and CORF 
PT, OT, and SLP services to add a requirement that the claims include 
information on beneficiary functional limitations. In addition, we 
proposed to amend the POC requirements set forth in the regulations for 
outpatient therapy services and CORFs to require that the therapy 
goals, which must be included in the POC, are consistent with the 
beneficiary's functional limitations and goals reported on claims for 
services.
    Specifically, we proposed to amend the regulations for outpatient 
OT, PT, and SLP (Sec.  410.59, Sec.  410.60, and Sec.  410.62, 
respectively) by adding a new paragraph (a)(4) to require that claims 
submitted for services furnished contain

[[Page 68978]]

the required information on beneficiary functional limitations.
    We also proposed to amend the POC requirements set forth at Sec.  
410.61(c) to require that the therapy goals, which must be included in 
the treatment plan, must be consistent with those reported on claims 
for services. This requirement is in addition to those already existing 
conditions for the POC.
    To achieve consistency in the provision of PT, OT, and SLP services 
across therapy benefits, we proposed to amend Sec.  410.105 to include 
the same requirements for these services furnished in CORFs. These 
proposed revisions would require that the goals specified in the 
treatment plan be consistent with the beneficiary functional 
limitations and goals reported on claims for services and that claims 
submitted for services furnished contain specified information on 
beneficiary functional limitations, respectively. The requirements do 
not apply to respiratory therapy services.
    We did not receive any comments on the proposed regulatory changes 
and are finalizing the changes as proposed.
(11) Consulting With Relevant Stakeholders
    Section 3005(g) of the MCTRJCA requires us to consult with relevant 
stakeholders as we propose and implement this reporting system. In the 
CY 2013 PFS proposed rule, we indicated that we are meeting this 
requirement through the publication of this proposal and specifically 
by soliciting public comment on the various aspects of our proposal. In 
addition, we noted that we would meet with key stakeholders and discuss 
this issue in Open Door Forums over the course of the summer.
    During the CY 2013 proposed rule comment period, we met with the 
various therapy professional associations and provider groups in order 
to solicit their comments on the various aspects of this proposal. At 
the CMS Physicians, Nurses & Allied Health Professionals Open Door 
Forum on July 17, 2012, we discussed the provisions of the proposed 
rule, including these requirements. We also discussed this proposed 
rule at the CMS Hospital & Hospital Quality Open Door Forum on July 18, 
2012. In developing the final rule, we took into consideration many of 
the critical issues that were raised by the various stakeholders in 
these meetings and Forums. Accordingly, we believe we have met our 
obligation to consult with relevant stakeholders in proposing and 
implementing the required claims-based data collection strategy, and in 
developing our final policies, we have taken into consideration the 
various needs of stakeholders affected by this effort.

H. Primary Care and Care Coordination

    In recent years, we have recognized primary care and care 
coordination as critical components in achieving better care for 
individuals, better health for individuals, and reduced expenditure 
growth. Accordingly, we have prioritized the development and 
implementation of a series of initiatives designed to improve payment 
for, and encourage long-term investment in, primary care and care 
management services. These initiatives include the following programs 
and demonstrations:
     The Medicare Shared Savings Program (described in 
``Medicare Program; Medicare Shared Savings Program: Accountable Care 
Organizations; Final Rule'' which appeared in the Federal Register on 
November 2, 2011 (76 FR 67802)).
    ++ The testing of the Pioneer ACO model, designed for experienced 
health care organizations (described on the Center for Medicare and 
Medicaid Innovation's (Innovation Center's) Web site at 
innovations.cms.gov/initiatives/ACO/Pioneer/index.html).
    ++ The testing of the Advance Payment ACO model, designed to 
support organizations participating in the Medicare Shared Savings 
Program (described on the Innovation Center's Web site at 
innovations.cms.gov/initiatives/ACO/Advance-Payment/index.html).
     The Primary Care Incentive Payment (PCIP) Program 
(described on the CMS Web site at www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Downloads/PCIP-2011-Payments.pdf).
     The patient-centered medical home model in the Multi-payer 
Advanced Primary Care Practice (MAPCP) Demonstration designed to test 
whether the quality and coordination of health care services are 
improved by making advanced primary care practices more broadly 
available (described on the CMS Web site at www.cms.gov/Medicare/Demonstration-Projects/DemoProjectsEvalRpts/downloads/mapcpdemo_Factsheet.pdf).
     The Federally Qualified Health Center (FQHC) Advanced 
Primary Care Practice demonstration (described on the CMS Web site at 
www.cms.gov/Medicare/Demonstration-Projects/DemoProjectsEvalRpts/downloads/mapcpdemo_Factsheet.pdf and the Innovation Center's Web site 
at innovations.cms.gov/initiatives/FQHCs/index.html).
     The Comprehensive Primary Care (CPC) initiative (described 
on the Innovation Center's Web site at innovations.cms.gov/initiatives/Comprehensive-Primary-Care-Initiative/index.html). The CPC initiative 
is a multi-payer initiative fostering collaboration between public and 
private health care payers to strengthen primary care in certain 
markets across the country.
    In coordination with these initiatives, we also continue to explore 
other potential refinements to the PFS that would appropriately value 
primary care and care coordination within Medicare's statutory 
structure for fee-for-service physician payment and quality reporting. 
We believe that improvements in payment for primary care and 
recognizing care coordination initiatives are particularly important as 
EHR technology diffuses and improves the ability of physicians and 
other providers of health care to work together to improve patient 
care. We view these potential refinements to the PFS as part of a 
broader strategy that relies on input and information gathered from the 
initiatives described above, research and demonstrations from other 
public and private stakeholders, the work of all parties involved in 
the potentially misvalued code initiative, and from the public at 
large.
    In the CY 2012 PFS proposed rule (76 FR 42793 through 42794), we 
initiated a discussion to gather information about how primary care 
services have evolved to focus on preventing and managing chronic 
conditions. We also proposed to review evaluation and management (E/M) 
services as potentially misvalued and suggested that the American 
Medical Association Relative (Value) Update Committee (AMA RUC) might 
consider changes in the practice of chronic conditions management and 
care coordination as key reason for undertaking this review. In the CY 
2012 PFS final rule with comment period (76 FR 73062 through 73065), we 
did not finalize our proposal to review E/M codes due to consensus from 
an overwhelming majority of commenters that a review of E/M services 
using our current processes could not appropriately value the evolving 
practice of chronic care coordination at the time, and therefore, would 
not accomplish the agency's goal of paying appropriately for primary 
care services. We stated that we would continue to consider ongoing 
research projects, demonstrations, and the numerous policy alternatives 
suggested by commenters. In addition, in the CY 2012 PFS proposed rule 
(76 FR 42917 through 42920), we initiated a public

[[Page 68979]]

discussion regarding payments for post-discharge care management 
services. We sought broad public comment on how to further improve care 
management for a beneficiary's transition from the hospital to the 
community setting within the existing statutory structure for physician 
payment and quality reporting. We specifically discussed how post 
discharge care management services are coded and valued under the 
current E/M coding structure, and we requested public comment. The 
physician community responded that comprehensive care coordination 
services are not adequately represented in the descriptions of, or 
payments for, office/outpatient E/M services. The American Medical 
Association (AMA) and the American Academy of Family Physicians (AAFP) 
created workgroups to consider new options for coding and payment for 
primary care services. The AAFP Task Force recommended that CMS create 
new primary care E/M codes and pay separately for non-face-to-face E/M 
Current Procedural Terminology (CPT) codes. (A summary of these 
recommendations is available at www.aafp.org/online/en/home/publications/news/news-now/inside-aafp/20120314cmsrecommendations.html.) The AMA workgroup, Chronic Care 
Coordination Workgroup (C3W), has and continues to develop codes to 
describe care transition and care coordination activities. (Several 
workgroup meeting minutes and other related items are available at 
www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/medicare/care-coordination.page.) 
Since the publication of the proposed rule, the C3W has completed 
development of two new transitional care management (TCM) codes. These 
new codes are:
     99495 Transitional Care Management Services with the 
following required elements:
    ++ Communication (direct contact, telephone, electronic) with the 
patient and/or caregiver within 2 business days of discharge.
    ++ Medical decision making of at least moderate complexity during 
the service period.
    ++ Face-to-face visit, within 14 calendar days of discharge.
     99496 Transitional Care Management Services with the 
following required elements:
    ++ Communication (direct contact, telephone, electronic) with the 
patient and/or caregiver within 2 business days of discharge.
    ++ Medical decision making of high complexity during the service 
period.
    ++ Face-to-face visit, within 7 calendar days of discharge.
    We discuss these codes in greater detail below.
    Under current PFS policy, care coordination is a component of E/M 
services which are generally reported using E/M CPT codes. The pre- and 
post-encounter non-face-to-face care management work is included in 
calculating the total work for the typical E/M services, and the total 
work for the typical service is used to develop RVUs for the E/M 
services. In the CY 2012 PFS proposed rule, we highlighted some of the 
E/M services that include substantial care coordination work. 
Specifically, we noted that the vignettes that describe a typical 
service for mid-level office/outpatient services (CPT codes 99203 and 
99213) include furnishing care coordination, communication, and other 
necessary care management related to the office visit in the post-
service work. We also highlighted vignettes that describe a typical 
service for hospital discharge day management (CPT codes 99238 and 
99239), which include furnishing care coordination, communication, and 
other necessary management related to the hospitalization in the post-
service work.
    The payment for non-face-to-face care management services is 
bundled into the payment for face-to-face E/M visits. Moreover, 
Medicare does not pay for services that are furnished to parties other 
than the beneficiary and which Medicare does not cover, for example, 
communication with caregivers. Accordingly, we do not pay separately 
for CPT codes for telephone calls, medical team conferences, prolonged 
services without patient contact, or anticoagulation management 
services.
    However, the physician community continues to tell us that the care 
coordination included in many of the E/M services, such as office 
visits, does not adequately describe the non-face-to-face care 
management work involved in primary care. Because the current E/M 
office/outpatient visit CPT codes were designed to support all office 
visits and reflect an overall orientation toward episodic treatment, we 
agree that these E/M codes may not reflect all the services and 
resources required to furnish comprehensive, coordinated care 
management for certain categories of beneficiaries such as those who 
are returning to a community setting following discharge from a 
hospital or SNF stay. As part of our multi-year strategy to recognize 
and support primary care and care management, we proposed in the CY 
2013 PFS proposed rule (77 FR 44776-44780) to create a HCPCS G code to 
describe care management involving the transition of a beneficiary from 
care furnished by a treating physician during a hospital stay 
(inpatient, outpatient observation services, or outpatient partial 
hospitalization), SNF stay, or community mental health center (CMHC) 
partial hospitalization program to care furnished by the beneficiary's 
primary physician in the community. We also solicited comment on how 
care furnished in these settings might be incorporated into the current 
fee-for-service structure of the PFS.
    Specifically, this HCPCS G code would describe all non-face-to-face 
services related to the TCM furnished by the community physician or 
qualified nonphysician practitioner within 30 calendar days following 
the date of discharge from an inpatient acute care hospital, 
psychiatric hospital, long-term care hospital, skilled nursing 
facility, and inpatient rehabilitation facility; hospital outpatient 
for observation services or partial hospitalization services; and a 
partial hospitalization program at a CMHC to community-based care. The 
post-discharge TCM service includes non-face-to-face care management 
services furnished by clinical staff member(s) or office-based case 
manager(s) under the supervision of the community physician or 
qualified nonphysician practitioner. We based the concept of this 
proposal, in part, on our policy for care plan oversight services. We 
currently pay physicians for the non-face-to-face care plan oversight 
services furnished for beneficiaries under care of home health agencies 
or hospices. These beneficiaries require complex and multidisciplinary 
care modalities that involve: Regular physician development and/or 
revision of care plans, subsequent reports of patient status, review of 
laboratory and other studies, communication with other health 
professionals not employed in the same practice who are involved in the 
patient's care, integration of new information into the care plan, and/
or adjustment of medical therapy. Physicians furnishing these services 
bill HCPCS codes G0181 or G0182 (See the Medicare benefit manual, 100-
02, Chapter 15, Section 30 for detailed description of these services.)
    For CY 2013, we proposed to create a new code to describe post-
discharge TCM services. This service was proposed to include:
     Assuming responsibility for the beneficiary's care without 
a gap.
    ++ Obtaining and reviewing the discharge summary.
    ++ Reviewing diagnostic tests and treatments.

[[Page 68980]]

    ++ Updating of the patient's medical record based on a discharge 
summary to incorporate changes in health conditions and on-going 
treatments related to the hospital or nursing home stay within 14 
business days of the discharge.
     Establishing or adjusting a plan of care to reflect 
required and indicated elements, particularly in light of the services 
furnished during the stay at the specified facility and to reflect 
result of communication with beneficiary.
    ++ An assessment of the patient's health status, medical needs, 
functional status, pain control, and psychosocial needs following the 
discharge.
     Communication (direct contact, telephone, electronic) with 
the beneficiary and/or caregiver, including education of patient and/or 
caregiver within 2 business days of discharge based on a review of the 
discharge summary and other available information such as diagnostic 
test results, including each of the following tasks:
    ++ An assessment of the patient's or caregiver's understanding of 
the medication regimen as well as education to reconcile the medication 
regimen differences between the pre- and post-hospital, CMHC, or SNF 
stay.
    ++ Education of the patient or caregiver regarding the on-going 
care plan and the potential complications that should be anticipated 
and how they should be addressed if they arise.
    ++ Assessment of the need for and assistance in establishing or re-
establishing necessary home and community based resources.
    ++ Addressing the patient's medical and psychosocial issues, and 
medication reconciliation and management.
    When indicated for a specific patient, the post-discharge 
transitional care service was also proposed to include:
     Communication with other health care professionals who 
will (re)assume care of the beneficiary, education of patient, family, 
guardian, and/or caregiver.
     Assessment of the need for and assistance in coordinating 
follow up visits with health care providers and other necessary 
services in the community.
     Establishment or reestablishment of needed community 
resources.
     Assistance in scheduling any required follow-up with 
community providers and services.
    The proposed post-discharge transitional care HCPCS G code was 
described as follows:
    GXXX1 Post-discharge transitional care management with the 
following required elements:
     Communication (direct contact, telephone, electronic) with 
the patient or caregiver within 2 business days of discharge.
     Medical decision making of moderate or high complexity 
during the service period.
     To be eligible to bill the service, physicians or 
qualified nonphysician practitioners must have had a face-to-face E/M 
visit with the patient in the 30 days prior to the transition in care 
or within 14 business days following the transition in care.
    The post-discharge transitional care services HCPCS G code we 
proposed would be used by the community physician or qualified 
nonphysician practitioner to report the services furnished in the 
community to ensure the coordination and continuity of care for 
patients discharged from a hospital (inpatient stay, outpatient 
observation, or outpatient partial hospitalization), SNF stay, or CMHC. 
The post-discharge transitional care service would parallel the 
discharge day management service for the community physician or 
qualified nonphysician practitioner and complement the E/M office/
outpatient visit CPT codes.
    We proposed that the post-discharge transitional care service HCPCS 
G code would be used to report physician or qualifying nonphysician 
practitioner services for a patient whose medical and/or psychosocial 
problems requires moderate or high complexity medical decision-making 
during transitions in care from hospital (inpatient stay, outpatient 
observation, and partial hospitalization), SNF stay, or CMHC settings 
to community-based care. The Evaluation and Management Guidelines 
define decision-making of moderate and high medical complexity. In 
general, moderate complexity medical decision-making includes multiple 
diagnoses or management options, moderate complexity and amount of data 
to be reviewed, a moderate amount and/or complexity of data to be 
reviewed; and a moderate risk of significant complications, morbidity, 
and/or mortality. High complexity decision-making includes an extensive 
number of diagnoses or management options, an extensive amount and/or 
complexity of data to be reviewed, and high risk of significant 
complications, morbidity, and/or mortality (See Evaluation and 
Management Services Guide, Centers for Medicare & Medicaid Services, 
December 2010.) We proposed that the post-discharge transitional care 
HCPCS code (GXXX1) would be payable only once in the 30 days following 
a discharge, per patient per discharge, to a single community physician 
or qualified nonphysician practitioner (or group practice) who assumes 
responsibility for the patient's post-discharge TCM services. The 
service would be billable only at 30 days post discharge or thereafter. 
The post-discharge TCM service would be distinct from services 
furnished by the discharging physician or qualified nonphysician 
practitioner reporting CPT codes 99238 (Hospital discharge day 
management, 30 minutes or less); 99239 (Hospital discharge day 
management, more than 30 minutes); 99217 (Observation care discharge 
day management); or Observation or Inpatient Care services, CPT codes 
99234 -99236; as appropriate.
    We proposed to pay only one claim for the post-discharge 
transitional care GXXX1 billed per beneficiary at the conclusion of the 
30 day post-discharge period Given the elements of the service and the 
short window of time following a discharge during which a physician or 
qualifying nonphysician practitioner will need to perform several tasks 
on behalf of a beneficiary, we stated our belief that it would be 
unlikely that two or more physicians or practitioners would have had a 
face-to-face E/M contact with the beneficiary in the specified window 
of 30 days prior or 14 days post discharge and have furnished the 
proposed post-discharge TCM services listed above. Therefore, we did 
not believe it necessary to take further steps to identify a 
beneficiary's community physician or qualified nonphysician 
practitioner who furnished the post-discharge TCM services. We proposed 
to pay only one claim for the post-discharge transitional care GXXX1 
billed per beneficiary at the conclusion of the 30 day post-discharge 
period. Post-discharge TCM services relating to any subsequent 
discharges for a beneficiary in the same 30-day period would be 
included in the single payment. Practitioners billing this post-
discharge transitional care code accept responsibility for managing and 
coordinating the beneficiary's care over the first 30 days after 
discharge.
    Comment: We received many comments on the proposed new code. The 
vast majority supported the concept in whole or in part. Only a handful 
of comments were generally opposed to the proposal to recognize and pay 
for TCM services. One commenter, while acknowledging that our proposal 
was ``well intentioned,'' expressed concern about adopting such an 
important proposal without explicit statutory direction. In particular, 
the commenter

[[Page 68981]]

recommended that we should be more judicious in using the PFS 
rulemaking process to adopt far-reaching new policies requiring sizable 
BN adjustments. The commenter suggested that, if the proposed policies 
had been mandated by the Congress, the BN adjustment would presumably 
not be required. Another commenter suggested that the proposed new code 
was duplicative, because pre- and post-encounter non-face-to-face care 
management work is included in the total work for the typical E/M 
services, and the total work for subsequent post-operative visits that 
accompany surgical procedures.
    Response: We thank the commenters who wrote in support of this 
proposal. For the reasons that we stated in the proposed rule, we do 
not believe that all the pre- and post- encounter non-face-to-face care 
management work that typically occurs when a beneficiary is discharged 
from a hospital, SNF or CMHC stay is included in the total work for the 
typical E/M services. This is because the E/M codes represent the 
typical outpatient visit and do not capture or reflect the significant 
care coordination that needs to occur when a beneficiary transitions 
from institutional to community-based care. (77 FR 44776) Therefore, we 
continue to believe that separate payment for TCM services does not 
duplicate payment for typical E/M services. We also believe that 
adoption of new codes such as our proposed TCM code is consistent with 
our statutory directive to maintain the physician fee schedule by 
recognizing changes in practice patterns and by adjusting codes, 
relative values, and payment accordingly. We have routinely added new 
codes created by AMA CPT to the fee schedule. As we indicated in the 
proposed rule, our proposal was, in part, a response to work by the 
AMAs C3W to develop new codes for TCM services. Below we discuss the 
AMA's recommendation that we adopt the TCM codes developed by that 
workgroup in place of our proposed TCM G-code.
    Comment: Most comments were generally supportive of the proposal to 
recognize and pay for TCM services. A few commenters merely expressed 
general support for the proposal. However, the great majority of these 
generally positive comments also recommended adopting the proposed TCM 
G code with revisions to the code description, or adopting the AMA's 
new CPT TCM codes in place of our proposed TCM G-code.
    Response: We appreciate the widespread support for our initiative 
to recognize and pay for TCM services. As we discuss below, we are 
proceeding with our proposal in a modified form, adopting some of the 
commenters' specific recommendations for revision. Most importantly, we 
are accepting the recommendation of many commenters that we adopt the 
AMA's CPT TCM codes in place of our proposed TCM G-code. As discussed 
below, we will therefore pay for new CPT TCM codes 99495 and 99496 with 
some small modifications to the code descriptions developed by the 
AMA's C3W. The new TCM codes developed by the AMA C3W are:
     99495 Transitional Care Management Services with the 
following required elements:
    ++ Communication (direct contact, telephone, electronic) with the 
patient and/or caregiver within 2 business days of discharge.
    ++ Medical decision making of at least moderate complexity during 
the service period.
    ++ Face-to-face visit, within 14 calendar days of discharge.
     99496 Transitional Care Management Services with the 
following required elements:
    ++ Communication (direct contact, telephone, electronic) with the 
patient and/or caregiver within 2 business days of discharge.
    ++ Medical decision making of high complexity during the service 
period.
    ++ Face-to-face visit, within 7 calendar days of discharge.
    We discuss these codes in greater detail and respond to these 
specific recommendations below.
    Comment: Many commenters, including the AMA and other specialty 
societies, expressed appreciation for our initiative to propose a new 
G-code and language to describe TCM, but urged us instead to implement 
the new CPT TCM codes. Commenters emphasized that these codes 
represented the consensus of the physician community as represented by 
the AMA's C3W. Commenters also emphasized that the CPT TCM codes are 
very similar to our proposal, with a few key differences. We summarize 
the key differences between our proposed TCM G-code and the CPT TCM 
codes in Table 26.

 Table 26--Key Differences Between Proposed Transitional Care Management
                     (TCM) G-Code and the CPT Codes
------------------------------------------------------------------------
                               CMS Proposed TCM G-
                                      code              CPT TCM codes
------------------------------------------------------------------------
Code(s).....................  GXXX1--Post-          99490X--Transitional
                               discharge             care management
                               transitional care     services (medical
                               management (medical   decision making of
                               decision making of    moderate
                               moderate to high      complexity), and
                               complexity).          99491X--Transitiona
                                                     l care management
                                                     services (decision
                                                     making of high
                                                     complexity).
Face-to-face visit..........  Separately billed     Face-to-face visit
                               face-to-face E/M      within 14 calendar
                               visit within 30       days of discharge
                               days prior to the     (99490X), or within
                               hospital discharge    7 calendar days
                               or within the first   (99491X). The first
                               14 days of the 30-    face-to-face visit
                               day period of TCM     is part of the TCM
                               services.             service and not
                                                     reported
                                                     separately. E/M
                                                     services after the
                                                     first face-to-face
                                                     visit may be
                                                     reported
                                                     separately.
Relationship with patient...  The patient may be    The reporting
                               new to the            physician or NPP
                               physician's           must have an
                               practice (provided    established
                               the face-to-face      relationship with
                               visit requirements    the patient.
                               above are met).       Established patient
                                                     means a visit in
                                                     the past 3 years.
Discharge management........  The physician or NPP  A physician or NPP
                               who bills for         may report both the
                               discharge             discharge code and
                               management services   appropriate TCM
                               during the time       code.
                               period covered by
                               TCM services may
                               not also bill for
                               GXXX1.

[[Page 68982]]

 
Global services.............  The physician who     The physician who
                               reports a service     reports a service
                               with a global         with a global
                               period of 010 or      period of 010 or
                               090 days may not      090 days may not
                               also report the TCM   also report the TCM
                               service.              service. However,
                                                     the AMA recommends
                                                     that specialties
                                                     work on a CPT
                                                     proposal for a new
                                                     code to describe
                                                     extensive post-
                                                     discharge TCM
                                                     services.
------------------------------------------------------------------------

    A few commenters from the medical community did not specifically 
recommend adopting the CPT TCM codes. For example, one major medical 
society supported our proposal on the grounds, among other 
considerations, that it was consistent with the ``general direction of 
organized medicine, as evidenced by the fact that the AMA's CPT 
Editorial Panel has created two new codes for transitional care 
management.'' This commenter then expressed support for several of the 
several elements in our proposed G code which differ from the CPT TCM 
codes, such as our ``proposal to keep the required post-discharge face-
to-face E/M separately reportable.'' (We discuss this issue in further 
detail later in this section.)
    Response: We agree with those commenters who recommended that we 
should acknowledge the physician community's work on primary care by 
adopting the CPT TCM codes in place of our proposed G-code. With regard 
to the differences noted above, we agree with the AMA's CPT 
construction that uses two separate codes to distinguish moderate and 
high complexity services in place of our single proposed G-code, which 
allowed for reporting services of either moderate or high complexity. 
We discuss the issues connected with the other differences between our 
proposed TCM G-code and the AMA's CPT TCM codes in responses to more 
specific comments of the AMA and others below.
    We explicitly constructed this proposal as a payment for non-face-
to-face post-discharge TCM services separate from payment for E/M or 
other medical visits. However, we believe that it is important to 
ensure that the community physician or qualified nonphysician 
practitioner furnishing post-discharge TCM services either already have 
or establish, soon after discharge, a relationship with the 
beneficiary. As such, we proposed that the community physician or 
qualified nonphysician practitioner reporting post-discharge TCM GXXX1 
should already have a relationship with the beneficiary, or establish 
one soon after discharge, prior to furnishing TCM and billing this 
code. Therefore, we specifically proposed that the community physician 
or qualified nonphysician practitioner reporting a TCM G-code must have 
billed an E/M visit for that beneficiary within 30 days prior to the 
hospital discharge (the start of post-discharge TCM period), or must 
conduct an E/M office/outpatient visit (99201 to 99215) within the 
first 14 days of the 30-day post-discharge period of TCM services. In 
either case, the E/M visit would be separately billed under our G-code 
proposal. While we proposed that the post-discharge TCM code would not 
include a face-to-face visit, and that physicians or qualified 
nonphysician practitioners would bill and be paid for this care 
management service separately from a medical visit, we sought comments 
about whether we should require a face-to-face visit when billing for 
the post-discharge TCM service: That is, whether we should bundle a 
required visit into the reporting and payment for the TCM codes. We 
were also concerned about whether beneficiaries would understand their 
coinsurance liability for the post-discharge transitional care service 
when they did not visit the physician's or qualified nonphysician 
practitioner's office.
    Comment: The AMA and many other commenters recommended that we 
should require a face-to-face visit within 7 to 14 days after discharge 
when billing for the post-discharge TCM service. Under the CPT TCM 
codes, the first face-to-face visit is part of the TCM service and not 
reported separately. Additional E/M services required for managing the 
beneficiary's clinical issues in addition to the required face-to-face 
visit may be reported separately. These commenters emphasized that 
requiring a face-to-face visit within 7 to 14 days of discharge will 
provide for a more successful transition from facility to community. 
Other commenters maintained that we should retain the requirement for a 
separately billable face-to-face E/M either within 30 days before or 14 
days after discharge. These commenters emphasized that such a 
requirement acknowledges that an established relationship with the 
patient is needed to bill the new code, and the level of E/M service 
will not be the same for every patient. A few commenters specifically 
recommended that it was not necessary to adopt any such requirement for 
a face-to-face visit (whether separately billable or not) in the 
context of a service that is essentially non-face-to-face. Some 
emphasized that it could be inefficient to require a visit that may not 
always be clinically necessary, and that the clinical decision about 
whether a visit is necessary should be left to the physician or 
qualified nonphysician practitioner. Other commenters emphasized that 
an office visit could be impractical in cases where patients may have 
limited mobility or otherwise have difficulty travelling to a physician 
office. Some of these commenters urged that we not adopt such a 
requirement, while others recommended that we expand the list of 
acceptable face-to-face visits to include other outpatient visit codes, 
such as home visits (99341-99350) and domiciliary/rest home visits 
(99324-99337). Still others stated that the window in which the post 
discharge visit must occur should be extended to 30 days post-
discharge, not 14 days.
    Response: The primary driver in creating these new CPT TCM codes 
has been to improve care coordination and to provide better incentives 
to ensure that these patients are seen in a physician's office, rather 
than be at risk for readmission. Therefore, we agree that care 
coordination beginning immediately upon discharge and the face-to-face 
visit within 7 or 14 days of discharge (as appropriate) will provide 
for a more successful transition from a facility to the community. 
However, as we indicated in the proposed rule, our adoption of codes 
for TCM services is part of the broader HHS and CMS multi-year strategy 
to recognize and support primary care and care management, and we are 
committed to considering new options and developing future proposals 
for payment of primary care services under the MPFS. Therefore, we 
consider the requirement for a face-to-face visit in

[[Page 68983]]

association with the non-face-to-face tasks of TCM to be a short-term, 
transitional strategy while we continue to explore our interest in 
further improvements to advanced primary care payment.
    We also share the commenters' concerns about beneficiaries who may 
have limited mobility or otherwise have difficulty travelling to a 
physician office in the period following a discharge. We note that the 
final CPT TCM codes, 99495 and 99496, which we are adopting in this 
final rule with comment period, requires a face-to-face visit, but does 
not specify the location/setting for that portion of the service. The 
AMA RUC states in its recommendation that, ``each code includes a 
timely face-to-face visit which typically occurs in the office, but can 
also occur at home or other location where the patient resides.'' 
Finally, we agree with those commenters who stated that beneficiaries 
would understand their coinsurance liability better if the TCM services 
included a required E/M visit as part of the service.
    We also sought comments regarding whether we should incorporate 
such a required visit on the same day into the payment for the proposed 
code. We considered several reasons for requiring a face-to-face visit 
on the same day as the date of discharge. We wondered whether, with a 
face-to-face visit immediately after discharge, the plan of care would 
be more accurate given that the patient's medical or psychosocial 
condition may have changed from the time the practitioner last met with 
the patient and the practitioner could better develop a plan of care 
through an in-person visit and discussion. On the other hand, we 
contemplated several scenarios where it is not possible for a 
beneficiary to get to the physician's or qualified nonphysician 
practitioner's office and welcomed comment on whether an exception 
process would be appropriate if we were to finalize a same day face-to-
face visit as a requirement for billing the post-discharge TCM code.
    Comment: Commenters were almost uniformly opposed to a requirement 
for a same day visit. The commenters believed that a same day visit is 
unrealistic and should not be required because hospital discharge 
records are not always immediately available to the physician who would 
be assuming responsibility for transitional care. Some commenters, 
including several who favor a face-to-face requirement other than a 
same day requirement, also favored an exception for beneficiaries too 
feeble to travel to an office. Other commenters maintained that a 
requirement for a face-to-face encounter with an exception process 
could prove confusing and administratively challenging as it would 
require communication of exceptions criteria and audit/appeals 
processes.
    Response: In conjunction with adopting the AMA's recommendation to 
require a face-to-face visit within 7 or 14 days of discharge for 
reporting the CPT TCM codes, we have also decided not to proceed with a 
requirement for a same day face-to-face visit. We agree with commenters 
who stated that such a requirement would be unrealistic in many 
situations, and would require the adoption of an exceptions process 
that could, unto itself, prove administratively difficult and 
confusing. At the same time, we emphasize that we believe physicians 
should seek to make an assessment and conduct the face-to-face visit as 
quickly as medically necessary after discharge in order to address 
patient care needs.
    Comment: As we noted above, we proposed to require communication 
(direct contact, telephone, electronic) with the patient or caregiver 
within 2 business days of discharge. Some commenters stated that the 
specific requirement for the physician to communicate with the patient 
within 2 business days of discharge to begin the coordination of care 
is unrealistic. Some contended that hospital discharge records are not 
always available that quickly. Several other commenters expressed 
concern about the references to ``business days'' in this requirement. 
(Other requirements, for length of TCM service and the timing of the 
required E/M visit are established in terms of calendar days for 
purposes of the TCM codes.) The commenters noted that, traditionally, 
business days are Monday through Friday, except for holidays. However, 
many primary care practices are also open on weekends, making those 
``business days'' for those practices. Most importantly, beneficiaries' 
need for medical care and care coordination is not limited to 
``business days,'' nor are their discharges. Thus, the commenters 
recommended that CMS change ``business days'' to ``calendar days'' in 
this context, which, they asserted, would be consistent with CMS's 
proposal to define the code as a 30 calendar day service. The AMA CPT 
TCM codes incorporate a requirement for an interactive contact with the 
patient or caregiver, as appropriate, within 2 business days of 
discharge. This contact may be direct (face-to-face), telephonic, or by 
electronic means. The AMA CPT TCM codes also specify that, for purposes 
of this requirement, business days are Monday through Friday, except 
holidays, without respect to normal practice hours or date of 
notification of discharge. If two or more separate attempts are made in 
a timely manner, but are unsuccessful and other TCM criteria are met, 
the service may be reported. We emphasize, however, that we expect 
attempts to communicate to continue until they are successful.
    Response: Our proposed TCM G-code contained a requirement for 
communication with the patient or caretaker within 2 business days of 
discharge. We also agree with the AMA's assessment concerning the 
importance of such a requirement to meeting the goals of successful 
TCM. We also agree with the AMA's provision to allow for billing of the 
TCM service if two or more separate, unsuccessful attempts at 
communication are made within a timely fashion. We believe that this 
provision should substantially reduce the concerns of some commenters 
about the tight timeline for making this initial contact. We also 
believe that concerns about the availability of hospital discharge 
records should decline dramatically as both hospitals and physicians 
respond to the current incentive payments (and the payment reductions 
beginning in 2015) to encourage adoption of electronic health records 
systems. We cannot agree with those commenters who suggested that we 
should substitute ``calendar days'' for ``business days'' in this 
requirement. We do not believe that the timeframe for this requirement 
needs to be expressed in calendar days to be consistent with the 30 
calendar day timeframe for the service. More importantly, establishing 
a timeframe of 2 calendar days for this initial contact would severely 
disadvantage those practices which do not have regular business hours 
on the weekends.
    Comment: In our proposed G-code, we required that physicians or 
qualified nonphysician practitioners must have had a face-to-face E/M 
visit with the beneficiary in the 30 days prior to the transition in 
care or within 14 business days following the transition in care. 
However, we allowed that, if the physician or qualified nonphysician 
practitioner met this requirement, the patient could otherwise be new 
to the practice. The AMA recommended that the physician reporting the 
CPT TCM codes must have an established relationship with the patient, 
as required for the those codes, rather than allowing physicians to 
bill for TCM services furnished to patients who are new to their 
practices. Under CPT TCM definitions, an established relationship with 
a patient exists when a physician has billed a visit with the patient 
within

[[Page 68984]]

the last three years. Many commenters maintained that a visit within 30 
days prior to the discharge was largely irrelevant to the actual 
provision of TCM services. Other commenters maintained that defining a 
pre-existing relationship as a visit within 30 days prior to the 
discharge is far too restrictive. A patient with established disease 
may only be seen by a physician every 3 to 6 months. We should 
therefore allow an E/M service to be furnished any time in the 12 
months prior to the discharge to be considered evidence of an 
established relationship.
    Response: We agree with commenters that a visit within 30 days 
before the hospital discharge might be too restrictive for purposes of 
establishing an existing relationship with a patient. We are therefore 
accepting the AMA's recommendation not to include such a requirement in 
the CPT TCM codes and note that the CPT TCM codes also do not require a 
visit within 30 days before discharge. Rather, as the AMA has 
recommended, we will include a requirement for a face-to-face visit 
with the beneficiary within 14 days (in the case of CPT code 99495) or 
7 days (in the case of CPT code 99495. This required visit is bundled 
into the payment for the codes and is not separately payable. We do not 
entirely agree with the AMA's recommendation that the physician must 
have an established relationship prior to the discharge with the 
patient to report the CPT TCM codes. We are concerned that such a 
requirement would make it impossible for an especially vulnerable group 
of patients, specifically, those who do not have an established a 
relationship with a primary care or other community physician, to 
receive the benefit of post-discharge TCM services. These patients may 
well be among those who would benefit most from these services, 
particularly because receiving TCM services could provide the 
opportunity for them to establish a continuing relationship with a 
physician who is able to assume overall management of their care. 
Therefore,, in conjunction with our adoption of the CPT TCM codes, we 
will develop additional Medicare-specific guidance for the use of these 
codes that modifies this element of the CPT TCM prefatory instructions, 
to allow a physician to bill these codes for new patients (provided 
that the physician meets visit requirement and all other requirements 
for the CPT TCM codes). It is important to note, however, that the 
payment amount for the CPT TCM codes will be the same whether the codes 
are billed under Medicare for treating new or established patients 
under the TCM codes. For Medicare purposes we are modifying the 
prefatory instructions for the CPT TCM codes because we wish to 
encourage the provision of TCM services to those beneficiaries who can 
benefit from the services--whether the beneficiary is a new or 
established patient. However, we believe that the typical case will 
involve provision of TCM services to an established patient, and 
relative values for codes are established on the basis of the typical 
case. Physicians may choose to bill other appropriate codes (for 
example, new patient E/M codes) that better describe the services 
furnished.
    Comment: We proposed that a physician or qualified nonphysician 
practitioner who bills for discharge day management during the time 
period covered by the TCM services code may not also bill for HCPCS 
code GXXX1. The CPT discharge day management codes are 99217, 99234-
99236, 99238-99239, 99281-99285, or 99315-99316. The AMA/RUC and many 
other commenters recommended that a physician reporting the discharge 
management should also be able to report the new TCM service. The AMA/
RUC and other commenters noted an AMA data analysis that nearly 25 
percent of those visits reported within 14 days of discharge were from 
the physician who also furnished the discharge services. The commenters 
emphasized that discharge management services reflect the work done at 
the time of discharge. The TCM service describes the work following 
discharge. Therefore, the commenters contended that there should be 
minimal or no overlap in the actual work performed in providing these 
two services. Other commenters emphasized that the physician or group 
practice billing for discharge day management could also be the 
physician or group practice regularly responsible for the patient's 
primary care and would therefore be the appropriate physician to take 
responsibility for the patient's transition to the community.
    Response: We accept the AMA/RUC's recommendation (as supported by a 
number of commenters) to allow a physician to report both the discharge 
management code and a CPT TCM code. We agree with those commenters who 
emphasized that the physician billing discharge day management could 
also be the physician who is regularly responsible for the 
beneficiary's primary care (this may be especially the case in rural 
communities), and who would therefore be the appropriate physician to 
take responsibility for the patient's transition to the community. 
However, we continue to be concerned that there could be some overlap 
in the actual work involved in providing these two services and, that 
payment to one physician for both of these services might be excessive 
as a result. Therefore, we will monitor claims data to ascertain the 
extent to which the same physician bills for both the discharge day 
management and TCM services and analyze whether it may be appropriate 
to develop a payment adjustment that recognizes overlap in resources in 
the future.
    In addition, we note that the CPT TCM code prefatory language 
provides that the TCM service period ``commences upon the date of 
discharge and continues for the next 29 days.'' Subsequent CPT TCM 
language indicates that the first visit must occur within 7 or 14 
calendar days of the date of discharge depending on the level of 
decision-making. We are unclear as to whether the CPT TCM prefatory 
language intends to allow the first visit to occur on the same date as 
discharge. We note that there is a distinction between the discharge 
day management and TCM services, and we wish to avoid any implication 
that the E/M services furnished on the day of discharge as part of the 
discharge management service could be considered to meet the 
requirement for the TCM service that the physician or nonphysician 
practitioner must conduct an E/M service within 7 or 14 days of 
discharge. Therefore, we will specify that the E/M service required for 
the CPT TCM codes cannot be furnished by the same physician or 
nonphysician practitioner on the same day as the discharge management 
service.
    Comment: A number of commenters suggested that payment for the E/M 
hospital discharge management codes (CPT 99238 or 99239) is inadequate 
to reflect the discharging duties of the physician. While most of these 
commenters supported enhanced payment for community physicians to 
furnish care coordination services on the receiving end, they stated 
that a corresponding increase in payment to those physicians who are 
discharging patients is also warranted.
    Response: We continue to believe that the current hospital 
discharge management codes (CPT codes 99238 and 99239) and nursing 
facility discharge services (CPT codes 99315 and 99316) adequately 
capture the care coordination services required to discharge a 
beneficiary from hospital or skilled nursing facility care. The work 
relative values for those discharge management services include a 
number of pre-, post-, and intra-care

