[Federal Register Volume 79, Number 133 (Friday, July 11, 2014)]
[Proposed Rules]
[Pages 40317-40540]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-15948]



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Vol. 79

Friday,

No. 133

July 11, 2014

Part III





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Parts 403, 405, 410, et al.





Medicare Program; Revisions to Payment Policies Under the Physician Fee 
Schedule, Clinical Laboratory Fee Schedule, Access to Identifiable Data 
for the Center for Medicare and Medicaid Innovation Models & Other 
Revisions to Part B for CY 2015; Proposed Rule

Federal Register / Vol. 79 , No. 133 / Friday, July 11, 2014 / 
Proposed Rules

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 403, 405, 410, 414, 425, and 498

[CMS-1612-P]
RIN 0938-AS12


Medicare Program; Revisions to Payment Policies Under the 
Physician Fee Schedule, Clinical Laboratory Fee Schedule, Access to 
Identifiable Data for the Center for Medicare and Medicaid Innovation 
Models & Other Revisions to Part B for CY 2015

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

ACTION: Proposed rule.

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SUMMARY: This major proposed rule addresses changes to the physician 
fee schedule, and other Medicare Part B payment policies to ensure that 
our payment systems are updated to reflect changes in medical practice 
and the relative value of services, as well as changes in the statute. 
See the Table of Contents for a listing of the specific issues 
addressed in this proposed rule.

DATES: Comment date: To be assured consideration, comments must be 
received at one of the addresses provided below, no later than 5 p.m. 
on September 2, 2014.

ADDRESSES: In commenting, please refer to file code CMS-1612-P. 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-1612-P, 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-1612-P, 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: Gail Addis, (410) 786-4552, for issues 
related to the refinement panel or for any physician payment issues not 
identified below.
    Chava Sheffield, (410) 786-2298, for issues related to practice 
expense methodology, impacts, the sustainable growth rate, conscious 
sedation, or conversion factors.
    Kathy Kersell, (410) 786-2033, for issues related to direct 
practice expense inputs.
    Jessica Bruton, (410) 786-5991, for issues related to potentially 
misvalued services or work RVUs.
    Craig Dobyski, (410) 786-4584, for issues related to geographic 
practice cost indices or malpractice RVUs.
    Ken Marsalek, (410) 786-4502, for issues related to telehealth 
services.
    Pam West, (410) 786-2302, for issues related to conditions for 
therapists in private practice.
    Marianne Myers, (410) 786-5962, for issues related to ambulance 
extender provisions.
    Amy Gruber, (410) 786-1542, for issues related to changes in 
geographic area designations for ambulance payment.
    Anne Tayloe-Hauswald, (410) 786-4546, for issues related to 
clinical lab fee schedule.
    Corinne Axelrod, (410) 786-5620, for issues related to Rural Health 
Clinics or Federally Qualified Health Centers.
    Renee Mentnech, (410) 786-6692, for issues related to access to 
identifiable data for the Centers for Medicare & Medicaid models.
    Marie Casey, (410) 786-7861, for issues related to local 
determination process for clinical diagnostic laboratory tests.
    Frederick Grabau, (410) 786-0206, for issues related to private 
contracting/ opt -out.
    David Walczak, (410) 786-4475, for issues related to payment policy 
for substitute physician billing arrangements (locum tenens).
    Melissa Heesters, (410) 786-0618, for issues related to reports of 
payments or other transfers of value to covered recipients.
    Rashaan Byers, (410) 786-2305, for issues related to physician 
compare.
    Christine Estella, (410) 786-0485, for issues related to the 
physician quality reporting system.
    Alexandra Mugge (410) 786-4457, for issues related to EHR incentive 
program.
    Patrice Holtz, (410) 786-5663, for issues related to comprehensive 
primary care initiative.
    Terri Postma, (410) 786-4169, for issues related to Medicare Shared 
Savings Program.
    Kimberly Spalding Bush, (410) 786-3232, for issues related to 
value-based modifier and improvements to physician feedback.

SUPPLEMENTARY INFORMATION: 
    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: http://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,

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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

I. Executive Summary and Background
    A. Executive Summary
    B. Background
    C. Health Information Technology
II. Provisions of the Proposed Rule for PFS
    A. Resource-Based Practice Expense (PE) Relative Value Units 
(RVUs)
    B. Potentially Misvalued Services Under the Physician Fee 
Schedule
    C. Malpractice Relative Value Units (RVUs)
    D. Geographic Practice Cost Indices (GPCIs)
    E. Medicare Telehealth Services
    F. Valuing New, Revised and Potentially Misvalued Codes
    G. Chronic Care Management (CCM)
    H. Definition of Colorectal Cancer Screening Tests
    I. Payment of Secondary Interpretation of Images
    J. Conditions Regarding Permissible Practice Types for 
Therapists in Private Practice
    K. Payments for Physicians and Practitioners Managing Patients 
on Home Dialysis
III. Other Provisions of the Proposed Regulations
    A. Ambulance Extender Provisions
    B. Changes in Geographic Area Delineations for Ambulance Payment
    C. Clinical Laboratory Fee Schedule
    D. Removal of Employment Requirements for Services Furnished 
``Incident to'' Rural Health Clinic (RHC) and Federally Qualified 
Health Center (FQHC) Visits
    E. Access to Identifiable Data for the Center for Medicare and 
Medicaid Models
    F. Local Coverage Determination Process for Clinical Diagnostic 
Laboratory Tests
    G. Private Contracting/Opt-out
    H. Solicitation of Comments on the Payment Policy for Substitute 
Physician Billing Arrangements
    I. Reports of Payments or Other Transfers of Value to Covered 
Recipients
    J. Physician Compare Web site
    K. Physician Payment, Efficiency, and Quality Improvements--
Physician Quality Reporting System
    L. Electronic Health Record (EHR) Incentive Program
    M. Medicare Shared Savings Program
    N. Value-Based Payment Modifier and Physician Feedback Program
IV. Collection of Information Requirements
V. Response to Comments
VI. Regulatory Impact Analysis
Regulations Text

Acronyms

    In addition, because of the many organizations and terms to which 
we refer by acronym in this proposed rule, we are listing these 
acronyms and their corresponding terms in alphabetical order below:

AAA Abdominal aortic aneurysms
ACO Accountable care organization
AMA American Medical Association
ASC Ambulatory surgical center
ATA American Telehealth Association
ATRA American Taxpayer Relief Act (Pub. L. 112-240)
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)
CAD Coronary artery disease
CAH Critical access hospital
CBSA Core-Based Statistical Area
CCM Chronic care management
CEHRT Certified EHR technology
CF Conversion factor
CG-CAHPS Clinician and Group Consumer Assessment of Healthcare 
Providers and Systems
CLFS Clinical Laboratory Fee Schedule
CNM Certified nurse-midwife
CP Clinical psychologist
CPC Comprehensive Primary Care
CPEP Clinical Practice Expert Panel
CPT [Physicians] Current Procedural Terminology (CPT codes, 
descriptions and other data only are copyright 2013 American Medical 
Association. All rights reserved.)
CQM Clinical quality measure
CSW Clinical social worker
CT Computed tomography
CY Calendar year
DFAR Defense Federal Acquisition Regulations
DHS Designated health services
DM Diabetes mellitus
DSMT Diabetes self-management training
eCQM Electronic clinical quality measures
EHR Electronic health record
E/M Evaluation and management
EP Eligible professional
eRx Electronic prescribing
ESRD End-stage renal disease
FAR Federal Acquisition Regulations
FFS Fee-for-service
FQHC Federally qualified health center
FR Federal Register
GAF Geographic adjustment factor
GAO Government Accountability Office
GPCI Geographic practice cost index
GPO Group purchasing organization
GPRO Group practice reporting option
GTR Genetic Testing Registry
HCPCS Healthcare Common Procedure Coding System
HHS [Department of] Health and Human Services
HOPD Hospital outpatient department
HPSA Health professional shortage area
IDTF Independent diagnostic testing facility
IPPS Inpatient Prospective Payment System
IQR Inpatient Quality Reporting
ISO Insurance service office
IWPUT Intensity of work per unit of time
LCD Local coverage determination
MA Medicare Advantage
MAC Medicare Administrative Contractor
MAP Measure Applications Partnership
MAPCP Multi-payer Advanced Primary Care Practice
MAV Measure application validity [process]
MCP Monthly capitation payment
MedPAC Medicare Payment Advisory Commission
MEI Medicare Economic Index
MFP Multi-Factor Productivity
MIPPA Medicare Improvements for Patients and Providers Act (Pub. L. 
110-275)
MMA Medicare Prescription Drug, Improvement and Modernization Act of 
2003 (Pub. L. 108-173, enacted on December 8, 2003)
MP Malpractice
MPPR Multiple procedure payment reduction
MRA Magnetic resonance angiography
MRI Magnetic resonance imaging
MSA Metropolitan Statistical Areas
MSPB Medicare Spending per Beneficiary
MSSP Medicare Shared Savings Program
MU Meaningful use
NCD National coverage determination
NCQDIS National Coalition of Quality Diagnostic Imaging Services
NP Nurse practitioner
NPI National Provider Identifier
NPP Nonphysician practitioner
NQS National Quality Strategy
OACT CMS's Office of the Actuary
OBRA '89 Omnibus Budget Reconciliation Act of 1989 (Pub. L. 101-239)
OBRA '90 Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101- 
508)
OES Occupational Employment Statistics
OMB Office of Management and Budget
OPPS Outpatient prospective payment system
OT Occupational therapy
PA Physician assistant
PAMA Protecting Access to Medicare Act of 2014 (Pub. L. 113-93)
PC Professional component
PCIP Primary Care Incentive Payment
PE Practice expense
PE/HR Practice expense per hour
PEAC Practice Expense Advisory Committee
PECOS Provider Enrollment, Chain, and Ownership System
PFS Physician Fee Schedule
PLI Professional Liability Insurance
PMA Premarket approval
PQRS Physician Quality Reporting System
PPIS Physician Practice Expense Information Survey
PT Physical therapy
PY Performance year
QCDR Qualified clinical data registry
QRUR Quality and Resources Use Report
RBRVS Resource-based relative value scale
RFA Regulatory Flexibility Act
RHC Rural health clinic
RIA Regulatory impact analysis
RUC American Medical Association/Specialty Society Relative (Value) 
Update Committee
RUCA Rural Urban Commuting Area
RVU Relative value unit
SBA Small Business Administration
SGR Sustainable growth rate
SIM State Innovation Model
SLP Speech-language pathology
SMS Socioeconomic Monitoring System
SNF Skilled nursing facility
TAP Technical Advisory Panel
TC Technical component
TIN Tax identification number
UAF Update adjustment factor

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UPIN Unique Physician Identification Number
USPSTF United States Preventive Services Task Force
VBP Value-based purchasing
VM Value-Based Payment Modifier

Addenda Available Only Through the Internet on the CMS Web Site

    The PFS Addenda along with other supporting documents and tables 
referenced in this proposed rule are available through the Internet on 
the CMS Web site at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. 
Click on the link on the left side of the screen titled, ``PFS Federal 
Regulations Notices'' for a chronological list of PFS Federal Register 
and other related documents. For the CY 2015 PFS proposed rule, refer 
to item CMS-1612-P. Readers who experience any problems accessing any 
of the Addenda or other documents referenced in this proposed rule and 
posted on the CMS Web site identified above should contact 
Larry.Chan@cms.hhs.gov.

CPT (Current Procedural Terminology) Copyright Notice

    Throughout this proposed rule, we use CPT codes and descriptions to 
refer to a variety of services. We note that CPT codes and descriptions 
are copyright 2013 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 proposed rule would revise payment polices under the 
Medicare Physician Fee Schedule (PFS) and make other policy changes 
related to Medicare Part B payment. These changes would be applicable 
to services furnished in CY 2015.
2. Summary of the Major Provisions
    The Social Security Act (the Act) requires us to establish payments 
under the PFS based on national uniform relative value units (RVUs) 
that account for the relative resources used in furnishing a service. 
The Act requires that RVUs be established for three categories of 
resources: work, practice expense (PE); and malpractice (MP) expense; 
and, that we establish by regulation each year's payment amounts for 
all physicians' services, incorporating geographic adjustments to 
reflect the variations in the costs of furnishing services in different 
geographic areas. In this major proposed rule, we propose RVUs for CY 
2015 for the PFS, 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, as well as changes in the 
statute. In addition, this proposed rule includes discussions and 
proposals regarding:
     Misvalued PFS Codes.
     Telehealth Services.
     Chronic Care Management Services.
     Establishing Values for New, Revised, and Misvalued Codes.
     Updating the Ambulance Fee Schedule regulations.
     Changes to Core-Based Statistical Areas for Ambulance 
Payment.
     Updating the--
    ++ Physician Compare Web site.
    ++ Physician Quality Reporting System.
    ++ Medicare Shared Savings Program.
    ++ Electronic Health Record (EHR) Incentive Program.
     Value-Based Payment Modifier and the Physician Feedback 
Program.
3. Summary of Costs and Benefits
    The Act requires that annual adjustments to PFS 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. These 
adjustments can affect the distribution of Medicare expenditures across 
specialties. In addition, several proposed changes would affect the 
specialty distribution of Medicare expenditures. When considering the 
combined impact of work, PE, and MP RVU changes, the projected payment 
impacts are small for most specialties; however, the impact would be 
larger for a few specialties. The most significant impacts are for 
radiation therapy centers and radiation oncology for which there would 
be decreases of 8 and 4 percent, respectively. These reductions 
primarily stem from a proposal discussed in section II.A. to consider 
an equipment item as indirect rather than direct practice expense. 
Payment for chronic care management (CCM) services is projected to have 
a positive effect on family practice, internal medicine, and 
geriatrics. This proposed rule includes new proposed MP RVUs based upon 
CY 2015 five-year review of MP RVUs. For most specialties, the proposed 
revisions for the five-year review of MP RVUs would result in minor 
overall changes in RVUs, with only ophthalmology (-2 percent) having a 
projected change of at least 2 percent.

B. Background

    Since January 1, 1992, Medicare has paid for physicians' services 
under section 1848 of the Act, ``Payment for Physicians' Services.'' 
The system relies on national relative values that are established for 
work, PE, and MP, which are adjusted for geographic cost variations. 
These values are multiplied by a conversion factor (CF) to convert the 
RVUs into payment rates. The concepts and methodology underlying the 
PFS were enacted as part of the Omnibus Budget Reconciliation Act of 
1989 (Pub. L. 101-239, enacted on December 19, 1989) (OBRA '89), and 
the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508, enacted 
on November 5, 1990) (OBRA '90). The final rule published on November 
25, 1991 (56 FR 59502) set forth the first fee schedule used for 
payment for physicians' services.
    We note that throughout this proposed rule, unless otherwise noted, 
the term ``practitioner'' is used to describe both physicians and 
nonphysician practitioners (NPPs) who are permitted to bill Medicare 
under the PFS for services furnished to Medicare beneficiaries.
1. Development of the Relative Values
a. Work RVUs
    The work RVUs established for the initial fee schedule, which was 
implemented on January 1, 1992, were developed with extensive input 
from the physician community. A research team at the Harvard School of 
Public Health developed the original work RVUs for most codes under a 
cooperative agreement with the Department of Health and Human Services 
(HHS). In constructing the code-specific vignettes used in determining 
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.
    As specified in section 1848(c)(1)(A) of the Act, the work 
component of physicians' services means the portion of the resources 
used in furnishing the service that reflects physician time and 
intensity. We establish work RVUs for new, revised and potentially 
misvalued codes based on our review of information that generally 
includes, but is not limited to, recommendations

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received from the American Medical Association/Specialty Society 
Relative Value Update Committee (RUC), the Health Care Professionals 
Advisory Committee (HCPAC), the Medicare Payment Advisory Commission 
(MedPAC), and other public commenters; medical literature and 
comparative databases; as well as a comparison of the work for other 
codes within the Medicare PFS, and consultation with other physicians 
and health care professionals within CMS and the federal government. We 
also assess the methodology and data used to develop the 
recommendations submitted to us by the RUC and other public commenters, 
and the rationale for their recommendations.
b. Practice Expense RVUs
    Initially, only the work RVUs were resource-based, and the PE and 
MP RVUs were based on average allowable charges. Section 121 of the 
Social Security Act Amendments of 1994 (Pub. L. 103-432, enacted on 
October 31, 1994), amended section 1848(c)(2)(C)(ii) of the Act and 
required us to develop resource-based PE RVUs for each physicians' 
service beginning in 1998. We were required to consider general 
categories of expenses (such as office rent and wages of personnel, but 
excluding malpractice expenses) comprising PEs. The PE RVUs continue to 
represent the portion of these resources involved in furnishing PFS 
services.
    Originally, the resource-based method was to be used beginning in 
1998, but section 4505(a) of the Balanced Budget Act of 1997 (Pub. L. 
105-33, enacted on August 5, 1997) (BBA) delayed implementation of the 
resource-based PE RVU system until January 1, 1999. In addition, 
section 4505(b) of the BBA provided for a 4-year transition period from 
the charge-based PE RVUs to the resource-based PE RVUs.
    We established the resource-based PE RVUs for each physicians' 
service in a final rule, published on November 2, 1998 (63 FR 58814), 
effective for services furnished in CY 1999. Based on the requirement 
to transition to a resource-based system for PE over a 4-year period, 
payment rates were not fully based upon resource-based PE RVUs until CY 
2002. This resource-based system was based on two significant sources 
of actual PE data: The Clinical Practice Expert Panel (CPEP) data and 
the AMA's Socioeconomic Monitoring System (SMS) data. (These data 
sources are described in greater detail in the CY 2012 final rule with 
comment period (76 FR 73033).)
    Separate PE RVUs are established for services furnished in facility 
settings, such as a hospital outpatient department (HOPD) or an 
ambulatory surgical center (ASC), and in nonfacility settings, such as 
a physician's office. The nonfacility RVUs reflect all of the direct 
and indirect PEs involved in furnishing a service described by a 
particular HCPCS code. The difference, if any, in these PE RVUs 
generally results in a higher payment in the nonfacility setting 
because in the facility settings some costs are borne by the facility. 
Medicare's payment to the facility (such as the outpatient prospective 
payment system (OPPS) payment to the HOPD) would reflect costs 
typically incurred by the facility. Thus, payment associated with those 
facility resources is not made under the PFS.
    Section 212 of the Balanced Budget Refinement Act of 1999 (Pub. L. 
106-113, enacted on November 29, 1999) (BBRA) directed the Secretary of 
Health and Human Services (the Secretary) to establish a process under 
which we accept and use, to the maximum extent practicable and 
consistent with sound data practices, data collected or developed by 
entities and organizations to supplement the data we normally collect 
in determining the PE component. On May 3, 2000, we published the 
interim final rule (65 FR 25664) that set forth the criteria for the 
submission of these supplemental PE survey data. The criteria were 
modified in response to comments received, and published in the Federal 
Register (65 FR 65376) as part of a November 1, 2000 final rule. The 
PFS final rules 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 for 
CY 2010. 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). In CY 2010, 
we began a 4-year transition to the new PE RVUs using the updated PE/HR 
data, which was completed for CY 2013.
c. Malpractice RVUs
    Section 4505(f) of the BBA amended section 1848(c) of the Act to 
require that we implement resource-based MP RVUs for services furnished 
on or after CY 2000. The resource-based MP RVUs were implemented in the 
PFS final rule with comment period published November 2, 1999 (64 FR 
59380). The MP RVUs are based on commercial and physician-owned 
insurers' malpractice insurance premium data from all the states, the 
District of Columbia, and Puerto Rico. For more information on MP RVUs, 
see section II.C. of this proposed rule.
d. Refinements to the RVUs
    Section 1848(c)(2)(B)(i) of the Act requires that we review RVUs no 
less often than every 5 years. Prior to CY 2013, we conducted periodic 
reviews of work RVUs and PE RVUs independently. We completed five-year 
reviews of work RVUs that were effective for calendar years 1997, 2002, 
2007, and 2012.
    Although refinements to the direct PE inputs initially relied 
heavily on input from the RUC Practice Expense Advisory Committee 
(PEAC), the shifts to the bottom-up PE methodology in CY 2007 and to 
the use of the updated PE/HR data in CY 2010 have resulted in 
significant refinements to the PE RVUs in recent years.
    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.
    With regard to MP RVUs, we completed five-year reviews of MP that 
were effective in CY 2005 and CY 2010. This proposed rule includes a 
proposal for a five-year review for CY 2015.
    In addition to the five-year reviews, beginning for CY 2009, CMS 
and the 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.
e. Application of Budget Neutrality to Adjustments of RVUs
    As described in section VI.C.1. of this proposed rule, in 
accordance with section 1848(c)(2)(B)(ii)(II) of the Act, if revisions 
to the RVUs would cause expenditures for the year to change by more 
than $20 million, we make

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adjustments to ensure that expenditures do not increase or decrease by 
more than $20 million.
2. Calculation of Payments Based on RVUs
    To calculate the payment for each physicians' service, the 
components of the fee schedule (work, PE, and MP RVUs) are adjusted by 
geographic practice cost indices (GPCIs) to reflect the variations in 
the costs of furnishing the services. The GPCIs reflect the relative 
costs of physician work, PE, and MP in an area compared to the national 
average costs for each component. (See section II.D of this proposed 
rule for more information about GPCIs.)
    RVUs are converted to dollar amounts through the application of a 
CF, which is calculated based on a statutory formula by CMS's Office of 
the Actuary (OACT). The CF for a given year is calculated using (a) the 
productivity-adjusted increase in the Medicare Economic Index (MEI) and 
(b) the Update Adjustment Factor (UAF), which is calculated by taking 
into account the Medicare Sustainable Growth Rate (SGR), an annual 
growth rate intended to control growth in aggregate Medicare 
expenditures for physicians' services, and the allowed and actual 
expenditures for physicians' services. 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 MP x GPCI 
MP)] x CF.
3. Separate Fee Schedule Methodology for Anesthesia Services
    Section 1848(b)(2)(B) of the Act specifies that the fee schedule 
amounts for anesthesia services are to be based on a uniform relative 
value guide, with appropriate adjustment of an anesthesia conversion 
factor, in a manner to assure that fee schedule amounts for anesthesia 
services are consistent with those for other services of comparable 
value. Therefore, there is a separate fee schedule methodology for 
anesthesia services. Specifically, we establish a separate conversion 
factor for anesthesia services and we utilize the uniform relative 
value guide, or base units, as well as time units, to calculate the fee 
schedule amounts for anesthesia services. Since anesthesia services are 
not valued using RVUs, a separate methodology for locality adjustments 
is also necessary. This involves an adjustment to the national 
anesthesia CF for each payment locality.
4. Most Recent Changes to the Fee Schedule
    The CY 2014 PFS final rule with comment period (78 FR 74230) 
implemented changes to the PFS and other Medicare Part B payment 
policies. It also finalized many of the CY 2013 interim final RVUs and 
established interim final RVUs for new and revised codes for CY 2014 to 
ensure that our payment system is updated to reflect changes in medical 
practice, coding changes, and the relative values of services. It also 
implemented section 635 of the American Taxpayer Relief Act of 2012 
(Pub. L. 112-240, enacted on January 2, 2013) (ATRA), which revised the 
equipment utilization rate assumption for advanced imaging services 
furnished on or after January 1, 2014.
    Also, in the CY 2014 PFS final rule with comment period, we 
announced the following for CY 2014: the total PFS update of -20.1 
percent; the initial estimate for the SGR of -16.7 percent; and a CF of 
$27.2006. These figures were calculated based on the statutory 
provisions in effect on November 27, 2013, when the CY 2014 PFS final 
rule with comment period was issued.
    The Pathway for SGR Reform Act of 2013 (Pub. L. 113-67, enacted on 
December 26, 2013) established a 0.5 percent update to the PFS CF 
through March 31, 2014 and the Protecting Access to Medicare Act of 
2014 (Pub. L. 113-93, enacted on April 1, 2014) (PAMA) extended this 
0.5 percent update through December 31, 2014. As a result, the CF for 
CY 2014 that was published in the CY 2014 final rule with comment 
period (78 FR 74230) was revised to $35.8228 for services furnished on 
or after January 1, 2014 and on or before December 31, 2014. The PAMA 
provides for a 0.0 percent update to the PFS for services furnished on 
or after January 1, 2015 and on or before March 31, 2015.
    The Pathway for SGR Reform Act extended through March 31, 2014 
several provisions of Medicare law that would have otherwise expired on 
December 31, 2013. The PAMA extended these same provisions further 
through March 31, 2015. A list of these provisions follows.

 The 1.0 floor on the work geographic practice cost index
 The exceptions process for outpatient therapy caps
 The manual medical review process for therapy services
 The application of the therapy caps and related provisions to 
services furnished in HOPDs

    In addition, section 220 of the PAMA included several provisions 
affecting the valuation process for services under the PFS. Section 
220(a) of the PAMA amended section 1848(c)(2) of the Act to add a new 
subparagraph (M). The new subparagraph (M) provides that the Secretary 
may collect or obtain information from any eligible professional or any 
other source on the resources directly or indirectly related to 
furnishing services for which payment is made under the PFS, and that 
such information may be used in the determination of relative values 
for services under the PFS. Such information may include the time 
involved in furnishing services; the amounts, types and prices of 
practice expense inputs; overhead and accounting information for 
practices of physicians and other suppliers, and any other elements 
that would improve the valuation of services under the PFS. This 
information may be collected or obtained through surveys of physicians 
or other suppliers, providers of services, manufacturers and vendors; 
surgical logs, billing systems, or other practice or facility records; 
EHRs; and any other mechanism determined appropriate by the Secretary. 
If we use this information, we are required to disclose the source and 
use of the information in rulemaking, and to make available aggregated 
information that does not disclose individual eligible professionals, 
group practices, or information obtained pursuant to a nondisclosure 
agreement. Beginning with fiscal year 2014, the Secretary may 
compensate eligible professionals for submission of data.
    Section 220(c) of the PAMA amended section 1848(c)(2)(K)(ii) of the 
Act to expand the categories of services that the Secretary is directed 
to examine for the purpose of identifying potentially misvalued codes. 
The nine new categories are as follows:
     Codes that account for the majority of spending under the 
PFS.
     Codes for services that have experienced a substantial 
change in the hospital length of stay or procedure time.
     Codes for which there may be a change in the typical site 
of service since the code was last valued.
     Codes for which there is a significant difference in 
payment for the same service between different sites of service.
     Codes for which there may be anomalies in relative values 
within a family of codes.
     Codes for services where there may be efficiencies when a 
service is

[[Page 40323]]

furnished at the same time as other services.
     Codes with high intra-service work per unit of time.
     Codes with high PE RVUs.
     Codes with high cost supplies.

(See section II.B.2 of this final rule with comment period for more 
information about misvalued codes.).
    Section 220(i) of the PAMA also requires the Secretary to make 
publicly available the information we considered when establishing the 
multiple procedure payment reduction (MPPR) policy for the professional 
component of advanced imaging procedures. The policy reduces the amount 
paid for the professional component when two advanced imaging 
procedures are furnished in the same session. The policy was effective 
for individual physicians on January 1, 2012 and for physicians in the 
same group practice on January 1, 2013.
    In addition, section 220 of the PAMA includes other provisions 
regarding valuation of services under the PFS that take effect in 
future years. Section 220(d) of the PAMA establishes an annual target 
from CY 2017 through CY 2020 for reductions in PFS expenditures 
resulting from adjustments to relative values of misvalued services. 
The target is calculated as 0.5 percent of the estimated amount of 
expenditures under the fee schedule for the year. If the net reduction 
in expenditures for the year is equal to or greater than the target for 
the year, the funds shall be redistributed in a budget-neutral manner 
within the PFS. The amount by which such reduced expenditures exceed 
the target for the year shall be treated as a reduction in expenditures 
for the subsequent year, for purposes of determining whether the target 
has or has not been met. The legislation includes an exemption from 
budget neutrality if the target is not met. Other provisions of section 
220 of the PAMA include a 2-year phase-in for reductions in RVUs of at 
least 20 percent for potentially misvalued codes that do not involve 
coding changes and certain adjustments to the fee schedule areas in 
California. These provisions will be addressed as we implement them in 
future rulemaking.
    On March 5, 2014, we submitted to MedPAC an estimate of the SGR and 
CF applicable to Medicare payments for physicians' services for CY 
2015, as required by section 1848(d)(1)(E) of the Act. The actual 
values used to compute physician payments for CY 2015 will be based on 
later data and are scheduled to be published by November 1, 2014, as 
part of the CY 2015 PFS final rule with comment period.

C. Health Information Technology

    The Department of Health and Human Services (HHS) believes all 
patients, their families, and their health care providers should have 
consistent and timely access to their health information in a 
standardized format that can be securely exchanged between the patient, 
providers, and others involved in the patient's care. (HHS August 2013 
Statement, ``Principles and Strategies for Accelerating Health 
Information Exchange,'' see http://www.healthit.gov/sites/default/files/acceleratinghieprinciples_strategy.pdf) HHS is committed to 
accelerating health information exchange (HIE) through the use of 
electronic health records (EHRs) and other types of health information 
technology (HIT) across the broader care continuum through a number of 
initiatives including: (1) Alignment of incentives and payment 
adjustments to encourage provider adoption and optimization of HIT and 
HIE services through Medicare and Medicaid payment policies; (2) 
adoption of common standards and certification requirements for 
interoperable HIT; (3) support for privacy and security of patient 
information across all HIE-focused initiatives; and (4) governance of 
health information networks. These initiatives are designed to 
encourage HIE among health care providers, including professionals and 
hospitals eligible for the Medicare and Medicaid EHR Incentive Programs 
and those who are not eligible for the EHR Incentive Programs, and are 
designed to improve care delivery and coordination across the entire 
care continuum. For example, the Transition of Care Measure 2 
in Stage 2 of the Medicare and Medicaid EHR Incentive Programs requires 
HIE to share summary records for more than 10 percent of care 
transitions. In addition, to increase flexibility in ONC's HIT 
Certification Program and expand HIT certification, ONC has issued a 
proposed rule concerning a voluntary 2015 Edition of EHR certification 
criteria, which would more easily accommodate the certification of HIT 
used in all health care settings where health care providers are not 
typically eligible for incentive payments under the EHR Incentive 
Programs, to facilitate greater HIE across the entire care continuum. 
We believe that HIE and the use of certified EHRs can effectively and 
efficiently help providers improve internal care delivery practices, 
support management of patient care across the continuum, and support 
the reporting of electronically specified clinical quality measures 
(eCQMs). More information on the Voluntary 2015 Edition EHR 
Certification Criteria proposed rule is available at http://healthit.gov/policy-researchers-implementers/standards-and-certification-regulations.

II. Provisions of the Proposed Rule for PFS

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

1. Overview
    Practice expense (PE) is the portion of the resources used in 
furnishing a service that reflects the general categories of physician 
and practitioner expenses, such as office rent and personnel wages, but 
excluding MP expenses, as specified in section 1848(c)(1)(B) of the 
Act. As required by section 1848(c)(2)(C)(ii) of the Act, we use a 
resource-based system for determining PE RVUs for each physician's 
service. We develop PE RVUs by considering the direct and indirect 
practice resources involved in furnishing each service. Direct expense 
categories include clinical labor, medical supplies, and medical 
equipment. Indirect expenses include administrative labor, office 
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. 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 determine the direct PE for a specific service by adding the 
costs of the direct resources (that is, the clinical staff, medical 
supplies, and medical equipment) typically involved with furnishing 
that service. The costs of the resources are calculated using the 
refined direct PE inputs assigned to each CPT code in our PE database, 
which are generally based on our review of recommendations received 
from the RUC and those provided in response to public comment periods. 
For a detailed explanation of the 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).

[[Page 40324]]

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 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). The PPIS is a 
multispecialty, nationally representative, PE survey of both physicians 
and nonphysician practitioners (NPPs) paid under the PFS using a survey 
instrument and methods highly consistent with those used for the SMS 
and the supplemental surveys. The PPIS gathered information from 3,656 
respondents across 51 physician specialty and health care professional 
groups. We believe the PPIS is the most comprehensive source of PE 
survey information available. We used the PPIS data to update the PE/HR 
data for the CY 2010 PFS for almost all of the Medicare-recognized 
specialties that participated in the survey.
    When we began using the PPIS data in CY 2010, we did not change the 
PE RVU methodology 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 transitioned its use over a 4-year period from the previous PE 
RVUs to the PE RVUs developed using the new PPIS data. As provided in 
the CY 2010 PFS final rule with comment period (74 FR 61751), the 
transition to the PPIS data was complete for CY 2013. Therefore, PE 
RVUs from CY 2013 forward are developed based entirely on the PPIS 
data, except as noted in this section.
    Section 1848(c)(2)(H)(i) of the Act requires us to use the medical 
oncology supplemental survey data submitted in 2003 for oncology drug 
administration services. Therefore, the PE/HR for medical oncology, 
hematology, and hematology/oncology reflects the continued use of these 
supplemental survey data.
    Supplemental survey data on independent labs from the College of 
American Pathologists were implemented for payments beginning in CY 
2005. Supplemental survey data from the National Coalition of Quality 
Diagnostic Imaging Services (NCQDIS), representing independent 
diagnostic testing facilities (IDTFs), were blended with supplementary 
survey data from the American College of Radiology (ACR) and 
implemented for payments beginning in CY 2007. Neither IDTFs, nor 
independent labs, participated in the PPIS. Therefore, we continue to 
use the PE/HR that was developed from their supplemental survey data.
    Consistent with our past practice, the previous indirect PE/HR 
values from the supplemental surveys for these specialties were updated 
to CY 2006 using the MEI to put them on a comparable basis with the 
PPIS data.
    We also do not use the PPIS data for reproductive endocrinology and 
spine surgery since these specialties currently are not separately 
recognized by Medicare, nor do we have a method to blend the PPIS data 
with Medicare-recognized specialty data.
    Previously, we established PE/HR values for various specialties 
without SMS or supplemental survey data by crosswalking them to other 
similar specialties to estimate a proxy PE/HR. For specialties that 
were part of the PPIS for which we previously used a crosswalked PE/HR, 
we instead used the PPIS-based PE/HR. We continue previous crosswalks 
for specialties that did not participate in the PPIS. However, 
beginning in CY 2010 we changed the PE/HR crosswalk for portable x-ray 
suppliers from radiology to IDTF, a more appropriate crosswalk because 
these specialties are more similar to each other with respect to work 
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).
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 each 
of the services. The costs of these resources are calculated from the 
refined direct PE inputs in our PE database. For example, if one 
service has a direct cost sum of $400 from our PE database and another 
service has a direct cost sum of $200, the direct portion of the PE 
RVUs of the first service would be twice as much as the direct portion 
of the PE RVUs for the second service.
(2) Indirect Costs
    Section II.A.2.b. of this proposed rule 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 survey data described earlier in the PE/HR 
discussion. The general approach to developing the indirect portion of 
the PE RVUs is as follows:
     For a given service, we use the direct portion of the PE 
RVUs calculated as previously described and the average percentage that 
direct costs represent of total costs (based on survey data) across the 
specialties that furnish the service to determine an initial indirect 
allocator. In other words, the initial indirect allocator is calculated 
so that the direct costs equal the average percentage of direct costs 
of those specialties furnishing the service. For example, if the direct 
portion of the PE RVUs for a given service is 2.00 and direct costs, on 
average, represented 25 percent of total costs for the specialties that 
furnished the service, the initial indirect allocator would be 
calculated so that it equals 75 percent of the total PE RVUs. Thus, in 
this example, the initial indirect allocator would equal 6.00, 
resulting in a total PE RVUs of 8.00 (2.00 is 25 percent of 8.00 and 
6.00 is 75 percent of 8.00).
     Next, we add the greater of the work RVUs or clinical 
labor portion of the direct portion of the PE RVUs to this initial 
indirect allocator. In our example, if this service had work RVUs of 
4.00 and the clinical labor portion of the direct PE RVUs was 1.50, we 
would add 4.00 (since the 4.00 work RVUs are greater than the 1.50 
clinical labor portion) to the initial indirect allocator of 6.00 to 
get an indirect allocator of 10.00. In the absence of any further use 
of the survey data, the relative relationship between the indirect cost 
portions of the PE RVUs for any two services would be determined by the 
relative relationship between these indirect cost allocators. For 
example, if one service had an indirect cost allocator of 10.00 and 
another service had an indirect cost allocator of 5.00,

[[Page 40325]]

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 incorporate the specialty-specific indirect PE/HR 
data into the calculation. In our example, if, based on the survey 
data, the average indirect cost of the specialties furnishing the first 
service with an allocator of 10.00 was half of the average indirect 
cost of the specialties furnishing the second service with an indirect 
allocator of 5.00, the indirect portion of the PE RVUs of the first 
service would be equal to that of the second service.
d. Facility and Nonfacility Costs
    For procedures that can be furnished in a physician's office, as 
well as in a hospital or other 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 in calculating the 
PE RVUs for services furnished in a facility, we do not include 
resources that would generally not be provided by physicians when 
furnishing the service in a facility, the facility PE RVUs are 
generally lower than the nonfacility PE RVUs. Medicare makes a separate 
payment to the facility for its costs of furnishing a service.
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). The PC and 
TC may be furnished independently or by different providers, or they 
may be furnished together as a ``global'' service. When services have 
separately billable PC and TC components, the payment for the global 
service equals the sum of the payment for the TC and PC. To achieve 
this we use a weighted average of the ratio of indirect to direct costs 
across all the specialties that furnish the global service, TCs, and 
PCs; that is, we apply the same weighted average indirect percentage 
factor to allocate indirect expenses to the global service, PCs, and 
TCs for a service. (The direct PE RVUs for the TC and PC sum to the 
global 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 calculated 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 aggregate pool of direct PE costs for the 
current year. This is the product of the current aggregate PE (direct 
and indirect) RVUs, the CF, and the average direct PE percentage from 
the survey data used for calculating the PE/HR by specialty.
    Step 3: Calculate the aggregate pool of direct PE costs for use in 
ratesetting. This is the product of the aggregated direct costs for all 
services from Step 1 and the utilization data for that service.
    Step 4: Using the results of Step 2 and Step 3, calculate a direct 
PE scaling adjustment to ensure that the aggregate pool of direct PE 
costs calculated in Step 3 does not vary from the aggregate pool of 
direct PE costs for the current year. Apply the scaling factor to the 
direct costs for each service (as calculated in Step 1).
    Step 5: Convert the results of Step 4 to an RVU scale for each 
service. To do this, divide the results of Step 4 by the CF. Note that 
the actual value of the CF used in this calculation does not influence 
the final direct cost PE RVUs, as long as the same CF is used in Step 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 service.
    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 PE percentage * (direct PE RVUs/direct 
percentage) + work RVUs.
    There are two situations where this formula is modified:
     If the service is a global service (that is, a service 
with global, professional, and technical components), then the indirect 
PE allocator is: indirect percentage (direct PE RVUs/direct percentage) 
+ clinical PE RVUs + work RVUs.
     If the clinical labor PE RVUs exceed the work RVUs (and 
the service is not a global service), then the indirect allocator is: 
indirect PE percentage (direct PE RVUs/direct percentage) + clinical PE 
RVUs.
    (Note: For global services, the indirect PE allocator is based on 
both the work RVUs and the clinical labor PE RVUs. We do this to 
recognize that, for the PC service, indirect PEs 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.
     The first part does not vary by service and is the 
indirect percentage (direct PE RVUs/direct percentage).
     The second part is either the work RVU, clinical labor PE 
RVU, or both depending on whether the service is a global service and 
whether the clinical PE RVUs exceed the work RVUs (as described earlier 
in this step).
    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

[[Page 40326]]

indirect PE allocator for each service and the utilization data for 
that service.
    Step 13: Using the specialty-specific indirect PE/HR data, 
calculate specialty-specific aggregate pools of indirect PE for all PFS 
services for that specialty by adding the product of the indirect PE/HR 
for the specialty, the work time for the service, and the specialty's 
utilization for the service across all services furnished by the 
specialty.
    Step 14: Using the results of Step 12 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 service, PCs, and 
TCs. Under this method, the indirect practice cost index for a given 
service (for example, echocardiogram) does not vary by the PC, TC, and 
global service.)
    Step 17: Apply the service level indirect practice cost index 
calculated in Step 16 to the service level adjusted indirect allocators 
calculated in Step 11 to get the indirect PE RVUs.
(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 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 we note that 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 NPPs 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 prosthetist.
57.............................  Individual certified
                                  prosthetist[dash]orthotist.
58.............................  Medical supply company with registered
                                  pharmacist.
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.
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.
B2.............................  Pedorthic personnel.
B3.............................  Medical supply company with pedorthic
                                  personnel.
------------------------------------------------------------------------

     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 work time file is used; 
where it is not present, the intraoperative percentage from the payment 
files used by contractors to process Medicare claims is used instead. 
Where neither is available, we use the payment adjustment ratio to 
adjust the time accordingly. Table 2 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........................  Bilateral Surgery.......  150%.........................  150% of work time.
LT and RT....................
51...........................  Multiple Procedure......  50%..........................  Intraoperative portion.

[[Page 40327]]

 
52...........................  Reduced Services........  50%..........................  50%.
53...........................  Discontinued Procedure..  50%..........................  50%.
54...........................  Intraoperative Care only  Preoperative + Intraoperative  Preoperative +
                                                          Percentages on the payment     Intraoperative portion.
                                                          files used by Medicare
                                                          contractors to process
                                                          Medicare claims.
55...........................  Postoperative Care only.  Postoperative Percentage on    Postoperative portion.
                                                          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 (MPPRs). We note that 
section 1848(c)(2)(B)(v) of the Act exempts certain reduced payments 
for multiple imaging procedures and multiple therapy services from the 
BN calculation under section 1848(c)(2)(B)(ii)(II) of the Act. These 
MPPRs are not included in the development of the RVUs.
    For anesthesia services, we do not apply adjustments to volume 
since the average allowed charge is used when simulating RVUs, and 
therefore, includes all adjustments. A time adjustment of 33 percent is 
made only for medical direction of two to four cases since that is the 
only situation where time units are duplicative.
     Work RVUs: The setup file contains the work RVUs from this 
proposed rule with comment period.
(6) Equipment Cost Per Minute
    The equipment cost per minute is calculated as:

(1/(minutes per year * usage)) * price * ((interest rate/(1-(1/((1 + 
interest rate)- life of equipment)))) + maintenance)

Where:

minutes per year = maximum minutes per year if usage were continuous 
(that is, usage = 1); generally 150,000 minutes.
usage = variable, see discussion below.
price = price of the particular piece of equipment.
life of equipment = useful life of the particular piece of 
equipment.
maintenance = factor for maintenance; 0.05.
interest rate = variable, see discussion below.