[[Page 68985]]

coordination activities. For example, the hospital discharge management 
codes include the following pre-, intra-, and post- service activities 
relating to care coordination:
    Pre-service care coordination activities include:
     Communicate with other professionals and with patient or 
patient's family.
    Intra-service care coordination activities include:
     Discuss aftercare treatment with the patient, family and 
other healthcare professionals;
     Provide care coordination for the transition including 
instructions for aftercare to caregivers;
     Order/arrange for post discharge follow-up professional 
services and testing; and
     Inform the primary care or referring physician or 
qualified nonphysician practitioner of discharge plans.
    Post-service care coordination activities include:
     Provide necessary care coordination, telephonic or 
electronic communication assistance, and other necessary management 
related to this hospitalization; and
     Revise treatment plan(s) and communicate with patient and/
or caregiver, as necessary.
    The hospital and nursing facility discharge management codes also 
include a number of other pre-, intra and post-service activities.
    We certainly recognize that the services of physicians and other 
practitioners providing discharge management services are crucial to 
the overall success of TCM services. These codes have been valued by 
the AMA/RUC in the past, and these valuations have been reviewed and 
accepted by us. At this time, we are not aware of any substantive 
evidence that these codes are systematically undervalued.
    Comment: We proposed that a physician or qualified nonphysician 
practitioner who bills for emergency department visits (99281-99285), 
home health care plan oversight services (HCPCS code G0181), or hospice 
care plan oversight services (HCPCS code G0182) during the time period 
covered by the TCM services code may not also bill for HCPCS code 
GXXX1. We indicated that we believed these codes describe care 
management services for which Medicare makes separate payment and 
should not be billed in conjunction with GXXX1, which is a 
comprehensive post-discharge TCM service. The AMA noted that for the 
proposed TCM G-code we would not allow TCM services to be reported with 
emergency department visits, home health care oversight (G0181), 
hospice care plan oversight (G0182). The AMA CPT TCM codes allow for 
reporting of emergency department visits. The AMA also indicated that a 
physician or other qualified health care professional who reports a TCM 
code may not report the CPT codes for care plan oversight services 
(99339, 99340, 99374-99380). At the same time, the CPT TCM codes also 
specify that many other codes may not be reported with TCM (for 
example, non-face-to-face services such as telephone calls).
    Response: In conjunction with adopting the AMA CPT TCM, we accept 
the recommendation to allow reporting of emergency department visits 
when also billing the CPT TCM codes. We also agree with the 
recommendation not to allow reporting of care plan oversight services 
when also billing the CPT TCM codes. We had proposed to prohibit 
billing of the G-codes that we employ for home health care oversight 
(G0181), and hospice care plan oversight (G0182) with our proposed TCM 
G-code, on the grounds that such care management services duplicate the 
services provide in TCM. We are including these G-codes in the list of 
codes for such services that are precluded from billing with the CPT 
TCM codes, because we continue to believe that they are duplicative of 
the CPT care plan management aspects of the CPT TCM codes. We will also 
accept the AMA recommendation specifying many additional codes that may 
not be reported with CPT TCM codes (for example, non-face-to-face 
services such as telephone calls), as specified in the descriptions of 
CPT TCM codes 99495 or 99496 below. We are accepting these 
recommendations because they similarly avoid duplicate payment for the 
same services.
    Further, we proposed that a physician or qualified nonphysician 
practitioner billing for a procedure with a 10- or 90-day global period 
would not also be permitted to bill HCPCS code GXXX1 in conjunction 
with that procedure because any follow-up care management would be 
included in the post-operative portion of the global period.
    Comment: Many commenters expressed concerns with prohibiting 
physicians who bill services with a global period from billing the TCM 
code as well. One commenter stated that ``permitting a surgeon to 
receive payment under these circumstances would not result in duplicate 
payment for the same service * * * [I]f follow-up care management 
included in the post-operative portion of a global period can be 
reimbursed separately from the proposed transitional care management 
code when performed by two different physicians, they should remain 
separately reimbursable when these functions are all performed by the 
same physician.'' One commenter specifically agreed with our proposal 
to prohibit the billing of TCM by a physician providing the original 
care within a 010 or 090 day global period code. The AMA CPT TCM codes 
do not allow physicians billing services with global periods of 010 and 
090 days to bill for TCM services. However, the AMA RUC recommends that 
specialties work with the CPT Editorial Panel to develop a new code for 
those cases in which comprehensive TCM services are furnished along 
with the services already bundled into the global codes. However, the 
AMA RUC also indicates that it would not be typical for a surgeon to 
furnish TCM services.
    Response: We agree with the commenters that the physician who 
reports a global procedure should not be permitted to also report the 
TCM service, and we are adopting that policy in this final rule. The 
AMA RUC specifically states in its comment letter that it would not be 
typical for surgeons billing global procedures to also provide TCM 
services. Our goal is that the physician billing for TCM services 
should have an ongoing relationship with the beneficiary. We do not 
believe surgeons typically would be in a position to coordinate all 
aspects of a patient's care, because their relationship with a 
beneficiary frequently ends after the end of the global period (unless 
or until additional surgery is required).
    We proposed that the TCM code would be payable only once in the 30 
days following a discharge, per patient per discharge, to a single 
community physician or qualified nonphysician practitioner (or group 
practice) who assumes responsibility for the patient's post-discharge 
TCM. We expressed our belief that, given the elements of the TCM 
service and the short time period during which they must be furnished, 
it would be unlikely that two or more physicians would meet the 
requirements for billing the TCM code.
    Comment: Many commenters requested clarification concerning whether 
the TCM codes could be billed again if another hospital admission and 
discharge occur within the initial 30 day period following a discharge. 
The commenters recommended that we allow the clock to start over with 
each admission, that is, allow for payment of TCM even when readmission 
occurs within the original 30 day period after a discharge. A few 
commenters recommended that CMS develop a mechanism to monitor 
readmissions for patients receiving TCM services to

[[Page 68986]]

determine if this effort positively impacts beneficiary outcomes and 
decreases the burden on the healthcare system. The mechanism would 
require physician reporting at the beginning and end of the care 
period, and may require a ``start'' and a ``stop'' modifier to the new 
G-code. A few commenters specifically supported the ``only once within 
30 days of discharge'' policy. The AMA's C3W stipulated that the CPT 
TCM codes may be reported ``* * * only once per patient within 30 days 
of discharge. Another CPT TCM code may not be reported by the same 
individual or group for any subsequent discharge(s) within the 30 
days.''
    Response: In adopting the CPT TCM codes, we believe it is 
appropriate to maintain the limitation that the codes can be billed 
only once per patient within 30 days of discharge, which is consistent 
with the policy we proposed for our TCM G-code. Preventing unnecessary 
hospital readmissions in the period shortly after a discharge is an 
important goal and part of the reason we proposed improved recognition 
and payment of TCM services (as well as other initiatives within the 
Medicare program). We believe that it would be at least inconsistent 
with this goal, and perhaps even counterproductive to it, to allow for 
another TCM code to be billed when a hospital discharge occurs within 
30 days after the original discharge for which a TCM code has been 
billed. We appreciate the comments recommending that we monitor 
readmissions for patients receiving TCM services to determine if this 
effort positively impacts beneficiary outcomes and decreases the burden 
on the healthcare system. We will consider how to incorporate this into 
our existing initiatives that address these issues.
    Comment: We proposed that the TCM G-code would be payable to a 
single community physician or nonphysician practitioner (or group 
practice) who assumes responsibility for the patient's post-discharge 
TCM. Many commenters recommended allowing more than one physician to 
bill a TCM code during the same 30-day period on the grounds that: 
``Complex patients often have to follow-up with more than one provider 
after a discharge. Each of these providers could be performing care 
coordination and should be compensated accordingly.'' The CPT TCM codes 
allow for only one individual to report these services and only once 
per patient within 30 days of discharge.
    Response: We disagree that more than one physician should be 
allowed to bill the TCM codes during a single 30 day period after a 
discharge. Coordination of care intrinsically involves developing and 
implementing a single plan of care for a patient. Allowing multiple 
physicians to furnish this service simultaneously would introduce the 
danger that an individual patient might be subjected to inconsistent or 
even contradictory plans of care. In other words, allowing more than 
one physician to bill TCM codes simultaneously could lead to 
uncoordinated rather than coordinated post-discharge care. We will 
therefore follow the CPT TCM code rule that these services may be 
billed by only one individual during the 30 day period after discharge.
    Comment: Other commenters recommended further restricting and/or 
raising the bar for billing TCM codes. Many objected to our proposal to 
pay the first physician or qualified nonphysician practitioner who 
submitted a claim because, they asserted, it would lead to an 
uncoordinated, sub-optimal ``race to bill.'' One of these commenters 
expressed concern that practitioners' offices would have to compete 
with each other to submit the bill first. In addition, this commenter 
was concerned that practitioners' offices would not be able to track 
whether or not they are the first to submit a claim and could get paid 
for the service. MedPAC noted that the first physician or nonphysician 
practitioner to submit a claim may not be providing the bulk of the TCM 
services, and recommended raising the bar to ensure payment goes to 
physicians actually providing comprehensive primary care to the 
beneficiary by requiring that the billing provider must have billed for 
an E&M visit (that is, a face-to-face visit) that took place within the 
30 days prior to admission and within the 14 days following discharge. 
Another commenter recommended that we adopt a multi-stage process of 
screening claims to identify the beneficiary's primary care physician, 
who then would be the only physician permitted to bill a TCM code. The 
commenter noted that we referred to the community-based physician as 
the one who would manage and coordinate a beneficiary's care in the 
post-discharge period, and we anticipated that most community 
physicians will be primary care physicians and practitioners. The 
commenter also stated: ``It is thus perplexing that CMS did not propose 
to restrict the use of this code to actual primary care physicians.'' 
Others recommended employing a ``plurality of services'' determination 
in case more than one physician and/or nonphysician practitioner bills 
TCM after the same discharge. One commenter recommended that we should 
require beneficiaries to prospectively identify their primary care 
provider.
    Response Any physician who is appropriately enrolled in Medicare 
and furnishes the service may bill for that service. We continue to 
expect that most community physicians who are furnishing TCM services 
will be primary care physicians and practitioners. However, we also 
believe that there will be circumstances in which cardiologists, 
oncologists, or other specialists will be in the best position to 
furnish transitional care coordination after a hospital discharge. 
Furthermore, we believe that the requirements for physicians or 
qualified nonphysician practitioners to furnish multiple specific 
services for the beneficiary within a restricted period of time will 
limit the circumstances under which more than one practitioner might be 
able to bill the TCM codes. We appreciate MedPAC's suggestion that we 
require that the billing provider must have billed for an E/M visit 
(that is, a face-to-face visit) that took place within the 30 days 
prior to admission and within the 14 days following discharge. However 
we are concerned that adopting such a policy would actually have the 
unintended consequence of prohibiting many physicians with well-
established relationships and a history of providing comprehensive care 
for their beneficiaries from reporting the TCM service for these same 
patients, simply because an office visit may not have occurred within 
30 days prior to a, possibly even unanticipated, hospitalization. After 
considering all these comments, we continue to believe that it is not 
necessary to develop any further restrictions or complex operational 
mechanisms to identify one and only one physician or nonphysician 
practitioner who may bill the codes for a specific beneficiary. We have 
used such a ``first claim'' policy in other areas, such as a radiology 
interpretation and the Annual Wellness Visit. However, we would expect 
the discharging physician to support TCM services by discussing post-
discharge services with the beneficiary (which is an element in the 
discharge day management vignette), and to identify a community 
physician for follow-up whenever possible. Specifically, we expect 
discharging physicians and other physicians seeing beneficiaries in a 
facility to inform the beneficiaries that they should receive TCM 
services from their doctor or other practitioner after their discharge, 
and that Medicare will pay for those services. As a part of this

[[Page 68987]]

disclosure to patients, we also expect that the discharging physician 
would ask the beneficiary to identify the physician or nonphysician 
practitioner whom he or she wishes to furnish these transitional care 
management services. If the beneficiary does not have a preference for 
the physician who would furnish these services, the discharging 
physician may suggest a specific physician who might be in the best 
position to furnish the TCM services. The recording of this information 
could also help in the transitional care coordination activities. We 
believe that it could be helpful for the physician providing discharge 
day management services to record the community physician who would be 
providing TCM services in the discharge medical record and the 
discharge instructions for patients. We note that recent literature 
highlights the importance of these patient-centered communication 
activities for effective transitional care management.\1\ As we further 
consider how Advanced Primary Care practices can fit with a fee-for-
service model, we also will actively consider methodologies that could 
allow Medicare to identify the beneficiary's community/primary care 
physician.
---------------------------------------------------------------------------

    \1\ Hesselink MA, Schoonhoven L, Barach P et al. Improving 
patient handovers from hospital to primary care. Annals of Internal 
Medicine 2012; 157: 417-428.
---------------------------------------------------------------------------

    Comment: Many commenters endorsed our proposal not to restrict 
billing of this proposed TCM code to primary care physicians. Other 
commenters requested that we confirm that specialists can bill the new 
code if they meet the service requirements of comprehensive TCM 
services. Other commenters similarly requested confirmation that they 
can bill the TCM code if they meet the requirements. Some commenters 
from health care professions other than physicians, NPs, PAs, CNSs, and 
CNMs similarly requested that they be permitted to bill the CPT TCM 
codes and receive payment for these services.
    Response: We appreciate these comments and take this opportunity to 
confirm that, while we expect the TCM codes to be billed most 
frequently by primary care physicians, specialists who furnish the 
requisite services in the code descriptions may also bill the new TCM 
codes. As for nonphysician qualified health care professionals, we 
believe only NPs, PAs, CNSs, and certified nurse midwives (CNMs) can 
furnish the full range of E/M services and complete medical management 
of a patient under their Medicare benefit to the limit of their state 
scope of practice. Other nonphysician practitioners (such as registered 
dieticians, nutrition professionals or clinical social workers) or 
limited-license practitioners, (such as optometrists, podiatrists, 
doctors of dental surgery or dental medicine), are limited by the scope 
of their state licensing or their statutory Medicare benefit to furnish 
comprehensive medical evaluation and management services, and there is 
no Medicare benefit category that allows explicit payment to some of 
the other health professionals (such as pharmacists and care 
coordinators) seeking to bill TCM services. Accordingly, we will not 
adopt the requests of other health care professionals to bill the CPT 
TCM codes because these services go beyond the statutory benefit and 
state scope of practice for the requesting practitioners. As already 
discussed, we consider the separate coding and payment for these TCM 
services to be a short-term initiative as we further consider 
alternatives to ensure that any payment for primary care services would 
constitute a minimum level of care coordination, such as payments in a 
FFS setting.
    Comment: Several commenters requested that we extend recognition of 
care coordination to RHC physicians and providers as well or at least 
clarify whether providers practicing in rural health clinics may 
utilize the new HCPCS G-code.
    Response: While we recognize that RHCs have an important role in 
furnishing care in their communities, RHCs are paid an all-inclusive 
rate per visit. Since RHCs are not paid under the PFS, physicians and 
other RHC providers whose services are paid within the RHC all-
inclusive rate cannot bill using the CPT TCM codes for services 
furnished in the RHC. However, an RHC physician or other qualified 
provider who has a separate fee-for-service practice when not working 
at the RHC may bill the CPT TCM codes, subject to the other existing 
requirements for billing under the MPFS.
    Comment: We also proposed that the TCM G-code would be ``billable 
only at 30 days post discharge or thereafter.'' Although we proposed 
that the billing for TCM services would occur, as it does for most 
services, after the conclusion of the service that is, only at 30 days 
post discharge or thereafter), we welcomed comment on whether, in this 
case, there would be merit to allowing billing for the code to occur at 
the time the plan of care is established. Many commenters recommended 
that billing of TCM services should occur (as proposed) at the end of 
the 30-day TCM period. A smaller number of commenters recommended that 
it should be allowed to occur at the time the plan of care is 
established. One commenter observed that billing for the post-
transitional service at the time the plan of care is established may 
help prevent a ``race to the billing office'' by various providers, as 
the appropriate provider coordinating the post-transitional care would 
be well-established among the various medical providers involved in the 
patient's care. The CPT TCM code prefatory language provides: ``Only 
one individual may report these services and only once per patient 
within 30 days of discharge.'' (Emphasis supplied.)
    Response: We continue to believe that the billing for TCM services 
under the PFS should occur, as it does for most fee schedule services, 
after the conclusion of the service (that is, only at 30 days post 
discharge or thereafter). Allowing for billing at the time the plan of 
care is established, or at any other time prior to the end of the 30-
day period, would pose serious administrative problems. For example, 
adopting any policy other than billing at the end of the 30-day service 
period would make it difficult to monitor the CPT TCM requirement that 
the code be billed only once in the 30-day period beginning with the 
discharge. It would also be very challenging to monitor our policy that 
subsequent hospital admissions during that period will not begin a new 
30-day period and allow reporting of another TCM service. We will 
provide guidance to physicians and qualified NPPs regarding the billing 
of the CPT TCM codes, which will occur at the conclusion of the period 
for providing TCM services, 30 days post discharge. We appreciate the 
concern about preventing a situation where two physicians may rush to 
bill for TCM services. However, as we have previously discussed, we 
believe it would be quite unlikely that more than one physician or 
nonphysician practitioner will be able simultaneously to satisfy the 
numerous and complex requirements for billing the CPT TCM codes.
    Comment: Some commenters were concerned about the large number of 
activities that are required to furnish the TCM service. The commenters 
emphasized that many of the activities listed could require a lengthy 
discussion or actions that need to be undertaken with the patient that 
would far exceed that allowable time. Some commenters stated that the 
specific requirement that the physician communicate with the patient 
within 2 business days of discharge to begin the coordination of care 
is unrealistic because hospital

[[Page 68988]]

discharge records are not always available that quickly. Other 
commenters pointed to the requirement for an assessment of the 
patient's psychosocial needs as potentially an excessively burdensome 
requirement. One commenter asked us to reconsider the requirement that 
these codes only cover patients of moderate to high complexity on the 
grounds that most admissions are relatively straightforward and 
patients do not require moderate to complex decision making but that 
these less complex patients still require TCM services. On the other 
hand, some commenters recommended additions to the services already 
listed, such as the addition of communication between the accepting 
primary care/community physician and the discharging inpatient 
physician.
    Response: We agree with the commenters that a large number of 
activities are required to report the TCM codes. However, we believe 
that these requirements are entirely appropriate. As we have noted 
before, TCM services require management and coordination of all 
relevant aspects of a beneficiary's health status in the post-discharge 
period. And as a number of commenters maintained, physicians should not 
undertake TCM services unless they are capable and willing to assume 
comprehensive responsibility for a patient's care during the period of 
the service. In the light of these considerations, we believe the 
lengthy list of services required by our proposed G-code, and largely 
paralleled in the AMA's CPT TCM codes that we are adopting in this 
final rule, is quite appropriate to the nature of the service. With 
regard to the specific requirement for assessment of psychosocial 
needs, we note again for example that depression in older adults occurs 
in a complex psychosocial and medical context and opportunities are 
often missed to improve behavioral health and general medical outcomes 
when mental disorders are under-recognized and undertreated in primary 
care settings. We believe that it is therefore important to emphasize 
the equal importance of the beneficiary's mental health and his or her 
physical condition to successful discharge into the community. We 
believe that AMA has confirmed our assessment by requiring those 
reporting the CPT TCM codes to oversee the ``management and 
coordination of services, as needed, for all medical conditions, 
psychosocial needs and activity of daily living supports * * *'' The 
AMA has also confirmed our assessment that patients typically require 
complex and multidisciplinary care modalities in the post-discharge 
period by establishing a requirement of moderate to high complexity for 
reporting the CPT TCM codes. We do not believe that it is necessary to 
add a formal requirement for communication between the accepting 
primary care/community physician and the discharging inpatient 
physician. The accepting community physician is responsible for 
reviewing the discharge summary, and the community physician can decide 
whether standard clinical practice indicates the need for further 
communication with the discharging physician. However, as indicated 
above, we note our expectation that the discharging physician will 
communicate with the community physician as necessary as part of 
billing for discharge day management services.
    Comment: Some commenters recommended that we create disease 
specific TCM codes for major chronic conditions (for example, 
Alzheimer's, diabetes, HIV, cancer survivors planning services, etc.) 
or for special services (for example, comprehensive medication 
management services). The commenters were concerned that, otherwise, 
many cognitive specialists and other practitioners would not be able to 
bill the proposed TCM G-code.
    Response: With regard to treatment of the chronic conditions 
mentioned by commenters, both our proposed TCM G-code and the CPT TCM 
codes we are adopting in this final rule are defined broadly enough to 
incorporate the TCM activities involved in the treatment of patients 
with such diseases in the period after discharge. In addition, as we 
discuss below, we will be considering adoption of the complex care 
coordination codes developed by the AMA as we continue to explore 
payment for primary care services in future rulemaking. With regard to 
the TCM codes, we indicated in the proposed rule that we proposed the 
TCM G-code to recognize the services related to TCM by a community 
physician or qualified nonphysician practitioner. We used the term 
community physician and practitioner to refer to the community-based 
physician managing and coordinating a beneficiary's care in the post-
discharge period. We also indicated that we anticipated that most 
community physicians would be primary care physicians and 
practitioners. This is because the nature of the services involved in 
TCM (for example, communication with patient and family education to 
support self-management, independent living, and activities of daily 
living, assessment and support for treatment regimen adherence and 
medication management, etc.) are characteristic of primary care 
services as such services are usually understood. At the same time, 
neither the TCM G-code we proposed, nor the CPT TCM codes we are 
adopting in this final rule, preclude cognitive or other specialists 
from reporting these codes when they are appropriately furnishing the 
required primary care services of TCM. We certainly want to encourage 
cognitive and other specialists to assume responsibility for the 
comprehensive care of patients contemplated in the requirements of the 
CPT TCM codes when they are in the position to do so during the post-
discharge period.
    Comment: A few commenters recommended that there should be special 
TCM G-codes for psychologists and others who are not permitted to bill 
E/M codes.
    Response: The TCM service includes ``the management and/or 
coordination of services, as needed, for all medical conditions, 
psychosocial needs and activities of daily living.'' For reasons we 
have discussed at length above, the services described in the CPT E/M 
codes are intrinsic to furnishing the TCM service. It was for this 
reason that the AMA decided to include a post-discharge, face to face 
E/M service as a requirement for reporting the CPT TCM codes. We have 
had a longstanding restriction on the use of E/M codes by clinical 
psychologists. As we have explained in previous rulemaking (62 FR 
59057), the evaluation and management services included in the codes 
that psychologists cannot bill are services involving medical 
evaluation and management. Psychologists are not licensed to perform 
these types of services. Therefore, we do not believe it would be 
appropriate to provide a special TCM G-code for these practitioners. 
However, we would expect the community physicians and qualified 
nonphysician practitioners to refer patients to psychologists and other 
mental health professionals as part of the TCM service when doing so is 
warranted by evaluation of patients' psychosocial needs in the period 
after discharge. As indicated above, we believe the only nonphysician 
practitioners who may furnish the full range of E/M services and 
complete medical management of a patient under their Medicare benefit 
are NPs, PAs, CNSs, and CNMs, unless they are otherwise limited by 
their state scope of practice. Other nonphysician practitioners or 
limited-license practitioners, (such as optometrists, podiatrists, 
doctors of dental surgery or

[[Page 68989]]

dental medicine), are limited by the scope of their state licensing or 
their Medicare benefit from furnishing comprehensive medical evaluation 
and management services. As already discussed, we consider these TCM 
services to be a short-term initiative as we further consider 
alternatives to target payment for primary care services.
    Comment: Some commenters cited our statement that the proposed TCM 
G-code may be used ``[d]uring transitions in care from hospital 
(inpatient stay, outpatient observation, and partial hospitalization), 
SNF stay, or CMHC settings to community-based care.'' The commenters 
stated that this statement seems to avoid the reality that in many 
instances the transition from a hospital to a facility such as a SNF 
is, for all intents and purposes, the transition back to the community 
for many patients.
    Response: Individuals in SNFs are considered inpatients, and 
therefore the TCM codes may not be billed when patients are discharged 
to a SNF. For patients in SNFs there are E/M codes for initial, 
subsequent, discharge care, and the visit for the annual facility 
assessment, specifically CPT codes 99304-99318. These codes may be 
billed for SNF beneficiaries for the care management services they 
receive in the period after discharge from an acute care hospital. And 
then when SNF patients are discharged from the SNF to the community or 
to a nursing facility (even when the SNF and nursing facility are part 
of the same entity or located in the same building), the physician or 
practitioner who furnishes transitional care management services can 
use the CPT TCM codes to bill for those services. As such, we believe 
there will be appropriate payment for transitional care management 
services furnished following each transition of care from acute 
inpatient, to SNF, to the community or nursing facility setting.
    After considering all these comments, and for the reasons stated 
above we are adopting the CPT TCM codes subject to the modifications 
described in our responses to comments on the issues discussed above. 
In summary, these specific modifications are: Our decision not to 
restrict the billing of the CPT TCM codes to established patients, our 
clarification of the post-discharge service period, and our prohibition 
against billing a discharge day management service on the same day that 
a required E/M visit is furnished under the CPT TCM codes for the same 
patient. We will provide guidance to contractors and revise the 
relevant manual provisions in order to implement these policies.
    Below are the requirements of the CPT TCM codes as modified for 
Medicare purposes in this final rule.
     99495 Transitional Care Management Services with the 
following required elements:
    ++ Communication (direct contact, telephone, electronic) with the 
patient and/or caregiver within 2 business days of discharge.
    ++ Medical decision making of at least moderate complexity during 
the service period.
    ++ Face-to-face visit, within 14 calendar days of discharge.
     99496 Transitional Care Management Services with the 
following required elements:
    ++ Communication (direct contact, telephone, electronic) with the 
patient and/or caregiver within 2 business days of discharge.
    ++ Medical decision making of high complexity during the service 
period.
    ++ Face-to-face visit, within 7 calendar days of discharge.
    CPT codes 99495 and 99496 are used to report transitional care 
management services. These services are for a patient whose medical 
and/or psychosocial problems require moderate or high complexity 
medical decision making during transitions in care from an inpatient 
hospital setting (including acute hospital, rehabilitation hospital, 
long-term acute care hospital), partial hospital, observation status in 
a hospital, or skilled nursing facility/nursing facility, to the 
patient's community setting (home, domiciliary, rest home, or assisted 
living). Transitional care management commences upon the date of 
discharge and continues for the next 29 days.
    Transitional care management is comprised of one face-to-face visit 
within the specified time frames, in combination with non-face-to-face 
services that may be performed by the physician or other qualified 
health care professional and/or licensed clinical staff under his or 
her direction. It is our expectation that the services in the two lists 
of non-face-to-face services below will be routinely provided as part 
of transitional care management service unless the practitioner's 
reasonable assessment of the patient indicates that a particular 
service is not medically indicated or needed.
    Non-face-to-face services provided by clinical staff, under the 
direction of the physician or other qualified health care professional, 
may include:
     Communication (direct contact, telephone, electronic) with 
the patient and/or caregiver within 2 business days of discharge.
     Communication with home health agencies and other 
community services utilized by the patient.
     Patient and/or family/caretaker education to support self-
management, independent living, and activities of daily living.
     Assessment and support for treatment regimen adherence and 
medication management.
     Identification of available community and health 
resources.
     Facilitating access to care and services needed by the 
patient and/or family.
    Non-face-to-face services provided by the physician or other 
qualified health care provider may include:
     Obtaining and reviewing the discharge information (for 
example, discharge summary, as available, or continuity of care 
documents).
     Reviewing need for or follow-up on pending diagnostic 
tests and treatments.
     Interaction with other qualified health care professionals 
who will assume or reassume care of the patient's system-specific 
problems.
     Education of patient, family, guardian, and/or caregiver.
     Establishment or reestablishment of referrals and 
arranging for needed community resources.
     Assistance in scheduling any required follow-up with 
community providers and services.
    Transitional care management requires a face-to-face visit, initial 
patient contact, and medication reconciliation within specified time 
frames. The first face-to-face visit is part of the transitional care 
management service and not reported separately. Additional E/M services 
after the first face-to-face visit may be reported separately. 
Transitional care management requires an interactive contact with the 
patient or caregiver, as appropriate, within 2 business days of 
discharge. The contact may be direct (face-to-face), telephonic, or by 
electronic means. telephonic, or by electronic means. Medication 
reconciliation and management must occur no later than the date of the 
face-to-face visit.
    Medical decision making and the date of the first face-to-face 
visit are used to select and report the appropriate transitional care 
management code. For 99496, the face-to-face visit must occur within 7 
calendar days of the date discharge and medical decision making must be 
of high complexity. For 99495, the face-to-face visit must occur within 
14 calendar days of the date of discharge and medical decision making 
must be of at least moderate complexity.

[[Page 68990]]

    Medical decision making is defined by the E/M Services Guidelines. 
The medical decision making over the service period reported is used to 
define the medical decision making of transitional care management. 
Documentation includes the timing of the initial post discharge 
communication with the patient or caregivers, date of the face-to-face 
visit, and the complexity of medical decision making.
    (The E/M Services Guidelines define levels of medical decision 
making on the basis of the following factors:
     The number of possible diagnoses and/or the number of 
management options that must be considered;
     The amount and/or complexity of medical records, 
diagnostic tests, and/or other information that must be obtained, 
reviewed, and analyzed; and
     The risk of significant complications, morbidity, and/or 
mortality as well as comorbidities associated with the patient's 
presenting problem(s), the diagnostic procedure(s), and/or the possible 
management options.

Medical decision making of moderate complexity requires multiple 
possible diagnoses and/or the management options, moderate complexity 
of the medical data (tests, etc.) to be reviewed, and moderate risk of 
significant complications, morbidity, and/or mortality as well as 
comorbidities. Medical decision making of high complexity requires an 
extensive number of possible diagnoses and/or the management options, 
extensive complexity of the medical data (tests, etc.) to be reviewed, 
and a high risk of significant complications, morbidity, and/or 
mortality as well as comorbidities)
    Only one individual may report these services and only once per 
patient within 30 days of discharge. Another transitional care 
management service may not be reported by the same individual or group 
for any subsequent discharge(s) within the 30 days. The same individual 
may report hospital or observation discharge services and transitional 
care management. The same individual should not report transitional 
care management services provided in the post-operative period for a 
service with a global period.
    A physician or other qualified health care professional who reports 
codes 99495, 99496 may not report care plan oversight services (99339, 
99340, 99374-99380), prolonged services without direct patient contact 
(99358, 99359), anticoagulant management (99363, 99364), medical team 
conferences (99366-99368), education and training (98960-98962, 99071, 
99078), telephone services (98966-98968, 99441-99443), end stage renal 
disease services (90951-90970), online medical evaluation services 
(98969, 99444), preparation of special reports (99080), analysis of 
data (99090, 99091), complex chronic care coordination services 
(99481X-99483X), medication therapy management services (99605-99607), 
during the time period covered by the transitional care management 
services codes.
    It is very important to emphasize that we consider the non-face-to-
face services to be furnished by physicians, qualified health care 
professionals, and clinical staff to be intrinsic, indeed essential, 
components of the TCM codes. To support the non-face-to-face services, 
the TCM service requires a face-to-face visit, initial patient contact, 
and medication reconciliation within specified time frames. The first 
face-to-face visit is part of the TCM service and may not be reported 
separately. Additional reasonable and necessary E/M services required 
for managing the beneficiary's clinical issues in addition to the face-
to-face visit may be reported separately.
    Despite the importance of the face-to-face service that is a 
required element of the CPT TCM codes, the non-face-to-face services 
such as communication, referrals, education, identification of 
community resources, and medication management constitute the truly 
essential features that distinguish TCM from those services that are 
predominantly or exclusively face-to-face in nature.
    We are adopting these new CPT TCM codes to provide a separate 
reporting mechanism for the community physician for these services in 
the context of the broader CMS multi-year strategy to recognize and 
support primary care and care management. Therefore, we plan to monitor 
the use of the transitional care management billing codes. We wish to 
emphasize again that the policies we are finalizing in this final rule 
may be short-term payment strategies that may be modified and/or 
revised over time to be consistent with broader primary care and care 
management initiatives. Because CPT TCM codes 99495 and 99496 are new 
codes, they will be valued and designated as interim final in this 
final rule with comment period and subject to public comment.
    We would also note that this proposal coincides with our discussion 
under section III.J. of this final rule with comment period on the 
Value-based Payment Modifier and Physician Feedback Reporting Program 
which discusses hospital admission measures and a readmission measure 
as outcome measures for the proposed value-based payment modifier 
adjustment beginning in CY 2015.
c. Proposed Payment for Post-Discharge Transitional Care Management 
Service
    To establish a physician work relative value unit (RVU) for the 
proposed post-discharge TCM, HCPCS code GXXX1, we compared GXXX1 with 
CPT code 99238 (Hospital discharge day management; 30 minutes or less) 
(work RVU = 1.28). We recognized that, unlike CPT code 99238, HCPCS 
code GXXX1 is not a face-to-face visit. However, we believed that the 
physician time and intensity involved in post-discharge community care 
management is most equivalent to CPT code 99238 which, like the 
proposed new G code, involves a significant number of care management 
services. Therefore, we proposed a work RVU of 1.28 for HCPCS code 
GXXX1 for CY 2013. We also proposed the following physician times: 8 
minutes pre-evaluation; 20 minutes intra-service; and 10 minutes 
immediate post-service. In addition, we proposed to crosswalk the 
clinical labor inputs from CPT code 99214 (Level 4 established patient 
office or other outpatient visit) to proposed HCPCS code GXXX1. For 
malpractice expense, we proposed a malpractice crosswalk of CPT code 
99214 for HCPCS code GXXX1 for CY 2013. We believe the malpractice risk 
factor for CPT code 99214 appropriately reflects the relative 
malpractice risk associated with furnishing HCPCS code GXXX1. In our 
proposal, we noted that, as with other services paid under the PFS, the 
20 percent beneficiary coinsurance would apply to the post-discharge 
TCM service as would the Part B deductible.
    Comment: Several commenters recommended that we await the 
recommendations of the RUC and accept the RUC RVU values, so that we 
can fully take into account feedback from practicing physicians of all 
specialties before finalizing values for these non-face-to-face, care 
management services. With regard to the proposed RVU for physician 
work, a few commenters noted that our source code for GXXX1 included 
only 30 minutes of work for the discharging physician for whom most of 
the information is more readily available and that that time 
understates the effort required of the receiving physician. The 
commenters urged us to consider the significant potential variability 
in time and effort for the receiving physician. Another commenter urged 
CMS to utilize the

[[Page 68991]]

work RVUs used for care plan oversight HCPCS codes G0181 and G0182 in 
valuing the new code.
    With regard to PE, another commenter recommended that we assign 
clinical staff type RN/LPN only for the clinical staff work for the TCM 
codes because those are the only two clinical staff types who furnish 
clinical staff TCM activities. A commenter noted that this proposal 
largely ignores equipment costs (for example, computer, electronic 
health record, and telephone) that are essential to furnishing this 
service, and urged us to reconsider whether 1.41 is an appropriate 
practice expense RVU amount. Another commenter noted that our source 
code for practice expense, CPT code 99214, is for moderate complexity 
decision-making and that we should consider the greater costs 
associated with a patient of high complexity. One commenter agreed with 
our proposed malpractice value.
    Response: We agree with commenters that any valuation under the PFS 
should benefit from as much public review and input as possible, 
including review by the AMA RUC. The AMA RUC conducted a multi-
specialty survey of 110 physicians and recommended an RVU for each of 
the new CPT TCM codes. For CPT code 99495, the AMA RUC recommended the 
median survey work RVU of 2.11 with 40 minutes of intra-service time, 
and for CPT code 99496, the AMA RUC recommended the median work RVU of 
3.05 with 60 minutes of intra-service time. For CPT code 99496, we 
disagree with the observed median intra-service time of 60 minutes. We 
believe that 50 minutes of intra-service time is a more appropriate 
intra-service time for CPT code 99496. We observe that the primary 
reference code for CPT code 99495, CPT code 99214, has 25 minutes of 
intra-service time. We conclude that the typical physician time 
engaging in additional non-face-to-face activities and overseeing 
clinical staff care management activities is the difference between the 
intra-service time for CPT code 99214 and median intra-service time for 
CPT code 99495, 15 minutes. We believe that 50 minutes of intra-service 
time is more appropriate for CPT codes 99496 because it adds the 
additional non-face-to-face care management time of 15 minutes, to the 
intra-service time for the primary reference CPT code 99496, which is 
CPT code 99215 with an intra-service time of 35 minutes.
    We appreciate comments suggesting that we value our proposed G-
code, GXXX1, comparable to CPT codes G0180 and G0181. However, because 
we not finalizing the proposed G-codes and instead are adopting the CPT 
TCM codes on an interim final basis in this final rule with comment 
period, we believe that the AMA RUC recommendation, which reflects the 
services we included in the proposed G-code as well as a face-to-face 
visit, is a more basis for appropriate valuation. In response to 
comments noting that the discharge day management source code, CPT code 
99238, for GXXX1, does not contain sufficient time for the receiving 
physician and that the time does not reflect differences in the 
complexity of decision-making, we note that we are adopting AMA RUC 
recommended times as modified in the preceding paragraph on an interim 
final basis, with refinement, which include a longer time than the 
proposed time of 30 minutes, and those times are specific to the level 
of complexity. We also note that there is a significant amount of 
clinical labor time incorporated in the practice expense calculation 
for these codes. In summary, we are assigning a work RVU of 2.11 to CPT 
TCM code 99495 with intra-service time of 40 minutes, and a work RVU of 
3.05 with intra-service time of 50 minutes. The work RVUs included in 
Addendum B to this final rule with comment period reflect these interim 
final values. The physician time file associated with this PFS final 
rule with comment period is available on the CMS Web site in the 
Downloads section for the CY 2013 PFS final rule with comment period at 
www.cms.gov/PhysicianFeeSched/.
    Consistent with our policy discussed in section II.C.1. of this 
final rule with comment period for assigning malpractice RVUs, we 
developed malpractice RVUs for the new CPT TCM codes. For CPT code 
99495, the AMA RUC recommended a malpractice risk factor crosswalk to 
CPT code 99214, resulting in a malpractice RVU of 0.14 for CPT code 
99495. For CPT code 99496, the AMA RUC recommended a malpractice risk 
factor crosswalk to CPT code 99215, resulting in a malpractice RVU of 
0.20 for CPT code 99496. We are accepting the AMA RUC's recommended 
malpractice crosswalks for CPT codes 99495 and 99496 on an interim 
final basis. We appreciate comments in support of our proposed 
malpractice value for our non-face-to-face G-code, GXXX1, of 0.09. We 
believe that the interim final malpractice crosswalks recommended by 
the AMA RUC provide appropriate malpractice values for the CPT TCM 
codes, which include a face-to-face visit.
    For practice expense, we are accepting the AMA RUC-recommended 
practice expense inputs for these codes with one refinement to clinical 
labor time for CPT code 99496. We are refining the 60 minutes of 
recommended clinical labor time for a RN/LPN nurse blend dedicated to 
non-face-to-face care management activities from 60 minutes to 70 
minutes. We believe that the total clinical labor staff time and 
physician intra-service work time that the AMA RUC-recommended for non-
face-to-face care management activities was accurate, but that the 
proportionality between physician work and clinical staff time should 
be refined to reflect greater clinical staff time. In response to the 
comment on appropriate clinical staff type for non-face-to-face care 
management services, we note that we are accepting the AMA RUC 
recommended clinical labor staff type of an RN/LPN for conducting non-
face-to-face care coordination activities. The AMA RUC did not include 
additional costs for computer, EHR, and telephone in their 
recommendations. We believe accounting for the infrastructure required 
to furnish advanced primary care services is an issue we will consider 
as we pursue the broader HHS and CMS multi-year strategy to recognize 
and support primary care and care management under the MPFS.
    The CY 2013 final rule with comment period direct PE input database 
reflects these inputs and is available on the CMS Web site under the 
supporting data files for the CY 2013 PFS final rule with comment 
period at www.cms.gov/PhysicianFeeSched/. The PE RVUs included in 
Addendum B to this final rule with comment period reflect the RVUs that 
resulted from adopting these interim final values.
    For BN calculations, we estimated that physicians or qualified 
nonphysician practitioners would furnish post-discharge TCM services 
for 10 million discharges in CY 2013. We estimated that this number 
roughly considers the total number of hospital inpatient and SNF 
discharges, hospital outpatient observation services and partial 
hospitalization patients that may require moderate to high complexity 
decision-making following discharge.
    Comment: Some commenters indicated that our estimate of the number 
of claims we would receive for the transitional care services was 
overstated. Using a different set of assumptions, the AMA RUC commented 
that the number of billings would be closer to 2 million per year. The 
AMA RUC provided us with detailed utilization assumptions for the CPT 
TCM codes. These detailed utilization assumptions indicated physicians 
would bill 2,166,719 claims in CY 2013 for the CPT TCM codes, with 60 
percent of those claims for CPT TCM code99495