    Usage: We currently use an equipment utilization rate assumption of 
50 percent for most equipment, with the exception of expensive 
diagnostic imaging equipment, for which we use a 90 percent assumption 
as required by Section 1848(b)(4)(C) of the Act.
    Maintenance: This factor for maintenance was proposed and finalized 
during rulemaking for CY 1998 PFS (62 FR 33164). Several stakeholders 
have suggested that this maintenance factor assumption should be 
variable. We solicit comment regarding reliable data on maintenance 
costs that vary for particular equipment items.
    Per-use Equipment Costs: Several stakeholders have also suggested 
that our PE methodology should incorporate usage fees and other per-use 
equipment costs as direct costs. We also solicit comment on adjusting 
our cost formula to include equipment costs that do not vary based on 
the equipment time.
    Interest Rate: In the CY 2013 final rule with comment period (77 FR 
68902), we updated the interest rates used in developing an equipment 
cost per minute calculation. The interest rate was based on the Small 
Business Administration (SBA) maximum interest rates for different 
categories of loan size (equipment cost) and maturity (useful life). 
The interest rates are listed in Table 3. (See 77 FR 68902 for a 
thorough discussion of this issue.)

                   Table 3--SBA Maximum Interest Rates
------------------------------------------------------------------------
                                                               Interest
                Price                       Useful life          rate
                                                               (percent)
------------------------------------------------------------------------
<$25K...............................  <7 Years..............        7.50
$25K to $50K........................  <7 Years..............        6.50
>$50K...............................  <7 Years..............        5.50
<$25K...............................  7+ Years..............        8.00
$25K to $50K........................  7+ Years..............        7.00
>$50K...............................  7+ Years..............        6.00
------------------------------------------------------------------------


                                                              Table 4--Calculation of PE RVUs Under Methodology for Selected Codes
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                               99213      33533                                       93000      93005      93010
                                                                                                               Office     CABG,      71020     71020-TC   71020-26     ECG,       ECG,      ECG,
                                                              Step                 Source          Formula     visit,   arterial,   Chest x-   Chest x-   Chest x-  complete,   tracing    report
                                                                                                              est Non-    single    ray Non-  ray, Non-  ray, Non-     Non-       Non-      Non-
                                                                                                              facility   Facility   facility   facility   facility   facility   facility  facility
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ----------
(1) Labor cost (Lab)..............  Step 1..........  AMA.................  ....................      13.32      77.52       5.74       5.74       0.00       5.10       5.10       0.00
(2) Supply cost (Sup).............  Step 1..........  AMA.................  ....................       2.98       7.34        .53        .53       0.00       1.19       1.19       0.00
(3) Equipment cost (Eqp)..........  Step 1..........  AMA.................  ....................       0.17       0.58       6.92       6.92       0.00       0.09       0.09       0.00
(4) Direct cost (Dir).............  Step 1..........  ....................  =(1)+(2)+(3)........      16.48      85.45      13.19      13.19       0.00       6.38       6.38       0.00
(5) Direct adjustment (Dir. Adj.).  Steps 2-4.......  See footnote*.......  ....................     0.5898     0.5898     0.5898     0.5898     0.5898     0.5898     0.5898     0.5898
(6) Adjusted Labor................  Steps 2-4.......  =Lab * Dir Adj......  =(1)*(5)............       7.86      45.72       3.39       3.39       0.00       3.01       3.01       0.00
(7) Adjusted Supplies.............  Steps 2-4.......  =Eqp * Dir Adj......  =(2)*(5)............       1.76       4.33        .31        .31       0.00        .70        .70       0.00
(8) Adjusted Equipment............  Steps 2-4.......  =Sup * Dir Adj......  =(3)*(5)............        .10       0.34       4.08       4.08       0.00       0.05       0.05       0.00
(9) Adjusted Direct...............  Steps 2-4.......  ....................  =(6)+(7)+(8)........       9.72      50.40       7.78       7.78       0.00       3.77       3.77       0.00
(10) Conversion Factor (CF).......  Step 5..........  PFS.................  ....................    35.8228    35.8228    35.8228    35.8228    35.8228    35.8228    35.8228    35.8228
(11) Adj. labor cost converted....  Step 5..........  =(Lab * Dir Adj)/CF.  =(6)/(10)...........       0.22       1.28       0.09       0.09       0.00       0.08       0.08       0.00
(12) Adj. supply cost converted...  Step 5..........  =(Sup * Dir Adj)/CF.  =(7)/(10)...........       0.05       0.12       0.01       0.01       0.00       0.02       0.02       0.00
(13) Adj. equipment cost converted  Step 5..........  =(Eqp * Dir Adj)/CF.  =(8)/(10)...........       0.00       0.01       0.11       0.11       0.00       0.00       0.00       0.00
(14) Adj. direct cost converted...  Step 5..........  ....................  =(11)+(12)+(13).....       0.27       1.41       0.22       0.22       0.00       0.11       0.11       0.00
(15) Work RVU.....................  Setup File......  PFS.................  ....................       0.97      33.75       0.22       0.00       0.22       0.17       0.00       0.17
(16) Dir--pct.....................  Steps 6,7.......  Surveys.............  ....................       0.25       0.17       0.29       0.29        .29        .29        .29        .29
(17) Ind--pct.....................  Steps 6,7.......  Surveys.............  ....................       0.75        .83        .71        .71        .71        .71        .71        .71
(18) Ind. Alloc. Formula (1st       Step 8..........  See Step 8..........  ....................     ((14)/     ((14)/     ((14)/     ((14)/     ((14)/     ((14)/     ((14)/     ((14)/
 part).                                                                                           (16))*(17  (16))*(17  (16))*(17  (16))*(17  (16))*(17  (16))*(17  (16))*(17  (16))*(17
                                                                                                          )          )          )          )          )          )          )          )
(19) Ind. Alloc.(1st part)........  Step 8..........  ....................  See 18..............       0.82       6.67        .53        .53          0       0.26       0.26          0
(20) Ind. Alloc. Formula (2nd       Step 8..........  See Step 8..........  ....................       (15)       (15)    (15+11)       (11)       (15)    (15+11)       (11)       (15)
 part).
(21) Ind. Alloc.(2nd part)........  Step 8..........  ....................  See 20..............       0.97      33.75       0.31       0.09       0.22       0.25       0.08       0.17
(22) Indirect Allocator (1st +      Step 8..........  ....................  =(19)+(21)..........       1.79      40.42        .84        .62       0.22       0.51       0.34       0.17
 2nd).

[[Page 40328]]

 
(23) Indirect Adjustment (Ind.      Steps 9-11......  See Footnote**......  ....................      .3813      .3813      .3813      .3813      .3813      .3813      .3813      .3813
 Adj.).
(24) Adjusted Indirect Allocator..  Steps 9-11......  =Ind Alloc * Ind Adj  ....................       0.68      15.41        .32        .24       0.08       0.20       0.13        .06
(25) Ind. Practice Cost Index       Steps 12-16.....  ....................  ....................       1.07       0.75        .99        .99        .99       0.91       0.91       0.91
 (IPCI).
(26) Adjusted Indirect............  Step 17.........  = Adj.Ind Alloc *     =(24)*(25)..........       0.73      11.59        .32        .24       0.08       0.18       0.12       0.06
                                                       PCI.
(27) PE RVU.......................  Step 18.........  =(Adj Dir + Adj Ind)  =((14)+(26)) * Other       1.01      13.05        .53        .45        .08        .29        .23       0.06
                                                       * Other Adj.          Adj).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* The direct adj = [current pe rvus * CF * avg dir pct]/[sum direct inputs] = [step2]/[step3].
** The indirect adj = [current pe rvus * avg ind pct]/[sum of ind allocators] = [step9]/[step10].
Note: The use of any particular conversion factor (CF) in this table to illustrate the PE calculation has no effect on the resulting RVUs.

3. Changes to Direct PE Inputs for Specific Services
    In this section, we discuss other CY 2015 proposals and revisions 
related to direct PE inputs for specific services. The proposed direct 
PE inputs are included in the proposed rule CY 2015 direct PE input 
database, which is available on the CMS Web site under downloads for 
the CY 2015 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
a. RUC Recommendation for Monitoring Time Following Moderate Sedation
    We received a recommendation from the RUC regarding appropriate 
clinical labor minutes for post-procedure moderate sedation monitoring 
and post-procedure monitoring. The RUC recommended 15 minutes of RN 
time for one hour of monitoring following moderate sedation and 15 
minutes of RN time per hour for post-procedure monitoring (unrelated to 
moderate sedation). For 17 procedures listed in Table 5, the 
recommended clinical labor minutes differed from the clinical labor 
minutes in the direct PE database. We propose to accept, without 
refinement, the RUC recommendation to adjust these clinical labor 
minutes as indicated in Table 5 as ``Change to Clinical Labor Time.'' 
The CY 2015 direct PE database reflects these proposed changes and is 
available on the CMS Web site under the supporting data files for the 
CY 2015 PFS proposed rule at http://www.cms.gov/PhysicianFeeSched/.

              Table 5--Codes With Proposed Changes to Post-Procedure Clinical Labor Monitoring Time
----------------------------------------------------------------------------------------------------------------
                                                                               RUC recommended
                                                                 Current         total post-        Change to
                         CPT code                           monitoring  time      procedure      clinical labor
                                                                  (min)        monitoring time     time  (min)
                                                                                    (min)
----------------------------------------------------------------------------------------------------------------
32553.....................................................                30                60                30
35471.....................................................                21                60                39
35475.....................................................                60                30               -30
35476.....................................................                60                30               -30
36147.....................................................                18                30                12
37191.....................................................                60                30               -30
47525.....................................................                 6                15                 9
49411.....................................................                30                60                30
50593.....................................................                30                60                30
50200.....................................................                15                60                45
31625.....................................................                20                15                -5
31626.....................................................                25                15               -10
31628.....................................................                25                15               -10
31629.....................................................                25                15               -10
31634.....................................................                25                15               -10
31645.....................................................                10                15                 5
31646.....................................................                10                15                 5
----------------------------------------------------------------------------------------------------------------

b. RUC Recommendation for Standard Moderate Sedation Package
    We received a RUC recommendation to modify PE inputs included in 
the standard moderate sedation package. Specifically, the RUC indicated 
that several specialty societies have pointed to the need for a 
stretcher during procedures for which moderate sedation is inherent in 
the procedure. Although the RUC did not recommend that we make changes 
to PE inputs for codes at this time, the RUC indicated that its future 
recommendations would include the stretcher as a direct input for 
procedures including moderate sedation.
    The RUC recommended three scenarios that future recommendations 
would use to allocate the equipment time for the stretcher based on the 
procedure time and whether the stretcher would be available for other 
patients to use during a portion of the procedure. Although we 
appreciate the RUC's attention to the differences in the time required 
for the stretcher based on the time for the procedure, we believe that 
one of the purposes of standard PE input packages is to reduce the 
complexity associated with assigning appropriate PE inputs to 
individual procedures while, at the same time, maintaining relativity 
between procedures. Since we generally allocate inexpensive equipment 
items to the

[[Page 40329]]

entire service period when they are likely to be unavailable for 
another use during the full service period, we believe it is preferable 
to treat the stretcher consistently across these services. Therefore, 
we propose to modify the standard moderate sedation input package to 
include a stretcher for the same length of time as the other equipment 
items in the moderate sedation package. The proposed revised moderate 
sedation input package would be applied to relevant codes as we review 
them through future notice and comment rulemaking. It would be useful 
to hear stakeholders' views and the reasoning behind them on this 
issue, especially from those who think that the stretcher, as expressed 
through the allocation of equipment minutes, should be allocated with 
more granularity than the equipment costs that are allocated to other 
similar items.
c. RUC Recommendation for Migration From Film to Digital Practice 
Expense Inputs
    The RUC has provided a recommendation regarding the PE inputs for 
digital imaging services. Specifically, the RUC recommended that we 
remove a list of supply and equipment items associated with film 
technology since these items are no longer a typical resource input; 
these items are detailed in Table 6. The RUC also recommended that the 
Picture Archiving and Communication System (PACS) equipment be included 
for these imaging services since these items are now typically used in 
furnishing imaging services. We received a description of the PACS 
system as part of the recommendation, which included both items that 
appear to be direct PE items and items for which indirect PE RVUs are 
allocated in the PE methodology. As we have previously indicated, items 
that are not clinical labor, medical supplies, or medical equipment, or 
are not individually allocable to a particular patient for a particular 
procedure, are not categorized as direct costs in the PE methodology. 
Since we did not receive any invoices for the PACS system, we are 
unable to determine the appropriate pricing to use for the inputs. We 
propose to accept the RUC recommendation to remove the film supply and 
equipment items, and to allocate minutes for a desktop computer (ED021) 
as a proxy for the PACS workstation as a direct expense. Specifically, 
for the 31 services that already contain ED021, we propose to retain 
the time that is currently included in the direct PE input database. 
For the remaining services that are valued in the nonfacility setting, 
we propose to allocate the full clinical labor intraservice time to 
ED021, except when there is no clinical labor, in which case we propose 
to allocate the intraservice work time to ED021. For services valued 
only in the facility setting, we propose to allocate the post-service 
clinical labor time to ED021, since the film supply and/or equipment 
inputs were previously associated with the post-service period.

   Table 6--RUC-Recommended Supply and Equipment Items Proposed To Be
                  Removed for Digital Imaging Services
------------------------------------------------------------------------
            CMS code                            Description
------------------------------------------------------------------------
SK013...........................  computer media, dvd.
SK014...........................  computer media, floppy disk 1.44mb.
SK015...........................  computer media, optical disk 128mb.
SK016...........................  computer media, optical disk 2.6gb.
SK022...........................  film, 8inx10in (ultrasound, MRI).
SK025...........................  film, dry, radiographic, 8in x 10in.
SK028...........................  film, fluoroscopic 14 x 17.
SK033...........................  film, x-ray 10in x 12in.
SK034...........................  film, x-ray 14in x 17in.
SK035...........................  film, x-ray 14in x 36in.
SK037...........................  film, x-ray 8in x 10in.
SK038...........................  film, x-ray 8in x 10in (X-omat,
                                   Radiomat).
SK086...........................  video tape, VHS.
SK089...........................  x-ray developer solution.
SK090...........................  x-ray digitalization separator sheet.
SK091...........................  x-ray envelope.
SK092...........................  x-ray fixer solution.
SK093...........................  x-ray ID card (flashcard).
SK094...........................  x-ray marking pencil.
SK098...........................  film, x-ray, laser print.
SM009...........................  cleaner, x-ray cassette-screen.
ED014...........................  computer workstation, 3D
                                   reconstruction CT-MR.
ED016...........................  computer workstation, MRA post
                                   processing.
ED023...........................  film processor, PET imaging.
ED024...........................  film processor, dry, laser.
ED025...........................  film processor, wet.
ED027...........................  film processor, x-omat (M6B).
ER018...........................  densitometer, film.
ER029...........................  film alternator (motorized film
                                   viewbox).
ER067...........................  x-ray view box, 4 panel.
------------------------------------------------------------------------

    We note that the RUC exempted certain procedures from its 
recommendation because (a) the dominant specialty indicated that 
digital technology is not yet typical or (b) the procedure only 
contained a single input associated with film technology, and it was 
determined that the sharing of images, but not actual imaging, may be 
involved in the service. However, we do not believe that the most 
appropriate approach in establishing relative values for services that 
involve imaging is to exempt services from the transition from film to 
digital PE inputs based on information reported by individual 
specialties. Although we understand that the migration from film 
technology to digital technology may progress at different paces for 
particular specialties, we do not have information to suggest that the 
migration is not occurring for all procedures that require the storage 
of images. Just as it was appropriate to use film inputs as a proxy for 
some services for which digital inputs were typical pending these 
proposed changes in the direct PE input database, we believe it is 
appropriate to use digital inputs as a proxy for the services that may 
still use film, pending their migration to digital technology. In 
addition, since the RUC conducted its collection of information from 
the specialties over several years, we believe the migration process 
from film to digital inputs has likely continued over the time period 
during which the information was gathered, and that the digital PE 
inputs will reflect typical use of technology for most if not all of 
these services before the proposed change to digital inputs would take 
effect beginning January 1, 2015. We also believe that for the sake of 
relativity, we should remove the equipment and supply inputs noted 
below from all procedures in the direct PE database, including those 
listed in Table 7. We seek comment on whether the computer workstation, 
which we propose to use as a proxy for the PACS workstation, is the 
appropriate input for the services listed in Table 7, or whether an 
alternative input is a more appropriate reflection of direct PE costs.

     Table 7--Codes Containing Film Inputs But Excluded From the RUC
                             Recommendation
------------------------------------------------------------------------
              HCPCS                          Short descriptor
------------------------------------------------------------------------
21077...........................  Prepare face/oral prosthesis.
28293...........................  Correction of bunion.
61580...........................  Craniofacial approach skull.
61581...........................  Craniofacial approach skull.
61582...........................  Craniofacial approach skull.
61583...........................  Craniofacial approach skull.
61584...........................  Orbitocranial approach/skull.
61585...........................  Orbitocranial approach/skull.
61586...........................  Resect nasopharynx skull.
64517...........................  N block inj hypogas plxs.
64681...........................  Injection treatment of nerve.
70310...........................  X-ray exam of teeth.
77326...........................  Brachytx isodose calc simp.
77327...........................  Brachytx isodose calc interm.
77328...........................  Brachytx isodose plan compl.
91010...........................  Esophagus motility study.
91020...........................  Gastric motility studies.
91034...........................  Gastroesophageal reflux test.
91035...........................  G-esoph reflx tst w/electrod.
91037...........................  Esoph imped function test.
91038...........................  Esoph imped funct test > 1hr.
91040...........................  Esoph balloon distension tst.

[[Page 40330]]

 
91120...........................  Rectal sensation test.
91122...........................  Anal pressure record.
91132...........................  Electrogastrography.
91133...........................  Electrogastrography w/test.
92521...........................  Evaluation of speech fluency.
92523...........................  Speech sound lang comprehend.
92524...........................  Behavioral qualit analys voice.
92601...........................  Cochlear implt f/up exam <7.
92603...........................  Cochlear implt f/up exam 7/>.
92611...........................  Motion fluoroscopy/swallow.
92612...........................  Endoscopy swallow tst (fees).
92614...........................  Laryngoscopic sensory test.
92616...........................  Fees w/laryngeal sense test.
95800...........................  Slp stdy unattended.
95801...........................  Slp stdy unatnd w/anal.
95803...........................  Actigraphy testing.
95805...........................  Multiple sleep latency test.
95806...........................  Sleep study unatt&resp efft.
95807...........................  Sleep study attended.
95808...........................  Polysom any age 1-3> param.
95810...........................  Polysom 6/> yrs 4/> param.
95811...........................  Polysom 6/>yrs cpap 4/> parm.
95812...........................  Eeg 41-60 minutes.
95813...........................  Eeg over 1 hour.
95829...........................  Surgery electrocorticogram.
95950...........................  Ambulatory eeg monitoring.
95953...........................  Eeg monitoring/computer.
95954...........................  Eeg monitoring/giving drugs.
95955...........................  Eeg during surgery.
95956...........................  Eeg monitor technol attended.
95957...........................  Eeg digital analysis.
96904...........................  Whole body photography.
G0270...........................  Mnt subs tx for change dx.
G0271...........................  Group mnt 2 or more 30 mins.
------------------------------------------------------------------------