[[Page 68992]]

and 40 percent for CPT TCM code99496. Commenters also indicated that we 
should offset the cost of the TCM codes in our BN calculation with 
savings from reduced readmissions to hospitals and other facilities.
    Response: The estimate of the number of billings we will receive in 
CY 2013 for TCM services is sensitive to the utilization assumptions 
used and cannot be easily derived from existing codes. The number of 
discharge day management visits that are billed to Medicare is 
approximately 10 million. As reflected in the RUC recommendations, we 
agree with commenters that this is a reasonable starting point in the 
development of the estimate for the number of billings for the TCM 
services.
    The next step is to determine how many of these discharges will be 
readmissions in CY 2013. Since the patient would only be eligible for 
one TCM service associated with a hospital discharge and the later 
readmission, we are not counting the readmission in our utilization 
estimate. The AMA RUC used an estimate of 19.6 percent. We disagree 
with this estimate. More recent work by MedPAC indicates that the all 
cause readmission rate was closer to 15 percent in CY 2011.\2\ 
Accordingly, we adopted a 15 percent readmission rate.
---------------------------------------------------------------------------

    \2\ MedPAC September 7, 2012 Public Meeting Transcript, page 94, 
at http://medpac.gov/transcripts/092012_transcript.pdf, or slide 4 
at http://www.medpac.gov/transcripts/readmissions%20Sept%2012%20presentation.pdf.
---------------------------------------------------------------------------

    The AMA RUC also cited a variety of factors that it believes will 
reduce the number of billings from the universe of discharges, 
including the number of patients requiring moderate or high complexity 
decision-making based on the percentage of high cost Medicare patients 
in the Medicare population, the number of patients currently seen 
within 14 days of discharge, discharges where the primary care 
physician didn't know patient was in the hospital, cases where the 
patient couldn't be contacted or seen, cases where the patient died, 
cases where the patient changed doctors or didn't see the primary care 
doctor, and cases for which physicians will not furnish the TCM service 
as rapidly as we have assumed. The AMA RUC provided assumptions about 
the number of discharges it believes will not result in the billing of 
a TCM service. We have posted the AMA RUC calculation on our Web site 
at www.cms.gov/PhysicianFeeSched/. While we generally agree that some 
of these factors will impact the billings for the TCM code, we believe 
that the construct of the RUC estimate with assumed exact values for 
each and every one of these factors understates the likely TCM 
billings.
    In considering this and similar comments, we examined the current 
distribution of the inpatient, observation, and nursing facility 
evaluation and management codes. Within each of these families, we also 
examined the severity of the presenting problems and the level of 
complexity of the medical decision-making to help differentiate the 
codes. We found that 85 percent of Hospital Observation and Initial and 
Subsequent Hospital Care services (CPT codes 99218-99233) were at Level 
2 or Level 3, generally indicating moderate to high severity and 
complexity. We note that over 90 percent of place of service 
designations for the discharge codes are inpatient or outpatient 
hospital. We found that 43 percent of Nursing Facility Care services 
(CPT codes 99304-99310) were at Level 2 or Level 3, generally 
indicating moderate to high severity and complexity. Although less 
relevant for the TCM policy, we also examined the Office or Other 
Outpatient visits (CPT codes 99201-99213) as a point of comparison and 
found that 41 percent of services were at Level 4 or Level 5, generally 
indicating moderate to high severity and complexity.
    In light of the data on the current severity and complexity levels 
of the evaluation and management services, and after consideration of 
the factors included in the AMA RUC estimate and removing 15 percent 
for readmissions, we believe that two-thirds of the discharges 
reflected in the discharge day management codes, are likely to result 
in TCM claims. This represents approximately 5.7 million claims [=10 
million discharges * (1-.15) for readmissions * (\2/3\) for severity 
and other factors)].
    We disagree with the RUC that 60 percent of those claims will be 
for 99495 and 40 percent for 99496. In looking at the relationship 
between the moderate and high Hospital Observation and Initial and 
Subsequent Hospital Care services (CPT codes 99218-99233) and the 
relationship between the moderate and high Nursing Facility Care 
services (99304-99310), we believe a more reasonable estimate is that 
75 percent of the TCM claims will be for 99495 and 25 percent for 
99496.
    Because the practice expense RVUs for the transitional care codes 
will vary depending on whether or not the service is billed in a 
facility or non-facility setting, we also need to further refine the 
estimate to determine the proportion of TCM services that will be paid 
at the facility rate versus the non-facility rate. After examining the 
facility and non-facility distribution of the 99214 and 99215 visit 
codes billed by primary care specialties, we believe that 92 percent of 
the TCM services will be billed in the non-facility setting.
    Lastly, we agree with the RUC that 26 percent of patients had at 
least one visit within 7 calendar days of discharge and 44 percent had 
one within 14 days of discharge. Because these are existing visits that 
will potentially now be billed as part of the TCM service, we partially 
offset the cost of the TCM services with the cost of the existing 
visits assumed to be billed as part of the CPT TCM code.
    For the comments requesting that we also offset the cost of the CPT 
TCM codes in our BN calculation with savings from reduced readmissions, 
there are currently many efforts underway to reduce hospital 
readmissions. We do not believe that it would be possible to isolate 
the effect of payment for TCM services on the readmission rate. 
Furthermore, the statute does not permit costs or savings from outside 
of the physician fee schedule to be used in the physician fee schedule 
BN calculation.
    For purposes of the Primary Care Incentive Payment Program (PCIP), 
we proposed to exclude the post discharge TCM services from the total 
allowed charges used in the denominator calculation to determine 
whether a physician is a primary care practitioner. Under section 
1833(x) of the Act, the PCIP provides a 10 percent incentive payment 
for primary care services within a specific range of E/M services when 
furnished by a primary care practitioner. Specific physician 
specialties and qualified nonphysician practitioners can qualify as 
primary care practitioners if 60 percent of their PFS allowed charges 
are primary care services. As we explained in the CY 2011 PFS final 
rule (75 FR 73435-73436), we do not believe the statute authorizes us 
to add codes (additional services) to the definition of primary care 
services. However, to avoid inadvertently disqualifying community 
primary care physicians who follow their patients into the hospital 
setting, we finalized a policy to remove allowed charges for certain E/
M services furnished to hospital inpatients and outpatients from the 
total allowed charges in the PCIP primary care percentage calculation.
    In the proposed rule, we also proposed that the TCM code should be 
treated in the same manner as those services for the purposes of PCIP 
because post-discharge TCM services are a complement in the community 
setting to the hospital-based discharge day management services already

[[Page 68993]]

excluded from the PCIP denominator. Similar to the codes already 
excluded from the PCIP denominator, we expressed concern that inclusion 
of the TCM code in the denominator of the primary care percentage 
calculation could produce unwarranted bias against ``true primary care 
practitioners'' who are involved in furnishing post-discharge care to 
their patients. Therefore, while physicians and qualified nonphysician 
practitioners who furnish TCM services would not receive an additional 
incentive payment under the PCIP for the service itself (because it is 
not considered a ``primary care service'' for purposes of the PCIP), 
the allowed charges for TCM services would not be included in the 
denominator when calculating a physician's or practitioner's percent of 
allowed charges that were primary care services for purposes of the 
PCIP.
    Comment: Some commenters recommended that the proposed TCM G-codes 
should be eligible for the PCIP. The commenters acknowledged that, to 
add our proposed G-code to the codes eligible for PCIP, we would have 
to revise our previous interpretation concerning the extent of the 
Secretary's discretion to modify the list of primary care E/M services 
eligible for PCIP. However, the commenters stated that our previous 
interpretation of the statutory language was incorrect, or at least not 
the only reasonable interpretation of the statutory language. A few 
commenters opposed excluding the allowed charges for TCM services from 
the denominator of the ratio used to determine qualification for the 
PCIP.
    Response: We continue to believe that the statute does not permit 
us to add codes (additional services) to the statutory definition of 
primary care services, which is a range of E/M services including 
office visits. The new CPT TCM codes fall outside the designated range 
of codes that qualify for the PCIP. Therefore, we cannot agree with 
those commenters who contended that it is permissible to add the new 
TCM codes to the list of codes eligible for PCIP. However, to avoid 
disadvantaging physicians who furnish post-discharge TCM services to 
their patients, we are finalizing our proposal to exclude the allowed 
charges for TCM services from the denominator when calculating a 
physician's or practitioner's percent of allowed charges that were 
primary care services for purposes of the PCIP.
    Comment: Many commenters urged us not to apply the 20 percent 
beneficiary coinsurance to TCM services. Some commenters stated a 
belief that we should categorize TCM as a preventive service and that 
we should therefore waive the coinsurance for the service. Other 
commenters expressed concern that beneficiaries will not understand 
their coinsurance liability for this service, since our proposed new 
post-discharge TCM G-code would not include a face-to-face visit. Some 
commenters were also concerned that this confusion would lead to 
increased bad debt for physicians and qualified NPPs billing the CPT 
TCM codes. Others urged us to work with the Congress to enact 
legislation to waive the beneficiary coinsurance for post-discharge 
care management services. On the other hand, some commenters noted that 
requiring a face-to-face E/M visit when billing the TCM code would 
reduce potential beneficiary confusion about the coinsurance for the 
TCM service.
    Response: We appreciate the reasons commenters have offered for 
waiving the beneficiary coinsurance for TCM as a preventive service. 
However, we do not believe we have authority to do so through the 
rulemaking process. This is because section 1861(ddd)(1)(B) of the Act 
requires, among other criteria, that ``additional preventive services'' 
can be added only if such services are recommended with a grade of A or 
B by the United States Preventive Services Task Force. We lack such a 
recommendation regarding the services described by the new CPT TCM 
codes. As we have discussed above, we agree with those commenters who 
observed that requiring a face-to-face E/M visit when billing the TCM 
code would reduce potential beneficiary confusion about the coinsurance 
for the TCM service. Now that we have modified our proposal for a TCM 
service to include a face-to-face service, beneficiaries will 
experience a face-to-face encounter to which they can relate their 
copayments for the service. We therefore believe that our adoption of 
the CPT TCM codes that include a required face-to-face visit as a 
component of the service will greatly reduce the potential for 
beneficiary confusion over the coinsurance for the service and the 
possibility of increased bad debt for physicians.
2. Primary Care Services Furnished in Advanced Primary Care Practices
a. Background
    As we discussed above, we are committed to considering new options 
and developing future proposals for payment of primary care services 
under the MPFS. Such options would promote comprehensive and continuous 
assessment, care management, and attention to preventive services that 
constitute effective primary care by establishing appropriate payment 
when physicians furnish such services. One potential method for 
ensuring that any targeted payment for primary care services would 
constitute a minimum level of care coordination and continuous 
assessment under the MPFS would be to pay physicians for services 
furnished in an ``advanced primary care practice'' that has implemented 
a medical home model supporting patient-specific care. The medical home 
model has been the subject of extensive study in medical literature. 
Since 2007, the AMA, American Academy of Family Physicians (AAFP), the 
American Academy of Pediatrics (AAP), the American College of 
Physicians (ACP), and the American Osteopathic Association (AOA), and 
many other physician organizations have also endorsed ``Joint 
Principles of the Patient-Centered Medical Home.'' In February 2011, 
the AAFP, the AAP, the ACP, and AOA also published formal ``Guidelines 
for Patient-Centered Medical Home (PCMH) Recognition and Accreditation 
Programs'' to develop and promote the concept and practice of the PCMH. 
(These guidelines are available at www.aafp.org/online/etc/medialib/aafp_org/documents/membership/pcmh/pcmhtools/pcmhguidelines.Par.0001.File.dat/GuidelinesPCMHRecognitionAccreditationPrograms.pdf.) As we have 
discussed above, the Innovation Center has been conducting several 
initiatives based on the medical home concept.
    The medical home concept emphasizes establishing an extensive 
infrastructure requiring both capital investments and new staffing, 
along with sophisticated processes, to support continuous and 
coordinated care with an emphasis on prevention and early diagnosis and 
treatment. The literature, reports, and guidelines dealing with the 
medical home concept define the requisite elements or functions that 
constitute this infrastructure and processes in various ways. For 
example, the Innovation Center's CPC initiative identified a set of 
five ``comprehensive primary care functions,'' which form the service 
delivery model being tested and the required framework for practice 
transformation under the CPC initiative. In the proposed rule (77 FR 
44780), we discussed these five ``comprehensive primary care 
functions'' as an appropriate starting point for discussing the 
incorporation of the comprehensive primary care services delivered in 
advanced primary care practices (practices implementing a medical home 
model) into the MPFS. These five

[[Page 68994]]

functions are: Risk-stratified care management, access and continuity, 
planned care for chronic conditions and preventive care, patient and 
caregiver engagement, and coordination of care across the medical 
neighborhood. (See our detailed discussion of these functions at the 
citation noted above.)
    In the proposed rule, we also discussed the need to establish a set 
of parameters to determine whether or not a clinical practice could be 
considered an advanced primary care practice (medical home) in the 
event that we were to establish an enhanced payment for primary care 
services furnished to Medicare beneficiaries in an advanced primary 
care practice environment. (77 FR 44781-44782) Specifically, we 
discussed two possible approaches to determining whether a practice has 
implemented all the necessary functions to be considered an advanced 
primary care practice or medical home. One approach would be to 
recognize one or more of the nationally available accreditation 
programs currently in use by major organizations that provide 
accreditation for advanced primary care practices, frequently 
credentialed as ``PCMHs.'' We identified four national models that 
provide accreditation for organizations wishing to become an advanced 
primary care practice; the Accreditation Association for Ambulatory 
Health, The Joint Commission, the NCQA, and the Utilization Review 
Accreditation Commission (URAC). Alternatively, we could develop our 
own criteria using, for example, the five functions of comprehensive 
primary care used in the CPC initiative and described above, to 
determine what constitutes advanced primary care for purposes of 
Medicare payment. We would then need to develop a process for 
determining whether specific physician practices meet the criteria for 
advanced primary care. This could include creating our own processes 
for review or could include using existing accrediting bodies to 
measure compliance against advanced primary care criteria determined by 
CMS.
    We also discussed another potential issue surrounding comprehensive 
primary care services delivered in an advanced primary care practice, 
specifically attribution of a beneficiary to an advanced primary care 
practice. (77 FR 44782) In a fee-for-service environment we would need 
to determine which practice is currently serving as the advanced 
primary care practice for the beneficiary to ensure appropriate 
payment. One method of attribution could be that each beneficiary 
prospectively chooses an advanced primary care practice. Other 
attribution methodologies might examine the quantity and type of E/M or 
other designated services furnished to that beneficiary by the 
practice. We welcomed input on the most appropriate approach to the 
issue of how to best determine the practice that is functioning as the 
advanced primary care practice for each beneficiary. We emphasized that 
we would not consider proposals that would restrict a beneficiary's 
free choice of practitioners.
    In summary, we stated our belief that targeting primary care 
management payments to advanced primary care practices could have many 
merits, including ensuring a basic level of care coordination and care 
management. We recognize that the advanced primary care model has 
demonstrated efficacy in improving the value of health care in several 
contexts, and we are exploring whether we can achieve these outcomes 
for the Medicare population through several demonstration projects. 
Careful analysis of the outcomes of these demonstration projects will 
inform our understanding of how this model of care affects the Medicare 
population and of potential PFS payment mechanisms for these services. 
At the same time, we also believe that there are many policy and 
operational issues to be considered when nationally implementing such a 
program within the PFS. Therefore, we generally invited broad public 
comment on the accreditation and attribution issues discussed above and 
any other aspect, including payment, of integrating an advanced primary 
care model into the PFS.
    We received many helpful and informative comments on the issues we 
discussed in relation to recognizing advanced primary care practices, 
especially on the criteria and processes that should be used to 
identify such practices. We welcome these comments because we are 
actively considering such an advanced primary care practice model in 
the near future after a complete assessment of the results of ongoing 
demonstrations and policy and operational considerations.
    We also received many comments recommending that we adopt the 
complex care coordination codes developed by the AMA's C3W for CY 2013. 
As discussed in section III.M.3.a. of this final rule with comment 
period, on an interim final basis for CY 2013, we are assigning CPT 
codes 99487, 99488, and 99489 a PFS procedure status indicator of B 
(Payments for covered services are always bundled into payment for 
other services, which are not specified. If RVUs are shown, they are 
not used for Medicare payment. If these services are covered, payment 
for them is subsumed by the payment for the services to which they are 
bundled (for example, a telephone call from a hospital nurse regarding 
care of a patient). We will consider these codes, as well as other 
payment approaches as we continue our multi-year strategy to recognize 
and support primary care and care management.

I. Payment for Molecular Pathology Services

    The AMA CPT Editorial Panel has created new CPT codes to replace 
the codes used to bill for molecular pathology services that will be 
deleted at the end of CY 2012. The new codes describe distinct 
molecular pathology tests and test methods. CPT divided these molecular 
pathology codes into Tiers. Tier 1 codes describe common gene-specific 
and genomic procedures. Tier 2 codes capture reporting for less common 
tests. Each Tier 2 code represents a group of tests that the CPT 
Editorial Panel believes involve similar technical resources and 
interpretive work. The CPT Editorial Panel created 101 new molecular 
pathology CPT codes for CY 2012 and another 14 new molecular pathology 
codes for CY 2013.
    We stated in our notice for the Clinical Laboratory Fee Schedule 
(CLFS) Annual Public Meeting held on July 16, 2012 (77 FR 31620) that 
we were following our regular process to determine the appropriate 
basis and payment amounts for new clinical diagnostic laboratory tests, 
including molecular pathology tests, under the CLFS for CY 2013. 
However, we also stated that we understand stakeholders in the 
molecular pathology community continue to debate whether Medicare 
should pay for molecular pathology tests under the CLFS or the PFS. 
Medicare pays for clinical diagnostic laboratory tests through the CLFS 
and for services that ordinarily require physician work through the 
PFS. We stated that we believed we would benefit from additional public 
comments on whether these tests are clinical diagnostic laboratory 
tests that should be paid under the CLFS or whether they are 
physicians' services that should be paid under the PFS. Therefore, we 
solicited public comment on this issue in the CY 2013 PFS proposed rule 
(77 FR 44782 and 44783), as well as public comment on pricing policies 
for these tests under the CLFS during the CLFS Annual Public Meeting 
process.
    In the PFS proposed rule, we first discussed and requested public 
comment on whether these molecular pathology CPT codes describe 
services

[[Page 68995]]

that ordinarily require physician work, and then we discussed our 
proposal to address payment for these CPT codes on the PFS, pending 
public comment and resolution of the first question. The PFS proposal 
paralleled the CLFS Annual Public Meeting process during which we 
receive comments and recommendations on the appropriate basis for 
establishing a payment amount for the molecular pathology CPT codes as 
clinical diagnostic laboratory tests under the CLFS.
    As detailed in section II.B.1. of this final rule with comment 
period, Medicare establishes payment under the PFS by setting RVUs for 
work, practice expense (PE), and malpractice expense for services that 
ordinarily require physician work. To establish RVUs for physician 
work, we conduct a clinical review of the relative physician work (time 
by intensity) required for each PFS service. This clinical review 
includes the review of RVUs recommended by the American Medical 
Association/Specialty Society Relative Value Scale Update Committee 
(AMA RUC) and others. The AMA RUC-recommended work RVUs for a service 
typically are based in part on results of a survey conducted by the 
relevant specialty society. CMS establishes PE RVUs under a resource-
based PE methodology that considers the cost of direct inputs, as well 
as indirect PE costs. The AMA RUC, through the Practice Expense 
Subcommittee, recommends direct PE inputs to CMS, and the relevant 
specialty societies provide pricing information for those direct inputs 
to CMS. After we determine the appropriate direct PE inputs, the PE 
methodology is used to develop PE RVUs. Physician work and PE RVUs for 
each CPT code are constructed to reflect the typical case; that is, 
they reflect the service as it is most commonly furnished (71 FR 
69629). CMS establishes resource-based malpractice expense RVUs using 
weighted specialty-specific malpractice insurance premium data 
collected from commercial and physician-owned insurers, last updated 
for the CY 2010 final rule (74 FR 61758). For most services paid under 
the PFS, beneficiary cost-sharing is 20 percent of the fee schedule 
payment amount.
    CMS establishes a payment rate for new clinical diagnostic 
laboratory tests under the CLFS by either crosswalking or gap-filling. 
Crosswalking is used when a new test code is comparable to an existing 
test code, multiple existing test codes, or a portion of an existing 
test code on the CLFS. Under this methodology, the new test code is 
assigned the local fee schedule amounts and the national limitation 
amount (NLA) of the existing test, with payment made at the lesser of 
the local fee schedule amount or the NLA. Gap-filling is used when no 
comparable test exists on the CLFS. In the first year a test is gap-
filled, contractor-specific amounts are established for the new test 
code using the following sources of information: Charges for the test 
and routine discounts to charges; resources required to perform the 
test; payment amounts determined by other payers; and charges, payment 
amounts, and resources required for other tests that may be comparable 
or otherwise relevant. For the second year, the NLA is calculated, 
which is the median of the carrier-specific amounts. See Sec.  414.508. 
Services paid under the CLFS do not account for any physician work, 
although tests paid under the CLFS can involve assessment by a 
laboratory technician/technologist, a chemist, molecular biologist, or 
a geneticist--none of which are health care professional occupations 
that meet the statutory definition of a physician. Although payments 
can vary geographically due to contractor discretion across locality 
areas (which are the same localities used for the GPCIs under the PFS), 
payments cannot exceed a NLA, nor are they adjusted once rates are 
determined (apart from inflation updates as required by statute). In 
the CY 2008 PFS final rule with comment period, we adopted a 
prospective reconsideration process for new tests paid under the CLFS, 
allowing a single year for Medicare and stakeholders to review pricing 
for new tests after a payment is initially established through 
crosswalking, and in certain circumstances, up to 2 years for Medicare 
and stakeholders to review pricing for new tests after a payment is 
initially established through gap-filling (72 FR 66275 through 66279, 
66401 through 66402). Finally, in almost all circumstances, there is no 
beneficiary cost-sharing for clinical laboratory diagnostic tests paid 
on the CLFS.
    For a handful of clinical laboratory services paid under the CLFS, 
we allow an additional payment under the PFS for the professional 
services of a pathologist when they meet the requirements for a 
clinical consultation service as defined in Sec.  415.130(c). The PFS 
pays for services that ordinarily require the work of a physician and, 
with regard to pathology services, explicitly pays for both the 
professional and technical component of the services of a pathologist 
as defined in Sec.  415.130(b), including surgical pathology, 
cytopathology, hematology, certain blood banking services, clinical 
consultations, and interpretive clinical laboratory services.
    Molecular pathology tests are currently billed using combinations 
of longstanding CPT codes that describe each of the various steps 
required to perform a given test. This billing method is called 
``stacking'' because different ``stacks'' of codes are billed depending 
on the components of the furnished test. Currently, all of the stacking 
codes are paid through the CLFS; and one stacking code, CPT code 83912 
(molecular diagnostics; interpretation and report), is paid on both the 
CLFS and the PFS. Payment for the interpretation and report of a 
molecular pathology test when furnished and billed by a physician is 
made under the PFS using the professional component (PC, or modifier 
26) of CPT code 83912 (83912-26). Payment for the interpretation and 
report of a molecular pathology test when furnished by nonphysician 
laboratory professional is bundled into payment made under the CLFS 
using CPT code 83912.
    As we stated in the CY 2013 PFS proposed rule (77 FR 44783), since 
the creation of new molecular pathology CPT codes, there has been 
significant debate in the stakeholder community regarding whether these 
new molecular pathology CPT codes describe physicians' services that 
ordinarily require physician work and would be paid under the PFS, or 
whether they describe clinical diagnostic laboratory tests that would 
be paid on the CLFS. In the CY 2013 PFS proposed rule (77 FR 44783), we 
stated that there is little agreement on whether the technical 
component and/or professional component (interpretation and report) of 
these services are ordinarily furnished by a physician or a 
nonphysician laboratory professional. Additionally, we stated that some 
stakeholders have suggested that interpretation and report by any 
health care professional is generally not necessary for these services, 
as the laboratory result reporting is becoming more automated.
    In the CY 2012 PFS final rule with comment period (76 FR 73190), we 
stated that for CY 2012, Medicare would continue to use the existing 
stacking codes for the reporting and payment of these molecular 
pathology tests, and that the new molecular pathology CPT codes would 
not be valid for payment for CY 2012. We did this because we were 
concerned that we did not have sufficient information to know whether 
the new molecular pathology CPT codes describe clinical diagnostic 
laboratory tests or services that ordinarily require physician work. In 
the PFS proposed

[[Page 68996]]

rule, we stated that, for CY 2013, we continue to have many of the same 
concerns that led us not to recognize the 101 molecular pathology CPT 
codes for payment for CY 2012. We requested comment on whether the new 
molecular pathology CPT codes describe physicians' services that should 
be paid under the PFS, or whether they describe clinical diagnostic 
laboratory tests that should be paid under the CLFS. We also requested 
comment on the following more specific questions:
     Do each of the 101 molecular pathology CPT codes describe 
services that are ordinarily furnished by a physician?
     Do each of these molecular pathology CPT codes ordinarily 
require interpretation and written report?
     What is the nature of that interpretation and does it 
typically require physician work?
     Who furnishes interpretation services and how frequently?
    In the CY 2013 PFS proposed rule, we also proposed to price all of 
the new molecular pathology CPT codes through a single fee schedule, 
either the CLFS or the PFS. We stated that after meeting with 
stakeholders and reviewing each CPT code, we believed that there are a 
discrete number of laboratory methods used to generate results across 
molecular pathology tests. For example, two different tests 
(represented by different CPT codes) may be run using the same testing 
methodologies, but using different genes. However, there are very 
different processes for establishing payment rates under the PFS and 
the CLFS. As discussed above, Medicare sets payment under the CLFS by 
either crosswalking or gap-filling and, after the prospective 
reconsideration process we do not adjust the payment amount further 
(apart from inflation updates as required by statute). In contrast, 
Medicare sets payment under the PFS through a set of resource-based 
methodologies for physician work, PE, and malpractice expense, and 
payment can be reviewed and adjusted as the resources required to 
furnish a service change. We stated that we were concerned that 
establishing different prices for comparable laboratory services across 
two different payment systems would create a financial incentive to 
choose one test over another simply because of its fee schedule 
placement. We stated that we were also concerned that the differences 
in prices would become more pronounced over time, as we continue to 
review the values for physician work and PE inputs on the PFS relative 
to established CLFS prices. Therefore, largely because of the 
homogeneity of the laboratory methodologies behind these procedure test 
codes, we stated that we believe that it is appropriate for all new 
molecular pathology CPT codes to be priced on the same fee schedule 
using the same methodology. We invited public comment on that proposal.
    As we considered public comment on whether these molecular 
pathology CPT codes describe services that ordinarily require physician 
work, we wanted to ensure that there was a payment mechanism in place 
to pay for these CPT codes for CY 2013, either on the PFS or the CLFS. 
We stated that, because we believe that these molecular pathology CPT 
codes may be clinical diagnostic laboratory tests payable on the CLFS, 
comments and recommendations from the public on the appropriate basis 
for establishing payment amounts on the CLFS would be discussed and 
received through the CY 2013 CLFS Annual Public Meeting process. More 
information on these tests is available on the CMS Web site at 
www.cms.hhs.gov/ClinicalLabFeeSched.
    As a parallel to determining the appropriate basis and payment 
amounts for the molecular pathology CPT codes as clinical diagnostic 
laboratory tests through the CLFS Annual Public Meeting process, we 
also proposed payment for these codes under the PFS for CY 2013. In the 
CY 2013 PFS proposed rule, we stated that the AMA RUC and the College 
of American Pathologists (CAP) provided CMS with recommendations for 
physician work RVUs and PE inputs for most of the molecular pathology 
CPT codes. We did not have recommendations on physician work RVUs or 
direct PE inputs for a small number of codes, which represent tests 
that are patented, and therefore the methodology used to furnish the 
test is proprietary and was unavailable to the AMA RUC or CMS to 
support developing appropriate work and direct PE inputs. As we stated 
in the PFS proposed rule, the AMA RUC-recommended physician work RVUs 
range from 0.13 to 2.35, with a median work RVU of 0.45. The AMA RUC-
recommended physician intra-service times (which, for these codes, 
equals the total times) range from 7 minutes to 80 minutes, with a 
median intra-service time of 18 minutes. We noted that the physician 
work RVU for CPT code 83912-26 and all but one of the other clinical 
diagnostic laboratory services for which CMS recognizes payment for 
clinical interpretation is 0.37. Table 27 lists AMA RUC-recommended 
physician work RVUs and times, as well as the AMA RUC-estimated CY 2013 
utilization for these codes. This table contains the AMA RUC's 
estimated CY 2013 utilization for all 115 molecular pathology codes 
effective for CY 2013 and recommended physician work RVUs and times 
only for those codes that CAP believes are ordinarily performed by a 
physician. These values are listed for reference only and were not used 
for PFS rate-setting.
    As we stated in the PFS proposed rule, molecular pathology tests 
can be furnished in laboratories of different types and sizes (for 
example, a large commercial laboratory, academic or research 
laboratory, typically hospital-based, or potentially, a pathology group 
practice), and tests may be furnished in small or large batches. Also, 
although there are largely homogenous methods across the different 
tests considered here, we recognize that for a specific test, the 
combination of methods may vary across different laboratories. When 
developing direct PE input recommendations for CMS, CAP and the AMA RUC 
made assumptions about the typical laboratory setting and batch size to 
determine the typical direct PE inputs for each service. Given that 
many of these services are furnished by private laboratories, it was 
challenging for CAP and the AMA RUC to provide recommendations on the 
typical inputs for many services, and not possible for other services. 
We posted the AMA RUC- and CAP-recommended direct PE inputs on the CMS 
Web site in the files supporting the CY 2013 PFS proposed rule at 
www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. We stated in the 
CY 2013 PFS proposed rule (77 FR 44784) that we appreciate all of the 
effort CAP has made to develop national pricing inputs; however, we 
agree with its view that, in many cases, there is no established 
approach for the specific number and combination of methods involved in 
executing many of these tests and that the potential pathways for a 
laboratory or pathology group practice to execute these tests can vary 
considerably.
    As we discussed in the CY 2013 PFS proposed rule, in addition to 
recommendations on physician work and direct PE inputs, the AMA RUC 
provided CMS with recommended utilization crosswalks for most of the 
molecular pathology tests. When there are coding changes, the 
utilization crosswalk tracks Medicare utilization from an existing code 
to a new code. The existing code utilization figures are drawn from 
Medicare Part B claims data. We use utilization crosswalk assumptions 
to ensure PFS budget neutrality and to create PE RVUs

[[Page 68997]]

through the PE methodology. The AMA RUC's recommended crosswalk 
utilization is presented in Table 27 for reference, however, we note 
that because these services are not payable under the PFS, these values 
were not used for rate-setting. In the CY 2013 PFS proposed rule, we 
stated that we believe that the utilization assumptions for the 
technical component of the new CPT codes should be based on the 
utilization of the corresponding CPT codes currently billed on the 
CLFS, and not on the utilization of CPT code 83912-26. As we discussed 
in the CY 2013 PFS proposed rule, several laboratories provided us with 
a list of the molecular pathology tests that they perform, and 
identified the stacking codes that are currently used to bill for each 
test and the new CPT code that would be billed for each test. However, 
because the same molecular pathology test may be billed using different 
stacks, and the same stack may be billed for different tests, it is not 
possible to determine which stacks match which new CPT codes unless the 
billing entity billed both the new molecular pathology CPT code and the 
stacking codes. Additionally, if a beneficiary has more than one test 
on the same date of service and both stacks are billed on the same 
Medicare claim, it is not possible to determine which stacking codes on 
the claim relate to each test. Furthermore, some tests described by the 
new CPT codes are currently billed using general ``not otherwise 
classified'' (NOC) pathology CPT codes that capture a range of services 
and not just the specific molecular pathology tests described by the 
new CPT codes. We stated that, given these factors, it is difficult to 
estimate the utilization of the new molecular pathology CPT codes based 
on the Medicare billing of the current stacking and NOC codes.
    We stated that if we were to finalize payment for molecular 
pathology tests under the PFS, we did not believe that we could propose 
national payment rates, because the following questions remained:
     If these services are furnished by a physician, what are 
the appropriate physician work RVUs and times relative to other similar 
services?
     Where and how are each of these services typically 
furnished--for example, what is the typical laboratory setting and 
batch size?
     What is the correct projected utilization for each of 
these services?
    In the CY 2013 PFS proposed rule, we stated that, given these major 
areas of uncertainty, if CMS determined that new molecular pathology 
CPT codes should be paid under the PFS for CY 2013, we would propose to 
allow the Medicare contractors to price these codes because we do not 
believe that we have sufficient information to engage in accurate 
national pricing and because the price of tests can vary locally. As 
previously discussed, this proposal was parallel to the CLFS Annual 
Public Meeting process through which we received comments and 
recommendations on the appropriate basis for establishing a payment 
amount for these molecular pathology tests as clinical diagnostic 
laboratory tests under the CLFS. We stated that if we decided to 
finalize payment for these new codes under the PFS, we would consider 
modifying Sec.  415.130 as appropriate to provide for payment to a 
pathologist for molecular pathology tests.
    Finally, we stated that, after reviewing comments received on the 
proposals contained within the CY 2013 PFS proposed rule (77 FR 44782 
through 44787), and after hearing the discussion at the CLFS Annual 
Public Meeting and reviewing comments and recommendations during the 
public meeting process, we would determine the appropriate basis for 
establishing payment amounts for the new molecular pathology CPT codes. 
We stated that we would publish our final decision in the CY 2013 PFS 
final rule with comment period and, at the same time the final rule is 
published, post final payment determinations for any molecular 
pathology tests that will be paid under the CLFS.
    A summary of the comments received on the questions and proposals 
discussed in the CY 2013 PFS proposed rule, followed by our responses 
and conclusions are below.
    We received the following comments in response to our questions on 
whether these molecular pathology CPT codes describe services that are 
ordinarily furnished by a physician; whether the services require 
interpretation and written report and, if so, who ordinarily furnishes 
that interpretation and how frequently; what is the nature of that 
interpretation and does it typically require physician work; and the 
broader question of whether these codes describe physicians' services 
that should be paid under the PFS or if they describe clinical 
diagnostic laboratory tests that should be paid under the CLFS; as well 
as our proposal to price all molecular pathology CPT codes through a 
single fee schedule:
    Comment: Many commenters stated that these molecular pathology 
tests are not ordinarily furnished by a physician. These commenters 
stated that the services described by the new molecular pathology CPT 
codes do not require physician involvement, and that the vast majority 
of tests are performed (both the technical component and the 
interpretation) without a physician. The American Clinical Laboratory 
Association (ACLA) commented that a survey of its members showed that 
in most cases, the tests are performed, supervised, and interpreted by 
nonphysicians, most often doctoral-level scientists with expertise in 
medical genetics. ACLA noted that both Ph.D. geneticists and 
pathologists can be certified in genetics by an American Board of 
Medical Specialties. Comments indicated that some laboratories 
performing these tests do not employ physicians.
    In contrast, other commenters noted that the molecular pathology 
CPT codes were developed as global services, including both 
professional (physician work) and technical components together, and so 
the CPT codes inherently include physician work. They noted that many 
of the clinical vignettes developed as a part of the CPT and AMA RUC 
processes demonstrate the incorporation of the technical steps and the 
professional services by a pathologist associated with each code.
    There was little agreement among commenters on whether molecular 
pathology tests require any interpretation and whether that 
interpretation is ordinarily furnished by a physician. Several 
commenters noted that molecular pathology tests can be divided into 
three groups based on interpretation requirements. The first group 
includes tests that require interpretation by a physician to generate a 
beneficiary-specific result, which, they stated, includes tests that 
utilize fluorescence in situ hybridization or immunohistochemistry 
technology. The second group includes tests that require interpretation 
by a nonphysician qualified healthcare professional to produce a 
beneficiary-specific result, which, they stated, includes many of the 
genetic tests assigned to Tier 1 and Tier 2 CPT codes. The third group 
includes tests that do not require interpretation by either a physician 
or health care professional because the test system produces the 
beneficiary-specific result, which, they stated, includes multi-analyte 
assays with algorithmic analyses (MAAAs) and in vitro diagnostic kits 
for genetic tests that have been assigned Tier 1 and Tier 2 CPT codes.
    Other commenters noted that each of the tests represented by the 
new molecular pathology CPT codes ordinarily requires interpretation 
and report. Several commenters explained that even clearly negative 
results, in