    Finally, we note that the RUC recommendation also indicated that 
given the labor-intensive nature of reviewing all clinical labor tasks 
associated with film technology, these times would be addressed as 
these codes are reviewed. We agree with the RUC that reviewing and 
adjusting the times for each code would be difficult and labor-
intensive since the direct PE input database does not allow for a 
comprehensive adjustment of the clinical labor time based on changes in 
particular clinical labor tasks. To make broad adjustments such as this 
across codes, the PE database would need to contain the time associated 
with individual clinical labor tasks rather than reflecting only the 
sum of times for the pre-service period, service period, and post-
service period, as it does now. We recognize this situation presents a 
challenge in implementing RUC recommendations such as this one, and 
makes it difficult to understand the basis of both the RUC's 
recommended clinical labor times and our refinements of those 
recommendations. Therefore, we are considering revising the direct PE 
input database to include task-level clinical labor time information 
for every code in the database. As an example, we refer readers to the 
supporting data files for the direct PE inputs, which include public 
use files that display clinical labor times as allocated to each 
individual clinical labor task for a sample of procedures. We are 
displaying this information as we attempt to increase the transparency 
of the direct PE database. We hope that this modification could enable 
us to more accurately allocate equipment minutes to clinical labor 
tasks in a more consistent and efficient manner. Given the number of 
procedures and the volume of information involved, we are seeking 
comments on the feasibility of this approach. We note that we are not 
proposing to make any changes to PE inputs for CY 2015 based on this 
proposed modification to the design of the direct PE input database.
    The CY 2015 direct PE database reflects these proposed changes and 
is available on the CMS Web site under the supporting data files for 
the CY 2015 PFS proposed rule at http://www.cms.gov/PhysicianFeeSched/.
d. Inputs for Digital Mammography Services
    Mammography services are currently reported by and paid for using 
both CPT codes and G-codes. To meet the requirements of the Medicare, 
Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 
(BIPA), we established the G-codes for CY 2002 to pay for mammography 
services using new digital technologies (G0202 screening mammography 
digital; G0204 diagnostic mammography digital; G0206 diagnostic 
mammography digital). We continued to pay for mammography billed using 
the CPT codes when the services were furnished with film technology 
(77055 mammogram one breast; 77056 mammogram both breasts; 77057 
mammogram screening). As we discussed previously in this section, the 
RUC has recommended that all imaging codes, including mammography, be 
valued using digital rather than film inputs because film is no longer 
typical. A review of Medicare claims data shows that the mammography 
CPT codes are billed extremely infrequently, and that the G-codes are 
billed for the vast majority of mammography claims, confirming what the 
RUC has indicated regarding the use of digital technology. It appears 
that the typical mammography service is furnished using digital 
technology. As such, we do not believe there is a reason to continue 
the separate use of the CPT codes and the G-codes for mammography 
services since both sets of codes would have the same values when 
priced based upon the typical digital technology. Accordingly, we are 
proposing to delete the mammography G-codes beginning for CY 2015 and 
to pay all mammography using the CPT codes.
    Although we believe that the CPT codes should now be used to report 
all mammography services, we have concerns about whether the current 
values for the CPT codes accurately reflect the resource inputs 
associated with furnishing the services. Because the CPT codes have not 
been recently reviewed and significant technological changes have 
occurred during this time, we do not believe it would be appropriate to 
retain the current values for the CPT codes. Therefore, we are 
proposing to value the CPT codes using the RVUs previously established 
for the G-codes. We believe these values would be most appropriate 
since they were established to reflect the use of digital technology, 
which is now typical.
    As discussed in section II.B.3.b.(4) of this proposed rule, we are 
proposing these CPT codes as potentially misvalued and requesting that 
the RUC and other interested stakeholders review these services in 
terms of appropriate work RVUs, work time assumptions and direct PE 
inputs.
e. Radiation Treatment Vault
    In previous rulemaking (77 FR 68922; 78 FR 74346), we indicated 
that we included the radiation treatment vault as a direct PE input for 
several recently reviewed radiation treatment codes for the sake of 
consistency with its previous inclusion as a direct PE input for some 
other radiation treatment services, but that we intended to review the 
radiation treatment vault input and address whether or not it should be 
included in the direct PE input database for all services in future 
rulemaking. Specifically, we questioned whether it was consistent with 
the principles underlying the PE methodology to include the radiation 
treatment vault as a direct cost given that it appears to be more 
similar to building infrastructure costs than to medical equipment 
costs. Moreover, it is difficult to distinguish the cost of the vault 
from the cost of the building. In response to this action, we received 
comments and invoices from stakeholders who indicated that the vault 
should be classified as a direct cost. However, upon review of the 
information received, we believe that the specific structural 
components required to house the linear accelerator are similar in 
concept to components required to house other medical equipment such as 
expensive imaging

[[Page 40331]]

equipment. In general, the electrical, plumbing, and other building 
specifications are often unique to the intended functionality of a 
given building, including costs that are attributable to the specific 
medical equipment housed in the building, but do not represent direct 
medical equipment costs in our established PE methodology. Therefore we 
believe that the special building requirements indicated for the 
radiation treatment vault to house a linear accelerator do not 
represent a direct cost in our PE methodology, and that the vault 
construction is instead accounted for in the indirect PE methodology, 
just as the building and infrastructure costs are treated for other PFS 
services including those with infrastructure costs based on equipment 
needs Therefore, we propose to remove the radiation treatment vault as 
a direct PE input from the radiation treatment procedures listed in 
Table 8, because we believe that the vault is not, itself, medical 
equipment, and therefore, is accounted for in the indirect PE 
methodology.

Table 8--HCPCS Codes Affected by Proposed Removal of Radiation Treatment
                                  Vault
------------------------------------------------------------------------
              HCPCS                          Short descriptor
------------------------------------------------------------------------
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.
77411...........................  Radiation treatment delivery.
77412...........................  Radiation treatment delivery.
77413...........................  Radiation treatment delivery.
77414...........................  Radiation treatment delivery.
77416...........................  Radiation treatment delivery.
77418...........................  Radiation tx delivery imrt.
------------------------------------------------------------------------

f. Clinical Labor Input Errors
    Subsequent to the publication of the CY 2014 PFS final rule with 
comment period, it came to our attention that, due to a clerical error, 
the clinical labor type for CPT code 77293 (Respiratory Motion 
Management Simulation (list separately in addition to code for primary 
procedure)) was entered as L052A (Audiologist) instead of L152A 
(Medical Physicist), which has a higher cost per minute. We are 
proposing a correction to the clinical labor type for this service.
    In conducting a routine data review of the database, we also 
discovered that, due to a clerical error, the RN time allocated to CPT 
codes 33620 (Apply r&l pulm art bands), 33621 (Transthor cath for 
stent), and 33622 (Redo compl cardiac anomaly) was entered in the 
nonfacility setting, rather than in the facility setting where the code 
is valued. When a service is not valued in a particular setting, any 
inputs included in that setting are not included in the calculation of 
the PE RVUs for that service. Therefore, we are proposing to move the 
RN time allocated to these procedures to the facility setting. The PE 
RVUs listed in Addendum B reflect these technical corrections.
g. Work Time
    Subsequent to the publication of the CY PFS 2014 final rule with 
comment period, several inconsistencies in the work time file came to 
our attention. First, for some services, the total work time, which is 
used in our PE methodology, did not equal the sum of the component 
parts (pre-service, intra-service, post-service, and times associated 
with global period visits). The times in the CY 2015 work time file 
reflect our proposed corrected values for total work time. Second, for 
a subset of services, the values in the pre-positioning time, pre-
evaluation time, and pre-scrub-dress-wait time, were inadvertently 
transposed. We note that this error had no impact on calculation of the 
total times, but has been corrected in the CY 2015 work time file. 
Third, minor discrepancies for a series of interim final codes were 
identified between the work time file and the way we addressed these 
codes in the preamble text. Therefore, we have made adjustments to the 
work time file to reflect the decisions indicated in the preamble text. 
The work time file is available on the CMS Web site under the 
supporting data files for the CY 2015 PFS proposed rule at http://www.cms.gov/PhysicianFeeSched/. Note that for comparison purposes, the 
CY 2014 work time file is located at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices-Items/CMS-1600-FC.html.
h. Updates to Price for Existing Direct Inputs.
    In the CY 2011 PFS final rule with comment period (75 FR 73205), we 
finalized a process to act on public requests to update equipment and 
supply price and equipment useful life inputs through annual rulemaking 
beginning with the CY 2012 PFS proposed rule. During 2013, we received 
a request to update the price of SD216 (catheter, balloon, esophageal 
or rectal (graded distention test)) from $217 to $237.50. We also 
received a request to update the price of SL196 (kit, HER-2/neu DNA 
Probe) from $105 to $144.50. We received invoices that documented 
updated pricing for each of these supply items. We propose to increase 
the price associated with these supply items.
    We continue to believe it is important to maintain a periodic and 
transparent process to update the price of items to reflect typical 
market prices in our ratesetting methodology, and we continue to study 
the best way to improve our current process. We remind stakeholders 
that we have previously stated our difficulty in obtaining accurate 
pricing information. We have also made clear that the goal of the 
current transparent process is to offer the opportunity for the 
community to both request supply price updates by providing us copies 
of paid invoices, and to object to proposed changes in price inputs for 
particular items by providing additional information about prices 
available to the practitioner community. We remind stakeholders that 
PFS payment rates are developed within a budget neutral, relative value 
system, and any increases in price inputs for particular supply items 
result in corresponding decreases to the relative values of all other 
direct PE inputs.
    We note that we continue to have difficulty determining the best 
way to use the invoices that we receive. In all cases, we attempt to 
use the price that appears most representative, but it can be difficult 
to ascertain whether the prices on particular invoices are typical. For 
example, in some cases, we receive multiple invoices, but are only able 
to use one of them because the other invoices include additional items 
and do not separately identify the price of the item in question. In 
other cases, we receive multiple invoices at one price, which suggests 
that this price is likely a typical one. In other cases, we receive 
invoices for items already in the direct PE database that are based on 
a recent invoice. In these cases, it is not clear whether the new, 
usually higher priced, invoice reflects a more accurate price than the 
current price, but we need to determine whether to substitute the new 
price for the existing price, maintain the existing price, or average 
the two prices. We continue to seek stakeholder input on the best 
approach to using the small sample of invoices that are provided to us 
through this process.
    We also received a RUC recommendation to update the prices 
associated with two supply items. Specifically, the RUC recommended 
that we increase the price of SA042 (pack, cleaning and disinfecting, 
endoscope) from $15.52 to $17.06 to reflect the addition of supply item 
SJ009 (basin, irrigation) to the pack, and increase the price of SA019 
(kit, IV

[[Page 40332]]

starter) from $1.37 to $1.60 to reflect the addition of supply item 
SA044 (underpad 2 ft. x 3 ft. (Chux)) to the kit. We are proposing to 
update the prices for both of these items based on these 
recommendations. The CY 2015 direct PE database reflects these proposed 
changes and is available on the CMS Web site under the supporting data 
files for the CY 2015 PFS proposed rule at http://www.cms.gov/PhysicianFeeSched/.
i. New Standard Supply Package for Contrast Imaging
    The RUC recommended creating a new direct PE input standard supply 
package ``Imaging w/contrast, standard package'' for contrast enhanced 
imaging, with a price of $6.82. This price reflects the combined prices 
of the medical supplies included in the package; these items are listed 
in Table 9. We propose to accept this recommendation, but seek comment 
on whether all of the items included in the package are used in the 
typical case. The CY 2015 direct PE database reflects this proposed 
change and is available on the CMS Web site under the supporting data 
files for the CY 2015 PFS proposed rule at http://www.cms.gov/PhysicianFeeSched/.

                                Table 9--Standard Contrast Imaging Supply Package
----------------------------------------------------------------------------------------------------------------
    Medical supply description         CMS supply code              Unit             Quantity          Price
----------------------------------------------------------------------------------------------------------------
                                      Imaging w/Contrast--Standard Package
----------------------------------------------------------------------------------------------------------------
Kit, IV starter...................  SA019................  Kit..................               1          $1.368
Gloves, non-sterile...............  SB022................  Pair.................               1           0.084
Angiocatheter 14g-24g.............  SC001................  Item.................               1           1.505
Heparin lock......................  SC012................  Item.................               1           0.917
IV tubing (extension).............  SC019................  Foot.................              *3           1.590
Needle, 18-27g....................  SC029................  Item.................               1           0.089
Syringe 20ml......................  SC053................  Item.................               1           0.558
Sodium chloride 0.9% inj.           SH068................  Item.................               1           0.700
 bacteriostatic (30ml uou).
Swab-pad, alcohol.................  SJ053................  Item.................               1           0.013
                                                                                 -------------------------------
    TOTAL.........................  .....................  .....................  ..............           6.824
----------------------------------------------------------------------------------------------------------------
* The price for SC019 (IV tubing, (extension)) is $0.53 per foot.

j. Direct PE Inputs for Stereotactic Radiosurgery (SRS) Services (CPT 
Codes 77372 and 77373)
    In the CY 2014 PFS final rule with comment period (78 FR 74245), we 
summarized comments received about whether CPT codes 77372 and 77373 
would accurately reflect the resources used in furnishing the typical 
SRS delivery if there were no coding distinction between robotic and 
non-robotic delivery methods. Until now, SRS services furnished using 
robotic methods were billed using contractor-priced G-codes G0339 
(Image-guided robotic linear accelerator based stereotactic 
radiosurgery, complete course of therapy in one session or first 
session of fractionated treatment), and G0340 (Image-guided robotic 
linear accelerator-based stereotactic radiosurgery, delivery including 
collimator changes and custom plugging, fractionated treatment, all 
lesions, per session, second through fifth sessions, maximum five 
sessions per course of treatment). We indicated that we would consider 
these codes in future rulemaking.
    Most commenters suggested that the CPT codes accurately described 
both services, and the RUC stated that the direct PE inputs for the CPT 
codes accurately accounted for the resource costs of the described 
services. One commenter objected to the deletion of the G-codes but did 
not include any information to suggest that the CPT codes did not 
describe the services or that the direct PE inputs for the CPT codes 
were inaccurate. Based on a review of the comments received, we have no 
indication that the direct PE inputs included in the CPT codes do not 
reflect the typical resource inputs involved in furnishing an SRS 
service. Therefore, we propose to recognize only the CPT codes for 
payment of SRS services, and to delete the G-codes used to report 
robotic delivery of SRS.
k. Inclusion of Capnograph for Pediatric Polysomnography Services
    We are proposing to include equipment item EQ358, Sleep capnograph, 
polysomnography (pediatric), for CPT codes 95782 (Polysomnography; 
younger than 6 years, sleep staging with 4 or more additional 
parameters of sleep, attended by a technologist) and 95783 
(Polysomnography; younger than 6 years, sleep staging with 4 or more 
additional parameters of sleep, with initiation of continuous positive 
airway pressure therapy or bi-level ventilation, attended by a 
technologist). We understand that capnography is a required element of 
sleep studies for patients younger than 6 years, and propose to 
allocate this equipment item to 95782 for 602 minutes, and 95783 for 
647 minutes. Based on the invoice we received for this equipment item, 
we propose to price EQ358 at $4,534.23.
l. Nonfacility Direct PE Inputs for Intravascular Ultrasound
    A stakeholder requested that we establish nonfacility PE RVUs for 
CPT code 37250 (Intravascular ultrasound (non-coronary vessel) during 
diagnostic evaluation and/or therapeutic intervention; each additional 
vessel (List separately in addition to code for primary procedure)) and 
37251 (Intravascular ultrasound (non-coronary vessel) during diagnostic 
evaluation and/or therapeutic intervention; each additional vessel 
(List separately in addition to code for primary procedure)). We seek 
comment regarding whether it is appropriate to have nonfacility PE RVUs 
for this code and if so what inputs should assigned to this code.
4. Using OPPS and ASC Rates in Developing PE RVUs
    Accurate and reliable pricing information for both individual items 
and indirect PEs is critical to establish accurate PE RVUs for PFS 
services. As we have addressed in previous rulemaking, we have serious 
concerns regarding the accuracy of some of the information we use in 
developing PE RVUs. In particular, we have several longstanding 
concerns regarding the accuracy of direct PE inputs, including

[[Page 40333]]

both items and procedure time assumptions, and prices of individual 
supplies and equipment (78 FR 74248-74250). In addition to the concerns 
regarding the inputs used in valuing particular procedures, we also 
note that the allocation of indirect PE is based on information 
collected several years ago (as described above) and will likely need 
to be updated in the coming years. To mitigate the impact of some of 
these potentially problematic data used in developing values for 
individual services, in CY 2014 rulemaking we proposed to limit the 
nonfacility PE RVUs for individual codes so that the total nonfacility 
PFS payment amount would not exceed the total combined amount that 
Medicare would pay for the same code in the facility setting. In 
developing the proposal, we sought a reliable means for Medicare to set 
upper payment limits for office-based procedures and believed OPPS and 
ASC payment rates would provide an appropriate comparison because these 
rates are based on relatively more reliable cost information in 
settings with cost structures that generally would be expected to be 
higher than in the office setting.
    We received many comments regarding our proposal, the vast majority 
of which urged us to withdraw the proposal. Some commenters questioned 
the validity of our assumption that facilities' costs for providing all 
services are necessarily higher than the costs of physician offices or 
other nonfacility settings. Other commenters expressed serious concerns 
with the asymmetrical comparisons between PFS payment amounts and OPPS/
ASC payment amounts. Finally, many commenters suggested revisions to 
technical aspects of our proposed policy.
    In considering all the comments, however, we were persuaded that 
the comparison of OPPS (or ASC) payment amounts to PFS payment amounts 
for particular procedures is not the most appropriate or effective 
approach to ensuring that that PFS payment rates are based on accurate 
cost assumptions. Commenters noted several flaws with the approach. 
First, unlike PFS payments, OPPS and ASC payments for individual 
services are grouped into rates that reflect the costs of a range of 
services. Second, commenters suggested that since the ASC rates reflect 
the OPPS relative weights to determine payment rates under the ASC 
payment system, and are not based on cost information collected from 
ASCs, the ASC rates should not be used in the proposed policy. For 
these and other reasons raised by commenters, we are not proposing a 
similar policy for the CY 2015 PFS. If we consider using OPPS or ASC 
payment rates in developing PFS PE RVUs in future rulemaking, we would 
consider all of the comments received regarding the technical 
application of the previous proposal.
    After thorough consideration of the comments regarding the CY 2014 
proposal, we continue to believe that there are a various possibilities 
for leveraging the use of available hospital cost data in the PE RVU 
methodology to ensure that the relative costs for PFS services are 
developed using data that is auditable and comprehensively and 
regularly updated. Although some commenters questioned the premise that 
the hospital cost data are more accurate than the information used to 
establish PE RVUs, we continue to believe that the routinely updated, 
auditable resource cost information submitted contemporaneously by a 
wide array of providers across the country is a valid reflection of 
``relative'' resources and could be useful to supplement the resource 
cost information developed under our current methodology based upon a 
typical case that are developed with information from a small number of 
representative practitioners for a small percentage of codes in any 
particular year.
    Section 220(a) of the PAMA added a new subparagraph (M) under 
section 1848(c)(2) of the Act that gives us authority to collect 
information on resources used to furnish services from eligible 
professionals (including physicians, non-physician practitioners, PTs, 
OTs, SLPs and qualified audiologists), and other sources. It also 
authorizes us to pay eligible professionals for submitting solicited 
information. We will be exploring ways of collecting better and updated 
resource data from physician practices, including those that are 
provider-based, and other non-facility entities paid through the PFS. 
We believe such efforts will be challenging given the wide variety of 
practices, and that any effort will likely impose some burden on 
eligible professionals paid through the PFS regardless of the scope and 
manner of data collection. Currently, through one of the validation 
contracts discussed in section II.B. of this proposed rule, we have 
been gathering time data directly from physician practices. Through 
this project, we have learned much about the challenges for both CMS 
and the eligible professionals of collecting data directly from 
practices. Our experience has also shown that is difficult to obtain 
invoices for supply and equipment items that we can use in pricing 
direct PE inputs. Many specialty societies also have noted the 
challenges in obtaining recent invoices for medical supplies and 
equipment (78 FR 74249). Further, PE calculations also rely heavily on 
information from the Physician Practice Expense Information Survey 
(PPIS) survey, which, as discussed earlier, was conducted in 2007 and 
2008. When we implemented the results of the survey, many in the 
community expressed serious concerns over the accuracy of this or other 
PE surveys as a way of gathering data on PE inputs from the diversity 
of providers paid under the PFS.
    Section 220 of the PAMA also provides authority to use alternative 
approaches to establish practice expense relative values, including the 
use of data from other suppliers and providers of services. We are 
exploring the best approaches for exercising this authority, including 
with respect to use of hospital outpatient cost data. We understand 
that many stakeholders will have concerns regarding the possibility of 
using hospital outpatient cost data in developing PFS PE RVUs, and we 
want to be sure we are aware of these prior to considering or 
developing any future proposal relying on those data. Therefore, we are 
seeking comment on the possible uses of the Medicare hospital 
outpatient cost data (not the APC payment amount) in potential 
revisions of the PFS PE methodology. This could be as a means to 
validate or, perhaps, in setting the relative resource cost assumptions 
within the PFS PE methodology. We note that the resulting PFS payment 
amounts would not necessarily conform to OPPS payment amounts since 
OPPS payments are grouped into APCs, while PFS payments would continue 
to be valued individually and would remain subject to the relativity 
inherent in establishing PE RVUs, budget neutrality adjustments, and 
PFS updates. We are particularly interested in comments that compare 
such possibilities to other broad-based, auditable, mechanisms for data 
collection, including any we might consider under the authority 
provided under section 220(a) of the PAMA. We urge commenters to 
consider a wide range of options for gathering and using the data, 
including using the data to validate or set resource assumptions for 
only a subset of PFS services, or as a base amount to be adjusted by 
code or specialty-level recommended adjustments, or other potential 
uses.
    In addition to soliciting comments as noted above, we continue to 
seek a better understanding regarding the growing trend toward hospital 
acquisition of physician offices and

[[Page 40334]]

subsequent treatment of those locations as off-campus provider-based 
outpatient departments affects payments under PFS and beneficiary cost-
sharing. MedPAC continues to question the appropriateness of increased 
Medicare payment and beneficiary cost-sharing when physician offices 
become hospital outpatient departments, and to recommend that Medicare 
pay selected hospital outpatient services at PFS rates (MedPAC March 
2012 and June 2013 Report to Congress). We also remain concerned about 
the validity of the resource data as more physician practices become 
provider-based. Our survey data reflects the PE costs for particular 
PFS specialties, including a proportion of practices that may have 
become provider-based since the survey was conducted. Additionally, as 
the proportion of provider-based offices varies among physician 
specialties, so does the relative accuracy of the PE survey data. Our 
current PE methodology primarily distinguishes between the resources 
involved in furnishing services in two sites of service: The non-
facility setting and the facility setting. In principle, when services 
are furnished in the non-facility setting, the costs associated with 
furnishing services include all direct and indirect PEs associated with 
the work and the PE of the service. In contrast, when services are 
furnished in the facility setting, some costs that would be PEs in the 
office setting are incurred by the facility. Medicare makes a separate 
payment to the facility to account for some portion of these costs, and 
we adjust PEs accordingly under the PFS. As more physician practices 
become hospital-based, it is difficult to know which PE costs typically 
are actually incurred by the physician, which are incurred by the 
hospital, and whether our bifurcated site-of service differential 
adequately accounts for the typical resource costs given these 
relationships. We also have addressed this issue as it relates to 
accurate valuation of visits within the post-operative period of 10- 
and 90-day global codes in section II.B.4 of this proposed rule.
    To understand how this trend is affecting Medicare, including the 
accuracy of payments made through the PFS, we need to develop data to 
assess the extent to which this shift toward hospital-based physician 
practices is occurring. To that end, during CY 2014 rulemaking we 
sought comment regarding the best method for collecting information 
that would allow us to analyze the frequency, type, and payment for 
services furnished in off-campus provider-based hospital departments 
(73 FR 43302). We received many thoughtful comments. However, the 
commenters did not present a consensus opinion regarding the options we 
presented in last year's rule. Based on our analysis of the comments, 
we believe the most efficient and equitable means of gathering this 
important information across two different payment systems would be to 
create a HCPCS modifier to be reported with every code for physician 
and hospital services furnished in an off-campus provider-based 
department of a hospital. The modifier would be reported on both the 
CMS-1500 claim form for physicians' services and the UB-04 (CMS form 
1450) for hospital outpatient claims. (We note that the requirements 
for a determination that a facility or an organization has provider-
based status are specified in Sec.  413.65 and we define a hospital 
campus to be the physical area immediately adjacent to the provider's 
main buildings, other areas and structures that are not strictly 
contiguous to the main buildings but are located within 250 yards of 
the main buildings, and any other areas determined on an individual 
case basis, by the CMS regional office.)
    Therefore, we are proposing to collect this information on the type 
and frequency of services furnished in off-campus provider-based 
departments in accordance with our authority under section 
1834(c)(2)(M) of the Act (as added by section 220(a) of the PAMA) 
beginning January 1, 2015. The collection of this information would 
allow us to begin to assess the accuracy of the PE data, including both 
the service-level direct PE inputs and the specialty-level indirect PE 
information that we currently use to value PFS services. Furthermore, 
this information would be critical in order to develop proposed 
improvements to our PE data or methodology that would appropriately 
account for the different resource costs among traditional office, 
facility, and off-campus provider-based settings. We are seeking 
additional comment on whether a code modifier is the best mechanism for 
collecting this service-level information.

B. Potentially Misvalued Services Under the Physician Fee Schedule

1. Valuing 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; PE; and MP. 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 work 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.''
    Section 1848(c)(1)(B) of the Act defines the PE component as ``the 
portion of the resources used in furnishing the service that reflects 
the general categories of expenses (such as office rent and wages of 
personnel, but excluding malpractice expenses) comprising practice 
expenses.'' Section 1848 (c)(2)(C)(ii) of the Act requires that PE RVUs 
be determined based upon the relative PE resources involved in 
furnishing the service. (See section II.A. of this proposed rule for 
more detail on the PE component.)
    Section 1848(c)(1)(C) of the Act defines the MP component as ``the 
portion of the resources used in furnishing the service that reflects 
malpractice expenses in furnishing the service.'' Section 1848 
(c)(2)(C)(iii) of the Act specifies that MP expense RVUs shall be 
determined based on the relative MP expense resources involved in 
furnishing the service. (See section II.C. of this proposed rule for 
more detail on the MP component.)
2. Identifying, Reviewing, and Validating the RVUs of Potentially 
Misvalued Services
a. Background
    Section 1848(c)(2)(B) of the Act directs the Secretary to conduct a 
periodic review, not less often than every 5 years, of the RVUs 
established under the PFS. Section 1848(c)(2)(K) of the Act requires 
the Secretary to periodically identify potentially misvalued services 
using certain criteria and to review and make appropriate adjustments 
to the relative values for those services. Section 1848(c)(2)(L) to the 
Act also requires the Secretary to develop a process to validate the 
RVUs of certain potentially misvalued codes under the PFS, using the 
same criteria used to identify potentially misvalued codes, and to make 
appropriate adjustments.
    As discussed in section I.B. of this proposed rule, each year we 
develop appropriate adjustments to the RVUs taking into account 
recommendations provided by the American Medical Association/Specialty 
Society Relative Value Scale Update Committee (RUC), MedPAC, and 
others. For many years, the RUC has provided us with recommendations on 
the appropriate

[[Page 40335]]

relative values for new, revised, and potentially misvalued PFS 
services. We review these recommendations on a code-by-code basis and 
consider these recommendations in conjunction with analyses of other 
data, such as claims data, to inform the decision-making process as 
authorized by the law. We may also consider analyses of work 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 RUC. We also consider information provided by other 
stakeholders. We conduct a review to assess the appropriate RVUs in the 
context of contemporary medical practice. We note that section 
1848(c)(2)(A)(ii) of the Act authorizes the use of extrapolation and 
other techniques to determine the RVUs for physicians' services for 
which specific data are not available in addition to taking into 
account the results of consultations with organizations representing 
physicians. In accordance with section 1848(c) of the Act, we determine 
and make appropriate adjustments to the RVUs.
    In its March 2006 Report to the Congress, MedPAC discussed the 
importance of appropriately valuing physicians' services, noting 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. 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.'' We believe services can also 
become overvalued when PE declines. This can happen when the costs of 
equipment and supplies fall, or when equipment is used more frequently 
than is estimated in the PE methodology, reducing its cost per use. 
Likewise, services can become undervalued when physician work increases 
or PE rises.
    As MedPAC noted in its March 2009 Report to Congress, in the 
intervening years since MedPAC made the initial recommendations, ``CMS 
and the RUC have taken several steps to improve the review process.'' 
Also, since that time Congress added section 1848(c)(2)(K)(ii) to the 
Act, which augments our efforts. It directs the Secretary to 
specifically examine, as determined appropriate, potentially misvalued 
services in the following seven categories:
     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 RBRVS (the so-called `Harvard-valued codes'); and
     Other codes determined to be appropriate by the Secretary.
    Section 220(c) of the PAMA further expanded the categories of codes 
that the Secretary is directed to examine by adding nine additional 
categories. These are:
     Codes that account for the majority of spending under the 
PFS;
     Codes for services that have experienced a substantial 
change in the hospital length of stay or procedure time;
     Codes for which there may be a change in the typical site 
of service since the code was last valued;
     Codes for which there is a significant difference in 
payment for the same service between different sites of service;
     Codes for which there may be anomalies in relative values 
within a family of codes;
     Codes for services where there may be efficiencies when a 
service is furnished at the same time as other services;
     Codes with high intra-service work per unit of time;
     Codes with high PE RVUs; and
     Codes with high cost supplies.
    Section 1848(c)(2)(K)(iii) of the Act also specifies that the 
Secretary may use existing processes to receive recommendations on the 
review and appropriate adjustment of potentially misvalued services. In 
addition, the Secretary may conduct surveys, other data collection 
activities, studies, or other analyses, as the Secretary determines to 
be appropriate, to facilitate the review and appropriate adjustment of 
potentially misvalued services. This section also authorizes the use of 
analytic contractors to identify and analyze potentially misvalued 
codes, conduct surveys or collect data, and make recommendations on the 
review and appropriate adjustment of potentially misvalued services. 
Additionally, this section provides that the Secretary may coordinate 
the review and adjustment of any RVU with the periodic review described 
in section 1848(c)(2)(B) of the Act. Section 1848(c)(2)(K)(iii)(V) of 
the Act specifies that the Secretary may make appropriate coding 
revisions (including using existing processes for consideration of 
coding changes) that may include consolidation of individual services 
into bundled codes for payment under the PFS.
b. Progress in Identifying and Reviewing Potentially Misvalued Codes
    To fulfill our statutory mandate, we have identified and reviewed 
numerous potentially misvalued codes as 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. As part of our current process, we identify potentially 
misvalued codes for review, and request recommendations from the RUC 
and other public commenters on revised work RVUs and direct PE inputs 
for those codes. The RUC, through its own processes, also identifies 
potentially misvalued codes for review. Through our public nomination 
process for potentially misvalued codes established in the CY 2012 PFS 
final rule with comment period, 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 the five-year review process, we have reviewed over 1,250 
potentially misvalued codes to refine work RVUs and direct PE inputs. 
We have assigned appropriate work RVUs and direct PE inputs for these 
services as a result of these reviews. A more detailed discussion of 
the extensive prior reviews of 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, we finalized our 
policy to consolidate the review of physician work and PE at the same 
time (76 FR 73055 through 73958), and established a process for the 
annual

[[Page 40336]]

public nomination of potentially misvalued services.
    In the CY 2013 final rule with comment period, we built upon the 
work we began in CY 2009 to review potentially misvalued codes that 
have not been reviewed since the implementation of the PFS (so-called 
``Harvard-valued codes''). In CY 2009, we requested recommendations 
from the RUC to aid in our review of Harvard-valued codes that had not 
yet been reviewed, focusing first on high-volume, low intensity codes 
(73 FR 38589). In the Fourth Five-Year Review, we requested 
recommendations from the RUC to aid in our review of Harvard-valued 
codes with annual utilization of greater than 30,000 (76 FR 32410). In 
the CY 2013 final rule with comment period, we identified Harvard-
valued services with annual allowed charges that total at least 
$10,000,000 as potentially misvalued. In addition to the Harvard-valued 
codes, in the CY 2013 final rule with comment period we finalized for 
review a list of potentially misvalued codes that have stand-alone PE 
(codes with physician work and no listed work time and codes with no 
physician work and have listed work time).
    In the CY 2014 final rule with comment period, we finalized for 
review a list of potentially misvalued services that included 
ultrasound guidance codes that had longer procedure times than the 
typical procedure with which the code is billed to Medicare. We also 
finalized our proposal to replace missing post-operative hospital 
evaluation and management (E/M) visit information and work time for 
approximately 100 global surgery codes. In CY 2014, we also considered 
a proposal to limit Medicare PFS payments for services furnished in a 
nonfacility setting when the PFS payment would exceed the combined 
Medicare payment under the PFS to the practitioner and facility payment 
made to either the ASC or hospital outpatient. Based upon extensive 
public comment we did not finalize this proposal. We address our 
current consideration of the potential use of OPPS data in establishing 
RVUs for PFS services in section II.A. of this proposed rule.
c. Validating RVUs of Potentially Misvalued Codes
    Section 1848(c)(2)(L) of the Act requires the Secretary to 
establish a formal process to validate RVUs under the PFS. The Act 
specifies that the validation process may include validation of work 
elements (such as time, mental effort and professional judgment, 
technical skill and physical effort, and stress due to risk) involved 
with furnishing a service and may include validation of the pre-, post-
, and intra-service components of work. The Secretary is directed, as 
part of the validation, to validate a sampling of the work RVUs of 
codes identified through any of the 16 categories of potentially 
misvalued codes specified in 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 
(73054 through 73055).
    Since that time, we have contracted with two outside entities to 
develop validation models for RVUs. Given the central role of time in 
establishing work RVUs and the concerns that have been raised about the 
current time values used in rate setting, we contracted with the Urban 
Institute to collect time data from several practices for services 
selected by the contractor in consultation with CMS. These data will be 
used to develop time estimates for PFS services. The Urban Institute 
will use a variety of approaches to develop objective time estimates, 
depending on the type of service. Objective time estimates will be 
compared to the current time values used in the fee schedule. The 
project team will then convene groups of physicians from a range of 
specialties to review the new time data and their potential 
implications for work and the ratio of work to time. In its efforts to 
collect primary data on the time involved in PFS services, the Urban 
Institute has encountered numerous challenges. An interim report, 
Development of a Model for the Valuation of Work Relative Value Units, 
discusses the challenges encountered in collecting objective time data 
and offers some thoughts on how these can be overcome. This interim 
report is on the CMS Web site at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Downloads/RVUs-Validation-Urban-Interim-Report.pdf. Collection of time data under this project 
has just begun. A final report will be available once the project is 
complete.
    The second contract is with the RAND Corporation, which is using 
available data to build a validation model to predict work RVUs and the 
individual components of work RVUs, time, and intensity. The model 
design was informed by the statistical methodologies and approach used 
to develop the initial work RVUs and to identify potentially misvalued 
procedures under current CMS and RUC processes. RAND will use a 
representative set of CMS-provided codes to test the model. RAND 
consulted with a technical expert panel on model design issues and the 
test results. We anticipate a report from this project by the end of 
the year and will make the report available on the CMS Web site.
    Descriptions of both projects are available on the CMS Web site at 
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Downloads/RVUs-Validation-Model.pdf.
3. CY 2015 Identification and Review of Potentially Misvalued Services
a. Public Nomination of Potentially Misvalued Codes
    In the CY 2012 PFS final rule with comment period, we finalized a 
process for the public to nominate potentially misvalued codes (76 FR 
73058). The public and 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 work 
time.
     An anomalous relationship between the code being proposed 
for review and other codes.
     Evidence that technology has changed physician work.
     Analysis of other data on time and effort measures, such 
as operating room logs or national and other representative databases.
     Evidence that incorrect assumptions were made in the 
previous

[[Page 40337]]

valuation of the service, such as a misleading vignette, survey, or 
flawed crosswalk assumptions in a previous evaluation.
     Prices for certain high cost supplies or other direct PE 
inputs that are used to determine PE RVUs are inaccurate and do not 
reflect current information.
     Analyses of work time, work RVU, or direct PE inputs using 
other data sources (for example, Department of Veteran Affairs (VA) 
National Surgical Quality Improvement Program (NSQIP), the Society for 
Thoracic Surgeons (STS) National Database, and the Physician Quality 
Reporting System (PQRS) databases).
     National surveys of work time and intensity from 
professional and management societies and organizations, such as 
hospital associations.
    We evaluate the supporting documentation submitted with the 
nominated codes and assess whether the nominated codes appear to be 
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 indicate whether we are proposing each nominated 
code as a potentially misvalued code. The public has the opportunity to 
comment on these and all other proposed potentially misvalued codes. In 
that year's final rule, we finalize our list of potentially misvalued 
codes.
    During the comment period on the CY 2014 final rule with comment 
period, we received nominations and supporting documentation for two 
codes to be considered as potentially misvalued codes. We evaluated the 
supporting documentation for each nominated code to ascertain whether 
the submitted information demonstrated that the code should be proposed 
as potentially misvalued.
    CPT code 41530 (submucosal ablation of the tongue base, 
radiofrequency, 1 or more sites, per session) was nominated for review 
as a potentially misvalued code. The nominator stated that CPT code 
41530 is misvalued because there have been changes in the PE items used 
in furnishing the service. The nominator specifically requested that 
the SD109 probe (probe, radiofrequency, 3 array (StarBurstSDE)) be 
replaced with a more typically used probe, which costs less, and that a 
replacement be used for equipment code EQ214 (radiofrequency generator) 
to reflect a more appropriate input based on current invoices. We are 
proposing this code as a potentially misvalued code.
    CPT code 99174 (instrument-based ocular screening (eg, 
photoscreening, automated-refraction), bilateral) was also nominated 
for review as a potentially misvalued code. The nominator asserted that 
CPT code 99174 is misvalued because of outdated capital equipment 
inputs and the removal of supply code SK110 (fee, image analysis) from 
the code's direct PE inputs. (The latter change was proposed and 
finalized during CY 2014 notice and comment rulemaking). In 
establishing our public nomination process, we specified that the we 
would only consider nominations of active codes that are covered by 
Medicare at the time of the nomination stating, ``We also are limiting 
the review of RVUs to codes that are active, covered by Medicare, and 
for which the RVUs are used for payment purposes under the PFS so that 
resources are not expended on the review of codes with RVUs that have 
no financial impact on the PFS.'' (76 FR 73059). CPT code 99174 is non-
covered on the PFS and therefore does not meet the criteria for review 
as a potentially misvalued code. Accordingly, we are not proposing CPT 
code 99174 as a potentially misvalued code.
b. Potentially Misvalued Codes
(1) Review of High Expenditure Services Across Specialties With 
Medicare Allowed Charges of $10,000,000 or More
    We are proposing the approximately 65 codes listed in Table 10 as 
potentially misvalued codes as a prioritized subset of codes of the 
newly established statutory category, ``codes that account for the 
majority of spending under the physician fee schedule.'' As we identify 
potentially misvalued codes, we prioritize codes that are important to 
the Medicare program and its beneficiaries, and codes that account for 
a high level of Medicare expenditures meet this criterion. However, 
through our usual identification potentially misvalued codes it is 
possible to miss certain services that are important to a segment of 
Medicare practitioners and beneficiaries because the specialty that 
typically furnishes the service does not have high volume relative to 
the overall PFS utilization. To capture such services in developing 
this list, we looked at high expenditure services by specialty using a 
similar approach to the one we used in CY 2012. We believe it is 
appropriate to repeat this type of analysis periodically.
    To develop the CY 2015 proposed list in this category, we began by 
identifying the top 20 codes by specialty in terms of allowed charges. 
For this analysis, we used the same specialties as used for the impact 
analysis in section VI. of this proposed rule. We excluded codes from 
our proposed potentially misvalued list that we have reviewed since CY 
2009, with fewer than $10 million in allowed charges, and that describe 
anesthesia or E/M services. We excluded E/M services from the list of 
proposed potentially misvalued codes for the same reasons that we 
excluded them in the CY 2012 analysis, which we explained in the CY 
2012 final rule with comment period (76 FR 73062 through 73065).
    We believe that a review of the codes in Table 10 is warranted to 
assess changes in physician work and to update direct PE inputs since 
these codes have not been reviewed since CY 2009 or earlier. 
Furthermore, since these codes have significant impact on PFS payment 
at the specialty level, a review of the relativity of the codes is 
essential to ensure that the work and PE RVUs are appropriately 
relative within the specialty and across specialties, as discussed 
previously. For these reasons, we are proposing the codes listed in 
Table 10 as potentially misvalued.

 Table 10--Proposed Potentially Misvalued Codes Identified Through High
                      Expenditure Specialty Screen
------------------------------------------------------------------------
             HCPCS                           Short descriptor
------------------------------------------------------------------------
11100..........................  Biopsy skin lesion.
11101..........................  Biopsy skin add-on.
11730..........................  Removal of nail plate.
11750..........................  Removal of nail bed.
14060..........................  Tis trnfr e/n/e/l 10 sq cm/.
17110..........................  Destruct b9 lesion 1-14.
31575..........................  Diagnostic laryngoscopy.
31579..........................  Diagnostic laryngoscopy.
36215..........................  Place catheter in artery.
36475..........................  Endovenous rf 1st vein.
36478..........................  Endovenous laser 1st vein.
36870..........................  Percut thrombect av fistula.
51720..........................  Treatment of bladder lesion.
51728..........................  Cystometrogram w/vp.
51798..........................  Us urine capacity measure.
52000..........................  Cystoscopy.
55700..........................  Biopsy of prostate.
65855..........................  Laser surgery of eye.
66821..........................  After cataract laser surgery.
67228..........................  Treatment of retinal lesion.
68761..........................  Close tear duct opening.
71010..........................  Chest x-ray 1 view frontal.
71020..........................  Chest x-ray 2vw frontal&latl.
71260..........................  Ct thorax w/dye.
73560..........................  X-ray exam of knee 1 or 2.
73562..........................  X-ray exam of knee 3.
73564..........................  X-ray exam knee 4 or more.
74183..........................  Mri abdomen w/o & w/dye.
75978..........................  Repair venous blockage.
76536..........................  Us exam of head and neck.
76700..........................  Us exam abdom complete.
76770..........................  Us exam abdo back wall comp.
76775..........................  Us exam abdo back wall lim.
77263..........................  Radiation therapy planning.
77334..........................  Radiation treatment aid(s).
78452..........................  Ht muscle image spect mult.