[[Page 68998]]

most instances, require an expenditure of resources for interpretation. 
One commenter explained that the results of these technical procedures 
require interpretation of the raw data generated, and that a 
pathologist assumes the responsibility for the generation of these 
results and performs the work associated with interpreting them, 
irrespective of whether the beneficiary has a positive or negative 
result. Additionally, one commenter noted that as molecular pathology 
tests become more and more automated as the field and science evolve, 
the interpretation and reporting of these tests is concurrently 
becoming more and more complex.
    There was also little agreement among commenters as to whether the 
interpretation and report associated with these molecular pathology 
tests is ordinarily performed by a physician. Many commenters stated 
that clinical molecular diagnostics is a rapidly evolving diagnostic 
subspecialty that requires both technical and medical knowledge to 
interpret test results for use in beneficiary care. They explained that 
these molecular pathology tests require review by an expert who is 
well-versed in the interpretation of molecular pathology test results, 
who has the medical knowledge to place the results in a clinical 
context, and who can guide decisions about beneficiary treatment 
options and care management. They contended that selecting the best 
treatment path for an individual beneficiary's disease state is a key 
facet of molecular pathology and depends upon the pathologist's 
clinical expertise in the disease area. Commenters stated that, with 
molecular pathology, it is medically necessary for the pathologist to 
provide the referring physician with clinical insight about how the 
result should be interpreted based on the technique used and on the 
beneficiary's history and medical condition. They contended that this 
differs from other laboratory subspecialties where the ordering 
physician typically has the expertise to interpret test results. These 
commenters stated that interpretation and report of a molecular 
pathology test is ordinarily furnished by a physician.
    In contrast, other commenters noted that, regardless of the nature 
of the interpretation for a molecular pathology test, doctoral-level 
geneticists are qualified and credentialed to perform the 
interpretation. The commenters stated that physician interpretation is 
not typical. They stated that in some laboratories, physicians may 
interpret test results when circumstances require a broader clinical 
review. They went on to note that among 367,370 molecular pathology 
allowed services with interpretation and report paid by Medicare in 
2010, approximately 80 percent of the services did not require a 
physician interpretation.
    Commenters who stated that molecular pathology tests ordinarily 
require the interpretation of a physician also stated that the 
molecular pathology tests should be paid under the PFS. Generally, 
these commenters contended that it is medically necessary for a 
physician to interpret the molecular pathology test results, guide the 
beneficiary's treatment, assess the beneficiary's progress, and prepare 
the final report for the beneficiary's record. As such, the commenter 
stated molecular pathology, as a field, is fundamentally different from 
laboratory medicine. They reasoned that complex tests that require 
physician interpretation to be clinically meaningful belong on the PFS. 
Additionally, some commenters stated that these services should be paid 
under the PFS because the resources involved in furnishing molecular 
pathology tests are changing rapidly. They pointed out that only the 
PFS currently allows the valuation of the codes to be continuously 
reviewed and scrutinized, taking into account changing technology and 
increased efficiencies as technology is adopted and becomes more 
widespread. They noted that placing the CPT codes for these molecular 
pathology tests on the PFS will enable the healthcare system to capture 
those savings. Finally, some commenters who stated that the molecular 
pathology tests should be paid under the PFS also thought that CMS 
should establish CLFS payment for laboratory interpretation and report 
of a molecular pathology test.
    Commenters who stated that molecular pathology tests do not 
ordinarily require the interpretation of a physician also stated that 
the molecular pathology tests should be paid under the CLFS. Generally, 
these commenters contended that if a service is not ordinarily 
furnished by a physician, then CMS is precluded from paying for the 
service under the PFS. They explained that, as stated by the regulation 
at Sec.  415.130(b), allowable physician pathology tests can only be 
paid if they first meet the threshold criteria of Sec.  415.102(a)(1) 
(``The services are personally furnished for an individual beneficiary 
by a physician'') and Sec.  415.102(a)(3) (``The services ordinarily 
require performance by a physician.'') Additionally, some commenters 
stated that the tests described by the new molecular pathology CPT 
codes will continue to be performed exactly as they were prior to the 
coding change and that there is no reason why the tests should not 
continue to be paid under the CLFS. Finally, some commenters who stated 
that the molecular pathology tests should be paid under the CLFS also 
suggested that CMS should establish PFS payment for physician 
interpretation and report of a molecular pathology test.
    Finally, in response to our proposal to price all molecular 
pathology CPT codes through a single fee schedule, most commenters 
stated that CMS should assess each CPT code independently and include 
the molecular pathology tests that require physician work on the PFS, 
and the molecular pathology tests that do not require physician work on 
the CLFS. However, as stated above, some commenters stated that all the 
molecular pathology CPT codes include physician work, and should all be 
placed together on the PFS, while others stated that none of the 
molecular pathology CPT codes require physician work, and all should be 
placed together on the CLFS. Finally, as stated above, some commenters 
suggested that the tests should be paid under the CLFS with a PFS 
payment for physician interpretation and report of a molecular 
pathology test whereas others stated that the tests should be paid 
under the PFS with a CLFS payment for laboratory interpretation and 
report of a molecular pathology test.
    Response: We thank the commenters for their thorough responses to 
our questions and proposals. After reviewing the comments, we believe 
that the molecular pathology CPT codes describe clinical diagnostic 
laboratory tests that should be paid under the CLFS because these 
services do not ordinarily require interpretation by a physician to 
produce a meaningful result. While we recognize that these tests may be 
furnished by a physician, after reviewing the public comments and 
listening to numerous presentations by stakeholders throughout the 
comment period, we are not convinced that all these tests ordinarily 
require interpretation by a physician. Many commenters stated that 
geneticists can provide any necessary interpretation for a meaningful 
test result of a molecular pathology test if some interpretation is 
required. ACLA noted that both Ph.D. geneticists and pathologists can 
be certified in genetics by an American Board of Medical Specialties, 
evidence that the medical community recognizes geneticists as qualified 
to interpret molecular pathology test results. Commenters described 
automated laboratory processes and organizational structures that rely 
on geneticist

[[Page 68999]]

interpretation when needed, and they presented a claims analysis 
demonstrating that physician interpretation currently is not typical 
across molecular pathology services in CY 2010. Further, commenters 
stated that these molecular pathology tests are currently payable on 
the CLFS.
    We do not agree with some commenters that these codes inherently 
include physician work because they were developed as global services. 
We have a long-standing policy of dividing a global diagnostic service 
into a professional and technical component to separately capture the 
resources involved in the professional work and technical component of 
the test. We are not convinced that a physician must be involved in 
performing portions of the technical component. We believe that some 
molecular pathology tests are automated and do not require 
interpretation. Where the laboratory processes are not automated, 
laboratory personnel, including doctoral-level geneticists, can produce 
accurate molecular pathology test results. Although there might be 
occasions when a physician furnishes some of the technical component of 
a clinical laboratory test paid under the CLFS, we do not believe that 
performance by a physician changes the nature of the work. Rather, we 
believe it would still be appropriate to make payment for the technical 
work as part of the CLFS payment for the test. One commenter provided a 
claims analysis demonstrating that physicians are the most common 
entity to bill CPT code 89312 in the 2009 claims data; that there are 
more individual pathologists submitting claims for molecular pathology 
services than there are independent laboratories submitting claims for 
molecular pathology services. We believe this speaks to the different 
business structures in the pathology and laboratory communities. We 
would expect numerous different pathologists working in a hospital-
based academic or research laboratory to bill for their professional 
services interpreting and reporting on a molecular pathology test 
independently under their NPI or group NPI using CPT code 83912-26. We 
would expect commercial laboratories to bill CPT code 83912 for 
interpretation and report by a nonphysician laboratory professional, 
like a doctoral-level geneticist, for a great volume of tests under a 
single laboratory NPI. We do not believe this analysis of the typical 
provider supports an assessment of whether interpretation is ordinarily 
required for furnishing molecular pathology services.
    Finally, while we considered the differences in methodology for 
pricing under the CLFS versus the PFS, including the ability to apply a 
budget neutrality adjustment under the PFS, we do not believe that the 
differences in payment methodologies should be a definitive basis for 
deciding to choose a specific fee schedule. Rather, the statute 
requires Medicare to pay using separate methodologies for physicians' 
services and for clinical diagnostic laboratory tests. Ultimately, we 
believe the primary criterion for determining the appropriate payment 
methodology is the identification of a service as one or the other.
    Therefore, for CY 2013, we are assigning a PFS procedure status 
indicator of X (Statutory exclusion. These codes represent an item or 
service that is not within the statutory definition of ``physicians' 
services'' for PFS payment purposes (for example, ambulance services). 
No RVUs are shown for these codes and no payment may be made under the 
PFS to the molecular pathology CPT codes listed in Table 27, because 
payment will be made for these tests under the CLFS. More information 
on the CLFS determination of the appropriate basis for payment 
(crosswalk or gap-filling) for these tests is available on the CMS Web 
site at www.cms.hhs.gov/ClinicalLabFeeSched.
    While we do not believe the molecular pathology tests are 
ordinarily performed by physicians, we do believe that, in some cases, 
a physician interpretation of a molecular pathology test may be 
medically necessary to provide a clinically meaningful, beneficiary-
specific result. In order to make PFS payment for that physician 
interpretation, on an interim basis for CY 2013, we have created HCPCS 
G-code G0452 (molecular pathology procedure; physician interpretation 
and report) to describe medically necessary interpretation and written 
report of a molecular pathology test, above and beyond the report of 
laboratory results. This professional component-only HCPCS G-code will 
be considered a ``clinical laboratory interpretation service,'' which 
is one of the current categories of PFS pathology services under the 
definition of physician pathology services at Sec.  415.130(b)(4). 
Section Sec.  415.130(b)(4) of the regulations and section 60 of the 
Claims Processing Manual (IOM 100-04, Ch. 12, section 60.E.) specify 
certain requirements for billing the professional component of certain 
clinical laboratory services including that the interpretation (1) must 
be requested by the patient's attending physician, (2) must result in a 
written narrative report included in the patient's medical record, and 
(3) requires the exercise of medical judgment by the consultant 
physician. We note that a hospital's standing order policy can be used 
as a substitute for the individual request by a patient's attending 
physician. The current CPT code for interpretation and report, 83912-
26, is included on the current list of clinical laboratory 
interpretation services but will be deleted at the end of CY 2012.
    We will monitor the utilization of this service and collect data on 
billing patterns to ensure that G0452 is only being used when 
interpretation and report by a physician is medically necessary and is 
not duplicative of laboratory reporting paid under the CLFS. In the 
near future, we intend to reassess whether this HCPCS code is 
necessary, and if so, in conjunction with which molecular pathology 
tests. A discussion of the work and direct PE inputs for HCPCS G-code 
G0452 can be found later in this section. We note that physicians can 
continue to receive payment for the current clinical pathology 
consultation CPT codes 80500 (Clinical pathology consultation; limited, 
without review of a patient's history and medical records) and 80502 
(Clinical pathology consultation; comprehensive, for a complex 
diagnostic problem, with review of patient's history and medical 
records) if the pathology consultation services relating to a molecular 
pathology test meet the definition of those codes.
    We do not believe it is appropriate to establish a HCPCS G-code on 
the CLFS for the interpretation and report of a molecular pathology 
test by a doctoral-level scientist or other appropriately trained 
nonphysician health care professional. The new molecular pathology CPT 
codes consolidate the services previously reported using the CLFS 
stacking codes, including the CLFS stacking code for laboratory 
interpretation and report of a molecular pathology test (CPT code 
83912). As such, we believe that payment for the interpretation and 
report service would be considered part of the overall CLFS payment for 
the molecular pathology CPT codes. In addition, geneticists and other 
nonphysician laboratory personnel do not have a Medicare benefit 
category that allows them to bill and be paid for their interpretation 
services; therefore, they cannot bill or receive PFS payment for HCPCS 
code G0452.
    In response to our questions about the appropriate physician work 
RVUs and times, utilization crosswalks, and direct PE inputs for the 
molecular pathology services described by the CPT codes, as

[[Page 69000]]

well as our proposal to contractor price the codes for CY 2013 if we 
determined that the codes should be paid under the PFS for CY 2013, we 
received the following comments:
    Comment: Commenters were not in favor of our proposal to contractor 
price these CPT codes if we determined that the codes should be paid 
under the PFS. Commenters urged CMS to establish national payment rates 
for the new molecular pathology CPT codes. Several commenters 
recommended that we use the AMA RUC- and CAP-recommended RVUs and 
inputs for these tests. One commenter suggested that contractor pricing 
is unnecessary to set payment rates for the technical component, since 
CMS has hospital cost data that can be used to develop payment rates. 
This commenter went on to strongly urge CMS to provide clear and 
specific guidance that contractors must work with cost data from 
constituents in their areas to set appropriate rates for physician 
services.
    Commenters stated that they are concerned that contractor pricing 
would lack the breadth of input, external scrutiny, and relativity 
utilized in the development of the AMA RUC recommendations. Commenters 
also believe that contractor pricing would add administrative 
complexities and costs, and that variations in contractor pricing would 
be disruptive. Also, commenters stated that contractor pricing could 
result in movement of sites of testing to the highest paying regions in 
order to maximize Medicare payment for individual services. 
Furthermore, commenters suggested that the variation in the costs of 
these tests is related to differences in laboratory facilities, 
equipment, and/or test methodologies, and that the variation is not 
geographically based; therefore, contractor pricing is not appropriate.
    Regarding the utilization estimates for the new molecular pathology 
CPT codes, the AMA RUC noted that its utilization projections were 
based on the utilization of CPT code 83912 (molecular diagnostics; 
interpretation and report), which includes interpretation on both the 
physician fee schedule (83912-26) and the clinical laboratory fee 
schedule (83912), when interpretation by technical laboratory 
personnel, such as a geneticist, accompanies performance of the 
molecular pathology test represented by other ``stacking'' codes on a 
claim. The AMA RUC noted that utilization of this service has been 
growing rapidly and provided updated utilization assumptions based on 
2011 Medicare allowed charges for CPT code 83912. These utilization 
assumptions, and the AMA RUC-recommended physician work RVUs and times, 
for all 115 codes are included in Table 27 for reference. However, we 
note that because these services are not payable under the PFS, these 
values were not used for rate-setting.
    Response: We thank the commenters for their detailed responses to 
our questions and proposals. Beginning in CY 2013, the molecular 
pathology CPT codes will be paid under the CLFS, and HCPCS code G0452 
(Molecular diagnostics; interpretation and report) will be paid under 
the PFS. Because payment for the molecular pathology CPT codes will be 
made under the CLFS rather than the PFS, it is not necessary to 
consider further whether contractor pricing would be appropriate for 
the molecular pathology CPT codes under the PFS. We will add a new 
HCPCS code, G0452, to replace the current CPT code that is used to bill 
under the PFS for interpretation and report of a molecular pathology 
test (CPT code 83912-26), which is being deleted at the end of CY 2012. 
After reviewing the public comments, the AMA RUC and CAP 
recommendations, and the values of the current and similar services, we 
believe we have enough information to nationally price HCPCS code G0452 
for CY 2013. We believe it is appropriate to directly crosswalk the 
work RVUs, time, utilization, and malpractice risk factor of CPT code 
83912-26 to HCPCS code G0452, because we do not believe this coding 
change reflects a change in the service or in the resources involved in 
furnishing the service. The current work RVU of 0.37 for CPT code 
83912-26 is the same as nearly all the clinical laboratory 
interpretation service codes. This value is also within the range of 
AMA RUC- recommended values for the molecular pathology CPT codes--the 
utilization-weighted average AMA RUC-recommended work RVU was 0.33, and 
the median AMA RUC-recommended work RVU was 0.45 for the molecular 
pathology CPT codes. Based on this information, we believe a work RVU 
of 0.37 appropriately reflects the work of HCPCS code G0452. Therefore, 
we are assigning a work RVU of 0.37 and 5 minutes of pre-service time, 
10 minutes of intra-service time, and 5 minutes of post-service time to 
HCPCS code G0452 on an interim final basis for CY 2013. We request 
public comment on the interim final values for HCPCS code G0452.

    Table 27--AMA RUC-Recommended Physician Work RVUs, Times, and Estimated CY 2013 Utilization for Molecular
                                               Pathology CPT Codes
      [Please note, these values are displayed for reference only and were not used for PFS rate-setting.]
----------------------------------------------------------------------------------------------------------------
                                                                                                      AMA RUC
                                                                      AMA RUC         AMA RUC      estimated CY
          CPT code                     Short descriptor             recommended     recommended        2013
                                                                     work RVU     physician time    utilization
----------------------------------------------------------------------------------------------------------------
81200......................  Aspa gene..........................  ..............  ..............             450
81201......................  Apc gene full sequence.............            1.40              60             450
81202......................  Apc gene known fam variants........            0.77              28              90
81203......................  Apc gene dup/delet variants........            0.80              30             400
81205 *....................  Bckdhb gene........................  ..............  ..............             450
81206......................  Bcr/abl1 gene major bp.............            0.37              15          45,729
81207......................  Bcr/abl1 gene minor bp.............            0.15              11           3,500
81208......................  Bcr/abl1 gene other bp.............            0.46              18           1,000
81209 *....................  Blm gene...........................  ..............  ..............             450
81210......................  Braf gene..........................            0.37              15           7,000
81211 *....................  Brca1&2 seq & com dup/del..........  ..............  ..............           4,000
81212 *....................  Brca1&2 185&5385&6174 var..........  ..............  ..............           2,000
81213 *....................  Brca1&2 uncom dup/del var..........  ..............  ..............           4,000
81214 *....................  Brca1 full seq & com dup/del.......  ..............  ..............           4,000
81215 *....................  Brca1 gene known fam variant.......  ..............  ..............           1,000
81216 *....................  Brca2 gene full sequence...........  ..............  ..............           4,000
81217 *....................  Brca2 gene known fam variant.......  ..............  ..............             600

[[Page 69001]]

 
81220......................  Cftr gene com variants.............            0.15              10           7,000
81221......................  Cftr gene known fam variants.......            0.40              20           1,000
81222......................  Cftr gene dup/delet variants.......            0.22              13           1,300
81223......................  Cftr gene full sequence............            0.40              20           1,000
81224......................  Cftr gene intron poly t............            0.15              10           1,300
81225......................  Cyp2c19 gene com variants..........            0.37              13           2,000
81226......................  Cyp2d6 gene com variants...........            0.43              15           2,000
81227......................  Cyp2c9 gene com variants...........            0.38              14           4,000
81228 *....................  Cytogen micrarray copy nmbr........  ..............  ..............             900
81229 *....................  Cytogen m array copy no&snp........  ..............  ..............             900
81235......................  Egfr gene com variants.............            0.51              20           9,000
81240......................  F2 gene............................            0.13               7          31,000
81241......................  F5 gene............................            0.13               8          43,000
81242 *....................  Fancc gene.........................  ..............  ..............             450
81243......................  Fmr1 gene detection................            0.37              15           4,000
81244......................  Fmr1 gene characterization.........            0.51              20             100
81245......................  Flt3 gene..........................            0.37              15           6,000
81250 *....................  G6pc gene..........................  ..............  ..............             450
81251 *....................  Gba gene...........................  ..............  ..............             450
81252......................  Gjb2 gene full sequence............            0.65              30             400
81253......................  Gjb2 gene known fam variants.......            0.52              28             150
81254......................  Gjb6 gene com variants.............            0.40              15             500
81255 *....................  Hexa gene..........................  ..............  ..............             450
81256......................  Hfe gene...........................            0.13               7          25,000
81257......................  Hba1/hba2 gene.....................            0.50              20           4,500
81260 *....................  Ikbkap gene........................  ..............  ..............             450
81261......................  Igh gene rearrange amp meth........            0.52              21           4,500
81262......................  Igh gene rearrang dir probe........            0.61              20             700
81263......................  Igh vari regional mutation.........            0.52              23             400
81264......................  Igk rearrangeabn clonal pop........            0.58              22           4,000
81265......................  Str markers specimen anal..........            0.40              17          14,000
81266......................  Str markers spec anal addl.........            0.41              15             300
81267......................  Chimerism anal no cell selec.......            0.45              18           2,000
81268......................  Chimerism anal w/cell select.......            0.51              20             300
81270......................  Jak2 gene..........................            0.15              10          19,000
81275......................  Kras gene..........................            0.50              20          14,000
81280 *....................  Long qt synd gene full seq.........  ..............  ..............             450
81281 *....................  Long qt synd known fam var.........  ..............  ..............             450
81282 *....................  Long qt syn gene dup/dlt var.......  ..............  ..............             450
81290 *....................  Mcoln1 gene........................  ..............  ..............             450
81291......................  Mthfr gene.........................            0.15              10           9,000
81292......................  Mlh1 gene full seq.................            1.40              60           1,000
81293......................  Mlh1 gene known variants...........            0.52              28             500
81294......................  Mlh1 gene dup/delete variant.......            0.80              30             800
81295......................  Msh2 gene full seq.................            1.40              60           1,000
81296......................  Msh2 gene known variants...........            0.52              28             500
81297......................  Msh2 gene dup/delete variant.......            0.80              30             800
81298......................  Msh6 gene full seq.................            0.80              30             450
81299......................  Msh6 gene known variants...........            0.52              28             600
81300......................  Msh6 gene dup/delete variant.......            0.65              30             500
81301......................  Microsatellite instability.........            0.50              20           1,000
81302......................  Mecp2 gene full seq................            0.65              30             200
81303......................  Mecp2 gene known variant...........            0.52              28              50
81304......................  Mecp2 gene dup/delet variant.......            0.52              28             150
81310......................  Npm1 gene..........................            0.39              19           4,500
81315......................  Pml/raralpha com breakpoints.......            0.37              15           1,000
81316......................  Pml/raralpha 1 breakpoint..........            0.22              12           5,000
81317......................  Pms2 gene full seq analysis........            1.40              60             600
81318......................  Pms2 known familial variants.......            0.52              28             200
81319......................  Pms2 gene dup/delet variants.......            0.80              30             375
81321......................  Pten gene full sequence............            0.80              30             950
81322......................  Pten gene known fam variant........            0.52              28             150
81323......................  Pten gene dup/delet variant........            0.65              30             200
81324 *....................  Pmp22 gene dup/delet...............  ..............  ..............             450
81325 *....................  Pmp22 gene full sequence...........  ..............  ..............             450
81326 *....................  Pmp22 gene known fam variant.......  ..............  ..............             450
81330 *....................  Smpd1 gene common variants.........  ..............  ..............             450
81331......................  Snrpn/ube3a gene...................            0.39              15             250

[[Page 69002]]

 
81332......................  Serpina1 gene......................            0.40              15           1,000
81340......................  Trb@ gene rearrange amplify........            0.63              25           4,000
81341......................  Trb@ gene rearrange dirprobe.......            0.45              19           1,000
81342......................  Trg gene rearrangement anal........            0.57              25           5,000
81350......................  Ugt1a1 gene........................            0.37              15             850
81355......................  Vkorc1 gene........................            0.38              15           4,000
81370......................  Hla i & ii typing lr...............            0.54              15          14,000
81371......................  Hla i & ii type verify lr..........            0.60              30           9,000
81372......................  Hla i typing complete lr...........            0.52              15           4,000
81373......................  Hla i typing 1 locus lr............            0.37              15           4,000
81374......................  Hla i typing 1 antigen lr..........            0.34              13          13,000
81375......................  Hla ii typing ag equiv lr..........            0.60              15           2,000
81376......................  Hla ii typing 1 locus lr...........            0.50              15           2,000
81377......................  Hla ii type 1 ag equiv lr..........            0.43              15           2,000
81378......................  Hla i & ii typing hr...............            0.45              20           2,000
81379......................  Hla i typing complete hr...........            0.45              15           1,000
81380......................  Hla i typing 1 locus hr............            0.45              15           1,000
81381......................  Hla i typing 1 allele hr...........            0.45              12           1,000
81382......................  Hla ii typing 1 loc hr.............            0.45              15           1,000
81383......................  Hla ii typing 1 allele hr..........            0.45              15           1,000
81400......................  Mopath procedure level 1...........            0.32              10           2,500
81401......................  Mopath procedure level 2...........            0.40              15           2,000
81402......................  Mopath procedure level 3...........            0.50              20           2,000
81403......................  Mopath procedure level 4...........            0.52              28           2,000
81404......................  Mopath procedure level 5...........            0.65              30           2,000
81405......................  Mopath procedure level 6...........            0.80              30           1,850
81406......................  Mopath procedure level 7...........            1.40              60           1,000
81407......................  Mopath procedure level 8...........            1.85              60           1,000
81408......................  Mopath procedure level 9...........            2.35              80           1,000
81479 *....................  Unlisted molecular pathology.......  ..............  ..............               0
----------------------------------------------------------------------------------------------------------------
 * The AMA RUC concluded that these services are not typically performed by a physician at this time. Therefore,
  they have not been reviewed for physician work or time by the AMA RUC.

J. Payment for New Preventive Service HCPCS G-Codes

    Under section 1861(ddd) of the Act, as amended by section 4105 of 
the Affordable Care Act, CMS is authorized to add coverage of 
``additional preventive services'' if certain statutory criteria are 
met as determined through the national coverage determination (NCD) 
process, including that the service meets all of the following 
criteria: (1) They must be reasonable and necessary for the prevention 
or early detection of illness or disability, (2) they must be 
recommended with a grade of A or B by the United States Preventive 
Services Task Force (USPSTF), and (3) they must be appropriate for 
individuals entitled to benefits under Part A or enrolled under Part B. 
After reviewing the USPSTF recommendations for the preventive services, 
conducting evidence reviews, and considering public comments under the 
NCD process, we determined that the above criteria were met for the 
services listed in Table 28. Medicare now covers each of the following 
preventive services:
     Screening and Behavioral Counseling Interventions in 
Primary Care to Reduce Alcohol Misuse, effective October 14, 2011;
     Screening for Depression in Adults, effective October 14, 
2011;
     Screening for Sexually Transmitted Infections (STIs) and 
High Intensity Behavioral Counseling (HIBC) to Prevent STIs, effective 
November 8, 2011;
     Intensive Behavioral Therapy for Cardiovascular Disease, 
effective November 8, 2011; and
     Intensive Behavioral Therapy for Obesity, effective 
November 29, 2011.
    Table 28 lists the HCPCS G-codes created for reporting and payment 
of these services. The Medicare PFS payment rates for these services 
are discussed below. The NCD process establishing coverage of these 
preventive services was not complete at the time of publication of the 
CY 2012 PFS final rule with comment period, so we could not include 
interim RVUs for these preventive services in the addenda to our CY 
2012 final rule with comment period. However, we were able to include 
these HCPCS G-codes with national payment amounts for these services in 
the CY 2012 PFS national relative value files, which were effective 
January 1, 2012. From the effective date of each service to December 
31, 2011, the payment amount for these codes was established by the 
Medicare Administrative Contractors.

[[Page 69003]]



             Table 28--New Preventive Service HCPCS G-Codes
------------------------------------------------------------------------
                                         CMS national
                      HCPCS code long      coverage        CMS change
     HCPCS code          descriptor     determination     request  (CR)
                                            (NCD)
------------------------------------------------------------------------
G0442...............  Annual alcohol   Screening and    CR7633
                       misuse           Behavioral
                       screening, 15    Counseling
                       minutes.         Interventions
                                        in Primary
                                        Care to Reduce
                                        Alcohol Misuse
                                        (NCD 210.8).
G0443...............  Brief face-to-   Screening        CR7633
                       face             Behavioral
                       behavioral       Counseling
                       counseling for   Interventions
                       alcohol          in Primary
                       misuse, 15       Care to Reduce
                       minutes.         Alcohol Misuse
                                        (NCD 210.8).
G0444...............  Annual           Screening for    CR7637
                       Depression       Depression in
                       Screening, 15    Adults (NCD
                       minutes.         210.9).
G0445...............  High-intensity   Screening for    CR7610
                       behavioral       Sexually
                       counseling to    Transmitted
                       prevent          infections(STI
                       sexually         s) and High-
                       transmitted      Intensity
                       infections,      Behavioral
                       face-to-face,    Counseling
                       individual,      (HIBC) to
                       includes:        prevent STIs
                       education,       (NCD 210.10).
                       skills
                       training, and
                       guidance on
                       how to change
                       sexual
                       behavior;
                       performed semi-
                       annually, 30
                       minutes.
G0446...............  Annual, face-to- Intensive        CR7636
                       face intensive   Behavioral
                       behavioral       Therapy for
                       therapy for      Cardiovascular
                       cardiovascular   Disease (NCD
                       disease,         210.11).
                       individual, 15
                       minutes.
G0447...............  Face-to-face     Intensive        CR7641
                       behavioral       Behavioral
                       counseling for   Therapy for
                       obesity, 15      Obesity (NCD
                       minutes.         210.12).
------------------------------------------------------------------------

    Two new HCPCS codes, G0442 (Annual alcohol misuse screening, 15 
minutes), and G0443 (Brief face-to-face behavioral counseling for 
alcohol misuse, 15 minutes), were created for the reporting and payment 
of screening and behavioral counseling interventions in primary care to 
reduce alcohol misuse.
    As we explained in the proposed rule, we believe that the screening 
service described by HCPCS code G0442 requires similar physician work 
as CPT code 99211 (Level 1 office or other outpatient visit, 
established patient). Accordingly, we proposed a work RVU of 0.18 for 
HCPCS code G0442 for CY 2013, the same work RVU as CPT code 99211. For 
physician time, we proposed 15 minutes, which is the amount of time 
specified in the HCPCS code descriptor for G0442. We proposed a 
malpractice expense crosswalk to CPT code 99211. The proposed direct PE 
inputs were reflected in the CY 2013 proposed direct PE input database, 
available on the CMS Web site under the downloads for the CY 2013 PFS 
proposed rule at www.cms.gov/PhysicianFeeSched/. We requested public 
comment on this CY 2013 proposed value for HCPCS code G0442.
    Comment: Commenters supported the proposed payment for HCPCS code 
GO442 although a commenter suggested that in the future CMS should use 
the AMA RUC to assist us in valuing new codes.
    Response: In response to the suggestion that we rely upon AMA RUC 
input in valuing new codes, we agree with the commenter that the input 
of the AMA RUC is extremely useful in valuing new codes and in general, 
we obtain its recommendations in establishing the original values for 
new codes. However, because this new code was added through an NCD 
effective as of October 14, 2011, public commenters, including the AMA 
RUC, were not able to comment for consideration for CY 2012. We note 
that since this code was valued in CY 2012 based upon CPT code 99211 
and the AMA RUC had provided a recommendation on this code previously, 
the AMA RUC was involved, albeit indirectly, in setting this rate. In 
addition, there was opportunity for the AMA RUC to provide comment on 
this code in response to the solicitation for comment on the CY 2013 
proposed rule.
    After consideration of the public comments we received, we are 
finalizing our CY 2013 proposal to establish a work RVU of 0.18 and a 
time of 15 minutes for HCPCS code G0442. For malpractice expense, we 
are finalizing our proposed crosswalk for HCPCS code G0442 to CPT code 
99211. We are also finalizing the direct PE inputs as proposed. The 
direct PE inputs associated with this code are included in the CY 2013 
direct PE input database, available on the CMS Web site under the 
downloads for the CY 2013 PFS final rule with comment period at 
www.cms.gov/PhysicianFeeSched/. Additionally, we note that the PE RVUs 
included in Addendum B reflect the values that result from the 
finalization of this policy.
    As we explained in the proposed rule, we believe that the 
behavioral counseling service described by HCPCS code G0443 requires 
similar work as CPT code 97803 (Medical nutrition therapy; re-
assessment and intervention, individual, face-to-face with the patient, 
each 15 minutes). Accordingly, we proposed a work RVU of 0.45 for HCPCS 
code G0443 for CY 2013, the same work RVU as CPT code 97803. For 
physician time, we proposed 15 minutes, which is the amount of time 
specified in the HCPCS code descriptor for G0443. For malpractice 
expense, we proposed a malpractice expense crosswalk to CPT code 97803. 
The proposed direct PE inputs are reflected in the CY 2013 proposed 
direct PE input database, available on the CMS Web site under the 
downloads for the CY 2013 PFS proposed rule at www.cms.gov/PhysicianFeeSched/. We requested public comment on this CY 2013 
proposed value for HCPCS code G0443.
    Comment: Commenters supported the proposed payment for HCPCS code 
G0443. A commenter inquired why HCPCS code G0443 was crosswalked to CPT 
code 99212 and CPT code 97803 rather than to CPT code 99407 (Smoking 
and tobacco use cessation counseling visit; intensive, greater than 10 
minutes). We also received a comment that in the future CMS should use 
the AMA RUC to assist us in valuing new codes.
    Response: The commenter was mistaken in stating that HCPCS code 
G0443 was crosswalked to CPT code 99212; it was crosswalked only to CPT 
code 97803. In response to the comment about crosswalking this code to 
CPT 99407, we had considered CPT code 99407 when we initially set the 
payment rate for HCPCS code G0443 and after consideration of this 
comment we continue to believe that the value based upon CPT code 
97803, which is a 15-minute counseling code is appropriate. In response 
to the suggestion that we rely upon AMA RUC input in valuing new codes, 
we agree with the commenter that the input of the AMA RUC is extremely 
useful in valuing new codes and in general, we obtain its 
recommendations in establishing the original values for new codes. 
However, because this new code

[[Page 69004]]

was added through an NCD effective as of October 14, 2011, public 
commenters, including the AMA RUC, were not able to comment for 
consideration for CY 2012. We note that since this code was valued in 
CY 2012 based upon CPT code 97803 and the AMA RUC had provided 
recommendation on this code previously, the AMA RUC was involved, 
albeit indirectly, in setting this rate. In addition, there was 
opportunity for the AMA RUC to provide comment on this code in the 
solicitation for comment on the CY 2013 proposed rule.
    After consideration of the public comments that we received, we are 
finalizing the proposed work RVU of 0.45 and a time of 15 minutes for 
HCPCS code G0443. For malpractice expense, we are finalizing our 
proposed crosswalk to for HCPCS code G0443 to CPT code 97803. We are 
also finalizing the direct PE inputs as proposed. The direct PE inputs 
associated with this code are included in the CY 2013 direct PE input 
database, available on the CMS Web site under the downloads for the CY 
2013 PFS final rule with comment period at www.cms.gov/PhysicianFeeSched/. Additionally, we note that the PE RVUs included in 
Addendum B reflect the values that result from the finalization of this 
policy. HCPCS code G0444 (Annual Depression Screening, 15 minutes) was 
created for the reporting and payment of screening for depression in 
adults. As we explained in the proposed rule, we believe that the 
screening service described by HCPCS code G0444 requires similar 
physician work as CPT code 99211. Accordingly, we proposed a work RVU 
of 0.18 for HCPCS code G0444 for CY 2013, the same work RVU as CPT code 
99211. For physician time, we proposed 15 minutes, which is the amount 
of time specified in the HCPCS code descriptor for G0444. For 
malpractice expense, we proposed a malpractice expense crosswalk to CPT 
code 99211. The proposed direct PE inputs were reflected in the CY 2013 
proposed PE input database, available on the CMS Web site under the 
downloads for the CY 2013 PFS proposed rule at www.cms.gov/PhysicianFeeSched/. We requested public comment on this CY 2013 
proposed value for HCPCS code G0444.
    Comment: Commenters supported the proposed payment for HCPCS code 
GO444 although a commenter suggested that in the future CMS should use 
the AMA RUC to assist us in valuing new codes.
    Response: In response to the suggestion that we rely upon AMA RUC 
input in valuing new codes, we agree with the commenter that the input 
of the AMA RUC is extremely useful in valuing new codes and in general 
, we obtain its recommendations in establishing the original values for 
new codes. However, because this new code was added through an NCD 
effective as of October 14, 2011, public commenters, including the AMA 
RUC, were not able to comment for consideration for CY 2012. We note 
that since this code was valued in 2012 based upon CPT code 99211 and 
the AMA RUC had provided recommendation on this code previously, the 
AMA RUC was involved, albeit indirectly, in setting this rate. In 
addition, there was opportunity for the AMA RUC to provide comment on 
this code in response to the solicitation for comment on the CY 2013 
proposed rule.
    After consideration of the public comments we received, we are 
finalizing the proposed a work RVU of 0.18, and a time of 15 minutes 
for HCPCS G0444 code. For malpractice expense, we are finalizing our 
proposed crosswalk for HCPCS G0444 code. For malpractice expense, we 
are finalizing our proposed crosswalk for HCPCS code G0444 to CPT code 
99211. We are also finalizing the direct PE inputs as proposed. The 
direct PE inputs associated with this code are included in the CY 2013 
direct PE input database, available on the CMS Web site under the 
downloads for the CY 2013 PFS final rule with comment period at 
www.cms.gov/PhysicianFee Sched/. Additionally, we note that the PE RVUs 
included in Addendum B reflect the values that result from the 
finalization of this policy. HCPCS code G0445 (high-intensity 
behavioral counseling to prevent sexually transmitted infections, face-
to-face, individual, includes: Education, skills training, and guidance 
on how to change sexual behavioral, performed semi-annually, 30 
minutes) was created for the reporting and payment of HIBC to prevent 
STIs. As we explained in the proposed rule, we believe that the 
behavioral counseling service describe by HCPCS code G0445 requires 
similar physician work as CPT code 97803. Accordingly, we proposed a 
work RVU of 0.45 for HCPCS code G0445 for CY 2013, the same work RVU as 
CPT code 97803. For physician time, we proposed 30 minutes, which is 
the amount of time specified in the HCPCS code descriptor for G0445. 
For malpractice expense, we proposed a malpractice expense, we proposed 
a malpractice expense crosswalk to CPT code 97803. The proposed direct 
PE inputs were reflected in the CY 2013 proposed direct PE input 
database, available on the CMS Web site under the downloads for the CY 
2013 PFS CY 2013 proposed rule at www.cms.gov/PhysicianFeeSched/. We 
requested public comment on this CY 2013 proposed value for HCPCS code 
G0445.
    Comment: Commenters supported the proposed payment for HCPCS code 
G0445 although a commenter suggested that in the future we should use 
the AMA RUC to assist us in valuing new codes.
    Response: In response to the suggestion that we rely upon AMA RUC 
input in valuing new codes, we agree with the commenter that the input 
of the AMA RUC is extremely useful in valuing new codes and in general, 
we obtain its recommendations in establishing the original values for 
new codes. However, because this new code was added through an NCD 
effective as of October 14, 2011, public commenters, including the AMA 
RUC, were not able to comment for consideration for CY 2012. We note 
that since this code was valued in CY 2012 based upon CPT code 97803 
and the AMA RUC had provided recommendation on this code previously, 
the AMA RUC was involved, albeit indirectly, in setting this rate. In 
addition, there was opportunity for the AMA RUC to provide comment on 
this code in response to the solicitation for comment on the CY 2013 
proposed rule.
    After consideration of the public comments we received, we are 
finalizing the proposed a work RVU of 0.45 and a time of 30 minutes for 
HCPCS code G0445. For malpractice expense, we are finalizing our 
proposed crosswalk for HCPCS code G0445 to CPT code 97803. We are also 
finalizing the direct PE inputs as proposed. The direct PE inputs 
associated with this code are included in the CY 2013 direct PE input 
database, available on the CMS Web site under the downloads for the CY 
2013 PFS final rule with comment period at www.cms.gov/PhysicianFeeSched/. Additionally, we note that the PE RVUs included in 
Addendum B reflect the values that result from the finalization of this 
policy. HCPCS code G0446 (Annual, face-to-face intensive behavioral 
therapy for cardiovascular disease, individual, 15 minutes) was created 
for the reporting and payment of intensive behavioral therapy for 
cardiovascular disease. As we explained in the proposed rule, we 
believe that the behavioral therapy service described by HCPCS code 
G0446 requires similar physician work as CPT code 97803. Accordingly, 
we proposed a work RVU of 0.45 for HCPCS code G0446 for CY 2013, the 
same work RVU as CPT code

[[Page 69005]]

97803. For physician time, we proposed 15 minutes, which is the amount 
of time specified in the HCPCS code descriptor for G0446. For 
malpractice expense, we proposed a malpractice expense crosswalk to CPT 
code 97803. The proposed direct PE inputs were reflected in the CY 2013 
proposed direct PE input database, available on the CMS Web site under 
the downloads for the CY 2013 PFS proposed rule at www.cms.gov/PhysicianFeeSched/. We requested public comment on this CY 2013 
proposed value for HCPCS code G0446.
    Comment: Commenters supported the proposed payment for HCPCS code 
GO446. In addition, a commenter urged a change in our policy to allow 
billing of multiple units of this code in one encounter. We also 
received a comment that in the future CMS should use the AMA RUC to 
assist us in valuing new codes.
    Response: In response to the suggestion regarding billing multiple 
units of HCPCS code G0446, this proposal deals only with the payment 
rate for this service, not coverage issues. We note that the NCD is 
clear that only one visit annually is covered. In response to the 
suggestion that we rely upon AMA RUC input in valuing new codes, we 
agree with the commenter that the input of the AMA RUC is extremely 
useful in valuing new codes and in general, we obtain its 
recommendations in establishing the original values for new codes. 
However, because this new code was added through an NCD effective as of 
October 14, 2011, public commenters, including the AMA RUC, were not 
able to comment for consideration for CY 2012. We note that since this 
code was valued based upon CPT code 97803 and AMA RUC had provided 
recommendation on this code previously, the AMA RUC was involved, 
albeit indirectly, in setting this rate. In addition, there was 
opportunity for the AMA RUC to provide comment on this code in response 
to the solicitation for comment on the CY 2013 proposed rule.
    Based upon the comments we received, we are finalizing the proposed 
rate for HCPCS code G0446. It will be valued with a work RVU of 0.45, 
and with a time of 15 minutes. For malpractice expense, we are 
finalizing our proposed crosswalk for HCPCS code G0446 to CPT code 
97803. We are also finalizing the direct PE inputs as proposed. The 
direct PE inputs associated with this code are included in the CY 2013 
direct PE input database, available on the CMS Web site under the 
downloads for the CY 2013 PFS final rule with comment period at 
www.cms.gov/PhysicianFeeSched/. Additionally, we note that the PE RVUs 
included in Addendum B reflect the values that result from the 
finalization of this policy. HCPCS G0447 (Face-to-face behavioral 
counseling for obesity, 15 minutes) was created for the reporting and 
payment of intensive behavioral therapy for obesity. As we explained in 
the proposed rule, we believe that the behavioral counseling service 
described by HCPCS code G0447 requires similar physician work to CPT 
code 97803. Accordingly, we proposed a work RVU of 0.45 for HCPCS code 
G0447 for CY 2013, the same work RVU as CPT code 97803. For physician 
time, we proposed 15 minutes, which is the amount of time specified in 
the HCPCS code descriptor for G0447. For malpractice expense, we 
proposed a malpractice expense crosswalk to CPT code 97803. The 
proposed direct PE inputs were reflected in the CY 2013 direct PE input 
database, available on the CMS Web site under the downloads for the CY 
2013 PFS proposed rule at www.cms.gov/PhysicianFeeSched/. We requested 
public comment on this CY 2013 proposed value for HCPCS code G0447.
    Comment: Commenters supported the proposed payment for HCPCS code 
GO447. In addition, a commenter urged a change in our policy to allow 
billing of multiple units of this code in one encounter. We also 
received a comment that in the future CMS should use the AMA RUC to 
assist us in valuing new codes.
    Response: With regard to billing for multiple units of HCPCS code 
G0447 in the same encounter, this proposal addresses only the payment 
rate for, not the coverage of this code. We note that the NCD 
establishes that coverage is for one visit per day of service. In 
response to the suggestion that we rely upon AMA RUC input in valuing 
new codes, we agree with the commenter that the input of the AMA RUC is 
extremely useful in valuing new codes and in general, we obtain its 
recommendations in establishing the original values for new codes. 
However, because this new code was added through an NCD effective as of 
October 14, 2011, public commenters, including the AMA RUC, were not 
able to comment for consideration for CY 2012. We note that since this 
code was valued in CY 2012 based upon CPT code 97803 and AMA RUC had 
provided recommendation on this code previously, the AMA RUC was 
involved, albeit indirectly, in setting this rate. In addition, there 
was opportunity for the AMA RUC to provide comment on this code in the 
response to the solicitation for comment on the CY 2013 proposed rule.
    After the consideration of the public comments we received, we are 
finalizing the proposed work RVU of 0.45 and a time of 15 minutes for 
HCPCS G0447 code. For malpractice expense, we are finalizing our 
proposal to crosswalk HCPCS code G0447 to CPT code 97803. We are also 
finalizing the direct PE inputs as proposed. The direct PE inputs 
associated with this code are included in the CY 2013 direct PE input 
database, available on the CMS Web site under the downloads for the CY 
2013 PFS final rule with comment period at http://www.cms.gov/PhysicianFeeSched/. Additionally, we note that the PE RVUs included in 
Addendum B reflect the values that result from the finalization of this 
policy.

K. Certified Registered Nurse Anesthetists Scope of Benefit

    The benefit category for services furnished by a certified 
registered nurse anesthetist (CRNA) was added in section 1861(s)(11) of 
the Act by section 9320 of the Omnibus Budget Reconciliation Act (OBRA) 
of 1986. Since this benefit was implemented on January 1, 1989, CRNAs 
have been eligible to bill Medicare directly for services within this 
benefit category. Section 1861(bb)(2) of the Act defines a CRNA as ``a 
certified registered nurse anesthetist licensed by the State who meets 
such education, training, and other requirements relating to anesthesia 
services and related care as the Secretary may prescribe. In 
prescribing such requirements the Secretary may use the same 
requirements as those established by a national organization for the 
certification of nurse anesthetists.''
    Section 410.69(b) defines a CRNA as a registered nurse who: (1) Is 
licensed as a registered professional nurse by the State in which the 
nurse practices; (2) meets any licensure requirements the State imposes 
with respect to nonphysician anesthetists; (3) has graduated from a 
nurse anesthesia educational program that meets the standards of the 
Council on Accreditation of Nurse Anesthesia Programs, or such other 
accreditation organization as may be designated by the Secretary; and 
(4) meets one of the following criteria: (i) Has passed a certification 
examination of the Council on Certification of Nurse Anesthetists, the 
Council on Recertification of Nurse Anesthetists, or any other 
certification organization that may be designated by the Secretary; or 
(ii) is a graduate of a program described in paragraph (3) of

[[Page 69006]]

this definition and within 24 months after that graduation meets the 
requirements of paragraph (4)(i) of this definition.
    Section 1861(bb)(1) of the Act defines services of a CRNA as 
``anesthesia services and related care furnished by a certified 
registered nurse anesthetist (as defined in paragraph (2)) which the 
nurse anesthetist is legally authorized to perform as such by the State 
in which the services are furnished.'' CRNAs are paid at the same rate 
as physicians for furnishing such services to Medicare beneficiaries. 
Payment for services furnished by CRNAs only differs from physicians in 
that payment to CRNAs is made only on an assignment-related basis 
(Sec.  414.60) and supervision requirements apply in certain 
circumstances.
    At the time that the Medicare benefit for CRNA services was 
established, anesthesia practice, for anesthesiologists and CRNAs, 
largely occurred in the surgical setting and services other than 
anesthesia (medical and surgical) were furnished in the immediate pre- 
and post-surgery timeframe. The scope of ``anesthesia services and 
related care'' as delineated in section 1861(bb)(1) of the Act 
reflected that practice. As anesthesiologists and CRNAs have moved into 
other practice settings, questions have arisen regarding what services 
are encompassed under the benefit category's characterization of 
``anesthesia and related care.'' As an example, some CRNAs now offer 
chronic pain management services that are separate and distinct from a 
surgical procedure. We recently received additional information about 
upcoming changes to CRNA curricula to include specific training 
regarding chronic pain management services. Such changes in CRNA 
practice have prompted questions as to whether these services fall 
within the scope of section 1861(bb)(1) of the Act.
    As we noted in the CY 2013 proposed rule (77 FR 44788), Medicare 
Administrative Contractors (MACs) have reached different conclusions as 
to whether the statutory benefit category description of ``anesthesia 
services and related care'' encompasses the chronic pain management 
services furnished by CRNAs. The scope of the benefit category 
determines the scope of services for which a physician, practitioner, 
or supplier may receive Medicare payment. In order for the specific 
services to be paid by Medicare, the services must be reasonable and 
necessary for treatment of the patient's illness or injury.
    To address what is included in the benefit category for CRNAs in 
the CY 2013 proposed rule, we assessed our current regulations and 
subregulatory guidance, and determined that the existing guidance does 
not specifically address whether chronic pain management is included in 
the CRNA benefit. In the Internet Only Manual (Pub 100-04, Ch 12, Sec 
140.4.3), we discuss the medical or surgical services that fall under 
the ``related care'' language stating: ``These may include the 
insertion of Swan Ganz catheters, central venous pressure lines, pain 
management, emergency intubation, and the pre-anesthetic examination 
and evaluation of a patient who does not undergo surgery.'' Some have 
interpreted the reference to ``pain management'' in this language as 
authorizing direct payment to CRNAs for chronic pain management 
services, while others have taken the view that the services 
highlighted in the manual language are services furnished in the 
perioperative setting and refer only to acute pain management 
associated with the surgical procedure.
    After assessing in the proposed rule (see 77 FR 44788) the 
information available to us, we concluded that chronic pain management 
was an evolving field, and we recognized that certain states have 
determined that the scope of practice for a CRNA should include chronic 
pain management to meet health care needs of their residents and ensure 
their health and safety. We also found that several states, including 
California, Colorado, Missouri, Nevada, South Carolina, and Virginia, 
were debating whether to include pain management in the CRNA scope of 
practice. After determining that the scope of practice for CRNAs was 
evolving and that there was not a clear answer on pain management 
specifically, we proposed to revise our regulations at Sec.  410.69(b) 
to define the statutory benefit for CRNA services with deference to 
state scope of practice laws. Specifically, we proposed to add the 
following language: ``Anesthesia and related care includes medical and 
surgical services that are related to anesthesia and that a CRNA is 
legally authorized to perform by the state in which the services are 
furnished.'' We explained that this proposed definition would set a 
Medicare standard for the services that can be furnished and billed by 
CRNAs while allowing appropriate flexibility to meet the unique needs 
of each state. The proposal also dovetailed with the language in 
section 1861(bb)(1) of the Act requiring the state's legal 
authorization to furnish CRNA services as a key component of the CRNA 
benefit category. Finally, we stated that the proposed benefit category 
definition was also consistent with our policy to recognize state scope 
of practice as defining the services that can be furnished and billed 
by other NPPs.
    The following is a summary of the comments we received regarding 
the proposal to revise our regulations at Sec.  410.69(b) to define the 
statutory description of CRNA services. We received a significant 
volume of comments from specialty groups, individual physicians, and 
practitioners, including CRNAs and Student Registered Nurse 
Anesthetists (SRNAs), educational program directors, and patients, who 
strongly supported defining the CRNA benefit broadly. There were also 
many commenters who strongly opposed this proposal, including specialty 
groups, individual physicians and practitioners, patients, educational 
program directors, and a patient advocacy group.
    Comment: Among those supporting the concept of our proposal, we 
received several comments suggesting alternative regulatory definitions 
of the statutory benefit category phrase, ``anesthesia and related 
care.'' Many commenters said that CMS should allow CRNAs to practice to 
the full extent of state law. Some commenters provided alternative 
definitions for anesthesia and related care. These included ``medical 
and surgical services that are related to anesthesia or that a CRNA is 
legally authorized to perform by the State in which the services are 
furnished,'' ``medical and surgical services that are related to 
anesthesia, including chronic pain management services unless 
specifically prohibited or outside the scope of the CRNA's license to 
practice,'' ``medical services, surgical services, and chronic and 
acute pain management services that a CRNA is legally authorized to 
perform by the State in which the services are furnished,'' ``medical 
and surgical services a CRNA is legally authorized to perform by the 
state in which services are furnished and which are done to provide 
surgical or obstetrical anesthesia or alleviate post-operative or 
chronic pain,'' and ``medical and surgical services that are related to 
anesthesia, including chronic pain management, unless a CRNA is legally 
prohibited to perform by the State in which the services are 
furnished.'' One commenter made the point that Medicare should use a 
definition that included coverage of advanced practice registered nurse 
services that are within the scope of practice under applicable state 
law, just as physicians' services are now covered.

[[Page 69007]]

    Other commenters referenced preamble text in our 1992 final rule, 
which states ``we describe related care services as * * * pain 
management services, and other services not directly connected with the 
anesthesia service or associated with the surgical service'' and noted 
that historically, related care services have been recognized as a 
different class of anesthesia services, which may or may not be related 
to anesthesia. One commenter requested that we define ``related care'' 
separately from anesthesia, as ``medical and surgical services not 
directly related to anesthesia, including but not limited to the 
insertion of arterial lines, central venous pressure lines, and Swan 
Ganz catheters, acute and chronic pain management and emergency 
intubation, and that a CRNA is legally authorized to perform by the 
state in which the services are furnished.''
    Some commenters pointed to Medicare policies allowing other 
advanced practice nurses such as nurse practitioners or clinical nurse 
specialists to furnish and bill for physicians' services as support for 
recognizing a similar interpretation of the scope of CRNA practice. 
Commenters stated that CRNAs should be able to practice to the full 
extent of state law. Commenters cited the Institute of Medicine report 
[The Future of Nursing: Leading Change, Advancing Health, 11/17/10] 
that stated that nurses should be able to practice to the full extent 
of their education and training.
    Our proposal to define related care as ``related to anesthesia'' 
resulted in various views as to whether this would include pain 
management and other services. Some stated that it restricted the 
benefit category, but others believed that it expanded it. The 
commenters further stated that there are no chronic, long-term, 
anesthesia related services that occur outside the operating room or 
recovery room where the practice of anesthesia is appropriate. Others 
stated that chronic pain management services are outside the scope of 
perioperative related care defined in the Act, and that chronic pain is 
not related to anesthesia.
    Response: After reviewing comments regarding our proposed 
definition of ``anesthesia and related care,'' we believe that the 
proposed regulation language stating that ``Anesthesia and related care 
includes medical and surgical services that are related to anesthesia 
and that a CRNA is legally authorized to perform by the state in which 
the services are furnished'' would not accomplish our goals. It would 
require updating as health care evolves and as CRNA practice changes. 
It also would continue Medicare's differentiation between CRNAs and 
other NPPs because the Medicare benefit for other NPPs relies more 
heavily on the NPPs' authority under state law. In addition, we agree 
with commenters that the primary responsibility for establishing the 
scope of services CRNAs are sufficiently trained and, thus, should be 
authorized to furnish, resides with the states. We agree with 
commenters that, as CRNA training and practice evolve, the state scope 
of practice laws for CRNAs serve as a reasonable proxy for what 
constitutes ``anesthesia and related care.'' Therefore, we are revising 
Sec.  410.69(b) to define the statutory benefit category for CRNAs, 
which is specified as ``anesthesia and related care,'' as ``those 
services that a certified registered nurse anesthetist is legally 
authorized to perform in the state in which the services are 
furnished.'' By this action, we are defining the Medicare benefit 
category for CRNAs as including any services the CRNA is permitted to 
furnish under their state scope of practice. In addition, this action 
results in CRNAs being treated similarly to other advanced practice 
nurses for Medicare purposes. This policy is consistent with the 
Institute of Medicine's recommendation that Medicare cover services 
provided by advanced practice nurses to the full extent of their state 
scope of practice. CMS will continue to monitor state scope of practice 
laws for CRNAs to ensure that they do not expand beyond the appropriate 
bounds of ``anesthesia and related care'' for purposes of the Medicare 
program.
    Comment: Some commenters suggested that the proposal expands the 
scope of practice of CRNAs into the practice of medicine, and that the 
proposal undermines medical education, the practice of medicine, and 
the pain medicine specialty by equating nurses with physicians. 
Commenters further stated that such proposals, which lead to 
privileging and reimbursement for nonphysician practitioners that are 
identical to that of physicians, decrease the incentives to complete 
the rigorous training involved in medical school. Others stated that 
the proposal would interfere with the authority of states to regulate 
scope of practice.
    Response: We acknowledge the concerns of the physician community; 
however, the intent of the proposal is not to undermine medical 
education, the practice of medicine, or the pain medicine specialty, 
but to establish parity between the scope of the Medicare benefit 
category for CRNAs and the CRNA authority to practice under state law. 
This proposal does not address payment rates for anesthesiologists or 
CRNAs. The statutory provisions that establish payment rates for CRNAs 
at the same rate as anesthesiologists are relatively longstanding. Our 
proposal in no way is intended to interfere with the authority of 
individual states; rather, it largely defers to individual states to 
determine the scope of practice for CRNAs. We believe that using state 
scope of practice law as a proxy for services encompassed in the 
statutory benefit language ``anesthesia and related care'' is 
preferable to choosing among individual interpretations of whether 
particular services fall within the scope of ``anesthesia and related 
care.'' Moreover, we believe states are in an ideal position to gauge 
the status of, and respond to changes in, CRNA training and practice 
over time that might warrant changes in the definition of the scope of 
``anesthesia services and related care'' for purposes of the Medicare 
program. As such, we believe it is appropriate to look to state scope 
of practice law as a proxy for the scope of the CRNA benefit.
    Comment: Many commenters addressed the extent to which the 
standards for nurse anesthesia curricula and the content of nurse 
anesthesia educational programs do or do not prepare CRNAs to practice 
outside the perioperative setting, and specifically, to furnish chronic 
pain services. We received detailed comments regarding the necessary 
components of chronic pain services and conflicting information about 
whether CRNAs are trained or licensed to furnish such services. We 
received thorough descriptions of the skills required to furnish 
chronic pain services and the necessity of medical education to prepare 
one to furnish such services. Commenters also provided information 
about the inherent dangers involved in chronic pain services, the 
manner in which technical skills in chronic pain procedures are 
obtained, and the ways in which chronic pain services are or are not 
similar to other procedures performed by CRNAs in the perioperative 
setting and for labor epidurals. We received many comments from the 
physician community with concerns about the possibility of the 
furnishing of procedures that are not indicated due to lack of medical 
knowledge required to screen out patients who are not appropriate 
candidates for procedures.
    Some commenters pointed to the long period of time during which 
CRNAs have furnished chronic pain services with no documented 
differences in

[[Page 69008]]

patient outcomes, while others expressed concern about negative 
outcomes observed from inadequately trained providers. Descriptions 
were also provided regarding lawsuits at the state level that have 
debated whether CRNAs are qualified to furnish chronic pain services, 
the importance of medical regulation in protecting patients who may not 
be able to differentiate between different types of providers, and the 
role of the medical education process in ensuring competency of 
physicians. Other commenters opined that it is the responsibility of 
the individual provider to assure his or her competency for any and all 
procedures furnished.
    Response: We acknowledge the varying perspectives about the 
education and training of CRNAs to furnish chronic pain management 
services as well as differences of opinion regarding the safety of 
chronic pain management services furnished by CRNAs. We are unable, at 
this time, to assess the appropriateness of the CRNA training relating 
to specific procedures. We are also unaware of any data regarding the 
safety of chronic pain management services when furnished by different 
types of professionals. However, we expect that states take into 
account all appropriate practitioner training and certifications, as 
well as the safety of their citizens, when making decisions about the 
scope of services CRNAs are authorized to furnish and providing 
licenses to individual practitioners in their jurisdictions.
    We note that we did not address the services that CRNAs are trained 
and qualified to furnish in our proposal or in this final rule with 
comment period. Our proposal and this final rule merely define what 
services are included in the scope of the Medicare benefit established 
in section 1861(bb)(1) of the Act. The definition that we are adopting 
uses the state scope of practice as a proxy for what the term 
``anesthesia and related care'' in section 1861(bb)(1) of the Act means 
and thus leaves decisions about what services constitute anesthesia and 
related care to be resolved by the state. This appropriately recognizes 
the actions of state bodies formed specifically to address the issue of 
what constitutes the scope of practice for a CRNA. We believe that 
determining whether or not CRNAs are adequately trained and can safely 
furnish chronic pain management is an appropriate decision for state 
bodies. This proposal is consistent with the Institute of Medicine's 
report on advanced practice nursing, which recommends that Medicare 
should ``include coverage of advanced practice registered nurse 
services that are within the scope of practice under applicable state 
law, just as physicians' services are now covered.''
    We agree with commenters that it also is the responsibility of 
individual practitioners (physicians and CRNAs) to ensure that they are 
adequately trained and qualified to furnish any and all procedures that 
they furnish.
    Comment: We received comments about the cost of CRNA services 
relative to those furnished by anesthesiologists. Commenters stated 
that chronic pain management services are less costly than surgical 
interventions, and that the services of CRNAs are more cost-effective 
for the Medicare program. Others stated that allowing CRNAs to furnish 
these services could increase spending due to the provision of 
inappropriate services and the complications that could result from 
procedures furnished by CRNAs who are not adequately trained.
    Response: We do not have sufficient evidence to determine that 
chronic pain management interventions reduce the need for surgical 
interventions, or that there would be increased provision of 
inappropriate services and complications under a definition of the 
Medicare benefit category that defines ``anesthesia and related care'' 
as services a CRNA is authorized to furnish in his or her state. 
Spending for services under Medicare is not a factor in determining 
whether the statutory benefit encompasses particular services. However, 
we would note that CRNAs are generally paid at the same rate as 
anesthesiologists so there are no direct cost savings when services are 
furnished by CRNAs.
    Comment: We received comments regarding special concerns about 
access in rural areas. Commenters stated that CRNAs help patients avoid 
traveling long distances and long waits for appointments by having 
local providers available. Furthermore, commenters noted that as the 
population ages, the demand for chronic pain management services will 
increase. Commenters stated that decreased access to chronic pain 
management services (which would result if CRNAs are not permitted to 
furnish and bill for these services) would result in more 
institutionalization, reduced quality of life, longer wait times, and 
increased costs. Others stated that chronic pain management services 
are not emergent care services; that chronic pain management is a 
specialty that should be furnished by those with a high degree of sub-
specialty training, and that pain physicians can be spread out over 
large areas since only a small minority of patients need procedural 
care. Some commenters cited a shortage of pain management physicians 
qualified to treat chronic pain, others stated that there is no 
shortage of such providers, while still others stated that the proposal 
may increase access, but at the expense of having unqualified 
providers. Finally, some commenters stated that procedures furnished 
improperly pose a greater danger than a lack of available services.
    Response: While assuring access for beneficiaries in rural areas is 
a priority for Medicare, we do not have sufficient data to evaluate the 
presence or degree of problems of access to chronic pain management 
services in rural areas. We also do not have evidence that CRNAs have 
furnished chronic pain management services in quantities sufficient to 
improve any access problems in rural areas. We further lack sufficient 
data to determine whether beneficiaries who lack access to a CRNA care 
are more likely to suffer the negative outcomes cited by commenters. 
This lack of information does not deter us taking action to define the 
statutory benefit as it is not necessary to conclude that beneficiaries 
will suffer negative consequences to prompt us to act. Rather we are 
issuing this regulation based upon the factors we described above.
    Comment: We received comments regarding those services included in 
the definition of anesthesia and related care, as well as services 
``related to anesthesia.'' Some commenters stated that chronic pain 
management services are not directly ``related to anesthesia'' but 
still constitute ``related care''. Other commenters stated that CMS has 
already acknowledged in early preamble language that CRNAs may furnish 
services not directly related to anesthesia. Still other commenters 
stated that chronic pain services are not related to anesthesia in any 
way. One commenter suggested that CMS has already differentiated 
between anesthesia related acute pain and interventional chronic pain 
based on the creation of different specialty codes for anesthesia and 
chronic pain. One commenter requested that CMS make a regulatory change 
to allow CRNAs to order diagnostic tests in order to effectively 
provide chronic pain management services.
    Response: We believe that the statutory intent was to include 
services not directly related to the peri-anesthetic setting in the 
CRNA benefit category. We believe that relying on state scope of 
practice to define the services encompassed in anesthesia and related 
care is preferable to choosing among conflicting definitions of

[[Page 69009]]

``anesthesia and related care'' or listing the specific services that 
fall within that benefit category. Rather, we believe states are in a 
better position to gauge the status of, and respond to changes in, CRNA 
training and practice over time that might warrant changes in the 
definition of the scope of ``anesthesia services and related care'' for 
purposes of the Medicare program. As such, we believe it is appropriate 
to look to state scope of practice law as a proxy for the scope of the 
CRNA benefit.
    Comment: Several commenters expressed concern with the wording of 
our proposal; specifically, that the term ``related to anesthesia'' was 
unclear and subject to interpretation. States do not typically define 
services ``related to anesthesia'' in their state scope of practice 
acts.
    Response: We agree with commenters that the wording of the proposal 
was unclear. In response to these and other commenter concerns, we are 
adopting a modification of our proposal to rely on state scope of 
practice to define the services encompassed in ``anesthesia and related 
care'' under section 1861(bb)(1) of the Act.
    Comment: One commenter requested that we provide clarification for 
the payment of CRNA services furnished; specifically, which medical 
and/or surgical CRNA services are eligible for cost-based reimbursement 
(for CRNA pass-through payments or Method II billing for Critical 
Access Hospitals).
    Response: We will be modifying the Internet Only Manual to reflect 
the change we are making in this final rule with comment period. The 
request for the list of services that are eligible for cost-based 
reimbursement is beyond the scope of this rule, as it pertains to 
hospital billing. We anticipate this matter will be addressed 
separately in a forthcoming transmittal.
    Comment: Commenters requested that CMS instruct Medicare 
contractors to review prior denials of claims for CRNA services prior 
to any final rule determination of the scope of the CRNA Medicare 
benefit category.
    Response: This definition of the Medicare benefit for CRNAs will be 
effective for services furnished on or after January 1, 2013. It does 
not apply to services furnished prior to this point so we will not be 
instructing contractors to review prior denials of claims.
    After consideration of all comments, we are finalizing our proposal 
with modification to revise our regulations at Sec.  410.69(b) to 
define ``Anesthesia and related care'' under the statutory benefit for 
CRNA services as follows: ``Anesthesia and related care means those 
services that a certified registered nurse anesthetist is legally 
authorized to perform in the state in which the services are 
furnished.'' We will continue to monitor the state scope of practice 
laws for CRNAs in order to insure that the use of state scope of 
practice as a proxy to define ``anesthesia services and related care'' 
is consistent with the goals and needs of Medicare program.

L. Ordering of Portable X-Ray Services

    Portable x-ray suppliers furnish diagnostic imaging services at a 
beneficiary's location. These services are most often furnished in 
residences, including private homes and alternative living facilities 
(for example, nursing homes) rather than in a traditional clinical 
setting (for example, a doctor's office or hospital). The supplier 
transports mobile diagnostic imaging equipment to the beneficiary's 
location, sets up the equipment, and administers the test onsite. The 
supplier may interpret the results itself or it may furnish the results 
to an outside physician for interpretation. Portable x-ray services may 
avoid the need for expensive ambulance transport of frail beneficiaries 
to a radiology facility or hospital.
    Our Medicare Conditions for Coverage (CfC) regulations require that 
``portable x-ray examinations are performed only on the order of a 
doctor of medicine (MD) or doctor of osteopathy (DO) licensed to 
practice in the state * * *'' (Sec.  486.106(a)). With the exception of 
portable x-ray services, Medicare payment regulations at Sec.  
410.32(a) allow physicians, as defined in section 1861(r) of the Act, 
and certain nonphysician practitioners at Sec.  410.32(a)(2) to order 
diagnostic x-ray tests, diagnostic laboratory tests, and other 
diagnostic tests as long as those nonphysician practitioners are 
operating within the scope of their authority under state law and 
within the scope of their Medicare statutory benefit. Physicians other 
than an MD or DO recognized to order diagnostic tests under Sec.  
410.32(a) include the following limited-license practitioners: Doctor 
of optometry, doctor of dental surgery and doctor of dental medicine, 
and doctor of podiatric medicine. Nonphysician practitioners authorized 
to order diagnostic tests under Sec.  410.32(a)(2) include nurse 
practitioners, physician assistants, clinical nurse specialists, 
certified nurse-midwives, clinical psychologists, and clinical social 
workers. Nonphysician practitioners have become an increasingly 
important component of clinical care, and we believe that delivery 
systems should take full advantage of all members of a healthcare team, 
including nonphysician practitioners.
    Although current Medicare regulations limit the ordering of 
portable x-ray services to a MD or a DO, the Office of the Inspector 
General (OIG) in its December 2011 report entitled Questionable Billing 
Patterns of Portable X-Ray Suppliers (OEI-12-10-00190) found that 
Medicare was paying for portable x-ray services ordered by physicians 
other than MDs and DOs, including podiatrists and chiropractors, and by 
nonphysician practitioners. We issued a special education article on 
January 20, 2012, through the Medicare Learning Network (MLN) 
``Important Reminder for Providers and Suppliers Who Provide Services 
and Items Ordered or Referred by Other Providers and Suppliers,'' 
reiterating our current policy that portable x-ray services can only be 
ordered by a MD or DO. The article is available at http://www.cms.gov/MLNMattersArticles/downloads/SE1201.pdf on the CMS Web site. Since the 
publication of the above mentioned article, several stakeholders have 
told us that members of the healthcare community fail to distinguish 
ordering for portable x-ray services from ordering for other diagnostic 
services where our general policy is to allow nonphysician 
practitioners and physicians other than MDs and DOs to order diagnostic 
tests within the scope of their authority under state law and their 
Medicare statutory benefit. They report finding the different 
requirements confusing.
    We proposed to revise our current regulations, which limit ordering 
of portable x-ray services to only a MD or DO, to allow other 
physicians and nonphysician practitioners acting within the scope of 
their Medicare benefit and state law to order portable x-ray services. 
Specifically, we proposed revisions to the CfC at Sec.  486.106(a) and 
Sec.  486.106(b) to permit portable x-ray services to be ordered by a 
physician or nonphysician practitioner in accordance with the ordering 
policies for other diagnostic services under Sec.  410.32(a).
    This proposed change would allow a MD or DO, as well as a nurse 
practitioner, clinical nurse specialist, physician assistant, certified 
nurse-midwife, doctor of optometry, doctor of dental surgery and doctor 
of dental medicine, doctor of podiatric medicine, clinical 
psychologist, and clinical social worker to order portable x-ray 
services within the scope of their authority under state law and the 
scope of their Medicare benefit. Although all of these physicians and 
nonphysician practitioners are authorized to order

[[Page 69010]]

diagnostic services in accordance with Sec.  410.32(a), their Medicare 
benefit and state scope of practice delimits the services that they can 
furnish. For example, the state scope of practice for clinical 
psychologists typically is limited to the diagnosis and treatment of 
mental health disorders and related services. The scope of the Medicare 
benefit for clinical social workers under 1861(hh) of the Act limits 
their ability to order diagnostic tests to mental health related tests.
    Comment: The majority of commenters supported allowing additional 
nonphysician and limited-license practitioners to order portable x-ray 
services. The commenters stated that this proposal is consistent with 
the increasing role for practitioners other than MDs or DOs in health 
care delivery today, with nonphysician and limited license practitioner 
training and practice, with staffing decisions for care furnished in 
nursing homes and other home care settings, and with the scope of 
practice for various practitioners under state law.
    Response: We thank the commenters for their support and agree with 
these comments. As we stated in the CY 2013 PFS proposed rule, we 
believe nonphysician practitioners have become an increasingly 
important component of clinical care, and we believe that delivery 
systems should take full advantage of all members of a healthcare team, 
including nonphysician practitioners. Allowing limited-license and 
nonphysician practitioners to order portable x-ray services within the 
scope of their practice will enhance the role of those practitioners.
    Comment: Some commenters either questioned or opposed the ability 
of certain nonphysician or limited-license practitioners to order 
portable x-ray services. The commenters stated that by including 
clinical psychologists and clinical social workers, our proposal was 
too broad as these nonphysician practitioners do not have the 
appropriate education or training to order portable x-ray services. In 
addition, they noted that the ordering of portable x-ray services is 
not within clinical psychologists' and clinical social workers' state 
scopes of practice. One commenter stated that the ordering authority 
for portable x-ray services should only be expanded to physician 
assistants, nurse practitioners, and doctors of podiatric medicine, 
stating that there is no convincing or clinically supportable rationale 
for other practitioners identified in Sec.  410.32(a), including 
certified nurse-midwives, doctors of optometry, doctors of dental 
surgery and doctors of dental medicine, clinical social workers, and 
clinical psychologists, to order portable x-ray services. A few 
commenters stated that some nonphysician and limited-license 
practitioners have not been trained to diagnose an illness, to use x-
rays as part of the diagnosis and treatment of a beneficiary, to know 
how to interpret an x-ray, and to plan a course of medically 
appropriate follow-up treatment. Commenters requested the clinical 
rationale and FY 2011 data on portable x-ray ordering by select 
nonphysician practitioners. One commenter stated that deferring to 
state scope of practice laws for limited- license and nonphysician 
practitioners did not constitute sufficient stewardship by Medicare to 
ensure payment for appropriate services.
    Response: We disagree. We proposed to modify our rule for ordering 
portable x-ray services to make it consistent with rules for ordering 
all other diagnostic tests. Our proposed policy would eliminate the 
specific requirements limiting the types of practitioners who can order 
portable x-ray services, and instead place ordering for portable x-ray 
services under the general regulations governing ordering of diagnostic 
tests in Sec.  410.32(a)(2). Under Sec.  410.32(a)(2), limitations on 
the ability of various practitioners to order diagnostic tests are 
established by the practitioner's scope of practice under state law and 
the scope of the practitioner's Medicare benefit. The current 
regulation applies to x-rays (other than portable x-rays), MRI, CT 
scans, and a host of other diagnostic tests that are more complex and 
potentially higher risk than portable x-ray services. We do not believe 
that nonphysician and limited-license practitioners who can routinely 
order and employ the results of reasonable and necessary x-rays, MRIs, 
and CT scans should continue to be precluded from ordering and 
utilizing portable x-ray imaging in the same manner. Further, most of 
the nonphysician practitioners listed in Sec.  410.32(a)(2) are 
authorized by statute to furnish physician services under the scope of 
their Medicare benefit and state scope of practice, including ordering, 
interpreting, and using test results to treat a beneficiary.
    With regard to clinical social workers, under section 1861(hh) of 
the Act, the scope of their Medicare benefit is further limited to 
services ``for the diagnosis and treatment of mental illnesses.'' 
Therefore, the proposed change to our regulations to allow clinical 
social workers to order portable x-ray services in the same way that 
they are permitted to order other diagnostic tests under Sec.  
410.32(a) would not allow clinical social workers to order portable x-
ray services. Portable x-ray services fall within the scope of the 
Medicare benefit for the remaining nonphysician and limited-license 
practitioners, including clinical psychologists. As noted above, we 
believe state scope of practice laws might limit ordering of portable 
x-ray services by clinical psychologists or other practitioners. 
Additionally, certain other practitioners are unlikely to have a reason 
to order portable x-ray services, such as doctors of optometry. We have 
no evidence to suggest that clinical psychologists or other limited 
license or nonphysician practitioners are ordering significant numbers 
of x-rays, CTs, and MRIs under Sec.  410.32(a) authority at this time. 
We do not expect any marked change in ordering patterns following the 
change in regulation to allow for ordering of portable x-ray services.
    With regard to the request for FY 2011 data on portable x-ray 
ordering by select nonphysician practitioners, we do not believe this 
or any recent data on portable x-ray ordering patterns for limited-
license or nonphysician practitioners would be meaningful information 
regarding future potential ordering patterns for portable x-ray 
services because these practitioners are not permitted to order 
portable x-ray services under the current regulation. We believe our 
proposal is consistent with our current regulations that generally 
allow nonphysician practitioners to order diagnostic services, and the 
agency's interest in having delivery systems take full advantage of all 
members of a healthcare delivery team. We describe below our intention 
to design monitoring systems that will capture excessive ordering.
    Comment: Several commenters requested that CMS clarify that the 
proposal for CY 2013 is actually a clarification of long standing 
policy that nonphysician practitioners have been able to order portable 
x-ray services since implementation of the their authority to order 
diagnostic tests under Sec.  410.32(a)(2) and requested that CMS 
indicate that this authority is not a change in policy effective 
January 1, 2013. Commenters stated that the regulations at Sec.  
410.32(a), established as a result of the Balanced Budget Act (BBA) of 
1997 (Pub. L. 105-33), were promulgated long after the 1969 CfC 
requirement at Sec.  486.106 and that the more recent regulation trumps 
older requirements. These commenters stated that it was merely an 
oversight on the part of CMS when the agency failed to update the 
regulations at Sec.  486.106. They also stated that some manual 
language and educational materials have

[[Page 69011]]

been inconsistent in communicating that only MDs or DOs can order 
portable x-ray services over the years. Commenters requested that if 
CMS does conclude that allowing nonphysician and limited-license 
practitioner ordering of portable x-ray services is a change in policy 
for CY 2013, then CMS should specify in the preamble that no repayments 
or other actions are required, including recoupment efforts as a result 
of the OIG's findings in the December 2011 report entitled Questionable 
Billing Patterns of Portable X-ray Suppliers (OEI 12-10-00190).
    Response: There is a longstanding regulation requiring ordering of 
portable x-ray services by an MD or DO at Sec.  486.106(a) and Sec.  
486.106(b). There is a specific section of the regulation under Sec.  
410.32 dedicated to portable x-ray services, Sec.  410.32(c), that 
explicitly cross-references the requirements under Sec.  486.106. As 
such, we do not believe that, when revising the regulation at Sec.  
410.32 to expand the general rules for ordering diagnostic tests under 
the BBA, the agency simply failed to notice the requirement in the same 
section relating to portable x-ray tests. Further, the specific 
requirement for MD or DO ordering of portable x-ray services under 
Sec.  410.32(c) explicitly excepts portable x-ray services from the 
general ordering rules under Sec.  410.32(a). The only means to revise 
the regulations containing this longstanding CfC is through notice and 
comment rulemaking, which was the purpose of the proposal we made in 
the CY 2013 proposed rule. The change in policy to allow limited-
license and nonphysician practitioners to order portable x-ray services 
will be effective beginning in CY 2013.
    The OIG report concluded, and CMS concurred, that CMS should recoup 
payment for portable x-ray services identified under the report as 
ordered by limited-license physicians and nonphysician practitioners, 
other than a MD or DO in accordance with our regulations at Sec.  
410.32(c) and Sec.  486.106 since this was consistent with this 
recommendation. We will continue our recoupment efforts in response to 
the OIG report. However, we have instructed our payment contractors 
that the ordering of portable x-ray services should not be made a 
priority for additional medical review activity beyond claims 
identified in the OIG audit.
    After considering the public comments received, we are finalizing 
our CY 2013 proposal to revise the CfC at Sec.  486.106(a) and Sec.  
486.106(b) to permit portable x-ray services to be ordered by 
physicians or nonphysician practitioners in accordance with the general 
ordering policies for other diagnostic services as specified under 
Sec.  410.32(a). Therefore, effective for services furnished on or 
after January 1, 2013, the following practitioners will be permitted to 
order portable x-rays in accordance with Medicare regulations and 
subject to their scope of practice under state law and their applicable 
Medicare statutory benefit: A physician (including an MD or a DO, 
doctor of optometry, doctor of dental surgery and doctor of dental 
medicine, and doctor of podiatric medicine), or a nurse practitioner, 
clinical nurse specialist, physician assistant, certified nurse-
midwife, or clinical psychologist, where the ordering of portable x-ray 
services is within the scope of their practice under state law. As 
discussed above, although clinical social workers are permitted to 
order diagnostic tests under Sec.  410.32(a)(2), the scope of their 
Medicare benefit is limited to services for the diagnosis and treatment 
of mental illnesses. As such, we do not believe these nonphysician 
practitioners would need to order portable x-ray services. We also are 
finalizing revisions to the language included under Sec.  410.32(c) 
specific to portable x-ray services to recognize the same authority for 
physicians and nonphysician practitioners to order diagnostic tests as 
is prescribed for other diagnostic services under Sec.  410.32(a). 
Finally, we are finalizing two technical corrections that we proposed 
to make in the CY 2013 PFS proposed rule. One is to Sec.  410.32(d)(2), 
where we currently cite paragraph (a)(3) for the definition of a 
qualified nonphysician practitioner. The definition of a qualified 
nonphysician practitioner is currently found in paragraph (a)(2), while 
paragraph (a)(3) does not exist; therefore, we are correcting the 
citation. The second technical correction is in Sec.  410.32(b)(2)(iii) 
to better reflect the statutory authority to furnish neuropsychological 
testing in addition to psychological testing. We did not receive any 
comments on these proposed technical corrections. The documentation 
requirement for this paragraph remains unchanged.
    Although we believe it is appropriate to finalize policy to allow 
nonphysician practitioners and limited-license practitioners to order 
portable x-ray services within the scope of their authority under state 
law and the scope of their Medicare statutory benefit given overall 
changes in health care delivery practice patterns since the beginning 
of the Medicare program, we remain concerned about the OIG's recent 
findings. The OIG observed other questionable billing patterns for 
portable x-ray services in addition to ordering by nonphysician 
practitioners. Of specific note was the observation that some portable 
x-ray suppliers are furnishing services on the same day that the 
beneficiary also receives services in a clinical setting, such as the 
physician office or hospital. Under current regulations at Sec.  
486.106(a)(2), the order for portable x-ray services must include a 
statement concerning the condition of the beneficiary which indicates 
why portable x-ray services are necessary. If, on the same day that a 
portable x-ray service was furnished, the patient was able to travel 
safely to a clinical setting, we believe the statement of need for 
portable x-ray services could be questionable. We also are concerned 
that the OIG observed some portable x-ray suppliers billing for 
multiple trips to a facility on the same day Medicare makes a single 
payment for each trip the portable x-ray supplier makes to a particular 
location. We make available several modifiers to allow the portable x-
ray supplier to indicate the number of beneficiaries served on a single 
trip to a facility. We expect portable x-ray suppliers to use those 
modifiers and not to bill multiple trips to the same facility on a 
single day when only one trip was made. Additionally, we strongly 
encourage portable x-ray suppliers to make efficient use of resources 
and consolidate trips, to the extent it is clinically appropriate to do 
so, rather than making multiple trips on the same day.
    Comment: Several stakeholders provided scenarios where a portable 
x-ray service would be medically necessary on the same day as a 
hospital, physician office, or other clinical setting.
    Response: We agree that there may be unusual circumstances when 
portable x-ray services could be appropriate with a same day visit to a 
hospital, physician office, or other clinical setting. Proper 
documentation of the rationale for such same day occurrences would be 
required to substantiate the necessity for those services.
    In conjunction with our proposal to expand the scope of physicians 
and nonphysician practitioners who can order portable x-ray services, 
we intend to develop, as needed, monitoring standards predicated by 
these and other OIG findings. In addition, we will be conducting data 
analysis of ordering patterns for portable x-ray and other diagnostic 
services to determine if additional claims edits, provider audits, or 
fraud investigations are required to prevent abuse of these services 
and to allow for the collection of any potential

[[Page 69012]]

overpayments. We encourage physicians and practitioners, as with any 
diagnostic test, to proactively determine and document the medical 
necessity for this testing.
    Comment: One commenter noted that our proposal to expand the scope 
of ordering for portable x-ray services was at odds with our statements 
indicating our intent to engage in greater monitoring of the delivery 
of portable x-ray services overall. The commenter recommended that we 
target any new program integrity efforts to practitioner groups where 
there is evidence of abuse.
    Response: We disagree. We believe allowing nonphysician and 
limited-license practitioners to order portable x-ray services is 
consistent with statutory authority and changes in health care 
delivery. Any monitoring effort would target more generally, the 
utilization and delivery of portable x-ray services, of which of the 
actual x-ray service is only one small component.
    In the proposed rule (77 FR 44791), we solicited comments and 
suggestions for updating the current regulations at 42 CFR Part 486, 
Subpart C--Conditions for Coverage: Portable X-Ray Services through 
future rulemaking. Below are our responses to public comments on 
suggestions for future rulemaking at 42 CFR Part 486, Subpart C--
Conditions for Coverage: Portable X-Ray Services.
    Comment: One commenter suggested CMS clarify the differences 
between portable x-ray providers and mobile independent diagnostic 
testing facilities (IDTFs). The commenter specifically recommended that 
CMS clarify whether portable x-ray suppliers and mobile IDTFs can 
furnish the same services to Medicare beneficiaries or whether there 
are limitations on the types of services that portable x-ray suppliers 
and IDTFs can furnish. The commenter also recommended that CMS 
establish educational and training requirements for portable x-ray 
suppliers and IDTF technicians.
    Response: We appreciate these comments and will take them into 
consideration when undertaking future rulemaking.