[[Page 40338]]

 
88185..........................  Flowcytometry/tc add-on.
91110..........................  Gi tract capsule endoscopy.
92136..........................  Ophthalmic biometry.
92250..........................  Eye exam with photos.
92557..........................  Comprehensive hearing test.
93280..........................  Pm device progr eval dual.
93306..........................  Tte w/doppler complete.
93351..........................  Stress tte complete.
93978..........................  Vascular study.
94010..........................  Breathing capacity test.
95004..........................  Percut allergy skin tests.
95165..........................  Antigen therapy services.
95957..........................  Eeg digital analysis.
96101..........................  Psycho testing by psych/phys.
96118..........................  Neuropsych tst by psych/phys.
96372..........................  Ther/proph/diag inj sc/im.
96375..........................  Tx/pro/dx inj new drug addon.
96401..........................  Chemo anti-neopl sq/im.
96409..........................  Chemo iv push sngl drug.
97032..........................  Electrical stimulation.
97035..........................  Ultrasound therapy.
97110..........................  Therapeutic exercises.
97112..........................  Neuromuscular reeducation.
97113..........................  Aquatic therapy/exercises.
97116..........................  Gait training therapy.
97140..........................  Manual therapy 1/> regions.
97530..........................  Therapeutic activities.
G0283..........................  Elec stim other than wound.
------------------------------------------------------------------------

(2) Epidural Injection and Fluoroscopic Guidance--CPT Codes 62310, 
62311, 62318, 62319, 77001, 77002 and 77003
    For CY 2014, we established interim final values for four epidural 
injection procedures, CPT codes 62310 (Injection(s), of diagnostic or 
therapeutic substance(s) (including anesthetic, antispasmodic, opioid, 
steroid, other solution), not including neurolytic substances, 
including needle or catheter placement, includes contrast for 
localization when performed, epidural or subarachnoid; cervical or 
thoracic), 62311 (Injection(s), of diagnostic or therapeutic 
substance(s) (including anesthetic, antispasmodic, opioid, steroid, 
other solution), not including neurolytic substances, including needle 
or catheter placement, includes contrast for localization when 
performed, epidural or subarachnoid; lumbar or sacral (caudal)), 62318 
(Injection(s), including indwelling catheter placement, continuous 
infusion or intermittent bolus, of diagnostic or therapeutic 
substance(s) (including anesthetic, antispasmodic, opioid, steroid, 
other solution), not including neurolytic substances, includes contrast 
for localization when performed, epidural or subarachnoid; cervical or 
thoracic) and 62319 (Injection(s), including indwelling catheter 
placement, continuous infusion or intermittent bolus, of diagnostic or 
therapeutic substance(s) (including anesthetic, antispasmodic, opioid, 
steroid, other solution), not including neurolytic substances, includes 
contrast for localization when performed, epidural or subarachnoid; 
lumbar or sacral (caudal)). These interim final values resulted in CY 
2014 payment reductions from the CY 2013 rates for all four procedures.
    In the CY 2014 final rule with comment period (78 FR 74340), we 
described in detail our interim valuation of these codes. We indicated 
we established interim final work RVUs for these codes below those 
recommended by the RUC because we did not believe that the RUC-
recommended work RVUs accounted for the substantial decrease in time it 
takes to furnish these services since the last time they were valued as 
reflected in the RUC survey data for these four codes. Since the RUC 
provided no indication that the intensity of the procedures had 
changed, we believed that the work RVUs should reflect the reduction in 
time. We also established interim final direct PE inputs for these four 
codes based on the RUC-recommended inputs without any refinement. These 
recommendations included the removal of the radiographic-fluoroscopy 
room for 62310, 62311, and 62318 and a portable C-arm for 62319.
    We received thousands of comments objecting to the CY 2014 interim 
final values for these codes, many citing concerns with patient access 
and with the potential for the payment reductions under the PFS to 
inappropriately incentivize the use of the hospital setting or to 
encourage the use of other injections. Some suggested these payment 
rates might affect the rate of opioid use. Although most comments did 
not address the accuracy of the relative value inputs used in 
determining PFS payment rates, those that did most often objected to 
our valuations of the work RVUs and recommended that we instead accept 
the RUC recommendations. Several commenters objected to our rationale 
for setting the interim final work RVUs lower than the RUC-recommended 
values primarily based upon the reduction in time. Commenters gave two 
primary reasons why this reduction was inappropriate. Some pointed out 
that a reduction in work based upon a reduction in time presumes that 
the existing time is correct. These commenters asserted that the 
existing times were not correct for these codes. For example, the RUC 
noted that the CY 2013 survey times were from the original 1999 survey 
and were an outlier when compared to the previously reported code's 
original Harvard-valued total time of 42 minutes. One commenter noted 
that CMS indicates that in setting work values, the agency considers 
time, mental effort, professional judgment, technical skill, physical 
effort and stress due to risk; but in this case, rather than following 
our process, we only considered time. Others also said that we did not 
take into account the intensity, complexity, or risk of performing 
epidural injections. Commenters disagreed with the use of the lowest 
RUC survey value as the basis for the work valuation. One commenter 
said that we failed to explain adequately why our work RVUs were below 
those recommended by the RUC. One recommended that we assign values 
more similar to those used for paravertebral injections.
    Two commenters stated that critical PE inputs, including an 
epidural needle, loss or resistance syringe and spinal needle, were 
missing from the valuation. One commenter indicated that a 
radiographic-fluoroscopic room should be included for CPT codes 62310, 
62311 and 62318; and a mobile C-Arm should be included for CPT code 
62319. Another commenter requested the decreases in the PE RVUs be 
phased in over a period of years.
    Several commenters objected to the use of the interim final process 
for valuing these codes, citing the lack of opportunity for public 
comment and the lack of time to adequately prepare before the cuts to 
reimbursement took effect. Some suggested a delay in implementation.
    Lastly, several commenters requested refinement panel review of 
these codes.
    After analyzing the comments and considering valuation of these 
codes, we believe that we need to reassess our valuation of these codes 
and require additional information in order to do so. Our data show 
that these epidural codes are frequently billed with imaging guidance. 
For example, CPT code 62310 was billed with CPT code 77003 
(Fluoroscopic guidance and localization of needle or catheter tip for 
spine or paraspinous diagnostic or therapeutic injection procedures 
(epidural or subarachnoid)) 79 percent of the time in the nonfacility 
setting in CY 2013. CPT code 62319, which is the epidural injection 
code that is least frequently billed with CPT code 77003 in the 
nonfacility setting, was still billed with this guidance code 40 
percent of the time. These codes were also frequently billed with image 
guidance in the facility setting. CPT codes 62310 and 62311 were billed 
with CPT code 77003, 79 percent and 74 percent of the time,

[[Page 40339]]

respectively in CY 2013. However, in the facility setting CPT codes 
62318 and 62319 were much less frequently billed with CPT code 77003, 
only 3 percent and 11 percent, respectively. In addition, these four 
epidural injection codes are sometimes billed with other fluoroscopic 
or imaging guidance codes. Based on the frequency with which these 
codes are reported with fluoroscopic guidance codes, it appears that 
fluoroscopic guidance is both typically used and typically reported 
separately in conjunction with the epidural injection services.
    As we considered the concerns raised regarding the CY 2014 payment 
changes for the epidural injection procedures, we looked at the values 
for other injection procedures. Other injection procedures, including 
some recommended by commenters for use as a reference in valuing these 
epidural injection codes, include the work and PEs of image guidance in 
the injection code. For example, transforaminal injections, CPT codes 
64479 (Injection(s), anesthetic agent and/or steroid, transforaminal 
epidural, with imaging guidance (fluoroscopy or CT); cervical or 
thoracic, single level), 64480 (Injection(s), anesthetic agent and/or 
steroid, transforaminal epidural, with imaging guidance (fluoroscopy or 
CT); cervical or thoracic, each additional level (List separately in 
addition to code for primary procedure)), 64483 (Injection(s), 
anesthetic agent and/or steroid, transforaminal epidural, with imaging 
guidance (fluoroscopy or CT); lumbar or sacral, single level) and 64484 
(Injection(s), anesthetic agent and/or steroid, transforaminal 
epidural, with imaging guidance (fluoroscopy or CT); lumbar or sacral, 
each additional level (List separately in addition to code for primary 
procedure)) include the image guidance in the injection code. 
Similarly, the paravertebral injections, CPT code 64490 (Injection(s), 
diagnostic or therapeutic agent, paravertebral facet (zygapophyseal) 
joint (or nerves innervating that joint) with image guidance 
(fluoroscopy or CT), cervical or thoracic; single level), 64491 
(Injection(s), diagnostic or therapeutic agent, paravertebral facet 
(zygapophyseal) joint (or nerves innervating that joint) with image 
guidance (fluoroscopy or CT), cervical or thoracic; second level (List 
separately in addition to code for primary procedure)), 64492 
(Injection(s), diagnostic or therapeutic agent, paravertebral facet 
(zygapophyseal) joint (or nerves innervating that joint) with image 
guidance (fluoroscopy or CT), cervical or thoracic; third and any 
additional level(s) (List separately in addition to code for primary 
procedure)), 64493 (Injection(s), diagnostic or therapeutic agent, 
paravertebral facet (zygapophyseal) joint (or nerves innervating that 
joint) with image guidance (fluoroscopy or CT), lumbar or sacral; 
single level), 64494 (Injection(s), diagnostic or therapeutic agent, 
paravertebral facet (zygapophyseal) joint (or nerves innervating that 
joint) with image guidance (fluoroscopy or CT), lumbar or sacral; 
second level (List separately in addition to code for the primary 
procedure)) and 64495 (Injection(s), diagnostic or therapeutic agent, 
paravertebral facet (zygapophyseal) joint (or nerves innervating that 
joint) with image guidance (fluoroscopy or CT), lumbar or sacral; third 
and any additional level(s)(List separately in addition to code for 
primary procedure)) each include the image guidance bundled in the 
injection CPT code.
    Based upon our analysis of the Medicare claims data and comments 
received on the CY 2014 final rule with comment period, it appears that 
these codes are typically furnished with imaging guidance. Thus, we 
believe it would be appropriate for the injection and imaging guidance 
codes to be bundled and the inputs for image guidance to be included in 
the valuation of the epidural injection codes as it is for 
transforaminal and paravertebral codes. We do not believe the epidural 
injection codes can be appropriately valued without considering the 
typical use of image guidance. We also believe this will help assure 
relativity with other injection codes that include the image guidance. 
To determine how to appropriately value resources for the combined 
codes, we believe more information is needed. Accordingly, we propose 
to include CPT codes 62310, 62311, 62318 and 62319 on the potentially 
misvalued code list so that we can obtain information to support their 
valuation with the image guidance included. In the meantime, we are 
proposing to revert to the CY 2013 input values for CPT codes 62310, 
62311, 62318 and 62319 for CY 2015. Specifically, we will use the CY 
2013 work RVUs, work times, and direct PE inputs to establish payment 
rates for CY 2015. The work, PE, and MP RVUs for these codes are listed 
in Addendum B and the time values for all CY 2015 codes are listed in 
the file ``CY 2015 PFS Work Time,'' available on the CMS Web site under 
downloads for the CY 2015 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. The direct PE inputs are displayed the 
file ``CY 2015 PFS Direct PE Inputs,'' available on the CMS Web site 
under downloads for the CY 2015 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    Because it is clear that the proposed PE inputs for the epidural 
injection codes include items that are specifically related to image 
guidance, such as the radiographic fluoroscopic room, we believe 
separate reporting of the image guidance codes would overestimate the 
resources used in furnishing the two services together. To avoid this 
situation, we are also proposing to prohibit the billing of image 
guidance codes in conjunction with these four epidural injection codes. 
We believe our two-tiered proposal to utilize CY 2013 input values for 
this code family, while prohibiting the separate billing of imaging 
guidance codes in conjunction with epidural injection, would best 
ensure that appropriate reimbursement continues to be made while we 
gather additional information and consider the best way to value these 
services.
    With regard to comments about the time for responding to the 
interim values, we would refer to section II.F of this proposed rule, 
which discusses a proposal to make changes in the process used for 
establishing revised values for codes such as these.
    With regard to the request for refinement, we are denying this 
request as the comments do not demonstrate that the requirements for 
refinement were met. Moreover, since we are proposing different values 
for these codes for CY 2015 (using CY 2013 inputs) there would be no 
purpose for refinement as the public comment period for this proposed 
rule will provide the opportunity for the public to share any relevant 
information on our proposed values.
(3) Neurostimulator Implantation--CPT Codes 64553 and 64555
    A stakeholder raised questions regarding whether CPT codes 64553 
(Percutaneous implantation of neurostimulator electrode array; cranial 
nerve) and 64555 (Percutaneous implantation of neurostimulator 
electrode array; peripheral nerve (excludes sacral nerve)) included the 
appropriate direct PE inputs when furnished in the nonfacility setting. 
It appears that these inputs have not been evaluated recently and, 
therefore, we are nominating these codes as potentially misvalued for 
the purpose of

[[Page 40340]]

ascertaining whether or not there are nonfacility direct PE inputs that 
are not included in the direct PE inputs that are typical supply costs 
for these services.
(4) Mammography--CPT Codes 77055, 77056, and 77057, and HCPCS Codes 
G0202, G0204, and G0206
    Medicare currently pays for mammography services through both CPT 
codes, (77055 (mammography; unilateral), 77056 (mammography; bilateral) 
and 77057 (screening mammography, bilateral (2-view film study of each 
breast)) and HCPCS G-codes, (G0202 (screening mammography, producing 
direct digital image, bilateral, all views), G0204 (diagnostic 
mammography, producing direct digital image, bilateral, all views), and 
G0206 (diagnostic mammography, producing direct digital image, 
unilateral, all views)). The CPT codes were designed to be used for 
mammography regardless of whether film or digital technology is used. 
However, for Medicare purposes, the HCPCS G-codes were created to be 
used for digital technology in response to special payment rules for 
digital mammography included in the Medicare Benefit Improvements and 
Protection Act of 2000.
    As discussed in section II.A., the RUC recommended that CMS update 
the direct PE inputs for all imaging codes to reflect the migration 
from film-to-digital storage technologies since digital storage is now 
the typically used in imaging.
    Our data confirms that the overwhelming majority of all mammography 
is digital. As a result, we are proposing that the CPT codes 77055, 
77056 and 77057 be used for reporting mammography to Medicare 
regardless of whether film or digital technology is used, and to delete 
the HCPCS G-codes G0202, G0204, and G0206. We are proposing, for CY 
2015, to value the CPT codes using the values established for the 
digital mammography G-codes since digital technology is now the typical 
service. (See section II.A. of this proposed rule for more discussion 
of this proposal.) In addition, since the G-codes values that we 
propose to use for the CPT codes for CY 2015 have not been reviewed 
since they were created in CY 2002, we are proposing to include CPT 
codes 77055, 77056, and 77057 on the list of potentially misvalued 
codes.
(5) Abdominal Aortic Aneurysm Ultrasound Screening--G0389
    When Medicare began paying for abdominal aortic aneurysm (AAA) 
ultrasound screening in CY 2007, we created HCPCS code G0389 
(Ultrasound, B-scan and/or real time with image documentation; for 
abdominal aortic aneurysm (AAA) screening), and set the RVUs at the 
same level as CPT code 76775 (Ultrasound, retroperitoneal (e.g., renal, 
aorta, nodes), B-scan and/or real time with image documentation; 
limited). We noted in the CY 2007 final rule with comment period that 
CPT code 76775 was used to report the service when furnished as a 
diagnostic test and that we believed the service reflected by G0389 
used equivalent resources and work intensity to those contained in CPT 
code 76775 (71 FR 69664 through 69665).
    In the CY 2014 proposed rule, based on a RUC recommendation, we 
proposed to replace the ultrasound room included as a direct PE input 
for CPT code 76775 with a portable ultrasound unit. Since all the RVUs 
(including the PE RVUs) for G0389 were crosswalked from CPT code 76775, 
the proposed PE RVUs for G0389 in the CY 2014 proposed rule were 
reduced significantly as a result of this change to the direct PE 
inputs for 76775. However, we did not discuss the applicability of this 
change to G0389 in the proposed rule's preamble and did not receive any 
comments on G0389 in response to the proposed rule. We finalized the 
change to CPT code 76775 in the CY 2014 final rule with comment period 
and the corresponding PE RVUs for G0389 were also reduced.
    Subsequent to the publication of the CY 2014 final rule, a 
stakeholder suggested that the reduction in the RVUs for G0389 did not 
accurately reflect the resources involved in furnishing the service and 
asked that CMS consider using an alternative crosswalk. Specifically, 
the stakeholder stated that the type of equipment typically used in 
furnishing G0389 is different than that used for CPT code 76775, the 
time involved in furnishing G0389 is greater than that of CPT code 
76775, and the specialty that typically furnishes G0389 is different 
than the one that typically furnishes CPT code 76775. The stakeholder 
suggested an alternative crosswalk of CPT code 76705 (Ultrasound, 
abdominal, real time with image documentation; limited (eg, single 
organ, quadrant, follow-up)).
    After considering the issue, we are proposing G0389 as a 
potentially misvalued code and seeking recommendations regarding the 
appropriate inputs that should be used to develop RVUs for this code. 
We have not reviewed the inputs used to develop RVUs for this code 
since it was established in CY 2007 and the RVUs were directly 
crosswalked from 76705. Based on the issues raised by stakeholders, we 
believe that we should value this code through our standard 
methodologies, including the full PE RVU methodology. In order to do 
so, we are proposing to include this code on our list of proposed 
potentially misvalued codes and seek input from the public and other 
stakeholders, including the RUC, regarding the appropriate work RVU, 
time, and direct PE inputs that reflect the typical resources involved 
in furnishing the service.
    Until we receive the information needed to revalue this service, we 
are proposing to maintain the work RVU for this code and revert to the 
same PE RVUs we used for CY 2013, adjusted for budget neutrality. We 
are proposing MP RVUs based on the five-year review update process as 
described in section II.C of this proposed rule. We believe this 
valuation will ameliorate the effect of the CY 2014 reduction in G0389 
that resulted from reflection of the change in RVUs for the crosswalked 
code while we assess the valuation of this code through our usual 
methodologies. The proposed PE RVUs are contained in Addendum B 
available on the CMS Web site under downloads for the CY 2015 PFS 
proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
(6) Prostate Biopsy Codes--HCPCS Codes G0416, G0417, G0418, and G0419
    For CY 2014, we modified the code descriptors of G0416 through 
G0419 so that these codes could be used for any method of prostate 
needle biopsy services, rather than only for prostate saturation 
biopsies. The CY 2014 descriptions are:
     G0416 (Surgical pathology, gross and microscopic 
examination for prostate needle biopsies, any method; 10-20 specimens).
     G0417 (Surgical pathology, gross and microscopic 
examination for prostate needle biopsies, any method; 21-40 specimens).
     G0418 (Surgical pathology, gross and microscopic 
examination for prostate needle biopsies, any method; 41-60 specimens).
     G0419 (Surgical pathology, gross and microscopic 
examination for prostate needle biopsies, any method; greater than 60 
specimens).
    Subsequently, we have discussed prostate biopsies with 
stakeholders, and reviewed medical literature and Medicare claims data 
in considering how best to code and value prostate biopsy pathology 
services. In considering these discussions and our review, we have 
become aware that the

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current coding structure may be confusing, especially since the number 
of specimens associated with prostate biopsies is relatively 
homogenous. For example, G0416 (10-20 specimens) represents the 
overwhelming majority of all Medicare claims submitted for the four G-
codes. Therefore, in the interest of both establishing straightforward 
coding and maintaining accurate payment, we believe it would be 
appropriate to use only one code to report prostate biopsy pathology 
services. Therefore, we propose to revise the descriptor for G0416 to 
define the service regardless of the number of specimens, and to delete 
codes G0417, G0418, and G0419. We propose to revise G0416 for use to 
report all prostate biopsy pathology services, regardless of the number 
of specimens, because we believe this will eliminate the possible 
confusion caused by the coding while maintaining payment accuracy.
    Based on our review of medical literature and examination of 
Medicare claims data, we believe that the typical number of specimens 
evaluated for prostate biopsies is between 10 and 12. Since G0416 is 
the code that currently is valued and used for between 10 and 12 
specimens, we are proposing to use the existing values for G0416 for CY 
2015.
    In addition, we are proposing G0416 as a potentially misvalued code 
for CY 2015. We seek public comment on the appropriate work RVUs, work 
time, and direct PE inputs.
(7) Obesity Behavioral Group Counseling--GXXX2 and GXXX3
    Under section 1861(ddd) of the Act, we added coverage for a new 
preventive benefit, Intensive Behavioral Therapy for Obesity, effective 
November 29, 2011, and created HCPCS code G0447 (Face-to-face 
behavioral counseling for obesity, 15 minutes) for reporting and 
payment of individual behavioral counseling for obesity. Coverage 
requirements specific to this service are delineated in the Medicare 
National Coverage Determinations Manual, Pub. 100-03, Chapter 1, 
Section 210, available at http://www.cms.gov/manuals/downloads/ncd103c1_Part4.pdf.
    It has been brought to our attention that behavioral counseling for 
obesity is sometimes furnished in group sessions, and questions were 
raised about whether group sessions could be billed using HCPCS code 
G0447. To improve payment accuracy, we are creating two new HCPCS codes 
for the reporting and payment of group behavioral counseling for 
obesity. Specifically, we are creating GXXX2 (Face-to-face behavioral 
counseling for obesity, group (2-4), 30 minutes) and GXXX3 (Face-to-
face behavioral counseling for obesity, group (5-10), 30 minutes). The 
coverage requirements for these services would remain in place, as 
described in the National Coverage Determination for Intensive 
Behavioral Therapy for Obesity cited in this section of the proposed 
rule. The practitioner furnishing these services would report the 
relevant group code for each beneficiary participating in a group 
therapy session.
    We believe that the face-to-face behavioral counseling for obesity 
services described by GXXX2 and GXXX3 would require similar per minute 
work and intensity as HCPCS code G0447, which is a 15-minute code with 
a work RVU of 0.45. Therefore, to develop proposed work RVUs for HCPCS 
codes GXXX2 and GXXX3 we scaled the work RVU of HCPCS code G0447 to 
reflect the differences in the codes in terms of the time period 
covered by the code and the typical number of beneficiaries per 
session. Adjusting the work RVU for the longer time of the group codes 
results in a work RVU of 0.90 for a 30-minute session. Since the 
services described by GXXX2 and GXXX3 will be billed per beneficiary 
receiving the service, the work RVUs and work time that we are 
proposing for these codes are based upon the typical number of 
beneficiaries per session, 4 and 9, respectively. Accordingly, we are 
proposing a work RVU of 0.23 with a work time of 8 minutes for GXXX2 
and a work RVU of 0.10 with a work time of 3 minutes for GXXX3.
    Using the same logic, we are proposing to use the direct PE inputs 
for GXXX2 and GXXX3 currently included for G0447, prorated to account 
for the differences in time and number of beneficiaries described by 
the new codes. The proposed direct PE inputs for these codes are 
included in the CY 2015 proposed direct PE input database, available on 
the CMS Web site under the downloads for the CY 2015 PFS proposed rule 
at http://www.cms.gov/PhysicianFeeSched/. We are also proposing to 
crosswalk the malpractice risk factor from HCPCS code G0447 to both 
HCPCS codes GXXX2 and GXXX3, as we believe the same specialty mix will 
furnish these services. We request public comment on these proposed 
values for HCPCS codes GXXX2 and GXXX3.
4. Improving the Valuation and Coding of the Global Package
a. Overview
    Since the inception of the PFS, we have valued and paid for certain 
services, such as surgery, as part of global packages that include the 
procedure and the services typically provided in the periods 
immediately before and after the procedure (56 FR 59502). For each of 
these codes (usually referred to as global surgery codes), we establish 
a single PFS payment that includes payment for particular services that 
we assume to be typically furnished during the established global 
period.
    There are three primary categories of global packages that are 
labeled based on the number of post-operative days included in the 
global period: 0-day; 10-day; and 90-day. The 0-day global codes 
include the surgical procedure and the pre-operative and post-operative 
physicians' services on the day of the procedure, including visits 
related to the service. The 10-day global codes include these services 
and, in addition, visits related to the procedure during the 10 days 
following the procedure. The 90-day global codes include the same 
services as the 0-day global codes plus the pre-operative services 
furnished one day prior to the procedure and post-operative services 
during the 90 days immediately following the day of the procedure.
    Section 40.1 of the Claims Processing Manual (Pub. 100-04, Chapter 
12 Physician/Nonphysician Practitioners) defines the global surgical 
package to include the following services when furnished during the 
global period:
     Preoperative Visits--Preoperative visits after the 
decision is made to operate beginning with the day before the day of 
surgery for major procedures and the day of surgery for minor 
procedures;
     Intra-operative Services--Intra-operative services that 
are normally a usual and necessary part of a surgical procedure;
     Complications Following Surgery--All additional medical or 
surgical services required of the surgeon during the postoperative 
period of the surgery because of complications that do not require 
additional trips to the operating room;
     Postoperative Visits--Follow-up visits during the 
postoperative period of the surgery that are related to recovery from 
the surgery;
     Postsurgical Pain Management--By the surgeon;
     Supplies--Except for those identified as exclusions; and