M. Addressing Interim Final Relative Value Units (RVUs) From CY 2012 
and Establishing Interim Final RVUs for CY 2013

    Section 1848(c)(2)(B) of the Act requires that we review RVUs for 
physicians' services no less often than 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. To facilitate the review and 
appropriate adjustment of potentially misvalued services, section 
1848(c)(2)(K)(iii) specifies that the Secretary may use existing 
processes to receive recommendations; conduct surveys, other data 
collection activities, studies, or other analyses as the Secretary 
determined to be appropriate; and use analytic contractors to identify 
and analyze potentially misvalued services, conduct surveys or collect 
data. In accordance with section 1848(c)(2)(K)(iii) of the Act, we 
identify potentially misvalued codes, and 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 other public commenters.
    For many years, the AMA RUC has provided CMS with recommendations 
on the appropriate relative values for PFS services. 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. 
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.
    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 malpractice 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, after 
conducting a clinical review of the codes, we determine whether we 
agree with the recommended work RVUs for a service (that is, whether we 
agree the AMA RUC-recommended valuation is accurate). If we disagree, 
we determine an alternative value that 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 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.
    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 and new information from the 
commenters concerning clinical aspects of the physician work associated 
with the service (57 FR 55917) that were not already considered in 
making the interim valuation or the AMA RUC deliberations, we refer the 
service to a refinement panel, as discussed in further detail in 
section III.M.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

[[Page 69013]]

malpractice RVUs or direct PE inputs, in the following year's PFS final 
rule with comment period. We 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.
1. Methodology
    We conducted a clinical review of each code identified in this 
section and reviewed the current and recommended work RVUs, intensity, 
and time to furnish the pre-service, intra-service, and post-service 
activities, as well as other components of the service that contribute 
to the value. Our clinical review generally includes, but is not 
limited to, a review of information provided by the AMA RUC and other 
public commenters, medical literature, and comparative databases, as 
well as a comparison with other codes within the Medicare PFS, 
consultation with other physicians and healthcare professionals within 
CMS and the Federal Government, and the views based on clinical 
experience of the physicians on the PFS clinical review team. We also 
assessed the methodology and data used to develop the recommendations 
submitted to us by the AMA RUC and other public commenters and the 
rationale for the recommendations. As we noted in the CY 2011 PFS final 
rule with comment period (75 FR 73328 through 73329), there are a 
variety of methodologies and approaches used to develop 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 and 
recommended physician work and time values, as well as the intensity of 
the service, all relative to other services.
    Several years ago, to aid in the development of pre-service time 
recommendations for new and revised CPT codes, the AMA RUC created 
standardized pre-service time packages. The packages include pre-
service evaluation time, pre-service positioning time, and pre-service 
scrub, dress and wait time. Currently there are six pre-service time 
packages for services typically furnished in the facility setting, 
reflecting the different combinations of straightforward or difficult 
procedure, straightforward or difficult patient, and without or with 
sedation/anesthesia. Currently there are two pre-service time packages 
for services typically furnished in the nonfacility setting, reflecting 
procedures without and with sedation/anesthesia care.
    We have developed several standard building block methodologies to 
appropriately value services when they have very common billing 
patterns. As we have discussed in past rulemaking, most recently in the 
CY 2012 PFS final rule with comment period (76 FR 73107 through 73108), 
in cases where a service is typically furnished to a beneficiary on the 
same day as an evaluation and management (E/M) service, we believe that 
there is overlap between the two services in some of the activities 
furnished during the pre-service evaluation and post-service time. We 
believe that at least one-third of the physician time in both the pre-
service evaluation and post-service period is duplicative of work 
furnished during the E/M visit. Accordingly, in cases where we believe 
that the AMA RUC has not adequately accounted for the overlapping 
activities in the recommended work RVU and/or times, we adjust the work 
RVU and/or times to account for the overlap. The work RVU for a service 
is the product of the time involved in furnishing the service times the 
intensity of the work. Pre-service evaluation time and post-service 
time both have a long-established intensity of work per unit of time 
(IWPUT) of .0224, which means that 1 minute of pre-service evaluation 
or post-service time equates to .0224 of a work RVU. Therefore, in many 
cases where we remove 2 minutes of pre-service time and 2 minutes of 
post-service time from a procedure to account for the overlap with the 
same day E/M service, we also remove a work RVU of .09 (4 minutes x 
.0224 IWPUT) if we do not believe the overlap in time has already been 
accounted for in the work RVU. We continue to believe this adjustment 
is appropriate. The AMA RUC has recognized this valuation policy and, 
in many cases, addresses the overlap in time and work when a service is 
typically provided on the same day as an E/M service.
    We appreciate the creation and use of these standardized pre-
service time packages. However, we believe that services that involve 
only a local anesthetic agent do not typically involve the same amount 
of pre-service time as procedures involving sedation or non-local 
anesthesia care. We request that the AMA RUC consider assigning 
services that require only local anesthesia without sedation to the 
``no sedation/anesthesia care'' pre-service time package, or that the 
AMA RUC create one or more new pre-service time packages to reflect the 
pre-service time typically involved in furnishing local anesthesia 
without sedation.
    For many CPT codes that are typically billed on the same day as an 
E/M service, the recommendations from the AMA RUC state that the AMA 
RUC reviewed the work associated with the procedure, and adjusted the 
pre-service and/or post-service time to account for the work that is 
furnished as a part of the E/M service. For many codes, the AMA RUC 
made this adjustment from the pre-service evaluation time included in 
the AMA RUC-selected pre-service time package. However, as we noted 
above, we believe that the pre-service time packages for procedures 
with sedation or anesthesia care may overstate the time involved in 
furnishing services that involve only local or topical anesthesia 
without sedation. As a result, though the AMA RUC may have removed some 
pre-service time from the package to account for the same day E/M 
service, in a few instances, consistent with our established same day 
E/M reduction methodology discussed above, we further reduced the AMA 
RUC-recommended pre-service evaluation time to fully account for the 
overlapping time with the same day E/M service.
2. Finalizing CY 2012 Interim and CY 2013 Proposed Values for CY 2013
    In this section, we address the interim final values published in 
the CY 2012 PFS final rule with comment period (76 FR 73026 through 
73474), as subsequently corrected in the January 4, 2012 (77 FR 227 
through 232) correction notice; and the proposed values published in 
the CY 2013 PFS proposed

[[Page 69014]]

rule (77 FR 44722 through 45061). We discuss the results of the CY 2012 
refinement panels for certain CY 2012 interim final code values, 
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. The final CY 2013 direct PE database that lists the 
direct PE inputs is available on the CMS Web site under the downloads 
for the CY 2013 PFS final rule with comment period at: www.cms.gov/PhysicianFeeSched/. The final CY 2013 work, PE, and malpractice RVUs 
are displayed in Addendum B to this final rule with comment period at: 
www.cms.gov/PhysicianFeeSched/.
a. Finalizing CY 2012 Interim and Proposed Work RVUs for CY 2013
i. 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 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 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.
    Depending on the number and range of codes that are subject to 
refinement in a given year, we establish refinement panels with 
representatives from four 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). Typical panels 
have included 8 to 10 physicians across the four groups.
    Following the addition of section 1848(c)(2)(K) to the Act by 
Section 3134 of the Affordable Care Act, which authorized the Secretary 
to review potentially misvalued codes and make appropriate adjustments 
to the RVUs, we reassessed the refinement panel process. As detailed in 
the CY 2011 PFS final rule with comment period (75 FR 73306), we 
believed that 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, who then provide informed 
recommendations. Therefore, we indicated that we would continue the 
refinement process, but with administrative modification and 
clarification. We also noted that we would continue using the 
established composition that includes representatives from the four 
groups of physicians--clinicians representing the specialty most 
identified with the procedures in question, physicians with practices 
in related specialties, primary care physicians, and CMDs.
    One change relates to the calculation of the refinement panel 
results. The basis of the process is that following discussion of the 
information but without an attempt to reach a consensus, each member of 
the panel votes independently. 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). Over 
time, we found the statistical test used to evaluate the RVU ratings of 
individual panel members became less reliable as the physicians in each 
group 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). As a result, we 
eliminated the use of the statistical F-test and instead indicated that 
we would use the median work value of the individual panel members' 
ratings. We said that this approach would simplify the refinement 
process administratively, while providing a result 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. At the same time, we clarified that we have the final authority 
to set the RVUs, including making adjustments to the work RVUs 
resulting from the refinement process, and that we will make such 
adjustments if warranted by policy concerns (75 FR 73307).
    As we continue to strive to make the refinement panel process as 
effective an efficient as possible, we would like to remind readers 
that the refinement panels are not intended to review every code for 
which we did not propose to accept the AMA RUC-recommended RVUs. Rather 
the refinement panels are designed for situations where there is new 
information available that might provide a reason for a change in work 
values and for which a multi-specialty panel of physicians might 
provide input that would assist us in making work RVU decisions. 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 state they are requesting refinement 
panel review in their public comment letters.
    Furthermore we have asked commenters requesting refinement panel 
review to submit sufficient new 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 presented during the CY 2012 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. Thus, if the only 
information that a commenter has to present is information already 
considered by the AMA RUC, referral to a refinement panel is not 
appropriate. To facilitate selection of codes for refinement, we 
request that commenters seeking refinement panel review of work RVUs 
submit supporting information that has not already been considered the 
AMA RUC in creating recommended work RVUs or by CMS in assigning 
proposed and interim final work RVUs. We can make best use of our 
resources as well as those of the specialties involved and physician 
volunteers, by avoiding duplicative consideration of information by the 
AMA RUC, CMS, and a refinement panel. To achieve this goal, CMS will 
continue to critically evaluate the need to refer codes to refinement 
panels in future years, specifically considering any new information 
provided by commenters.
(2) Interim Final Work RVUs Referred to the Refinement Panel in CY 2012
    We referred to the CY 2012 refinement panel 17 CPT codes with 
interim final work values for which we

[[Page 69015]]

received a request for refinement that met the process described above. 
For these 17 CPT codes, all commenters requested increased work RVUs. 
For ease of discussion, we will be referring to these services as 
``refinement codes.'' Consistent with the process described above, 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;
     Four 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 and submitted those 
ratings to CMS 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 panel.
    We note that the individual codes reviewed by the CY 2012 
refinement panel, and their final work RVUs are discussed in section 
III.B.1.b. of this final rule with comment period. Also, see Table 29 
for the refinement panel ratings and the final work RVUs for the codes 
reviewed by the CY 2012 refinement panel.

                       Table 29--Codes Reviewed Under the CY 2012 Refinement Panel Process
----------------------------------------------------------------------------------------------------------------
                                                                                       2012
                                                      CY 2012      AMA RUC/HCPAC    refinement     CY 2013 final
      CPT code             Short descriptor        interim final    recommended    median  panel       WRVU
                                                       WRVU          work RVU         rating
----------------------------------------------------------------------------------------------------------------
26341..............  Manipulat palm cord post               0.91            1.66            1.30            0.91
                      inj.
29581..............  Apply multlay comprs lwr               0.25            0.60            0.50        \3\ 0.25
                      leg.
32096..............  Open wedge/bx lung infiltr.           13.75           17.00           17.00           13.75
32097..............  Open wedge/bx lung nodule..           13.75           17.00           17.00           13.75
32098..............  Open biopsy of lung pleura.           12.91           14.99           14.99           12.91
32100..............  Exploration of chest.......           13.75           17.00           17.00           13.75
32505..............  Wedge resect of lung                  15.75           18.79           18.79           15.75
                      initial.
38230..............  Bone marrow harvest allogen            3.09            4.00            4.00            3.50
38232..............  Bone marrow harvest autolog            3.09            3.50            3.50            3.50
62370..............  Anl sp inf pmp/mdreprg&fil.            0.90            1.10            1.10            0.90
92587..............  Evoked auditory test                   0.35            0.45            0.45            0.35
                      limited.
92588..............  Evoked auditory tst                    0.55            0.60            0.60            0.55
                      complete.
94060..............  Evaluation of wheezing.....            0.26            0.31            0.27            0.27
94726..............  Pulm funct tst                         0.26            0.31            0.26            0.26
                      plethysmograp.
94727..............  Pulm function test by gas..            0.26            0.31            0.26            0.26
94728..............  Pulm funct test                        0.26            0.31            0.26            0.26
                      oscillometry.
94729..............  C02/membane diffuse                    0.17            0.19            0.19            0.19
                      capacity.
----------------------------------------------------------------------------------------------------------------

ii. Code-Specific Issues
---------------------------------------------------------------------------

    \3\ This value is interim for CY 2013.
---------------------------------------------------------------------------

    In this section, we discuss all code families for which we received 
a comment on an interim final physician work value in CY 2012 PFS final 
rule with comment period or on a proposed value in the CY 2013 PFS 
proposed rule. Refer to Addendum B for a comprehensive list of all 
final values.
(1) Integumentary System: Skin, Subcutaneous, and Accessory Structures 
(CPT Code 11056)
    For discussion on CY 2013 interim final work values for CPT code 
11056 refer to section III.M.3. of this final rule with comment period.
(2) Integumentary System: Nails (CPT Code 11719)
    For discussion on CY 2013 interim final work values for CPT code 
11719 refer to section III.M.3. of this final rule with comment period.
(3) Integumentary System: Repair (Closure) (CPT Codes 12035-12057)
    For discussion on CY 2013 interim final work values for CPT codes 
12035 through12057 refer to section III.M.3. of this final rule with 
comment period.
(4) Integumentary System: Repair (Closure) (CPT Codes 15272 and 15276)
    As detailed in the CY 2012 final rule with comment period (76 FR 
73112), 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.
    We assigned a work RVU of 0.33 to 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)) on 
an interim final basis for CY 2012. After clinical review of CPT code 
15272, we believed that a work RVU of 0.33 accurately reflected the 
work 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 believed this value 
overstated 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 believed 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 these two services is the

[[Page 69016]]

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). Therefore, we assigned a work RVU of 0.33 
to CPT code 15272 on an interim final basis for CY 2012.
    Comment: Commenters opposed the CMS-recommended interim final work 
RVU of 0.33 assigned to CPT code 15272. Commenters disagreed with our 
rationale to crosswalk CPT code 15272 to CPT code 15341 and stated that 
CPT code 15003 (Surgical preparation or creation of recipient site by 
excision of open wounds, burn eschar, or scar (including subcutaneous 
tissues), or incisional release of scar contracture, trunk, arms, legs; 
each additional 100 sq. cm, or part thereof, or each additional 1% of 
body area of infants and children (List separately in addition to code 
for primary procedure), which has a work RVU of 0.80, is a more 
suitable comparison code. Commenters noted that although CPT code 15003 
requires 15 minutes of intra-service time whereas CPT code 15272 
requires 10 minutes, it is a more appropriate comparison for valuation 
of the services under this code. Commenters stated that the AMA RUC-
recommended work RVU places this service in the proper rank order with 
the base code, CPT code 15271. Furthermore, commenters noted that if 
all the AMA RUC recommendations for the family of CPT codes 15271 
through15278 were accepted, the result would be financial savings for 
Medicare. Therefore, commenters recommended that we accept the AMA RUC-
recommended work RVU of 0.59 for CPT code 15272.
    Response: Based on the comments received, we re-reviewed CPT code 
15272 and continue to believe that CPT code 15272 is similar in 
intensity to CPT code 15341. The primary distinguishing factor between 
the two services is that CPT code 15272 has 10 minutes of intra-service 
time and CPT code 15341 has 15 minutes. We continue to believe that the 
AMA RUC-recommended work RVU overstates the intensity of this procedure 
compared to the base procedure CPT code 15271. We maintain that valuing 
the 10 minutes of intra-service work at the same intensity as CPT code 
15341, which equates to a work RVU of 0.33, is appropriate. We believe 
that this resulting work RVU maintains appropriate relativity with the 
base code and the entire family of CPT codes (15271 through15278). 
Therefore, we are finalizing a work RVU of 0.33 for CPT code 15272.
    We assigned a work RVU of 0.50 to 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)) on an interim final basis for CY 2012 based on our clinical 
review of 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 AMA RUC's recommended work RVU for CPT 
code 15272. We disagreed with the AMA RUC that these two CPT codes 
should be valued the same. We assigned an interim final work RVU of 
0.33 to CPT code 15272 but believed 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 digits, is 
more intense than the work associated with CPT code 15272, which 
describes work on the trunk, arms, and legs. Accordingly, we noted that 
our interim final work RVU for CPT code 15276 accurately captured the 
work associated with this service and established the appropriate 
relativity between the services. Therefore, we assigned a work RVU of 
0.50 to CPT code 15276 on an interim final basis for CY 2012.
    Comment: Commenters disagreed with the CMS-recommended interim 
final work RVU for CPT code 15276. Commenters suggested that CPT code 
15276 is analogous to CPT code 15272, for which the AMA RUC originally 
recommended a work RVU of 0.59, both in physician work and time and 
recommended that CPT code 15276 should be directly crosswalked to CPT 
code 15272. Further, the commenters agreed with the AMA RUC key 
reference to CPT code 15003 (Surgical preparation or creation of 
recipient site by excision of open wounds, burn eschar, or scar 
(including subcutaneous tissues), or incisional release of scar 
contracture, trunk, arms, legs; each additional 100 sq. cm, or part 
thereof, or each additional 1% of body area of infants and children), 
which has a work RVU of 0.80, and stated that CPT code 15276 requires 5 
minutes less intra-service time, 10 minutes versus 15 minutes, and 
requires less physician work to perform. Commenters recommended that we 
value CPT code 15276 based upon the AMA RUC-recommended work RVU of 
0.59 for CPT code 15276.
    Response: Based on the comments received, we re-evaluated whether 
CPT code 15003 was an appropriate comparison code for CPT code 15276. 
However, we concluded that the services of CPT code 15276 are more 
intense than those of CPT code 15272 accordingly; CPT code 15276 should 
be valued to reflect the difference in intensity. We believe a work RVU 
of 0.50 establishes the appropriate difference in intensity between 
these two services. Additionally, we believe this work RVU value 
maintains appropriate relativity with the base code, CPT code 15271, 
and maintains relatively within the entire family of CPT codes (15271 
through15278). Therefore, we are finalizing a work RVU of 0.50 for CPT 
code 15276.
(5) Musculoskeletal: Hand and Fingers (CPT Code 26341)
    CPT code 26341 (Manipulation, palmar fascial cord (ie, Dupuytren's 
cord), post enzyme injection (eg, collagenase), single cord) was 
created by the CPT Editorial Panel along with CPT code 20517 to 
describe a technique for treating Dupuytren's contracture by injecting 
an enzyme into the Dupuytren's cord for full finger extension and 
manipulation, effective January 1, 2012.
    As detailed in the CY 2012 final rule with comment period, we 
assigned an interim final work RVU of 0.91 to CPT code 26341 (76 FR 
73192). After reviewing survey results for CPT code 26341, the AMA RUC 
recommended a work RVU of 1.66, which corresponds to the survey 25th 
percentile value. After clinical review of CPT code 26341, we believed 
the service described by CPT code 26341 is analogous to that of CPT 
code 97140 (Manual therapy techniques (eg, mobilization/manipulation, 
manual lymphatic drainage, manual traction), 1 or more regions, each 15 
minutes), which has a work RVU of 0.43. However, since 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), we added the work RVU of 0.48 for CPT code 99212, to the 
work RVU of 0.43 for CPT code 97140 to obtain the work RVU of 0.91 for 
CPT code 26341.
    Comment: Commenters disagreed with our decision to crosswalk the 
work RVU of CPT code 26341 to that of CPT code 97140, stating that the 
codes do not have comparable work because CPT code 97140 is performed 
by physical therapists while surgeons perform CPT code 26341. 
Commenters also stated that the work associated with CPT code 26341 
includes local or regional

[[Page 69017]]

anesthesia and the procedure may result in skin rupture, requiring 
physician attention to manipulation. In addition, commenters noted that 
the post-procedure neurovascular assessment involved in CPT code 26341 
is added physician work that is distinctly different from the manual 
therapy techniques furnished in CPT code 97140. Commenters asserted 
that the difference in physician work, intensity, and complexity 
distinguishes the two codes. Commenters also disagreed with our use of 
a reverse building block methodology to value the additional work and 
complexity and said that we arbitrarily reduced the value of the 
surgeon's work involved. Commenters recommended we instead value the 
code based upon the AMA RUC-recommended work RVU of 1.66 for CPT code 
26341 and requested refinement panel review of the code.
    Response: Based on comments received, we referred CPT code 26341 to 
the CY 2012 multi-specialty refinement panel for further review. The 
refinement panel median work RVU for CPT code 26341 was 1.30. We 
believe that the refinement panel median work RVU would create a rank 
order anomaly between this code and similar codes. Although CPT code 
97140 is typically furnished by a physical therapist, we do not believe 
that the difference in the provider specialty typically furnishing the 
service results in a difference in intensity of the service. Commenters 
stated that the post-procedure assessment involved in CPT code 26341 
added physician work that is distinctly different from the manual 
therapy techniques furnished in CPT code 97140. We disagree; both 
services require an assessment following manipulation appropriate to 
the provided service to determine the adequacy and outcome, both 
positive and negative, of the intervention and attention to an atypical 
response to treatment. We continue to believe that the crosswalk and 
reverse building block methodologies that we used in assigning the 
interim final work value are appropriate and the resulting work RVU 
accurately reflects the work associated with this service. After 
consideration of the public comments, refinement panel median, and our 
clinical review, we are finalizing a work RVU of 0.91 for CPT code 
26341.
(6) Musculoskeletal: Application of Casts and Strapping (CPT Codes 
29581-29584)
    For discussion on interim final work values for CPT codes 29581, 
29582, 29583, and 29584 refer to section III.M.3. of this final rule 
with comment period.
(7) Respiratory: Lungs and Pleura (CPT Codes 32096-32100, 32505)
    In the CY 2012 final rule with comment period, we assigned an 
interim final work RVU of 13.75 for CPT code 32096 (Thoracotomy, with 
diagnostic biopsy(ies) of lung infiltrate(s) (eg, wedge, incisional), 
unilateral) (76 FR 73193). As we noted, the CPT Editorial Panel 
reviewed the lung resection family of codes and deleted eight, revised 
five, and created 18 new codes to describe thoracoscopic procedures 
effective January 1, 2013. 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).
    As we noted in the CY 2012 final rule with comment period, after 
clinical review of CPT code 32096, we believed a work RVU of 13.75 
accurately reflected 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 accounted 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 (eg, for feeding or decompression) (separate 
procedure)). Therefore, we assigned the same work RVU to CPT code 32096 
as that of CPT code 44300 on an interim final basis for CY 2012.
    Comment: Commenters stated that CPT code 44300 is an arbitrary 
crosswalk, noting that CPT code 32096 describes an open thoracic 
procedure whereas CPT code 44300 is the placement of a feeding tube. A 
commenter shared a regression analysis of physician time and physician 
work of all thoracic surgery codes, which showed that the interim final 
work RVU value falls below the regression line and stated that this 
indicated an inappropriate work value. Commenters stated our work 
values are lower for equivalent physician time than virtually all our 
prior decisions for the specialty. Additionally, commenters noted that 
the values result in IWPUT values that are approximately half of those 
ordinarily associated with major surgical procedures. Therefore, 
commenters stated that the interim final work RVU of 13.75 for CPT code 
32096 would result in rank order anomalies with other codes in the 
physician fee schedule. Commenters recommended we use the AMA RUC-
recommended work RVU of 17.00 and requested refinement panel review of 
the code.
    Response: Based on comments received, we referred CPT code 32096 to 
the CY 2012 multi-specialty refinement panel for further review. The 
refinement panel median work RVU for CPT code 32096 was 17.00. 
Following the refinement panel, we again conducted a clinical review 
and continue to believe a work RVU of 13.75 accurately reflected the 
work associated with this service. For CY 2012, the CPT Editorial Panel 
deleted CPT code 32095 which had a work RVU of 10.14 and created CPT 
codes 32096, 32097, and 32100 to replace CPT code 32095. Upon our 
clinical review, we do not believe that there is a significant 
difference in intensity between deleted CPT code 32095 and replacement 
CPT code 32096. We believe that the appropriate work RVU for CPT code 
32096 should be close to a work RVU of 10.14, but should account for 
the increase in 15 minutes of total time between deleted CPT code 32095 
and new CPT code 32096. We believe that the refinement panel median 
work RVU of 17.00 far overstates this difference. Additionally, we 
continue to believe that the work associated with 32096 is similar in 
terms of physician time and intensity to CPT code 44300. Therefore, we 
still believe the work RVU of 13.75 appropriately values this service. 
After consideration of the public comments, refinement panel results, 
and our clinical review, we are assigning a work RVU of 13.75 as the 
final value for CPT code 32096.
    As detailed in the CY 2012 final rule with comment period, we 
assigned an interim final work RVU of 13.75 for CPT code 32097 
(Thoracotomy, with diagnostic biopsy(ies) of lung nodule(s) or mass(es) 
(eg, wedge, incisional), unilateral) (76 FR 73194). We noted that after 
clinical review of CPT code 32097, we believed a work RVU of 13.75 
accurately reflected the work associated with this service compared to 
other related services. We also noted that the AMA RUC had reviewed the 
specialty society survey results, compared the code to other services, 
and recommended the survey 25th percentile work RVU of 17.00. We stated 
that we determined that the work associated with CPT code 32097 was 
similar to CPT code 32096, to which we assigned a work RVU of 13.75 on 
an interim final basis for CY 2012.

[[Page 69018]]

Therefore, we assigned a work RVU of 13.75 for CPT code 32097 on an 
interim final basis for CY 2012.
    Comment: Commenters stated that CPT code 44300 is an arbitrary 
crosswalk for CPT code 32097 because it describes an open thoracic 
procedure whereas CPT code 44300 is the placement of a feeding tube. 
Commenters shared a regression analysis of physician work and time for 
all thoracic surgery codes, which shows that the interim final work RVU 
value falls below the regression line and noted that this indicates 
inappropriately low work intensity. Commenters stated our interim final 
work RVU values are lower for equivalent physician time than virtually 
all prior work RVU decisions for this specialty. Commenters noted that 
the interim final work RVU values result in IWPUT values that are 
approximately half of those ordinarily associated with major surgical 
procedures. Commenters added that the interim final work RVU of 13.75 
for CPT code 32097 result in rank order anomalies with other codes. 
Commenters recommended we instead use the AMA RUC-recommended work RVU 
of 17.00 for CPT code 32097 and requested refinement panel review of 
the code.
    Response: Based on comments received, we referred CPT code 32097 to 
the CY 2012 multi-specialty refinement panel for further review. The 
refinement panel median work RVU for CPT code 32097 was 17.00. CPT 
codes 32096, 32097, and 32100 were created to replace CPT code 32095, 
which was deleted, effective January 1, 2012. We believe these three 
services involve the same amount of physician work and should have the 
same work RVU. Thus, the same rationale that we used to value CPT code 
32096 applies to CPT code 32097. We continue to believe that the work 
associated with CPT code 32097 is similar in terms of physician time 
and intensity to CPT code 44300 and thus, still believe the work RVU of 
13.75 is appropriate. Additionally, we continue to believe that a work 
RVU of 17.00 overstates the increase in work between deleted CPT code 
32095 and its replacement CPT codes. After consideration of the public 
comments, refinement panel results, and our clinical review, we are 
assigning a work RVU of 13.75 as the final value for CPT code 32097.
    As detailed in the CY 2012 final rule with comment period, we 
assigned an interim final work RVU of 12.91 to CPT code 32098 
(Thoracotomy, with biopsy(ies) of pleura) (76 FR 73194). We noted that 
after clinical review, we believed a work RVU of 12.91 accurately 
reflected the work associated with this service as compared to other 
related services. After reviewing survey results and comparing the code 
to other services, the AMA RUC recommended the survey 25th percentile 
work RVU of 14.99. We noted 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) and therefore we believed that 
crosswalking to the work RVU of CPT code 47100 appropriately accounted 
for the work associated with CPT code 32098. Therefore, we assigned a 
work RVU of 12.91 to CPT code 32098 on an interim final basis for CY 
2012.
    Comment: Commenters shared a regression analysis of physician time 
and physician work of all thoracic surgery codes, and indicated that 
our interim final work RVU value falls below the regression line, which 
commenters noted indicated inappropriately low work intensity. 
Commenters stated that a work RVU of 12.91 results in an IWPUT of 
0.0741, which is insufficient intensity compared to other similar 
procedures. Commenters stated that our interim final work RVU of 12.91 
for CPT code 32098 placed this service out of relativity with the CPT 
codes in this family for which we accepted the AMA RUC recommendations 
and requested refinement panel review of the code.
    Response: Based on comments received, we referred CPT code 32098 to 
the CY 2012 multi-specialty refinement panel for further review. The 
refinement panel median was a work RVU of 14.99. This service would be 
out of rank order with the other services in the family described by 
CPT codes 32096, 32097, 32100, and 32505 if we adopted a work RVU of 
14.99. As noted above, we continue to believe a work RVU of 13.75 is 
appropriate for CPT code 32096. Since CPT code 32098 describes a more 
limited procedure that takes less time than the other codes in the 
family (CPT codes 32096, 32097, 32100, and 32505) it should have a 
lower work RVU. After consideration of the public comments, refinement 
panel results, and our clinical review, we believe that that the work 
associated with 32098 is similar in terms of physician time and 
intensity to CPT code 47100 and therefore we are assigning a work RVU 
of 12.91 as the final value for CY 2013 for CPT code 32098.
    We assigned a work RVU of 13.75 for CPT code 32100 (Thoracotomy; 
with exploration) on an interim final basis in the CY 2012 final rule 
with comment period (76 FR 73194). After clinical review of CPT code 
32100, we believed a work RVU of 13.75 accurately reflected the work 
associated with this service as compared to other related services. The 
AMA RUC reviewed the specialty society survey results, compared the 
code to other services, and recommended a work RVU of 17.00. We noted 
that the affected specialty society and AMA RUC asserted that CPT code 
32100 should be valued the same as CPT codes 32096 and 32097 because 
they believe that the work is similar for these three services. We 
noted that we assigned a work RVU of 13.75 to CPT codes 32096 and 
32097, and therefore a work RVU of 13.75 to CPT code 32100 as well.
    Comment: Commenters stated that CPT code 44300 is an inappropriate 
crosswalk for CPT code 32100 because it describes an open thoracic 
procedure whereas CPT code 44300 is the placement of a feeding tube. 
Commenters shared a regression analysis of physician work and time all 
thoracic surgery codes that shows the interim final work RVU value 
falls below the regression line and stated that this indicates 
inappropriately low work intensity. Commenters stated the interim final 
work RVU value is lower for equivalent physician time than virtually 
all prior work RVU assignments for this specialty. Commenters noted 
that the interim final work RVU value results in IWPUT values that are 
approximately half of those ordinarily associated with major surgical 
procedures. Therefore, commenters stated that the interim final work 
RVU of 13.75 for CPT code 32100 would result in rank order anomalies 
with other codes in the fee schedule. Commenters recommended we value 
the work based upon the AMA RUC-recommended work RVU of 17.00 for CPT 
code 32100 and requested refinement panel review of the code.
    Response: Based on comments received, we referred CPT code 32100 to 
the CY 2012 multi-specialty refinement panel for further review. The 
refinement panel median work RVU for CPT code 32100 was 17.00. CPT 
codes 32096, 32097, and 32100 were created to replace CPT code 32095, 
which was deleted, effective January 1, 2012. We believe these three 
services involve the same amount of physician work and should have the 
same work RVU. Thus, the same rationale that we used to value CPT codes 
32096 and 32097 applies to CPT code 32100. We continue to believe that 
the work associated with 32100 is similar in terms of physician time 
and intensity to CPT code 44300. In addition, we agree with the 
specialty society and AMA RUC's assertion that CPT code 32100 should be 
valued the same as CPT codes 32096 and 32097.