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     Miscellaneous Services--Items such as dressing changes; 
local incisional care; removal of operative pack; removal of cutaneous 
sutures and staples, lines, wires, tubes, drains, casts, and splints; 
insertion, irrigation and removal of urinary catheters, routine 
peripheral intravenous lines, nasogastric and rectal tubes; and changes 
and removal of tracheostomy tubes.
b. Concerns With the 10- and 90-Day Global Packages
    CMS supports bundled payments as a mechanism to incentivize high-
quality, efficient care. Although on the surface, the PFS global codes 
appear to function as bundled payments similar to those Medicare uses 
to make single payments for multiple services to hospitals under the 
inpatient and outpatient prospective payment systems, the practical 
reality is that these global codes function significantly differently 
than other bundled payments. First, the global surgical codes were 
established several decades ago when surgical follow-up care was far 
more homogenous than today. Today, there is more diversity in the kind 
of procedures covered by global periods, the settings in which the 
procedures and the follow-up care are furnished, the health care 
delivery system and business arrangements used by Medicare 
practitioners, and the care needs of Medicare beneficiaries. Despite 
these changes, the basic structures of the global surgery packages are 
the same as the packages that existed prior to the creation of the 
resource-based relative value system in 1992. Another significant 
difference between this and other typical models of bundled payments is 
that the payment rates for the global surgery packages are not updated 
regularly based on any reporting of the actual costs of patient care. 
For example, the hospital inpatient and outpatient prospective payment 
systems (the IPPS and OPPS, respectively) derive payment rates from 
hospital cost and charge data reported through annual Medicare hospital 
cost reports and the most recent year of claims data available for an 
inpatient stay or primary outpatient service. Because payment rates are 
based on consistently updated data, over time, payment rates adjust to 
reflect the average resource costs of current practice. Similarly, many 
of the new demonstration and innovation models track costs and make 
adjustments to payments. Another significant difference is that payment 
for the PFS global packages relies on valuing the combined services 
together. This means that there are no separate PFS values established 
for the procedures or the follow-up care, making it difficult to 
estimate the costs of the individual global code component services.
    These unique characteristics have contributed to the significant 
and numerous concerns that have been raised regarding the accuracy of 
payment for global codes--especially those that include 10- and 90-day 
post-operative periods. In the following paragraphs, we address a 
series of concerns regarding these codes, including: the fundamental 
difficulties in establishing appropriate relative values for these 
packages, the potential inaccuracies in the current information used to 
price these services, the limitations on appropriate pricing in the 
future, the potential for these packages to create unwarranted payment 
differentials among specialties, the possibility that the current codes 
are incompatible with current medical practice, and the potential for 
these codes to present obstacles to the adoption of new payment models.
    Independently, concerns such as these could be seen as issues that 
arise when developing many different payment mechanisms, for example: 
making fee-for-service payment rates, making single payments for 
multiple services, or paying practitioners for episodes of care over a 
period of time. However, in the case of the post-operative portion of 
the 10- and 90-day global codes, we believe these multi-layered 
concerns create substantial barriers to accurate valuation of these 
services relative to other PFS services.
(1) Fundamental Limitations in the Appropriate Valuation of the Global 
Packages With Post-Operative Days
    In general, we face many challenges in valuing PFS services as 
accurately as possible. However, the unique nature of global surgery 
packages with 10- and 90-day post-operative periods presents additional 
challenges distinct from those presented in valuing other PFS services. 
Our valuation methodology for PFS services generally relies on 
assumptions regarding the resources involved in furnishing the 
``typical case'' for each individual service unlike other payment 
systems that rely on actual data on the costs of furnishing services. 
Consistent with this valuation methodology, the RVUs for a global code 
should reflect the typical number and level of E/M services furnished 
in connection with the procedure. However, it is much easier to 
maintain relativity among the services that are valued on this basis 
when each of the services is described by codes of similar unit sizes. 
In other words, because codes with long post-operative periods include 
such a large number of services, any variations between the ``typical'' 
resource costs used to value the service and the actual resource costs 
associated with particular services are multiplied. The effects of this 
problem can be two-fold, skewing the accuracy of both the RVUs for 
individual global codes and the Medicare payment made to individual 
practitioners. The RVUs of the individual global service codes are 
skewed whenever there is any inaccuracy in the assumption of the 
typical number or kind of services in the post-operative periods. This 
inaccuracy has a greater impact than inaccuracies in assumptions for 
other PFS services because it affects a greater number of service units 
over a period of time than for individually priced services. 
Furthermore, in contrast to prospective payment systems, such 
inaccuracies under the PFS are not corrected over time through an 
annual ratesetting process that makes year-to-year adjustments based on 
data on actual costs. For example, if a 90-day global code is valued 
based on an assumption that ten post-operative visits is typical, but 
practitioners reporting the code typically only furnish six visits, 
then the resource assumptions are overestimated by the value of the 
four visits multiplied by the number of the times the procedure code is 
reported. In contrast, when our assumptions are incorrect about the 
typical resources involved in furnishing a PFS code that describes a 
single service, any inaccuracy in the RVUs is limited to the difference 
between the resource costs assumed for the typical service and the 
actual resource costs in furnishing one individual service. Such a 
variation between the assumptions used in calculating payment rates and 
the actual resource costs could be corrected if the payments for 
packaged services were updated regularly using data on actual services 
furnished. Although such a mechanism is common in other bundled payment 
systems, there is no such mechanism under the PFS. To make adjustments 
to the RVUs to account for inaccurate assumptions under the current PFS 
methodology, the global surgery code would need to be identified as 
potentially misvalued, survey data would have to reflect an accurate 
account of the number and level of typical post-operative visits, and 
we (with or without a corresponding recommendation from the RUC or 
others) would have to implement a change in RVUs based on the change in 
the number and level of visits to reflect the typical service.

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    These amplified inaccuracies may also occur whenever Medicare pays 
an individual practitioner reporting a 10- or 90-day global code. 
Practitioners may furnish a wide range of post-operative services to 
individual Medicare beneficiaries, depending on individual patient 
needs, changes in medical practice, and dynamic business models. Due to 
the way the 10- and 90-day global codes are constructed, the number and 
level of services included for purposes of calculating the payment for 
these services may vary greatly from the number and level of services 
that are actually furnished in any particular case. In contrast, the 
variation between the ``typical'' and the actual resource cost for the 
practitioner reporting an individually valued PFS services is 
constrained because the practitioner is only reporting and being paid 
for a specific service furnished on a particular date.
    For most PFS services, any difference between the ``typical'' case 
on which RVUs are based and the actual case for a particular service is 
limited to the variation between the resources assumed to be involved 
in furnishing the typical case and the actual resources involved in 
furnishing the single specific service. When the global surgical 
package includes more or a higher level of E/M services than are 
actually furnished in the typical post-operative period, the Medicare 
payment is based on an overestimate of the quantity or kind of services 
furnished, not merely an overestimation of the resources involved in 
furnishing an individual service. The converse is true if the RVUs for 
the global surgical package are based on fewer or a lower level of 
services than are typically furnished for a particular code.
(2) Questions Regarding Accuracy of Current Assumptions
    In previous rulemaking (77 FR 68911 through 68913), we acknowledged 
evidence suggesting that the values included in the post-operative 
period for global codes may not reflect the typical number and level of 
post-operative E/M visits actually furnished.
    In 2005, the 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 recorded in the 
patients' medical records to establish whether and, if so, how many 
post-operative E/M services were furnished by the surgeons. For about 
two-thirds of the claims sampled by the OIG, surgeons provided fewer E/
M services in the post-operative period than were included in the 
global surgical package payment for each procedure. A small percentage 
of the surgeons furnished more E/M services than were included in the 
global surgical package payment. The OIG identified the number of face-
to-face services recorded in the medical record, but did not review the 
medical necessity of the surgeries or the related E/M services. The OIG 
concluded that the RVUs for these global surgical packages are too high 
because they include a higher number of E/M services than typically are 
furnished within the global period for the reviewed procedures.
    Following that report, the OIG continued to investigate E/M 
services furnished during global surgical periods. In May 2012, the OIG 
published a report entitled ``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 
included as part of the global period payment for that service. Once 
again, a small percentage of surgeons furnished more E/M services than 
were included in the global surgical package payment. The OIG concluded 
that the RVUs for these global surgical packages are too high because 
they include a higher number of E/M services than typically are 
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 studied global surgical payments to 
reflect the number of E/M services that are actually being furnished. 
However, since it is not necessary under our current global surgery 
payment policy for a surgeon to report the individual E/M services 
actually furnished during the global surgical period, we do not have 
objective data upon which to assess whether the RVUs for global period 
surgical services reflect the typical number or level of E/M services 
that are furnished. In the CY 2013 PFS proposed rule (77 FR 44738), we 
previously sought public comments on collecting these data. As 
summarized in the CY 2013 PFS final rule (77 FR 68913) we did not 
discover a consensus among stakeholders regarding either the most 
appropriate means to gather the data, or the need for, or the 
appropriateness of using such data in valuing these services. In 
response to our comment solicitation, some commenters urged us to 
accept the RUC survey data as accurate in spite of the OIG reports and 
other concerns that have been expressed regarding whether the visits 
included in the global periods reflected the typical case. Others 
suggested that we should conduct new surveys using the RUC approach or 
that we should mine hospital data to identify the typical number of 
visits furnished. Some comments suggested eliminating the 10- and 90-
day global codes.
(3) Limitations on Appropriate Future Valuations of 10- and 90-day 
Global Codes
    Historically, our attempts to adjust RVUs for global services based 
on changes in the typical resource costs (especially with regard to 
site of service assumptions or changes to the number of post-surgery 
visits) have been difficult and controversial. At least in part, this 
is because the relationship between the work RVUs for the 10- and 90-
day global codes (which includes the work RVU associated with the 
procedure itself) and the number of included post-operative visits in 
the existing values is not always clear. Some services with global 
periods have been valued by adding the work RVU of the surgical 
procedure and all pre- and post-operative E/M services included in the 
global period. However, in other cases, as many stakeholders have 
noted, the total work RVUs for surgical procedures and post-operative 
visits in global periods are estimated as a single value without any 
explicit correlation to the time and intensity values for the 
individual service components. Although we would welcome more objective 
information to improve our determination of the ``typical'' case, we 
believe that even if we engaged in the collection of better data on the 
number and level of E/M services typically furnished during the global 
periods for global surgery services, the valuation of individual codes 
with post-operative periods would not be straightforward. Furthermore, 
we believe it would be important to frequently update the data on the 
number and level of visits furnished during the post-operative periods 
in order to account for any changes in the patient population, medical 
practice, or business arrangements. Although such information would be 
available for developing payment rates for bundled services through 
other Medicare payment systems, practitioners paid through the PFS do 
not report such data.

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(4) Unwarranted Payment Disparities
    Subsequent to our last comment solicitation regarding the valuation 
of the post-operative periods (77 FR 68911 through 68913), some 
stakeholders have raised concerns that global surgery packages 
contribute to unwarranted payment disparities between practitioners who 
do and do not furnish these services. These stakeholders have addressed 
several ways the 10- and 90-day global packages may contribute to 
unwarranted payment disparities.
    The stakeholders noted that, through the global surgery packages, 
Medicare pays practitioners who furnish E/M services during post-
surgery periods regardless of whether the services are actually 
furnished, while practitioners who do not furnish global procedures 
with post-operative visits are only paid for E/M services that are 
actually furnished. In some cases, it is possible that the practitioner 
furnishing the global surgery procedure may not furnish any post-
operative visits. Although we have policies to address the situation 
when post-operative care is transferred from one practitioner to 
another, the beneficiary might simply choose to seek care from another 
practitioner without a formal transfer of care. The other practitioner 
would then bill Medicare separately for E/M services for which payment 
was included in the global payment to the original practitioner. Those 
services would not have been separately billable if furnished by the 
original practitioner.
    These circumstances can lead to unwarranted payment differences, 
allowing some practitioners to receive payment for fewer services than 
reflected in the Medicare payment. Practitioners who do not furnish 
global surgery services bill and are paid only for each individual 
service furnished. When global surgery values are based on inaccurate 
assumptions about the typical services furnished in the post-operative 
periods, these payment disparities can contribute to differences in 
aggregate RVUs across specialties. Since the RVUs are intended to 
reflect differences in the relative resource costs involved in 
furnishing a service, any disparity between assumed and actual costs 
results not only in paying some practitioners for some services that 
are not furnished, it also skews relativity between specialties.
    Stakeholders have also pointed out that payment disparities can 
arise because E/M services reflected in global periods generally 
include higher PE values than the same services when billed separately. 
The difference in PE values between separately billed visits and those 
included in global packages result primarily from two factors that are 
both inherent in the PFS pricing methodology.
    First, there is a different mix of PE inputs (clinical labor/
supplies/equipment) included in the direct PE inputs for a global 
period E/M service and a separately billed E/M service. For example, 
the clinical labor inputs for separately reportable E/M codes includes 
a staff blend listed as ``RN/LPN/MTA'' (L037D) and priced at $0.37 per 
minute. Instead of this input, some codes with post-operative visits 
include the staff type ``RN'' (L051A) priced at a higher rate of $0.51 
per minute. For these codes, the higher resource cost may accurately 
reflect the typical resource costs associated with those particular 
visits. However, the different direct PE inputs may drive unwarranted 
payment disparities among specialties who report global surgery codes 
with post-operative periods and those that do not. The only way to 
correct these potential discrepancies under the current system, which 
result from the specialty-based differences in resource costs, would be 
to include standard direct PE inputs for these services regardless of 
whether or not the standard inputs are typical for the specialties 
furnishing the services.
    Second, the indirect PE allocated to the E/M visits included in 
global surgery codes is higher than that allocated to separately 
furnished E/M visits. This occurs because the range of specialties 
furnishing a particular global service is generally not as broad as 
range of specialties that report separate individual E/M services. 
Since the specialty mix for a service is a key factor in determining 
the allocation of indirect PE to each code, a higher amount of indirect 
PE can be allocated to the E/M services that are valued as part of the 
global surgery codes than to the individual E/M codes. Practitioners 
who use E/M codes to report visits separately are paid based on PE RVUs 
that reflect the amount of indirect PE allocated across a wide range of 
specialties, which has the tendency to lower the amount of indirect PE. 
For practitioners who are paid for visits primarily through post-
operative periods, indirect PE is generally allocated with greater 
specificity. Two significant steps would be required to alleviate the 
impact of this disparity. First, we would have to identify the exact 
mathematical relationship between the work RVU and the number and level 
of post-operative visits for each global code; and second, we would 
have to propose a significant alteration of the PE methodology in order 
to allocate indirect PE that does not correlate to the specialties 
reporting the code in the Medicare claims data.
    Furthermore, stakeholders have pointed out that the PE RVUs for 
codes with 10- or 90-day post-operative periods reflect the assumption 
that all outpatient visits occur in the higher-paid non-facility office 
setting, when many of these visits are likely to be furnished in 
provider-based departments, which would be paid at the lower, PFS 
facility rate if they were billable separately. As we note elsewhere in 
this proposed rule, we do not have data on the volume of physicians' 
services furnished in provider-based departments, but public 
information suggests that it is not insignificant and that it is 
growing. When these services are paid as part of a global package, 
there is no adjustment made based on the site of service. Therefore, 
even though the PFS payment for services furnished in post-operative 
global periods might include clinical labor, disposable supply, and 
medical equipment costs (and additional indirect PE allocation) that 
are incurred by the facility and not the practitioner reporting the 
service, the RVUs for global codes reflect all of these costs 
associated with the visits.
(5) Incompatibility of Current Packages With Current Practice and 
Unreliability of RVUs for Use in New Payment Models
    In addition to these issues, the 10- and 90-day global periods 
reflect a long-established but no longer exclusive model of post-
operative care that assumes the same practitioner who furnishes the 
procedure typically furnishes the follow-up visits related to that 
procedure. In many cases, we believe that models of post-operative care 
are increasingly heterogeneous, particularly given the overall shift of 
patient care to larger practices or team-based environments.
    We believe that RVUs used to establish PFS payments are likely to 
serve as critical building blocks to developing, testing, and 
implementing a number of new payment models, including those that focus 
on bundled payments to practitioners or payments for episodes of care. 
Therefore, we believe it is critical for us to ensure that the PFS RVUs 
accurately reflect the resource costs for individual PFS services 
instead of reflecting potentially skewed assumptions regarding the 
number of services furnished over a long period of time in the 
``typical'' case. To the extent that the 10- and 90-day global periods 
reflect inaccurate assumptions regarding resource costs associated with 
individual PFS services,

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we believe they are likely to be obstacles to a wide range of potential 
improvements to PFS payments, including the potential incorporation of 
payment bundling designed to foster efficiency and quality care for 
Medicare beneficiaries.
c. Proposed Transition of 10- and 90-Day Global Packages Into 0-Day 
Global Packages
    Although we have marginally addressed some of the concerns noted 
above with global packages in previous rulemaking, we do not believe 
that we have made significant progress in addressing the fundamental 
issues with the 10- and 90-day post-operative global packages. In the 
context of the misvalued code initiative, we believe it is critical for 
the RVUs used to develop PFS payment rates reflect the most accurate 
resource costs associated with PFS services. Based on the issues 
discussed above, we do not believe we can effectively address the 
issues inherent in establishing values for the 10- and 90-day global 
packages under our existing methodologies and with available data. As 
such, we do not believe that maintaining the post-operative 10-and 90-
day global periods is compatible with our continued interest in using 
more objective data in the valuation of PFS services and accurately 
valuing services relative to each other. Because the typical number and 
level of post-operative visits during global periods may vary greatly 
across Medicare practitioners and beneficiaries, we believe that 
continued valuation and payment of these face-to-face services as a 
multi-day package may skew relativity and create unwarranted payment 
disparities within PFS payment. We also believe that the resource based 
valuation of individual physicians' services will continue to serve as 
a critical foundation for Medicare payment to physicians, whether 
through the current PFS or in any number of new payment models. 
Therefore, we believe it is critical that the RVUs under the PFS be 
based as closely and accurately as possible on the actual resources 
involved in furnishing the typical occurrence of specific services
    To address the issues discussed above, we are proposing to retain 
global bundles for surgical services, but to refine bundles by 
transitioning over several years all 10- and 90-day global codes to 0-
day global codes. Medically reasonable and necessary visits would be 
billed separately during the pre- and post-operative periods outside of 
the day of the surgical procedure. We propose to make this transition 
for current 10-day global codes in CY 2017 and for the current 90-day 
global codes in CY 2018, pending the availability of data on which to 
base updated values for the global codes.
    We believe that transitioning all 10- and 90-day global codes to 0-
day global codes would:
     Increase the accuracy of PFS payment by setting payment 
rates for individual services based more closely upon the typical 
resources used in furnishing the procedures;
     Avoid potentially duplicative or unwarranted payments when 
a beneficiary receives post-operative care from a different 
practitioner during the global period;
     Eliminate disparities between the payment for E/M services 
in global periods and those furnished individually;
     Maintain the same-day packaging of pre- and post-operative 
physicians' services in the 0-day global; and
     Facilitate availability of more accurate data for new 
payment models and quality research.
    As we transition these codes, we would need to establish RVUs that 
reflect the change in the global period for all the codes currently 
valued as 10- and 90-day global surgery services. We seek assistance 
from stakeholders on various aspects of this task. Prior to 
implementing these changes, we intend to gather objective data on the 
number of E/M and other services furnished during the current post-
operative periods and use those data to inform both the valuation of 
particular services and the overall budget neutrality adjustments 
required to implement this proposal. We seek comment on the most 
efficient means of acquiring accurate data regarding the number of 
visits and other services actually being furnished by the practitioner 
during the current post-operative periods. For all the reasons stated 
above, we do not believe that survey data reflecting assumptions of the 
``typical case'' meets the standards required to measure the resource 
costs of the wide range of services furnished during the post-operative 
periods. We acknowledge that collecting information on these services 
through claims submission may be the best approach, and we would 
propose such a collection through future rulemaking. However, we are 
also interested in alternatives. For example, we seek information on 
the extent to which individual practitioners or practices may currently 
maintain their own data on services furnished during the post-operative 
period, and how we might collect and objectively evaluate that data.
    We also seek comment on the best means to ensure that allowing 
separate payment of E/M visits during post-operative periods does not 
incentivize otherwise unnecessary office visits during post-operative 
periods. If we adopt this proposal, we intend to monitor any changes in 
the utilization of E/M visits following its implementation but we are 
also seeking comment on potential payment policies that will mitigate 
such a change in behavior.
    In developing this proposal, we considered several alternatives to 
the transformation of all global codes to 0-day global codes. First, we 
again considered the possibility of gathering data and using the data 
to revalue the 10- and 90- day global codes. While this option would 
have maintained the status quo in terms of reporting services, it would 
have required much of the same effort as this proposal without 
alleviating many of the problems associated with the 10- and 90-day 
global periods. For example, collecting accurate data would allow for 
more accurate estimates of the number and kind of visits included in 
the post-operative periods at the time of the survey. However, this 
alternative approach would only mitigate part of the potential for 
unwarranted payment disparities. For example, the values for the visits 
in the global codes would continue to include different amounts of PE 
RVUs than separately reportable visits and would continue to provide 
incentives to some practitioners to minimize patient visits. 
Additionally, it would not address the changes in practice patterns 
that we believe have been occurring whereby the physician furnishing 
the procedure is not necessarily the same physician conducting the 
post-procedure follow up.
    This alternative option would also rest extensively on the 
effectiveness of using the new data to revalue the codes accurately. 
Given the unclear relationship between the assigned work RVUs and the 
post-operative visits across all of these services, incorporating 
objective data on the number of visits to adjust work RVUs would still 
necessitate extensive review of individual codes or families of codes 
by CMS and stakeholders, including the RUC. We believe the investment 
of resources for such an effort would be better made to solve a broader 
range of problems.
    We also considered other possibilities, such as altering our PE 
methodology to ensure that the PE inputs and indirect PE for visits in 
the global period were valued the same as