[[Page 69019]]

Furthermore, we continue to believe that a work RVU of 17.00 overstates 
the increase in work between deleted CPT code 32095 and its replacement 
CPT codes. Thus, we maintain that the interim final work RVU of 13.75 
is still appropriate. After consideration of the public comments, 
refinement panel results, and our clinical review, we are assigning a 
work RVU of 13.75 as the final value for CY 2013 for CPT code 32100.
    We assigned a work RVU of 15.75 for CPT code 32505 (Thoracotomy; 
with therapeutic wedge resection (eg, mass, nodule), initial) on an 
interim final basis in the CY 2012 final rule with comment period (76 
FR 73194). We noted that after clinical review of CPT code 32505, we 
believed a work RVU of 15.75 accurately reflected the work associated 
with this service compared to other related services. After reviewing 
the survey results, comparing the code to other services, the AMA RUC 
recommended the survey 25th percentile work RVU of 18.79. We explained 
that we assigned the interim final work RVU of 15.75 in recognition of 
the greater physician work and intensity involved in CPT 32505 as 
compared to CPT code 32096. We valued the additional 30 minutes of 
intra-service work associated with CPT code 32505 at 2.00 work RVUs. 
Accordingly, we assigned a work RVU of 15.75 for CPT code 32505 on an 
interim final basis for CY 2012.
    Comment: Commenters stated that they entirely disagreed with the 
methods used to value CPT code 32096 and therefore, disagreed with the 
value assigned to 32505 that was based upon the value assigned to CPT 
code 32096. Commenters said that the methods used for valuing CPT code 
32505 have never been employed to determine a code's work value. 
Further, commenters explained that our value results in an IWPUT of 
0.06, which is lower than the AMA RUC recommendation. Commenters 
recommended we value CPT code 32505 based upon the AMA RUC-recommended 
work RVU of 18.79 for this code and requested refinement panel review.
    Response: Based on comments received, we referred CPT code 32505 to 
the CY 2012 multi-specialty refinement panel for further review. We 
determined that the refinement panel median work RVU of 18.79 was 
relatively high in relation to the other codes in the family. We 
maintain that the incremental difference between CPT code 32096 and CPT 
code 32505 is 2.00 RVUs and, therefore continue to believe that a work 
RVU value of 15.75 accurately reflects the value of the service. As a 
result of the refinement panel results, the public comments, and our 
clinical review, we are assigning a work RVU of 15.75 as the final 
value for CPT code 32505.
(8) Respiratory: Lungs and Pleura (CPT Codes 32663, 32668-32673)
    For discussion on interim final work values for CPT codes 32663, 
32668 through 32673 refer to section III.M.3. of this final rule with 
comment period.
(9) Cardiovascular: Heart and Pericardium (CPT Code 36247)
    In the Fourth Five-Year Review of Work (76 FR 32445), 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) 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). 
In the CY 2012 PFS final rule with comment period (76 FR 73132), we 
agreed with commenters to the Fourth Five-Year Review of Work that our 
discussion of the global period was incorrect and should have indicated 
a change in global period from XXX to 000 (Minor procedure-includes 
RVUs for pre- and post-operative procedures on the same day). We stated 
that, based on comments received, we referred CPT code 36247 to the CY 
2011 multi-speciality refinement panel for further review. The 
refinement panel median value was a work RVU of 7.00, the AMA RUC-
recommended value. We went on to state that upon clinical review, we 
believed that our proposed work RVU of 6.29 was more appropriate. We 
stated that we observed a significant decrease in the physician times 
reported for this service that argue for a lower work RVU, 
notwithstanding that the survey was conducted for a 0-day global 
period, which includes an E/M service on the same day. Therefore, we 
assigned work RVUs of 6.29 and a global period of 000 to CPT code 36247 
on an interim basis for CY 2012 and invited additional public comment 
on this code in the CY 2012 final rule with comment period.
    Comment: A commenter appreciated that we acknowledged that we made 
an inadvertent error when we referred to the original global period of 
the code as 90 global days rather than XXX global days. However, this 
commenter stated that the new 0-day global period, which includes an E/
M service on the same day, justified the refinement panel's median 
value of a work RVU of 7.00. Additionally, commenters stated that the 
change from a global period of XXX (global concept does not apply) to a 
global period of 000 (Minor procedure-includes RVUs for pre- and post-
operative procedures on the same day) added additional pre-service 
work. Other commenters stated that with the removal of the lower 
extremity intervention patients from the code, the procedures now coded 
with this procedure are more complex and warrant an increased value. 
Commenters also pointed out that the CY 2011 refinement panel median 
for the code was 7.00 work RVUs. Commenters requested that we accept 
the AMA RUC recommendation of 7.00 work RVUs for CPT code 36247.
    Response: Based on comments received, we re-reviewed CPT code 
36247. We continue to believe that our proposed work RVU of 6.29 
accurately reflects the work associated with this service. Based on the 
significant reduction in the physician intra-service time assigned to 
this service from 86 minutes to 60 minutes, if this CPT code had 
maintained a global period of XXX, we believe it would have been 
appropriate to reduce the work RVU below the current value of 6.29 to 
reflect the reduction in time. We do not believe that the potential 
increase in intensity due to the complexity of the patient mix counter 
balances the decrease in intra-service time. We understand that this 
service now includes the work of a same day E/M visit, and we believe 
this additional work is accounted for by maintaining the current work 
RVU of 6.29 rather than reducing the work RVU, as would have been 
appropriate if the service had maintained global period of XXX. 
Therefore, we are finalizing a work RVU of 6.29 and a 000 global period 
for CPT code 36247.
(10) Renal Angiography Codes (CPT Code 36251)
    As detailed in the CY 2012 final rule with comment period (76 FR 
73196), the CPT Editorial Panel created four bundled renal angiography 
services (CPT codes 36251, 36252, 36253, and 36254), effective January 
1, 2012.
    We assigned a work RVU of 5.35 to 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) on an interim final basis for CY 2012 based upon our

[[Page 69020]]

clinical review of the code. 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) endoscopy, surgical, with 
maxillary antrostomy; with removal of tissue from maxillary sinus), 
which has a work RVU of 5.45, and 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 
that of CPT code 52341 (Cystourethroscopy; with treatment of ureteral 
stricture (eg, balloon dilation, laser, electrocautery, and incision), 
which has a work RVU of 5.35. We believed crosswalking to the work RVU 
of CPT code 52341 appropriately accounted for the work associated with 
CPT code 36251. Therefore, we assigned a work RVU of 5.35 to CPT code 
36251 on an interim final basis for CY 2012.
    Comment: Commenters disagreed with the interim final work RVU of 
5.35 for CPT code 36251, stating that the family of CPT codes (36251, 
36252, 36253, and 36254) was carefully reviewed by the AMA RUC and the 
rank order was appropriately established by the AMA RUC 
recommendations. Commenters recommended CPT code 36251 should be 
directly crosswalked to CPT code 31267 as the AMA had recommended and 
requested that we use 5.45 work RVUs for CPT code 36251.
    Response: Based on the comments received, we re-reviewed CPT code 
36251 and considered the commenters' recommendation that it be directly 
crosswalked to CPT code 31267. After re-considering the crosswalk, we 
continue to believe that the work associated with CPT code 36251 is 
closely aligned in terms of physician time and intensity with CPT code 
52341 and that crosswalking to CPT code 52341 appropriately results in 
a work RVU of 5.35. Therefore, we are finalizing a work RVU of 5.35 for 
CPT code 36251 for CY 2013.
    We assigned an interim final work RVU of 6.99 to 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), for CY 2012 after clinical review. 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), 
which has a work RVU of 7.38. Although the AMA RUC recommended a work 
RVU of 7.38 for CPT code 36252, we found that the intensity of this 
service is more similar to CPT code 58560 (Hysteroscopy, surgical; with 
division or resection of intrauterine septum (any method)), which has a 
work RVU of 6.99. Accordingly, we assigned an interim final work RVU of 
6.99 to CPT code 36252 for CY 2012.
    Comment: Commenters stated that this family of CPT codes 36251, 
36252, 36253, and 36254 were carefully reviewed by the AMA RUC, that 
the rank order was appropriately established based on the AMA RUC 
recommendations, and that CPT code 36252 should be 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), 
which has a work RVU of 7.38, as the AMA recommended.
    Response: Based on the comments received, we re-reviewed CPT code 
36252. Although commenters recommended a direct crosswalk to CPT code 
43272, we continue to believe that the work of the services is similar 
to the reference CPT code 58560. Accordingly, we find that the 
resulting work RVUs of 6.99 is still appropriate and accounts for the 
work associated with this service and we are finalizing a work RVU 
value of 6.99 for CPT code 36252.
(11) IVC Transcatheter Procedures (CPT Codes 37192 and 37193)
    As discussed in the CY 2012 final rule with comment period (76 FR 
73197), for 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 assigned 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.
    After clinical review of CPT code 37192, we believed a work RVU of 
7.35 accurately reflected 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 described 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, 
48 minutes pre-service time, 50 minutes intra-service time, and 30 
minutes post-service time. By comparing the times assigned to those of 
CPT code 93460, we determined that the survey median intra-service time 
of 45 minutes appropriately accounted for the time required to furnish 
the intra-service work of CPT code 37192. Therefore, we assigned it a 
work RVU of 7.35, 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: 
www.cms.gov/PhysicianFeeSched/.
    Comment: A commenter disagreed with our valuation for CPT code 
37192, but did not provide information as to why the valuation was 
inappropriate. The commenter urged that we accept the AMA RUC-
recommended work RVU and times.
    Response: After clinical re-review of CPT code 37192, we maintain 
that the work associated with CPT code 37192 is similar to CPT code 
93460, which has the following times: 48 minutes pre-service, 50 
minutes intra-service, and 30 minutes post-service. As a result, we 
continue to believe that the survey median intra-service time of 45 
minutes appropriately accounts for the time involved in furnishing the 
intra-service work of this procedure. We believe that the crosswalk 
work RVU of 7.35 more appropriately values the services furnished in 
this code than the AMA RUC recommended value of 8.00 RVUs. We are 
finalizing a work RVU of 7.35 to CPT code 37192, with a refinement to 
45 minutes of intra-service time. A complete listing of the times 
associated with this code is available on the CMS Web site at 
www.cms.gov/PhysicianFeeSched/.

[[Page 69021]]

    As discussed in the CY 2012 final rule with comment period (76 FR 
73197), for 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 assigned 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. After clinical review of CPT code 37193, we believed 
a work RVU of 7.35 accurately reflected 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 described the physician work involved in the service. We 
believed that the work associated with CPT code 37193 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, 
48 minutes pre-service time, 50 minutes intra-service time, and 30 
minutes post-service time. Based upon these times, we believed that the 
survey median intra-service time of 45 minutes appropriately accounted 
for the time required to furnish the intra-service work associated with 
CPT code 37193. Therefore, we assigned 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: 
www.cms.gov/PhysicianFeeSched/.
    Comment: Without providing more information, a commenter disagreed 
with the work RVUs assigned and refinement to time for CPT code 37193 
and urged that we accept the AMA RUC-recommended work RVU of 8.00, and 
recommended time.
    Response: After clinical re-review of CPT code 37193, we maintain 
that the work associated with CPT code 37193 is similar to CPT code 
93460, which has the following times: 48 minutes pre-service, 50 
minutes intra-service, and 30 minutes post-service. We continue to 
believe that the survey median intra-service time of 45 minutes 
appropriately accounted for the time required to furnish the intra-
service work of this CPT code 37193 rather than the AMA RUC-recommended 
intra-service time of 60 minutes. We also continue to believe that the 
work RVU of 7.35 more appropriately values the services furnished in 
this code than the AMA-recommended work RVU of 8.00. Therefore, we are 
finalizing a work RVU of 7.35 to CPT code 37132, with a refinement to 
45 minutes of intra-service time. A complete listing of the times 
associated with this code is available on the CMS Web site at: 
www.cms.gov/PhysicianFeeSched/.
(12) Hemic and Lymphatic Systems: General, Bone Marrow or Stem Cell 
Services/Procedures (CPT Codes 38230 and 38232)
    On an interim final basis, we assigned a work RVU of 3.09 to CPT 
codes 38230 (Bone marrow harvesting for transplantation; allogeneic) 
and 38232 (Bone marrow harvesting for transplantation; autologous) for 
CY 2012 (76 FR 73197). In the CY 2012 final rule with comment period we 
noted that for CY 2012, the CPT Editorial Panel split CPT code 38230 
into two separate CPT codes: 38230 and 38232 to more accurately reflect 
current medical practice. We noted that we changed the global period 
from 010 to 000 for CPT code 38230, and assigned a global period of 000 
to CPT code 38232, as these services rarely required overnight 
hospitalization and physician follow-up in the days following the 
procedure.
    We noted that after clinical review of CPT codes 38230 and 38232, 
we believed that a work RVU of 3.09 appropriately accounted for the 
work associated with these services. The AMA RUC reviewed the 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. Notwithstanding 
the AMA-RUC recommendation, we noted that the work for these services 
is very similar and should be valued the same. In CY 2011, CPT code 
38230 had a work RVU of 4.85 with a ten-day global period that included 
a CPT code 99213 (Level 3 office or outpatient visit, established 
patient), and a CPT code 99238 (discharge day management service). We 
explained that we considered converting the value of CPT code 38230 
from a 10-day global period to a 0-day global period by subtracting the 
work RVUs for CPT code 99213 (work RVU=0.97) and CPT code 99238 (work 
RVU=1.28), but believed that the resulting work RVU of 2.60 would 
result in this code being valued too low compared to other similar 
services. Instead, we found that the CPT code 38230 survey 25th 
percentile work RVU of 3.09 accurately captured the intensity of this 
service with the revised global period. Therefore, we assigned a work 
RVU of 3.09 to CPT code 38230 on an interim final basis for CY 2012. 
Since, as explained above, we believed that CPT code 38232 should have 
the same work RVU as CPT code 38230, we also assigned a work RVU of 
3.09 to CPT code 38230 on an interim final basis for CY 2012.
    Comment: Commenters acknowledged that the intra-service times of 
CPT codes 38230 and 38232 are similar; however, they stated that the 
service described by CPT code 38230 is typically more intense and 
stressful since it is being performed on a donor, who does not directly 
benefit from the procedure. Commenters also noted that collecting donor 
cells is typically prolonged to ensure that enough cells have been 
collected. Commenters stated that although the survey did not reflect 
the intra-service time for CPT code 38230, the AMA RUC-recommended 
values appropriately accounted for the lower time reported in the 
survey with a higher work RVU value. Additionally, commenters stated 
that the reverse building block methodology was an inappropriate policy 
to apply to any services with changing global day periods and in this 
case, particularly inappropriate because the post-operative visits 
built into the code were initially valued by the Harvard study several 
years ago. Given these arguments, commenters requested the AMA RUC 
recommended work RVUs of 4.00 for CPT code 38230 and 3.50 for CPT code 
38232 be used to value these codes and requested refinement panel 
review of these codes.
    Response: Based on comments received, we referred CPT codes 38230 
and 32832 to the CY 2012 multi-specialty refinement panel for further 
review. The refinement panel median work RVU for CPT code 38230 was 
4.00, and the median work RVU for CPT code 38232 was 3.50. We continue 
to believe that CPT codes 38232 and 38230 require the same amount of 
physician work and should be valued the same. After reviewing the 
public comments and the refinement panel ratings, we agree that the 
refinement panel median work RVU of 3.50 for CPT code 38232 more 
appropriately reflects the work of CPT codes 38230 and 38232 than the 
interim final work RVU of 3.09. We believe the refinement panel median 
work RVU of 4.00 for CPT code 38230 overstates the work associated with 
these services, especially considering that for CPT code

[[Page 69022]]

38230 the survey 25th percentile work RVU was 3.09 and a building block 
methodology based on the CY 2011 work RVU and global period yielded 
work RVU of 2.60 for this service. As a result of the refinement panel 
ratings, the public comments, and our clinical review, we are 
finalizing a work RVU of 3.50 for CPT codes 32830 and 32832.
(13) Digestive: Abdomen, Peritoneum, and Omentum (CPT Code 49084)
    As detailed in the CY 2012 final rule with comment period (76 FR 
73198), the CPT Editorial Panel deleted CPT codes 49080 and 49081and 
created three new CPT codes, 49082, 49083, and 49084, effective January 
1, 2012, to more accurately describe the current medical practice.
    After clinical review, we assigned a work RVU of 2.00 to CPT codes 
49083 (Abdominal paracentesis (diagnostic or therapeutic); with imaging 
guidance) and 49084 (Peritoneal lavage, including imaging guidance, 
when performed) on an interim final basis for CY 2012. 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 agreed with the AMA RUC-recommended work 
RVU of 2.00 for CPT code 49083, but disagreed that CPT 49084 should be 
valued more. Instead, we believed that CPT code 49084 requires similar 
work to code 49083 and should be valued the same. Therefore, we 
assigned a work RVU of 2.00 to CPT codes 49083 and 49084 on an interim 
final basis for CY 2012.
    Comment: One commenter disagreed with our valuation of CPT code 
49084 and the resulting work RVU recommendation but did not describe 
why.
    Response: After clinical re-review of CPT code 49084, we continue 
to believe that CPT code 49084 requires similar work as CPT code 49083 
and should be valued the same. Accordingly, we are finalizing a work 
RVU of 2.00 for CPT codes 49083 and 49084.
(14) Nervous: Spine and Spinal Cord (CPT Codes 62370)
    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)) newly created 
by the CPT Editorial Panel for CY 2012, was assigned an interim final 
work RVU of 0.90 for CY 2012 as discussed in the CY 2012 final rule 
with comment period (76 FR 73199).
    As we noted in the CY 2012 final rule with comment period, after 
clinical review of CPT code 62370, we believed that a work RVU of 0.90 
accurately accounted for the work associated with this service. We 
noted that 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) however, we believed that a work RVU of 1.10 for CPT code 62370 
was too high compared to similar services in this family. Instead, we 
found 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), which has a work 
RVU of 0.90. We noted that this value, which is between the specialty 
society survey 25th percentile and median work RVU, appropriately 
reflected the work of CPT code 62370. Therefore, we assigned a work RVU 
of 0.90 to CPT code 62370 on an interim final basis for CY 2012.
    Comment: Commenters disagreed with the value, explaining that CPT 
code 93281 was not an appropriate crosswalk because it was a 
programming only code while CPT code 62370, is a procedure and 
programming code. Commenters noted that the interim final work RVU of 
0.90 does not account for the work in refilling the pump, which 
requires a sterile puncture in a patient whose complexities preclude 
provision of these services by a nonphysician. Therefore, commenters 
requested that CPT code 62370 be valued based upon the AMA RUC 
recommended value of 1.10 work RVUs and requested refinement panel 
review of this code.
    Response: Based on comments received, we referred CPT code 62370 to 
the CY 2012 multi-specialty refinement panel for further review. The 
refinement panel median work RVU for CPT code 62370 was 1.10. In 
subsequent review, we determined that valuing this code at the 
refinement panel median work RVU value would result in too high a value 
as compared to the other codes in the family. CPT code 62369 
(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) has a 
work RVU of 0.67. CPT code 62369 describes the same procedure as CPT 
code 62370, except in CPT code 62369 the reprogramming and refill does 
not require physician skill and in CPT code 62370 the reprogramming and 
refill does require physician skill. We believe a work RVU of 0.90 for 
CPT code 62370 reflects the appropriate incremental increase in 
physician work for reprogramming and refill by a physician, versus a 
nonphysician. We also continue to believe that CPT code 93281, which 
was recently reviewed, has similar intensity and complexity to CPT code 
62370, and that CPT codes 93281 and 62370 include the same amount of 
intra-service physician time. We believe that CPT codes 93281 and 62370 
involve the same amount of physician work and maintain that a work RVU 
of 0.90 appropriately captures the physician work of these procedures. 
After reviewing the public comments, the refinement panel ratings, and 
our clinical review, we are finalizing a work RVU of 0.90 as for CPT 
code 62370.
(15) Diagnostic Radiology: Abdomen (CPT Codes 74174)
    For discussion on CY 2013 interim final work values for CPT code 
74174 refer to section III.M.3. of this final rule with comment period.
(16) Pathology and Laboratory: Urinalysis (CPT Codes 88120 and 88121)
    For discussion on CY 2013 interim work values for CPT codes 88120-
88121, refer to section III.M.3. of this final rule with comment 
period.
(17) Psychiatry: Psychiatric Therapeutic Procedures (CPT Codes 90845 
and 90869)
    For discussion on interim work values for CPT codes 90845 and 
90869, refer to section III.M.3. of this final rule with comment 
period.
(18) Ophthalmology: Special Ophthalmological Services (CPT Codes 92071)
    As detailed in the CY 2012 final rule with comment period (76 FR 
73202), for the Fourth Five-Year Review, we identified CPT code 92070 
through the Harvard-Valued--Utilization over 30,000 screen as a 
potentially misvalued code. Upon review of this service, the CPT 
Editorial Panel 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.
    We assigned an interim final work RVU of 0.61, with refinement to 
time as noted above to CPT code 92071 (Fitting of contact lens for 
treatment of ocular surface disease) for CY 2012. We

[[Page 69023]]

determined that CPT code 92071 is expected to capture the utilization 
of the deleted code CPT code 92070 (Fitting of contact lens for 
treatment of disease, including supply of lens). Since CPT code 92070 
was typically billed with an E/M service on the same day, we believed 
that CPT code 92071 would also typically be billed with an E/M service 
on the same day. We concluded that some of the activities conducted 
during the pre- and post-service times of the procedure code and the E/
M visit overlapped and, therefore, should not be counted twice in 
developing the procedure's work value. To account for this overlap, we 
reduced the pre-service evaluation time and post-service time by one-
third each. Specifically, we reduced each the pre-service evaluation 
time and the post-service time from 5 minutes to 3 minutes. To 
determine the appropriate work RVU for CPT code 92071, we calculated 
the value of the extracted time and subtracted it from the AMA RUC-
recommended work RVU of 0.70, which equals the CY 2011 work RVU for the 
deleted code, CPT 92070. In valuing CPT code 92071, we removed a total 
of 4 minutes (as described above) at an intensity of 0.0224 per minute, 
which amounted to the removal of 0.09 work RVUs. Therefore, we assigned 
an interim final work RVU of 0.61, with refinement to time as noted 
above to CPT code 92071 for CY 2012. A complete listing of the times 
associated with this code is available on the CMS Web site at: 
www.cms.gov/PhysicianFeeSched/.
    Comment: Commenters disagreed with the rationale used to lower the 
value for CPT code 92071 and further disagreed with the reverse 
building block methodology used. Commenters stated that the AMA RUC and 
the affected specialty society had reviewed and valued CPT code 92071 
with the assumption that an E/M service would be billed in conjunction 
with the service and cited the AMA summary of recommendations as 
evidence. Therefore, none of the pre- and post-time allocated to this 
code overlapped with the E/M service. They pointed out that the AMA 
RUC-recommended work RVU of 0.70 was lower than the survey median work 
RVU of 1.11. Commenters preferred the AMA RUC comparison of CPT code 
92071 to CPT code 65205 (Removal of foreign body, external eye; 
conjunctival superficial) with a work RVU of 0.71 and noted that both 
services have identical physician time components and should be valued 
similarly. Therefore, commenters requested the AMA RUC recommended work 
RVU of 0.70 and the AMA RUC recommended pre-service and immediate post-
service physician time of 5 minutes, each.
    Response: After clinical re-review, we continue to believe that the 
reverse building block methodology is an appropriate way to value the 
services described by CPT code 92071. We maintain that 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. To account for 
the overlap in work between CPT code 92071 and the same day E/M 
service, the AMA RUC removed 2 minutes pre-service time from the pre-
service package time of 7 minutes. We believe that the pre-service 
package overstates the time involved in this procedure and that a more 
appropriate starting point for the same day E/M reduction for this 
procedure is the survey median pre-service time. We believe that 
removing 2 minutes of pre-service time from the survey median pre-
service time of 5 minutes, as well as 2 minutes from the post-service 
time of 5 minutes better reflects the time involved in furnishing the 
work of this procedure alongside an E/M service. We continue to believe 
that a work RVU of 0.61 accurately reflects the work of the service 
relative to similar services. Therefore, we are finalizing a refinement 
to time and a work RVU of 0.61 for CPT code 92071. The times assigned 
to this CPT code are available on the CMS Web site at: www.cms.gov/PhysicianFeeSched/.
(19) Special Otorhinolaryngologic Services: Audiologic Function Tests 
(CPT Codes 92587 and 92588)
    On an interim final basis for CY 2012, we assigned a work RVU of 
0.35 to 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) as detailed in the CY 2012 
final rule with comment period (76 FR 73202). We identified CPT code 
92587 as a potentially misvalued code through the Fastest Growing 
screen. The specialty society surveyed this service to create a new 
recommendation for CY 2011. However, after reviewing the survey data, 
it concluded that more than one service is represented by this code and 
requested the service be referred back to the CPT Editorial Panel for 
further clarification. As a result, the CPT Editorial Panel created CPT 
code 92558 (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) to describe evoked otoacoustic 
emissions screening, and revised CPT codes 92587 and 92588 clarify the 
otoaucoustic emissions evaluations, effective January 1, 2012. After 
clinical review of CPT code 92587, we believed that the survey 25th 
percentile work RVU of 0.35 accurately described the work associated 
with this service. The HCPAC reviewed the survey results, and after a 
comparison to similar CPT codes, recommended a work RVU of 0.45 for CPT 
code 92587, which was between the survey 25th percentile and median 
values. We believed that CPT code 92587 was 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)), which has a work RVU 
of 0.35, and that the survey 25th percentile value appropriately 
reflected the relativity of this service. Therefore, we assigned a work 
RVU of 0.35 to CPT code 92587 on an interim final basis for CY 2012.
    Comment: Commenters disagreed with the interim final work RVU of 
0.35 and urged CMS to use the HCPAC recommendation of 0.45 since it is 
between the survey 25th percentile and median values. Commenters stated 
that although 25th percentile might be reasonable in situations where 
the accuracy of the survey data is in doubt, in this case the overall 
distribution of the data, the size of the sample, and response rate 
made the median a better guide. Commenters noted the importance of 
cross specialty comparisons, but stated that a crosswalk to CPT code 
97124 was not appropriate. Commenters stated that CPT code 92587 is a 
cognitive diagnostic service that requires the audiologist to review 
and interpret data resulting from numerous tonal pair samples 
administered to a patient's inner ear whereas CPT code 97124 is a 
therapeutic service involving hands-on manipulation of tissue and 
muscles. As a result, a more appropriate comparison code listed within 
the physical therapy section is the cognitive diagnostic work required 
to perform CPT code 97001 (Physical Therapy Evaluation), which has a 
work RVU of 1.20 and an intra-service time of 30 minutes. Commenters 
stated that it was, therefore, comparable to the requested 0.45 for 12 
minutes of intra-service work for CPT code 92587. Commenters requested 
that we accept the HCPAC-

[[Page 69024]]

recommended work RVU of 0.45 for CPT code 92587 and requested 
refinement panel review of the code.
    Response: Based on comments received, we referred CPT code 92587 to 
the CY 2012 multi-specialty refinement panel for further review. The 
refinement panel median value for CPT code 92587 was a work RVU of 
0.45. We note that prior to our assignment of interim final work RVUs 
for CY 2012, CPT code 92587 had a work RVU of 0.13 because the work of 
this service was captured in the practice expense RVU as clinical 
labor, rather than in the work RVU as professional work. For CY 2012, 
the work of this service was moved from the PE RVU to the work RVU. In 
re-valuing the service to reflect this shift, we believe the survey 
25th percentile work RVU of 0.35 captured the intensity of the 
professional work. While CPT codes 97124 and 92587 describe different 
services, we believe they involve the same time and have a very similar 
level of intensity and complexity and therefore should be valued the 
same. After consideration of the public comments, refinement panel 
results, and our clinical review, we are finalizing a work RVU of 0.35 
for CPT code 92587.
    On an interim final basis for CY 2012, we assigned a work RVU of 
0.55 to 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) (76 FR 73202). After 
clinical review of CPT code 92588, we believed that the survey 25th 
percentile work RVU of 0.55 accurately described 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 believed 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), which has a work RVU of 0.55, and 
that the survey 25th percentile work RVU of 0.55 appropriately 
reflected the relativity of this service. Therefore, we assigned a work 
RVU of 0.55 to CPT code 92588 on an interim final basis for CY 2012.
    Comment: Commenters agreed with us that CPT code 92588 involves a 
higher level of professional work and should be valued incrementally 
higher than CPT code 92587. However, commenters disagreed with the 
interim final work RVU values and believe the services furnished under 
the code involve a greater degree of professional work. Commenters 
stated that CPT code 92570 is not an appropriate comparison code 
because it is a bundled code that includes three different audiology 
tests, acoustic reflex threshold testing and acoustic reflex decay, as 
currently represented individually by CPT codes 92567 and 92568. As a 
bundled service, the work RVU for 92570 was reduced below the level of 
the combined services to account for efficiencies involved in 
conducting the three tests together. Commenters noted it is not 
appropriate to compare a bundled service, for which the work RVU has 
been reduced, with a test intended to evaluate overall outer hair cell 
function, using a minimum of 12 frequencies. Therefore, commenters 
requested the code be reviewed by the refinement panel.
    Response: Based on comments received, we referred CPT code 92588 to 
the CY 2012 multi-specialty refinement panel for further review. The 
refinement panel median value for CPT code 92588 was a work RVU of 
0.60. We note that prior to our assignment of interim final work RVUs 
for CY 2012, CPT code 92588 had a work RVU of 0.36 because the work of 
this service was captured in the practice expense RVU as clinical 
labor, rather than in the work RVU as professional work. For CY 2012, 
the work of this service was moved from the PE RVU to the work RVU. In 
re-valuing the service to reflect this shift, we believe the survey 
25th percentile work RVU of 0.55 captured the intensity of the 
professional work. While CPT codes 92570 is a bundled service, we 
believe CPT codes 92570 and 92588 involve very similar time and 
intensity and should be valued the same. Furthermore, we believe a work 
RVU of 0.55 for CPT code 92588 reflects the appropriate incremental 
difference over the work RVU of 0.35 for CPT code 92587. After 
consideration of the public comments, refinement panel results, and our 
clinical review, we are finalizing a work RVU of 0.55 for CPT code 
92588.
(20) Cardiovascular: Cardiac Catheterization (CPT Codes 93451-93568)
    For CY 2012, we assigned 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), 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

[[Page 69025]]

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) (eg, aortocoronary saphenous vein, free radial artery, or free 
mammary artery graft) to one or more coronary arteries and in situ 
arterial conduits (eg, 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). As discussed in the CY 2011 
final rule with comment period, the AMA RUC provided CMS with 
recommendations for several categories of new diagnostic cardiac 
catheterization services codes that previously were reported under 
multiple component codes. These 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. The AMA RUC generally recommended the 
lower of either the sum of the current RVUs for the component services 
or the specialty society survey 25th percentile value for the 
comprehensive cardiac catheterization. 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. As we noted 
in the CY 2011 final rule with comment period, in valuing these 
comprehensive services, we used a conservative estimate of 10 percent 
for the work efficiencies we would expect to occur when multiple 
component cardiac catheterization services are bundled together. In the 
CY 2011 final rule with comment period, we requested that the AMA RUC 
reexamine the cardiac catheterization codes.
    As discussed in the CY 2012 final rule with comment period (76 FR 
73202), 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. 
However, we continued to believe that there would be efficiencies when 
these services are performed together that should be reflected in the 
values assigned. In lieu of a more specific estimate from the AMA RUC, 
and using the best information available to us at the time, we noted 
that we believed it was appropriate to assign as interim final for CY 
2012 the AMA RUC CY 2011 recommendation with a 10 percent reduction in 
work to reflect the efficiencies described above.
    Comment: Commenters noted that at CMS's second request, the AMA RUC 
workgroup reviewed significant documentation of the valuation and 
coding history of the codes and after this extensive review, still 
found the original work value recommendations for these codes to be 
appropriate. Commenters stated that maintaining the diagnostic 
catheterization codes at their CY 2011 work RVU levels is arbitrary and 
that instead we should accept the AMA RUC recommendation for these new 
set of codes for diagnostic cardiac catheterization.
    Response: Based on the comments we received, we re-reviewed the 
cardiac catheterization codes (CPT codes 93451 through 93568). We 
appreciate that the AMA RUC reviewed the code set again; however, we 
still maintain that there are work efficiencies gained in the bundling 
of these services, and all services. The AMA RUC used a variety of 
methodologies in developing RVUs for the comprehensive services 
reviewed for CY 2012. The AMA RUC-recommended RVUs for the 
comprehensive codes for diagnostic cardiac catheterization were an 
average of only one percent lower than the original component codes. 
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 continue to believe 
an approximation of work efficiencies garnered through the bundling of 
the component codes could be as high as 27 percent. Thus, in the 
absence of more precise information, we believe that a 10 percent 
reduction in the AMA RUC-recommended work RVUs is an appropriate and 
conservative approximation of these efficiencies. Therefore, we are 
finalizing the CY 2012 interim final values for the cardiac 
catheterization codes as the final work RVU values for CY 2013. 
Specifically, we are finalizing the following work RVUs for the 
following CPT codes: a work RVU of 2.72 for CPT code 93451; a work RVU 
of 4.75 for CPT code 93452; a work RVU of 6.24 for CPT code 93453; a 
work RVU of 4.79 for CPT code 93454; a work RVU of 5.54 for CPT code 
93455; a work RVU of 6.15 for CPT code 93456; a work RVU of 6.89 for 
CPT code 93457; a work RVU of 5.85 for CPT code 93458; a work RVU of 
6.60 for CPT code 93459; a work RVU of 7.35 for CPT code 93460; a work 
RVU of 8.10 for CPT code 93461; a work RVU of 1.11 for CPT code 93563; 
a work RVU of 1.13 for CPT code 93564; a work RVU of 0.86 for CPT code 
93565; a work RVU of 0.86 for CPT code 93566; a work RVU of 0.97 for 
CPT code 93567; and a work RVU of 0.88 for CPT code 93568.
(21) Pulmonary: Other Procedures (CPT Codes 94060, 94726-94729)
    CPT code 94060 (Bronchodilation responsiveness, spirometry as in 
94010, pre- and post-bronchodilator administration) was assigned an 
interim final work RVU of 0.26 in the CY 2012 final rule with comment 
period (76 FR 73206). After CPT code 94060 was identified for review 
because it was on the Multispecialty Points of Comparison List, and 
also was identified as potentially misvalued through Codes Reported 
Together 75 percent or More screen, the CPT Editorial Panel reviewed 
the code and created CPT codes 94060, 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), 94728 
(Airway resistance by impulse

[[Page 69026]]

oscillometry), and 94729 (Diffusing capacity (eg, carbon monoxide, 
membrane) (List separately in addition to code for primary procedure)). 
For CY 2012, the CPT Editorial Panel also created CPT codes 94780 and 
94781 to report car seat testing administered to the patient in the 
private physician's office.
    For CY 2012, we assigned a work RVU of 0.26 to CPT codes 94060, 
94726, 94727, and 94728 on an interim final basis (76 FR 73206). After 
clinical review, we determined that CPT codes 94060, 94726, 94727, and 
94728, involve similar work and should have the same work RVUs. We 
noted that CPT code 94240 (Functional residual capacity or residual 
volume: helium method, nitrogen open circuit method, or other method) 
(work RVU=0.26) was deleted and the utilization associated with that 
service would be captured under the CPT codes 94726 and 92727. We also 
noted that we believed that a work RVU of 0.26 appropriately reflected 
the work associated with CPT codes 94060, 94726, 94727, and 94728 and 
that the AMA RUC had recommended the same work RVU (0.31) for all four 
codes, based upon each survey's 25th percentile work RVU. We explained 
that this value was further supported by CPT code 97012 (Application of 
a modality to 1 or more areas; traction, mechanical), which has a work 
RVU of 0.25) and which had similar time and intensity. Therefore, we 
assigned a work RVU of 0.26 to CPT codes 94060, 94726, 94727, and 94728 
on an interim final basis for CY 2012.
    Comment: Commenters disagreed with the work RVU assignments for 
these codes and stated that CPT code 94375 (Respiratory flow volume 
loop), which has a work RVU of 0.31, is the appropriate reference code, 
as the AMA RUC recommended. Although CPT code 94375 has more intra-
service time (7 minutes compared to 5 minutes), the survey respondents 
rated the surveyed codes as more intense and complex than the reference 
code. Commenters stated that the appropriate value for the level of 
physician work involved in CPT codes 94060, 94726, 94727, and 94728 is 
0.31 work RVUs. Therefore, commenters urged that we value CPT codes 
94060, 94726, 94727, and 94728 based upon the AMA RUC-recommended work 
RVU of 0.31 and requested these codes be reviewed by the refinement 
panel.
    Response: Based on comments received, we referred CPT codes 94060, 
94726, 94727, and 94728 to the CY 2012 multi-specialty refinement panel 
for further review. The refinement panel median work RVUs for the CPT 
codes were 0.27, 0.26, 0.26, and 0.26, respectively. As a result of the 
refinement panel ratings and our clinical review, we are assigning a 
work RVU of 0.27 as the final value for CPT code 94060 and 0.26 work 
RVUs as the final value for CPT code 94726, 94727, and 94728.
    After clinical review of CPT code 94729 (Diffusing capacity (eg, 
carbon monoxide, membrane) (List separately in addition to code for 
primary procedure)), we believed that a work RVU of 0.17 accurately 
reflected the work associated with this service. Based on a comparison 
to similar services, the AMA RUC recommended a work RVU of 0.19. We 
believed that CPT code 94010 (Spirometry, including graphic record, 
total and timed vital capacity, expiratory flow rate measurement(s), 
with or without maximal voluntary ventilation), which has a work RVU of 
0.17, was similar in time and intensity to CPT code 94729, and that the 
codes should have the same work RVUs. Therefore, we assigned a work RVU 
of 0.17 to CPT code 94729 on an interim final basis for CY 2012.
    Comment: Commenters disagreed that CPT code 94010 was similar in 
time and intensity to CPT code 94729, explaining that the service 
furnished under CPT code 94010, simple spirometry, is considered the 
foundation of pulmonary function testing and does not involve the same 
physician work as services furnished under CPT code 94729 a diffusing 
capacity including the membrane. Commenters suggested that the AMA RUC-
recommended crosswalk code 93352 (Use of echocardiographic contrast 
agent during stress echocardiography), which has a work RVU of 0.19 has 
identical physician time of 5 minutes and comparable physician work and 
intensity to CPT code 94729. Commenters requested that we value the 
code based upon the AMA RUC-recommended work RVU of 0.19 for CPT code 
94729 and requested this code be reviewed by the refinement panel.
    Response: Based on comments received, we referred CPT code 94729 to 
the CY 2012 multi-specialty refinement panel for further review. The 
refinement panel median work RVU for CPT code 94729 was 0.19. As a 
result of the refinement panel ratings and our clinical review, we are 
finalizing a work RVU of 0.19 for CPT code 94729.
    Furthermore, for CY 2013, we received no public comments on the CY 
2012 interim final work RVUs for CPT codes 94780 and 94781. We believe 
these values continue to be appropriate and are finalizing them without 
modification.
(22) Neurology and Neuromuscular Procedures: Autonomic Function Tests 
(CPT Codes 95938-95939)
    For discussion on interim work values for CPT codes 95938 and 
95939, refer to section III.M.3. of this final rule with comment 
period.
(23) Central Nervous System Assessments/Tests (CPT Codes 96110, HCPCS 
Code G0451)
    For CY 2012, the CPT Editorial Panel revised CPT code 96110 
(Developmental screening, with interpretation and report, per 
standardized instrument form) to reflect current practice and avoid use 
of inaccurate terms associated with this code. For CY 2012 we created 
HCPCS code G0451 (Development testing, with interpretation and report, 
per standardized instrument form) to replace CPT code 96110, which is 
discussed in the CY 2012 final rule with comment period (76 FR 73265). 
In the CY 2012 final rule correction notice (77 FR 227), we noted that 
the discussion of CPT codes 96110 and G0451 was omitted from the CY 
final rule with comment period due to an inadvertent error, and we 
included our intended discussion in subsequent the correction notice. 
Additionally, we corrected the PFS status indicator in Addendum B for 
CPT code 96110 to N (Non-covered service. These codes are noncovered 
services. Medicare payment is not made for these codes. If RVUs are 
shown, they are not used for Medicare payment.), from X (Statutory 
exclusion. These codes represent an item or service that is not within 
the statutory definition of ``physicians' services'' for PFS payment 
purposes (for example, ambulance services). No RVUs are shown for these 
codes and no payment may be made under the PFS.). The discussion and 
information in this section reflects the changes made in CY 2012 final 
rule correction notice.
    The CPT Editorial Panel revised the long descriptor for CPT code 
96110 from (Developmental testing; limited (for example, Developmental 
Screening Test II, Early Language Milestone Screen), with 
interpretation and report) to (Developmental screening, with 
interpretation and report, per standardized instrument form), effective 
January 1, 2012. With this change, we believed that the services 
described by CPT code 96110 consisted of screening services, and thus 
was not within the scope of benefits of the Medicare program, as 
defined by the Act. Therefore, we assigned CPT code 96110 a PFS 
procedure status indicator of N. To continue to make payment under the 
PFS for the testing services described

[[Page 69027]]

under CPT code 96110 prior to revision of the long descriptor, we 
created HCPCS code G0451 (Developmental testing, with interpretation 
and report, per standardized instrument form). To calculate resource-
based RVUs for HCPCS code G0451, we crosswalked the utilization, direct 
practice expense inputs, and malpractice risk factor from CPT code 
96110 to HCPCS code G0451. We noted in the CY 2012 final rule with 
comment period that CPT code 96110 did not have physician work RVUs, 
therefore no physician work RVUs had been assigned to HCPCS code G0451. 
The CY 2012 interim final RVUs assigned to G0451 were included in 
Addendum B of the CY 2012 final rule correction notice.
    Comment: We received notice from many commenters that they did not 
believe a procedure status of X was appropriate for CPT code 96110. 
Commenters stated that the change in the code description from 
``developmental testing; limited'' to ``developmental screening'' 
should not preclude payment for this service. Additionally, other 
commenters raised concerns that this code is used for early 
developmental screening in pediatric offices and worried that our 
decision not to cover this code under the Medicare program would 
influence Medicaid coverage. Commenters recommended that this testing 
service should continue to be paid under the Medicare PFS.
    Response: We thank commenters for bringing the error in the status 
indicator for CPT code 96110 to our attention. As noted above, we 
corrected the PFS status indicator in a correction notice (77 FR 227) 
to N (Noncovered service. These codes are noncovered services. Medicare 
payment may not be made for these codes. If RVUs are shown, they are 
not used for Medicare payment) is more appropriate for this code. 
Regarding commenters concern that the testing services previously 
reported under CPT code 96110 continue to be payable, we point out that 
while these service are no longer payable using CPT code 96110, they 
continue to be payable using HCPCS code G0451, effective January 1, 
2012. We understand that our lack of discussion of these services in 
the CY 2012 PFS final rule with comment period may have furthered this 
concern. We received no public comments on the CY 2012 interim final 
work RVUs for HCPCS code G0451. We believe these values continue to be 
appropriate and are finalizing them without modification.
b. Finalizing CY 2012 Interim Direct PE Inputs
i. Background and Methodology
    In this section, we address interim final direct PE inputs as 
presented in the CY 2012 PFS final rule with comment period and 
displayed in the final CY 2012 direct PE database available on the CMS 
Web site under the downloads at http://www.cms.gov/PhysicianFeeSched/PFSFRN/list.asp#TopOfPage.
    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.
    As we explained in the CY 2012 PFS final rule (76 FR 73212), we 
generally only establish interim final direct PE inputs for services 
when we receive direct PE input recommendations in the context of new, 
revised or potentially misvalued codes. However, for CY 2012, we 
established interim final direct PE inputs for several codes for which 
we did not receive direct PE recommendations. In the case of these 
codes, we believed it was necessary to establish new interim final 
direct PE inputs in order to maintain appropriate relativity among 
those codes and other related codes or between the PE, work and 
malpractice components of the PFS payment for the codes.
    Comment: Several commenters stated that they understood CMS' 
rationale for refining the direct PE inputs on an interim final basis 
as we explained above, but urged CMS to bring the AMA RUC's attention 
to these codes during the AMA RUC process so that these interim final 
refinements by CMS could be avoided.
    Response: We appreciate the commenters' suggestion. We also 
encourage the AMA RUC and other public commenters to consider issues 
related to maintaining appropriate relativity among related codes or 
between the PE, work, and malpractice components of the PFS payment for 
individual codes in the development of the recommendations that they 
provide to us. We believe that the AMA RUC and medical specialty 
societies, in light of CPT code descriptors and other language, as well 
as the guiding principles established through PFS rulemaking, are in a 
good position to identify, review, and develop direct PE input 
recommendations for coherent sets of codes, including component and 
combined codes, that ought to be developed or updated concurrently.
    In the CY 2012 PFS final rule with comment period (76 FR 73213), we 
addressed the general nature of some of our 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 broadly to comments we received regarding common refinements we 
made based on established principles or policies. Following those 
discussions, we summarize and respond to comments received regarding 
other refinements to particular codes.
    We note that the interim final direct PE inputs for CY 2012 that 
are being finalized for CY 2013 are displayed in the final CY 2013 
direct PE input database, available on the CMS Web site under the 
downloads for the CY 2013 PFS final rule at www.cms.gov/PhysicianFeeSched/. The inputs displayed there have also been used in 
developing the CY 2013 PE RVUs as displayed in Addendum B of this final 
rule.
    We also note that for several codes for which we established 
interim final direct PE inputs for CY 2012, we either made proposals in 
the CY 2013 PFS proposed rule with comment period as a result of those 
comments or we are establishing CY 2013 interim final direct PE inputs 
for the services based on new recommendations from the AMA RUC. We 
acknowledge receipt of those comments here and we note that those 
comments were taken into consideration in the development of CY 2013 
PFS proposals and our consideration of the CY 2013 AMA RUC direct PE 
input recommendations.
ii Common Refinements
(1) Equipment Time
    Prior to CY 2010, the AMA RUC did not generally provide CMS with 
recommendations regarding equipment time inputs. In CY 2010, in the 
interest of ensuring the greatest possible degree of accuracy in 
allocating equipment minutes, we requested that the AMA

[[Page 69028]]

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 continue to appreciate 
the AMA RUC's willingness to provide us with these additional inputs as 
part of its 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.
    We believe that certain highly technical pieces of equipment and 
equipment rooms are less likely to be used during all of the pre-
service or post-service tasks performed by clinical labor on the day of 
the procedure (the clinical labor service period) and are typically 
available for other patients even when one member of clinical staff may 
be occupied with a pre-service or post-service task related to the 
procedure.
    Some commenters have repeatedly objected to CMS' rationale for 
refinement of equipment minutes on this basis. We acknowledge the 
comments we received that reiterate those objections to this rationale 
and refer readers to our extensive discussion regarding those 
objections in the CY 2012 PFS final rule with commenter period (76 FR 
73182). In following paragraphs we address new comments on this policy.
    Comment: One commenter suggested that ``CMS allows only a single 
staff type'' for certain services, so that when pre-service and post-
service clinical labor tasks are assigned only to one type of clinical 
labor (a CT technologist, for example), the equipment otherwise used by 
that technologist (the CT room) is necessarily unavailable to another 
patient. Therefore, the commenter argued that in those cases CMS should 
also allocate the total number of minutes for all the clinical labor 
tasks on the day of the service to the CT room regardless of whether or 
not it is typical for the pre-service or post-service activities to 
actually take place in the room.
    Response: We understand the commenter's argument, but we do not 
agree with the conclusion for several reasons. First, we do not agree 
that allocating a number of minutes to a particular type of clinical 
staff in the direct PE input database can be appropriately viewed as 
CMS ``allowing only a single staff type'' being used to furnish 
services to Medicare beneficiaries. We believe that the direct PE input 
database should reflect the resources typically required in furnishing 
particular services, but we have no reason to believe that the inputs 
included in the database are prescriptive as to what actually happens 
in a medical practice. Therefore, we do not think the direct PE 
database staff type is likely to be a determining factor for the 
division of labor in physician offices and other nonfacility settings. 
Furthermore, we do not believe that most free-standing centers that 
furnish highly technical services to Medicare beneficiaries typically 
only employ one clinical staff member at a time. Therefore, it would 
not be reasonable to assume that all capital equipment in a typical 
practice is unavailable for use whenever pre- or post-service tasks are 
being undertaken by any individual technologist.
    We also note that there are hundreds of services in the direct PE 
input database that include more than one type of staff in the clinical 
labor inputs. For many services, for example, minutes are allocated for 
a standard nurse blend staff type for pre-service and post-service 
tasks, while technologists are only allocated intra-service period 
minutes. There is no standing CMS policy that would prevent 
consideration of dividing clinical labor tasks among different types of 
clinical labor in the direct PE input database.
    Comment: One commenter expressed a concern regarding the 
relationship between the CMS refinement of recommended equipment 
minutes and the 75% equipment utilization rate assumption mandated by 
section 1848(b)(4)(C) of the Act. The commenter also stated that these 
refinements are arbitrary and will further widen the gap between 
Medicare payments determined by the Medicare hospital outpatient 
prospective payment system (OPPS) and the technical component of PFS 
services.
    Response: As we have previously stated, we believe that many of the 
pre-service and post-service clinical labor tasks typically take place 
outside of resource-intensive equipment rooms to maximize use of 
capital-intensive resources. Monopolizing the room for fewer minutes 
per patient maximizes the availability of the machines. In turn, the 
assumed rate of use for the machine should be greater, and the resource 
cost of the machine is reduced through these efficiencies. Since the 
direct PE input database should reflect the typical resource costs of 
medical equipment, we believe that the reduced minutes and increased 
utilization rate are complementary, not contradictory.
    In response to the commenter's second assertion, these refinements 
are far from arbitrary. We have consistently applied these principles 
in refining the direct PE inputs for services as we review equipment 
inputs through the potentially misvalued code initiative and our review 
of new and revised codes since the AMA RUC started providing equipment 
minute recommendations to CMS in 2010. We believe that imprecise 
allocation of equipment minutes may be a significant factor in certain 
potentially misvalued codes. We understand the importance of relativity 
within the equipment category of direct practice expenses and seek 
public comment on whether it might be necessary to consider making 
corresponding refinements to equipment minutes for services across the 
fee schedule for the sake of maintaining relativity.
    Finally, as a general statement, differences in payment rates 
between different payment systems do not necessarily indicate a lack of 
appropriate relativity within each system. There can be legitimate 
reasons why a payment rate should vary in different payment systems 
(for example, higher indirect costs, different payment bundles). 
Nevertheless, excessive differences in payment rates between payment 
systems can be one indication of the need to examine the relativity 
between services in one or both systems. While we continue to examine 
this issue, we do not believe that it would be appropriate to establish 
or maintain inaccurate direct PE inputs for these services based on 
comparisons between the PFS and OPPS payment rates.
    We will continue to work to improve the accuracy of the equipment 
minutes as reflected in the direct PE input database and will address 
any further improvements in future rulemaking.
    After consideration of these comments, we are finalizing the 
current interim final direct PE inputs as refined based on this policy. 
The direct PE inputs are displayed in the final CY 2013 direct PE input 
database, available on the CMS Web site under the downloads for the CY 
2013 PFS final rule at www.cms.gov/PhysicianFeeSched/.

[[Page 69029]]

(2) Changes in Physician Time
    Some direct PE inputs are directly affected by revisions in 
physician time. 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. While the direct PE input recommendations 
generally correspond to the physician time values associated with 
services, we believe that in some cases inadvertent discrepancies 
between physician time values and direct PE inputs should be refined in 
the establishment of interim final direct PE inputs. In other cases, 
CMS refinement of recommended interim final physician times prompts 
necessary adjustments in the direct PE inputs. In the context of our 
establishment of interim final direct PE inputs for CY 2013, we explain 
those refinements in section III.M.3.b of this final rule with comment 
period.
    Comment: One commenter requested an explanation regarding why CMS 
assumes that the clinical time allocated for assisting the physician 
performing the procedure should conform to the physician intra-service 
time.
    Response: As we have explained in previous rulemaking (76 FR 
73213), 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. This 
time is usually allocated at some proportion of the physician time for 
a procedure. Frequently, the allocation is for the full physician 
intraservice time; this reflects the assumption that the clinical staff 
is assisting the physician during the entire procedure. For other 
services, the allocation is two-thirds or one-half of the physician 
time; this reflects the assumption that clinical staff is assisting the 
physician for a portion of the procedure time. In establishing interim 
final direct PE inputs, we note a change in clinical labor time (or 
corresponding change in equipment minutes) that results from a change 
in physician time as ``conforming to physician time.'' This note is not 
used to reflect a refinement to the recommended proportion for which 
the staff is assisting the physician performing the procedure. Instead, 
these refinements reflect a change in the base procedure time 
assumption for the service. After consideration of this comment, we are 
finalizing the current interim final direct PE inputs as refined based 
on this policy. The direct PE inputs are displayed in the final CY 2013 
direct PE input database, available on the CMS Web site under the 
downloads for the CY 2013 PFS final rule at www.cms.gov/PhysicianFeeSched/.
(3) Proxy Inputs for Digital Imaging
    Comment: In the context of several codes, several commenters 
objected to CMS' not accepting certain recommended items as direct PE 
inputs since these items, though atypical, may be considered surrogate 
items for digital imaging technology.
    Response: A variety of imaging services across the PFS include 
direct PE inputs that reflect film-based technology instead of digital 
technology. We have accepted the film-based technology inputs in the 
RUC recommendations as proxy inputs until a more comprehensive 
migration of such inputs from film to digital imaging can be executed. 
We anticipate updating all of the associated inputs in future 
rulemaking.
    After consideration of these comments, we are finalizing the 
current interim final direct PE inputs as refined based on this policy. 
The direct PE inputs are displayed in the final CY 2013 direct PE input 
database, available on the CMS Web site under the downloads for the CY 
2013 PFS final rule at www.cms.gov/PhysicianFeeSched/.
iii Code-Specific Direct PE Inputs
(1) Integumentary System: Repair (Closure) (CPT Codes 15271, 15273, 
15275, 15277)
    In establishing interim final direct PE inputs for 2012, CMS 
refined the AMA RUC's recommendation for CPT codes 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), 15273 
(Application of skin substitute graft to trunk, arms, legs, total wound 
surface area greater than or equal to 100 sq cm; first 100 sq cm wound 
surface area, or 1% of body area of infants and children), 15275 
(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; first 25 sq cm or less wound 
surface area), and 15277 (Application of skin substitute graft to face, 
scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, and/
or multiple digits, total wound surface area greater than or equal to 
100 sq cm; first 100 sq cm wound surface area, or 1% of body area of 
infants and children) to allocate the full service period minutes to 
the basic instrument pack (EQ137) by reducing the equipment allocation 
by 3 minutes to account for the overlapping time for cleaning the room 
and the pack.
    Comment: One commenter disagreed with CMS' reduction of the 
recommended minutes and stated that since the pack is unavailable for 
other patients while the room is being cleaned, the pack should be 
allocated the full number of service period clinical labor minutes, 
including the time for cleaning both the room and the pack. The 
commenter also stated that cleaning of the instruments is discrete 
work, most often done after the patient's departure.
    Response: Since clinical labor is allocated a specific number of 
minutes for cleaning surgical instrument packs, we do not believe that 
we should also allocate the clinical labor minutes for cleaning the 
other equipment associated with the services. Because we agree with the 
commenter that the task is discrete from the cleaning associated with 
the other equipment and the room itself, we do not think that the 
instrument pack is unavailable when the room is being cleaned.
    CMS also refined the recommended direct PE inputs for CPT codes 
15273 and 15275 by not including the post-op incision care (suture) 
pack (SA054) in each code because the code itself does not describe 
post-op care.
    Comment: One commenter disagreed with the refinement and pointed 
out that CPT guidelines state: ``Skin replacement surgery consists of 
surgical preparation and topical placement of an autograft (including 
tissue cultured autograft) or skin substitute graft (ie, homograft, 
allograft, xenograft). The graft is anchored using the provider's 
choice of fixation. When services are performed in the office, routine 
dressing supplies are not reported separately. Removal of current graft 
and/or simple cleansing of the wound is included, when performed.'' The 
commenter also noted that CPT codes 15273 and 15277 typically involve 
large grafts that will be anchored by sutures, and although these codes 
have a 0-day global period, removal of the graft is included in the 
work and therefore a suture removal kit is appropriate as a supply 
item.
    Response: Based on the rationale presented by the commenters, CMS 
agrees that one pack should be included as a supply item for CPT codes 
15273 and 15277. After consideration of the comments received, we are 
finalizing the direct PE inputs for CPT codes 15271, 15273, 15275, and 
15277 as established as interim final with the additional refinement of 
incorporating the supply item discussed above for CPT codes 15273 and 
15277.

[[Page 69030]]

(2) Musculoskeletal: General: Introduction or Removal (CPT Code 20527)
    In establishing interim final direct PE inputs for 2012, CMS 
refined the AMA RUC's recommendation for CPT code 20527 (Injection, 
enzyme (eg, collagenase), palmar fascial cord (ie, dupuytren's 
contracture)) by including a minimum multi-specialty visit pack (SA048) 
as a direct PE input for the service.
    Comment: A commenter presented information indicating that the 
multi-specialty pack is not typically used in furnishing the service.
    Response: We agree with the information presented by the commenter.
    After consideration of this comment, we are finalizing the direct 
PE inputs for CPT code 20527 as established as interim final with the 
additional refinement of removing the supply item discussed above. The 
direct PE inputs are displayed in the final CY 2013 direct PE input 
database, available on the CMS Web site under the downloads for the CY 
2013 PFS final rule at www.cms.gov/PhysicianFeeSched/.
(3) Musculoskeletal: Spine (Vetebral Column) (CPT Code 22525)
    In establishing interim final direct PE inputs for 2012, CMS 
refined the AMA RUC's recommendation for CPT code 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 (eg, kyphoplasty); 
each additional thoracic or lumbar vertebral body (list separately in 
addition to code for primary procedure))by not including additional 
clinical labor and equipment time for preparing the room, equipment, 
and supplies since the CPT code 22525 is an add-on code and time for 
those tasks is already included in the base code.
    Comment: A commenter disagreed with the removal of 2 minutes for 
preparing the room, equipment, and supplies and stated that since the 
add-on code requires more equipment than the base code the direct PE 
inputs should include additional minutes for preparing that equipment.
    Response: Based on our clinical review, we believe that the 
standard number of minutes allocated for the clinical labor to prepare 
the room, equipment, and supplies in the base code approximates the 
typical number of minutes for such tasks including the cases where the 
add-on code is necessary. Were the minutes accounted for separately in 
the add-on code, the number of minutes included in the base code would 
need to be re-examined. At this time, we believe that it would be more 
appropriate to maintain the standard number of minutes in the base code 
and not allocate additional time in the add-on code.
    Comment: A commenter informed CMS that the clinical labor codes 
associated with CPT Code 22525 were transposed in the direct PE input 
database.
    Response: We appreciate being informed of the inadvertent 
assignment of labor codes.
    After consideration of these comments, we are finalizing the direct 
PE inputs for CPT code 22525 as established as interim final with the 
additional refinement of assigning the appropriate labor codes.
(4) Musculoskeletal: Hand and Fingers (CPT Code 26341)
    In establishing interim final direct PE inputs for 2012, CMS 
refined the AMA RUC's recommendation for CPT code 26341 (Manipulation, 
palmar fascial cord (ie, dupuytren's cord), post enzyme injection (eg, 
collagenase), single cord) by including a minimum multi-specialty visit 
pack (SA048) as a direct PE input for the service period in the 
nonfacility and the same pack in both settings to account for the post-
service office visit included in the global period.
    Comment: A commenter stated that while the pack was typically used 
in the nonfacility setting during the service period, it is not 
typically used for the post-service office visit.
    Response: The allocation of the supply pack minutes in the facility 
setting reflects the standard allocation of direct PE inputs based on 
the office visits included in the global period for the service. We 
discuss the specifics related to these standard allocations in section 
III.M.3.b of this final rule with comment period. At this time, we do 
not believe it would be appropriate to deviate from these standards. We 
direct readers interested in the appropriate valuation of services with 
global periods to section III.B.2.d of this final rule with comment 
period.
    After consideration of this comment, we are finalizing the direct 
PE inputs for CPT code 26341 as established as interim final. The 
direct PE inputs are displayed in the final CY 2013 direct PE input 
database, available on the CMS Web site under the downloads for the CY 
2013 PFS final rule at www.cms.gov/PhysicianFeeSched/.
(5) Respiratory: Lungs and Pleura (CPT Code 32405) and Digestive: Liver 
(CPT Code 47000)
    In establishing interim final direct PE inputs for 2012, CMS 
refined the AMA RUC's recommendations for CPT codes 32405 (Biopsy, lung 
or mediastinum, percutaneous needle) and 47000 (Biopsy of liver, 
needle; percutaneous) by removing minutes allocated to the CT room 
(EL007) since these services are typically billed with radiological 
supervision and interpretation (S&I) services.
    Comment: A commenter pointed out that the CT room time included 
with the S&I code 77012 is only 9 minutes, which reflects a convention 
for some S&I codes. On this basis, the commenter suggested that for 
these codes, the CT room should be allocated the standard number of 
minutes minus the 9 minutes that overlap with the S&I code.
    Response: We appreciate the commenter pointing out this allocation 
of equipment minutes. We note that this convention does not apply 
consistently to all S&I codes and related procedure codes. We may 
address such inconsistencies in future rulemaking.
    After consideration of this comment, we are finalizing the direct 
PE inputs for CPT codes 32405 and 47000 as established as interim final 
with the additional refinement of including the CT room as a direct PE 
input for the services, with the reduction of 9 minutes to account for 
the overlapping number of minutes allocated in the S&I code.
(6) Cardiovascular: Arteries and Veins (CPT Codes 36200, 36246, 36247)
    In establishing interim final direct PE inputs for 2012, CMS 
refined the AMA RUC's recommendations for CPT codes 36200 (Introduction 
of catheter, aorta), 36246 (Selective catheter placement, arterial 
system; initial second order abdominal, pelvic, or lower extremity 
artery branch, within a vascular family), and 36247 (Selective catheter 
placement, arterial system; initial third order or more selective 
abdominal, pelvic, or lower extremity artery branch, within a vascular 
family) by reducing the number of clinical labor minutes allocated for 
preparing the room, equipment, and supplies used in the service to the 
standard number of minutes allocated to clinical labor for those tasks.
    Comment: One commenter stated that since vascular procedures have 
more variable supplies than typical procedures, more minutes for 
preparing supplies should be allocated for the clinical labor direct PE 
inputs.

[[Page 69031]]

    Response: Upon clinical review of these procedures, we believe that 
the standard number of minutes allocated for such tasks in similar 
services across the direct PE input database adequately accounts for 
the variability of supplies in these procedures.
    After consideration of this comment, we are finalizing the direct 
PE inputs for CPT codes 36200, 36246, and 36247 as established as 
interim final. The direct PE inputs are displayed in the final CY 2013 
direct PE input database, available on the CMS Web site under the 
downloads for the CY 2013 PFS final rule at www.cms.gov/PhysicianFeeSched/.
(7) Digestive: Abdomen, Peritoneum, and Omentum (CPT Code 49083)
    In establishing interim final direct PE inputs for 2012, CMS 
refined the AMA RUC's recommendations for CPT code 49083 (Abdominal 
paracentesis (diagnostic or therapeutic); with imaging guidance) by 
reducing the number of clinical labor minutes recommended for a series 
of tasks to correspond with the standard minutes as allocated across 
PFS services. Additionally, CMS refined the minutes allocated to the 
equipment associated with the service based on the standard allocation 
of minutes for highly technical and resource-intensive equipment.
    Comment: A commenter suggested that 42 minutes should be allocated 
to the equipment using CMS' methodologies and including the 25 minutes 
corresponding to the assist physician time.
    Response: We agree with the commenter that the 25 minutes is the 
appropriate time allocated for assisting the physician. However, we do 
not agree with the final number of minutes that should be allocated for 
the equipment. Based on our standard review for such equipment, we 
believe that the equipment should be allocated the minutes assumed for 
preparing the room, equipment, and supplies, preparing and positioning 
the patient, the procedure time itself, and the time allocated to clean 
the room and the equipment. Based on the procedure-specific assist 
physician time and the standard number of minutes allocated for the 
additional pre-service and post-service tasks, we have calculated the 
appropriate equipment minutes to sum to 32.
    After consideration of this comment, we are finalizing the direct 
PE inputs for CPT code 49083 as established as interim final, with the 
additional refinement of allocating 32 minutes for the equipment used 
in the service. The direct PE inputs are displayed in the final CY 2013 
direct PE input database, available on the CMS Web site under the 
downloads for the CY 2013 PFS final rule at www.cms.gov/PhysicianFeeSched/.
(8) Urinary: Bladder (CPT Code 51736)
    In establishing interim final direct PE inputs for 2012, CMS 
refined the AMA RUC's recommendations for CPT code 51736 (Simple 
uroflowmetry (ufr) (eg, stop-watch flow rate, mechanical uroflowmeter)) 
by adding the following supplies to the direct PE inputs for the 
service based on CMS clinical review: paper towel (SK082), disinfectant 
spray (SM012), and sanitizing cloth wipe (SM022).
    Comment: A commenter disagreed with this refinement and suggested 
instead that these supplies, as well as the digital uroflowmeter 
(EQ259), should instead only be included as direct PE inputs for CPT 
code 51741 (Complex uroflowmetry (eg, calibrated electronic 
equipment)).
    Response: Upon further clinical review, and on the basis of the 
commenter's recommendation, we agree that the items should be removed 
from the service.
    After consideration of this comment, we are finalizing the direct 
PE inputs for CPT code 51741 as established as interim final, with the 
additional refinement of removing the three supply items and one 
equipment item identified above. The direct PE inputs are displayed in 
the final CY 2013 direct PE input database, available on the CMS Web 
site under the downloads for the CY 2013 PFS final rule at www.cms.gov/PhysicianFeeSched/.
    (9) Nervous: Extracranial Nerves, Peripheral Nerves, and Autonomic 
Nervous System (CPT Codes 64633, 64635)
    In establishing interim final direct PE inputs for 2012, CMS 
refined the AMA RUC's recommendations for CPT code 64633 (Destruction 
by neurolytic agent, paravertebral facet joint nerve(s), with imaging 
guidance (fluoroscopy or ct); cervical or thoracic, single facet joint) 
and 64635 (Destruction by neurolytic agent, paravertebral facet joint 
nerve(s), with imaging guidance (fluoroscopy or ct); lumbar or sacral, 
single facet joint) by not including the recommended radiofrequency 
probe kit (SA100) as a supply item. As we explained in the CY 2012 PFS 
final rule (76 FR 73214), the very expensive disposable item had not 
previously been included as a direct PE input for predecessor codes 
that described the same services, and the recommendation did not 
include any information suggesting that such a significant resource 
cost had become typical in furnishing the services. At that time, we 
noted that the direct PE inputs for these codes were considered interim 
for CY 2012, and we would consider any submitted information regarding 
the use of this supply in furnishing these services prior to finalizing 
the direct PE inputs for CY 2013.
    Comment: One commenter responded to this refinement by explaining 
that furnishing the service requires a radiofrequency kit, but that the 
kit is reusable and typically has a useful life of several months.
    Response: We appreciate the information from the commenter, though 
we generally prefer additional information, including paid invoices, in 
order to price supply or equipment items accurately. For CY 2013, we 
believe it would be appropriate to finalize the direct PE inputs for 
these services with a new equipment item based on the disposable item 
included in the original recommendation and the information supplied by 
the commenter. We encourage stakeholders to submit additional 
information through the public process for updating prices for supplies 
and equipment we established in the CY 2011 PFS final rule (75 FR 
73205-73207). We believe that that process will allow us to describe 
the item and assign its price and useful life more accurately.
    CMS also refined the recommended direct PE inputs for CPT codes 
64633 and 64635 by allocating equipment minutes in the facility setting 
for the exam table (EF023) and the exam light (EQ168) based on the 
post-service office visits included in the global periods.
    Comment: One commenter suggested that allocating this time was not 
appropriate.
    Response: The allocation of equipment minutes in the facility 
setting reflects the standard allocation of direct PE inputs based on 
the office visits included in the global period for the service. We 
discuss the specifics related to these standard allocations in section 
III.M.3.b of this final rule with comment period. At this time, we do 
not believe it would be appropriate to deviate from these standards. We 
direct readers interested in the appropriate valuation of services with 
global periods to section III.B.2.d of this final rule with comment 
period.
    After consideration of these comments, we are finalizing the direct 
PE inputs for CPT code 64633 and 64635 as established as interim final, 
with the additional refinement of establishing this equipment item, 
``radiofrequency kit for destruction by

[[Page 69032]]

neurolytic agent'' (EQ354) as a placeholder direct PE input for the 
codes until we receive more information regarding the item. The direct 
PE inputs are displayed in the final CY 2013 direct PE input database, 
available on the CMS Web site under the downloads for the CY 2013 PFS 
final rule at www.cms.gov/PhysicianFeeSched/.
(10) Diagnostic Radiology: Spine and Pelvis (CPT Code 72120, 72170)
    In establishing interim final direct PE inputs for 2012, CMS 
refined the direct PE inputs for CPT codes 72120 (Radiologic 
examination, spine, lumbosacral; bending views only, 2 or 3 views) and 
72170 (Radiologic examination, pelvis; 1 or 2 views) by reducing the 
number of minutes allocated to the clinical labor for cleaning the room 
and equipment to one.
    Comment: A commenter disagreed with the revision and suggested that 
CMS should use the standard 3 minutes for this activity.
    Response: We appreciate the commenter's interest in CMS using the 
standard number of minutes for clinical labor tasks. As we explained in 
our refinements regarding reducing recommendations that exceeded the 
standard number of minutes, we believe that the standard number of 
minutes generally accommodates the range of minutes likely to be 
typical for such activities. We agree that it would be appropriate to 
include the standard minutes for these services.
    After consideration of these comments, we are finalizing the direct 
PE inputs for CPT codes 72120 and 72170, with the additional refinement 
of allocating two additional minutes to the clinical labor and the 
associated equipment inputs for cleaning the room and equipment. The 
direct PE inputs are displayed in the final CY 2013 direct PE input 
database, available on the CMS Web site under the downloads for the CY 
2013 PFS final rule at www.cms.gov/PhysicianFeeSched/.
(11) Nuclear Medicine: Diagnostic (CPT Codes 78226, 78227, 78579, 
78580, 78582, 78597, 78598)
    In establishing interim final direct PE inputs for 2012, CMS 
refined the AMA RUC's recommendations for CPT codes 78226 
(Hepatobiliary system imaging, including gallbladder when present;), 
78227(Hepatobiliary system imaging, including gallbladder when present; 
with pharmacologic intervention, including quantitative measurement(s) 
when performed), 78579 (Pulmonary ventilation imaging (eg, aerosol or 
gas)), 78580 (Pulmonary perfusion imaging (eg, particulate)), 78582 
(Pulmonary ventilation (eg, aerosol or gas) and perfusion imaging), 
78597 (Quantitative differential pulmonary perfusion, including imaging 
when performed), and 78598 (Quantitative differential pulmonary 
perfusion and ventilation (eg, aerosol or gas), including imaging when 
performed) by refining equipment time allocations as described in 
section III.M.2.b above.
    Comment: One commenter disagreed with those refinements and urged 
CMS to identify the clinical labor tasks associated with the minutes 
excluded from the equipment allocation.
    Response: We refer the commenter to the discussion above regarding 
the general principles of accurate assignment of equipment minutes. In 
the case of this family of codes, we believe that it is appropriate to 
allocate equipment minutes for clinical labor tasks of preparing the 
room, positioning the patient, placing the IV, acquiring images during 
the procedure itself, and cleaning the room, including additional 
minutes of cleaning for regulatory compliance. We do not believe that 
expensive equipment is typically unavailable for use for other patients 
while clinical staff performs such tasks as greeting and gowning the 
patient, reviewing mandatory radiation education, helping the patient 
to the waiting room, completing diagnostic forms or making lab and X-
ray requisitions. The minutes allocated to the equipment in the direct 
PE input database reflect the application of these principles as 
specifically determined through CMS clinical review.
    CMS also refined the recommended direct PE inputs for CPT codes 
78226, 78227, 78579, 78580, 78582, 78597, 78598 by examining all of the 
educational tasks included in the AMA RUC's recommendation and refining 
the sum of those times to a total number of minutes considered accurate 
under CMS clinical review. The AMA RUC recommendation included 6 
minutes of education by the nuclear medicine technologist. CMS refined 
the total number of minutes allocated for educational tasks to 4.
    Comment: One commenter disagreed with the refinement to remove the 
minutes allocated for providing patient counseling while the patient is 
being taken back to the waiting area. This commenter suggested that CMS 
may be confusing the recommended minutes for this task with the 
concurrent recommendation to include the standard number of minutes for 
patient education. The commenter suggested that since nuclear medicine 
patients are radioactive when they leave departments, they require more 
education than other services, especially since patients need to be 
reminded about the dangers of radioactivity after they leave the 
office.
    Response: We agree with the commenter that it is reasonable for 
more time to be allocated to these services for patient education. We 
also note that our interim refinements included more education time 
than typical for PFS services. However, we believe that it would be 
appropriate to include a total of 5 minutes for clinical labor patient 
education activities for these services in consideration of the 
comments received.
    CMS also refined the recommended direct PE inputs for CPT codes 
78226, 78227, 78579, 78580, 78582, 78597, 78598 by examining all of the 
cleaning tasks included in the AMA RUC's recommendation and refining 
the sum of those times to a total number of minutes considered accurate 
under CMS clinical review. The AMA RUC recommendation included 13 
minutes of cleaning tasks by a nuclear medicine technologist. CMS 
refined the total number of minutes allocated for educational tasks to 
10.
    Comment: One commenter suggested that the full 13 minutes of 
cleaning per service should be allocated on a standard basis for these 
codes to account for the number of minutes required to meet cleaning 
regulatory cleaning standards for services that use radioactive 
pharmaceuticals. The commenter also noted that this allocation has been 
included in similar services.
    Response: Upon clinical review, we continue to doubt that nuclear 
medicine technologists typically clean the room and equipment for 13 
minutes following every service. However, we acknowledge that there is 
an additional cleaning burden for these services, and we also agree 
with the commenter that other services that use similar substances 
incorporate the same number of minutes for mandated cleaning. 
Therefore, we believe it is appropriate that these services include 
these additional minutes for cleaning.
    After consideration of these comments, we are finalizing the direct 
PE inputs for CPT codes 78226, 78227, 78579, 78580, 78582, 78597, 78598 
with the additional refinement of allocating 1 additional clinical 
labor minute for patient education tasks and an additional 3 minutes to 
the clinical labor and equipment items to account for mandatory 
cleaning tasks. The direct PE inputs are displayed in the final CY 2013 
direct PE input database, available on the CMS Web site under the 
downloads for the CY 2013 PFS final

[[Page 69033]]

rule at www.cms.gov/PhysicianFeeSched/.
(12) Pulmonary: Diagnostic Testing and Therapies (CPT Codes 94728)
    In establishing interim final direct PE inputs for 2012, CMS 
refined the AMA RUC's recommendations for CPT code 94728 (Airway 
resistance by impulse oscillometry) by adding the body plethysmograph 
autobox (EQ044) as direct equipment input for the service based on the 
item's inclusion as a direct PE input for related services.
    Comment: One commenter noted that this code is used to describe 
services furnished primarily for children and that the equipment item 
cannot be used with pediatric patients.
    Response: We appreciate the additional information regarding the 
appropriate use of the equipment.
    After consideration of these comments, we are finalizing the direct 
PE inputs for CPT code 94728 with the additional refinement of removing 
the equipment item discussed above as a direct PE input for the 
service. The direct PE inputs are displayed in the final CY 2013 direct 
PE input database, available on the CMS Web site under the downloads 
for the CY 2013 PFS final rule at www.cms.gov/PhysicianFeeSched/.
(13) Hydration, Therapeutic, Prophylactic, Diagnostic Injections and 
Infusions, and Chemotherapy and Other Highly Complex Drug or Highly 
Complex Biologic Agent Administration (CPT Codes 96413, 96416)
    In establishing interim final direct PE inputs for 2012, CMS 
refined the AMA RUC's recommendations for CPT code 96413 (Chemotherapy 
administration, intravenous infusion technique; up to 1 hour, single or 
initial substance/drug) by not including the 6 clinical labor minutes 
in the pre-service period for completing pre-service diagnostic and 
referral forms and coordinating pre-surgery services since these tasks 
are not generally allocated for services without global periods.
    Comment: Several commenters suggested that the recommended times 
for these tasks reflects the time for the oncology nurse to document 
the upcoming chemotherapy session based on the physician's orders, 
coordinate the service under the physician's direction, ensure that the 
planned infusion is consistent with physician's direction, and confirm 
that there is no change in the drugs to be infused, anti-emetics to be 
supplied, or post-treatment instructions. The commenter also noted that 
the minutes allocated for those tasks in CPT code 96416 (Chemotherapy 
administration, intravenous infusion technique; initiation of prolonged 
chemotherapy infusion (more than 8 hours), requiring use of a portable 
or implantable pump) were removed in the same recommendation in order 
to account for the overlap in tasks since CPT code 96413 is typically 
also reported whenever CPT code 96416 is reported.
    Response: We agree with the commenter's recommendation to include 
those six minutes in CPT code 96413 and exclude those minutes in CPT 
code 96416, consistent with the AMA RUC recommendation.
    CMS refined the recommended direct PE inputs for CPT code 96416 by 
not including the 4 minutes assigned to the clinical labor for 
reviewing the charts and obtain chemotherapy-related medical history. 
This refinement reflected that CMS clinical review concluded that these 
tasks are already accounted for in the clinical labor minutes assigned 
to CPT code 96413 and would typically not be repeated when CPT code 
96416 is reported.
    Comment: Several commenters claimed that the nurse must perform 
these tasks and that the time is appropriately valued at 4 minutes.
    Response: We agree with the commenters that the time for the tasks 
is appropriately estimated at 4 minutes, but we maintain our belief 
that the tasks fully overlap with the same tasks associated with CPT 
code 96413, which is typically also reported whenever CPT code 96416 is 
reported. Therefore, we do not believe those 4 minutes should be 
allocated to both services.
    CMS also refined the recommended direct PE inputs for CPT code 
96416 by examining all of the tasks described in the AMA RUC's 
recommendation for monitoring the patient and removing the minutes that 
overlap with monitoring included in CPT code 96413. This refinement 
assumed no monitoring was necessary beyond the monitoring time already 
associated with CPT code 96413.
    Comment: One commenter objected to the refinement of the intra-
service time since the clinical labor performs the procedure.
    Response: We agree with the commenter that the recommendation 
reflects that the clinical staff is performing the procedure. The 
rationale for our refinement of the minutes for the task ``assist 
physician performing the procedure'' was described broadly as 
``conforming to physician time'' in the CY 2012 PFS final rule (76 FR 
73264), but was specifically intended to address the overlap in minutes 
allocated for monitoring the patient following the administration. We 
continue to believe that some of the 18 recommended minutes for 
monitoring tasks in CPT code 96416 overlap with the 24 minutes included 
in CPT code 96413 for monitoring. However, upon further clinical 
review, we believe that the overlap is not complete and that it would 
be appropriate to increase the total clinical labor minutes allocated 
in the service period by an additional 11 minutes to account for the 
additional monitoring that would typically occur when CPT code 96416 is 
furnished.
    After consideration of these comments, we are finalizing the direct 
PE inputs for CPT codes 96413 and 96416 with the additional refinements 
of including an additional 6 minutes of clinical labor time in the pre-
service period for CPT code 96413 and including an additional 11 
minutes of clinical labor time in the service period for CPT code 
96416. We also note that the minutes allocated to the equipment inputs 
will increase based on our standard allocation policies. The direct PE 
inputs are displayed in the final CY 2013 direct PE input database, 
available on the CMS Web site under the downloads for the CY 2013 PFS 
final rule at www.cms.gov/PhysicianFeeSched/.
    For all other CY 2012 new, revised, or potentially misvalued codes 
with CY 2012 interim final 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 2012.
c. Finalizing CY 2012 Interim and Proposed Malpractice Crosswalks for 
CY 2013
    Consistent with our malpractice methodology described in section 
III.C.1. of this final rule with comment period, for the CY 2012 PFS 
final rule, we assigned malpractice RVUs for CY 2012 new and revised 
codes by utilizing crosswalks to source codes that have a similar 
malpractice risk-of-service. After reviewing the AMA RUC-recommended 
malpractice source code crosswalks for CY 2012 new and revised codes, 
we accepted nearly all of them on an interim final basis for CY 2012. 
As detailed in the CY 2012 final rule with comment period (76 FR 73264 
through 73265), for four CPT codes describing multi-layer compression 
systems, we assigned a malpractice crosswalk different from the 
malpractice crosswalk recommended by the AMA RUC and HCPAC.
    In the CY 2012 PFS final rule with comment period, for CPT codes 
29581 (Application of multi-layer compression

[[Page 69034]]

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), we assigned 
an interim final malpractice crosswalk from CPT code 97140 (Manual 
therapy techniques (eg, mobilization/manipulation, manual lymphatic 
drainage, manual traction), 1 or more regions, each 15 minutes). CPT 
codes 29582, 29583, and 29584 were 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. After review, we believed that CPT code 97140 provides 
the most appropriate malpractice source code crosswalk for CPT codes 
29582, 29583, and 29584. As discussed in section III.M.3 of this CY 
2013 final rule with comment period, in the CY 2012 PFS final rule with 
comment period we stated that we believe CPT codes 29581, 29582, 29583, 
and 29584 all describe similar services from a resource perspective, 
and we assigned CPT code 29581 the same interim work RVU as CPT code 
29583. Because we find these services to be so similar, we stated that 
we also believed that it is appropriate for CPT codes 29581 and 29583 
to have the same malpractice source code crosswalk. Therefore, we 
assigned CPT code 97140 as the malpractice source code crosswalk for 
CPT codes 29581, 29582, 29583, and 29584.
    Additionally, for CY 2012 we created HCPCS G-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). For 
CY 2012, we assigned CPT code 96110 as the malpractice source code 
crosswalk for HCPCS code G0451.
    In accordance with our malpractice methodology, we adjusted the 
malpractice RVUs for the CY 2012 new/revised codes for the difference 
in work RVUs (or, if greater, the clinical labor portion of the fully 
implemented PE RVUs) between the source codes and the new/revised codes 
to reflect the specific risk-of-service for the new/revised codes. The 
interim final malpractice crosswalks were listed in Table 22 of the CY 
2012 PFS final rule with comment period (76 FR 73266 through 73268).
    We received no comments on the CY 2012 interim final m