[[Page 40346]]

separately reportable E/M codes or requiring reporting of the visits 
for all 10- and 90-day global services while maintaining the 10- and 
90-day global period payment rates. However, we believe this option 
would require all of the same effort by practitioners, CMS, and other 
stakeholders without alleviating most of the problems addressed in the 
preceding paragraphs.
    We also considered maintaining the status quo and identifying each 
of the 10- and 90-day global codes as potentially misvalued through our 
potentially misvalued code process for review as 10 and 90 day globals. 
Inappropriate valuations of these services has a major effect on the 
fee schedule due to the percentage of PFS dollars paid through 10- and 
90-day global codes (3 percent and 11 percent, respectively), and thus, 
valuing them appropriately is critical to appropriate valuation and 
relativity throughout the PFS. Through the individual review approach, 
we could review the appropriateness of the global period and the 
accurate number of visits for each service. Yet revaluing all 3,000 
global surgery codes through the potentially misvalued codes approach 
would not address many of the problems identified above. Unless such an 
effort was combined with changes in the PE methodology, it would only 
partially address the valuation and accuracy issues and would leave all 
the other issues unresolved. Moreover, the valuation and accuracy 
issues that could be addressed through this approach would rapidly be 
out of date as medical practice continues to change. Therefore, such an 
approach would be only partially effective and would impede our ability 
to address other potentially misvalued codes.
    We seek stakeholder input on an accurate and efficient means to 
revalue or adjust the work RVUs for the current 10- and 90-day global 
codes to reflect the typical resources involved in furnishing the 
services including both the pre- and post-operative care on the day of 
the procedure. We believe that collecting data on the number and level 
of post-operative visits furnished by the practitioner reporting 
current 10-and 90-day global codes will be essential to ensuring work 
RVU relativity across these services. We also believe that these data 
will be necessary to determine the relationship between current work 
RVUs and current number of post-operative visits, within categories of 
codes and code families. However, we believe that once we collect those 
data, there are a wide range of possible approaches to the revaluation 
of the large number of individual global services, some of which may 
deviate from current processes like those undertaken by the RUC. To 
date, the potentially misvalued code initiative has focused on several 
hundred, generally high-volume codes per year. This proposal requires 
revaluing a larger number of codes over a shorter period of time and 
includes many services with relatively low volume in the Medicare 
population. Given these circumstances, it does not seem practical to 
survey time and intensity information on each of these procedures. 
Absent any new survey data regarding the procedures themselves, we 
believe that data regarding the number and level of post-service office 
visits can be used in conjunction with other methods of valuation, such 
as:
     Using the current potentially misvalued code process to 
identify and value the relatively small number of codes that represent 
the majority of the volume of services that are currently reported with 
codes with post-operative periods, and then adjusting the aggregate 
RVUs to account for the number of visits and using magnitude estimation 
to value the remaining services in the family;
     Valuing one code within a family through the current 
valuation process and then using magnitude estimation to value the 
remaining services in the family;
     Surveying a sample of codes across all procedures to 
create an index that could be used to value the remaining codes.
    While we believe these are plausible options for the revaluation of 
these services, we believe there may be others. Therefore, we seek 
input on the best approach to achieve this proposed transition from 10- 
and 90-day, to 0-day global periods, including the timing of the 
changes, the means for revaluation, and the most effective and least 
burdensome means to collect objective, representative data regarding 
the actual number of visits currently furnished in the post-operative 
global periods. We also seek comment on whether the effective date for 
the transition to 0-day global periods should be staggered across 
families of codes or other categories. For example, while we are 
proposing to transition 10-day global periods in 2017 and 90-day global 
periods in 2018, we seek comment on whether we should consider 
implementing the transition more or less quickly and over one or 
several years. We also seek comment regarding the appropriate valuation 
of new, revised, or potentially misvalued 10- or 90-day global codes 
before implementation of this proposal.
5. Improving the Valuation of the Global Package
    In the CY 2013 proposed rule, we sought comments on methods of 
obtaining accurate and current data on E/M services furnished as part 
of a global surgical package. In addition to receiving the broader 
comments on measuring post-operative work, we also received a comment 
from the RUC saying that the hospital inpatient and discharge day 
management services included in the global period for many surgical 
procedures were inadvertently removed from the time file in 2007. With 
its comment letter, the RUC sent us a data file with updated times for 
these post-operative visits for some services that displayed zero 
hospital inpatient or discharge day visits in the CMS time file. After 
extensive review, we concluded that the data were deleted from the time 
file due to an inadvertent error as noted by the RUC. Therefore, during 
CY 2014 PFS rulemaking we finalized a proposal to replace the missing 
postoperative hospital inpatient and discharge day visits for the more 
than 100 codes that were identified by the RUC.
    Since then, the AMA has identified additional codes with data in 
the work time file that reflects a similar error. Since we believe 
these global surgery codes are missing postoperative hospital inpatient 
and discharge day visits due to an inadvertent error, we are proposing 
to include a corrected number of visits for the codes displayed in 
Table 11. This proposal would also alter the total time associated with 
the codes in the work time file.

[[Page 40347]]



                                     TABLE 11--Proposed Work Time Changes in Selected Global Surgical Package Visits
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Visits included in Global Package
       CPT  code            Short descriptor     ------------------------------------------------------------------------------   CY 2014      CY 2015
                                                     99231        99232        99233        99238        99291        99292         time         time
--------------------------------------------------------------------------------------------------------------------------------------------------------
19367.................  Breast reconstruction...         3.00  ...........  ...........         1.00  ...........  ...........       552.00       590.00
20802.................  Replantation arm                 6.00  ...........  ...........         1.00  ...........  ...........      1047.00      1041.00
                         complete.
20805.................  Replant forearm complete         6.00  ...........  ...........         1.00  ...........  ...........      1017.00      1012.00
20808.................  Replantation hand                5.00  ...........  ...........         1.00  ...........  ...........      1177.00      1112.00
                         complete.
20972.................  Bone/skin graft                  5.00  ...........  ...........         1.00  ...........  ...........       918.00       898.00
                         metatarsal.
21137.................  Reduction of forehead...  ...........  ...........  ...........         1.00  ...........  ...........       272.00       310.00
21138.................  Reduction of forehead...  ...........  ...........  ...........         1.00  ...........  ...........       362.00       400.00
21150.................  Lefort ii anterior               1.00  ...........  ...........         1.00         1.00  ...........       542.00       623.00
                         intrusion.
21159.................  Lefort iii w/fhdw/o              3.00  ...........  ...........         1.00         2.00  ...........       784.00       986.00
                         lefort i.
21160.................  Lefort iii w/fhd w/       ...........         2.50  ...........         1.00         2.50  ...........       844.00      1121.00
                         lefort i.
21172.................  Reconstruct orbit/        ...........         1.50  ...........         1.00         1.50  ...........       474.00       641.00
                         forehead.
21175.................  Reconstruct orbit/        ...........         1.00  ...........         1.00         2.00  ...........       767.00       731.00
                         forehead.
21179.................  Reconstruct entire        ...........  ...........  ...........         1.00         2.00  ...........       412.00       590.00
                         forehead.
21180.................  Reconstruct entire        ...........  ...........  ...........         1.00         2.00  ...........       492.00       670.00
                         forehead.
21181.................  Contour cranial bone             1.00  ...........  ...........         1.00  ...........  ...........       338.00       396.00
                         lesion.
21182.................  Reconstruct cranial bone  ...........         1.00  ...........         1.00         2.00  ...........       856.00       801.00
21183.................  Reconstruct cranial bone  ...........         2.00  ...........         1.00         2.00  ...........       669.00       891.00
21184.................  Reconstruct cranial bone  ...........         2.00  ...........         1.00         2.00  ...........       774.00       996.00
22102.................  Remove part lumbar               3.00  ...........  ...........         1.00  ...........  ...........       392.00       387.00
                         vertebra.
22310.................  Closed tx vert fx w/o            3.50  ...........  ...........         1.00  ...........  ...........       167.00       236.00
                         manj.
28122.................  Partial removal of foot   ...........  ...........  ...........         1.00  ...........  ...........       230.00       249.00
                         bone.
33470.................  Revision of pulmonary            1.50  ...........  ...........         1.00         3.50  ...........       890.00       769.00
                         valve.
33471.................  Valvotomy pulmonary              4.00  ...........  ...........         1.00         1.00  ...........       603.00       572.00
                         valve.
33476.................  Revision of heart         ...........  ...........  ...........         1.00         5.00  ...........       725.00       859.00
                         chamber.
33478.................  Revision of heart         ...........  ...........  ...........         1.00         5.00  ...........       740.00       882.00
                         chamber.
33610.................  Repair by enlargement...         7.00  ...........  ...........         1.00  ...........  ...........       770.00       648.00
33720.................  Repair of heart defect..  ...........  ...........  ...........         1.00         4.00  ...........       633.00       770.00
33737.................  Revision of heart                2.00  ...........  ...........         1.00         3.00  ...........       603.00       706.00
                         chamber.
33755.................  Major vessel shunt......         1.50  ...........  ...........         1.00         3.50  ...........       680.00       750.00
33762.................  Major vessel shunt......         1.50  ...........  ...........         1.00         3.50  ...........       740.00       755.00
33766.................  Major vessel shunt......         1.50  ...........  ...........         1.00         3.50  ...........       740.00       756.00
33775.................  Repair great vessels             0.50  ...........  ...........         1.00         6.50  ...........       860.00      1043.00
                         defect.
33776.................  Repair great vessels             1.50  ...........  ...........         1.00         6.50  ...........       950.00      1096.00
                         defect.
33777.................  Repair great vessels             3.50  ...........  ...........         1.00         4.50  ...........       950.00       993.00
                         defect.
33813.................  Repair septal defect....         1.00  ...........  ...........         1.00         3.00  ...........       603.00       664.00
33814.................  Repair septal defect....  ...........  ...........  ...........         1.00         5.00  ...........       710.00       838.00
33822.................  Revise major vessel.....  ...........  ...........  ...........         1.00         2.00  ...........       430.00       463.00
50360.................  Transplantation of               1.00         2.00         2.00         1.00  ...........  ...........       664.00       774.00
                         kidney.
61556.................  Incise skull/sutures....         3.00         3.00         1.00         1.00  ...........  ...........       749.00       692.00
61558.................  Excision of skull/               5.00  ...........  ...........         1.00  ...........  ...........       669.00       661.00
                         sutures.
61559.................  Excision of skull/               4.00  ...........  ...........         1.00  ...........  ...........       662.00       665.00
                         sutures.
61563.................  Excision of skull tumor.         1.00         2.00         1.00         1.00  ...........  ...........       762.00       656.00
61564.................  Excision of skull tumor.         4.00  ...........  ...........         1.00  ...........  ...........       629.00       623.00
61580.................  Craniofacial approach     ...........         3.00         4.00         1.00         1.00  ...........      1313.30      1078.30
                         skull.
61581.................  Craniofacial approach            1.00         1.00         5.00         1.00         1.00  ...........      1419.40      1214.40
                         skull.
61582.................  Craniofacial approach            4.00         3.00         1.00         1.00         1.00  ...........      1185.30      1010.30
                         skull.
61583.................  Craniofacial approach            8.00  ...........         1.00         1.00         1.00  ...........      1100.40       906.40
                         skull.
61584.................  Orbitocranial approach/          2.00         3.00         2.00         1.00         1.00  ...........      1066.40       842.40
                         skull.
61585.................  Orbitocranial approach/          1.00         3.00         3.00         1.00         2.00  ...........      1377.70      1101.70
                         skull.
61590.................  Infratemporal approach/          1.00  ...........         7.00         1.00         2.00  ...........      1732.40      1418.40
                         skull.
61591.................  Infratemporal approach/          3.00         4.00  ...........         1.00         2.00  ...........      1478.85      1254.85
                         skull.
61592.................  Orbitocranial approach/          1.00         3.00         2.00         1.00         2.00  ...........      1256.80      1002.80
                         skull.
61595.................  Transtemporal approach/   ...........         3.00         4.00         1.00         1.00  ...........      1312.80      1077.80
                         skull.

[[Page 40348]]

 
61596.................  Transcochlear approach/          1.00         4.00         3.00         1.00         1.00  ...........      1442.30      1188.30
                         skull.
61597.................  Transcondylar approach/          5.00         2.00         1.00         1.00         2.00  ...........      1284.40      1041.40
                         skull.
61598.................  Transpetrosal approach/          2.00         3.00         1.00         1.00         2.00  ...........      1253.10      1048.10
                         skull.
61600.................  Resect/excise cranial     ...........  ...........         6.00         1.00         1.00  ...........      1328.40      1101.40
                         lesion.
61601.................  Resect/excise cranial            2.00         2.00         2.00         1.00         2.00  ...........      1078.90       854.90
                         lesion.
61605.................  Resect/excise cranial            3.00         2.00         1.00         1.00         2.00  ...........      1238.60      1052.60
                         lesion.
61606.................  Resect/excise cranial            3.00         3.00         1.00         1.00         2.00  ...........      1161.90       926.90
                         lesion.
61607.................  Resect/excise cranial     ...........         1.00         6.00         1.00         2.00  ...........      1526.20      1201.20
                         lesion.
61608.................  Resect/excise cranial            3.00         3.00         2.00         1.00         2.00  ...........      1326.00      1042.00
                         lesion.
61613.................  Remove aneurysm sinus...         1.00  ...........         6.00         1.00         2.00  ...........      1416.00      1102.00
61615.................  Resect/excise lesion             2.00         4.00         2.00         1.00         1.00  ...........      1327.20      1092.20
                         skull.
61616.................  Resect/excise lesion             5.00         2.00         1.00         1.00         2.00  ...........      1329.80      1116.80
                         skull.
61618.................  Repair dura.............  ...........         1.00         2.00         1.00  ...........  ...........       647.10       573.10
61619.................  Repair dura.............         1.00         2.00         1.00         1.00  ...........  ...........       683.60       587.60
62115.................  Reduction of skull               4.50  ...........  ...........         1.00  ...........  ...........       672.00       678.00
                         defect.
62116.................  Reduction of skull               1.00         2.00         1.00         1.00  ...........  ...........       737.00       616.00
                         defect.
62117.................  Reduction of skull        ...........         2.00         2.00         1.00  ...........  ...........       854.00       714.00
                         defect.
62120.................  Repair skull cavity              3.00  ...........  ...........         1.00  ...........  ...........       512.00       523.00
                         lesion.
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 40349]]

6. Valuing Services That Include Moderate Sedation as an Inherent Part 
of Furnishing the Procedure
    The CPT manual includes more than 300 diagnostic and therapeutic 
procedures, listed in Appendix G, for which CPT has determined that 
moderate sedation is an inherent part of furnishing the procedure and, 
therefore, only the single procedure code is appropriately reported 
when furnishing the service and the moderate sedation. The work of 
moderate sedation has been included in the work RVUs for these 
diagnostic and therapeutic procedures based upon their inclusion in 
Appendix G. Similarly, the direct PE inputs for these services include 
those inputs associated with furnishing a typical moderate sedation 
service. To the extent that moderate sedation is typically furnished as 
part of the diagnostic or therapeutic service, the inclusion of 
moderate sedation in the valuation of the procedure is appropriate.
    It appears that practice patterns for endoscopic procedures are 
changing, and anesthesia is increasingly being separately reported for 
these procedures. For example, one study shows that while the use of a 
separate anesthesia professional for colonoscopies and upper 
endoscopies was just 13.5 percent in 2003, the rate more than doubled 
to 30.2 percent in 2009. An analysis of Medicare claims data shows that 
a similar pattern is occurring in the Medicare program. We find that, 
for certain types of procedures such as digestive surgical procedures, 
a separate anesthesia service is furnished 53 percent of the time. For 
some of these digestive surgical procedures, the claims analysis shows 
that this rate is as high as 80 percent.
    Our data clearly indicate that moderate sedation is no longer 
typical for all of the procedures listed in CPT's Appendix G, and, in 
fact, the data suggest that the percent of cases in which it is used is 
declining. For many of these procedures in Appendix G, moderate 
sedation continues to be furnished. The trend away from the use of 
moderate sedation toward a separately billed anesthesia service is not 
universal. It differs by the class of procedures, sometimes at the 
procedure code level, and is one that continues to evolve over time. 
Due to the changing nature of medical practice in this area, we are 
considering establishing a uniform approach to valuation for all 
Appendix G services for which moderate sedation is no longer inherent, 
rather than addressing this issue at the procedure level as individual 
procedures are revalued.
    We are seeking public comment on approaches to address the 
appropriate valuation of these services. Specifically, we are 
interested in approaches to valuing Appendix G codes that would allow 
Medicare to pay accurately for moderate sedation when it is furnished 
while avoiding potential duplicative payments when separate anesthesia 
is furnished and billed. To the extent that Appendix G procedure values 
are adjusted to no longer include moderate sedation, we request 
suggestions as to how moderate sedation should be reported and valued, 
and how to remove from existing valuations the RVUs and inputs related 
to moderate sedation.
    We note that in the CY 2014 PFS final rule with comment period, we 
established values for many upper gastrointestinal procedures, 58 of 
which were included in Appendix G. For those interim final values, we 
included the inputs related to moderate sedation. In the CY 2015 PFS 
final rule with comment period, we will address these interim final 
values, and we anticipate establishing CY 2015 inputs for the lower 
gastrointestinal procedures, many of which are also listed in Appendix 
G. It is our expectation that we will not change existing policies for 
valuing moderate sedation as inherent in these procedures until we have 
the opportunity to assess and respond to the comments on this proposed 
rule on the overall valuation of Appendix G codes.

C. Malpractice Relative Value Units (RVUs)

1. Overview
    Section 1848(c) of the Act requires that each service paid under 
the PFS be comprised of three components: Work; PE; and malpractice 
(MP) expense. As required by section 1848(c) of the Act, beginning in 
CY 2000, MP RVUs are resource based. Malpractice RVUs for new codes 
after 1991 were extrapolated from similar existing codes or as a 
percentage of the corresponding work RVU. Section 1848(c)(2)(B)(i) of 
the Act also requires that we review, and if necessary adjust, RVUs no 
less often than every 5 years. For CY 2015, we are proposing to 
implement the third comprehensive review and update of MP RVUs. For 
details about prior updates, see the CY 2010 final rule with comment 
period (74 FR 33537).
2. Methodology for the Proposed Revision of Resource-Based Malpractice 
RVUs
a. General Discussion
    The proposed MP RVUs were calculated by a CMS contractor based on 
updated MP premium data obtained from state insurance rate filings. The 
methodology used in calculating the proposed CY 2015 review and update 
of resource-based MP RVUs largely parallels the process used in the CY 
2010 update. The calculation requires using information on specialty-
specific MP premiums linked to a specific service based upon the 
relative risk factors of the various specialties that furnish a 
particular service. Because MP premiums vary by state and specialty, 
the MP premium information must be weighted geographically and by 
specialty. Accordingly, the proposed MP RVUs are based upon three data 
sources: CY 2011 and CY 2012 MP premium data; CY 2013 Medicare payment 
and utilization data; and CY 2015 proposed work RVUs and geographic 
practice cost indices (GPCIs).
    Similar to the previous update, we calculated the proposed MP RVUs 
using specialty-specific MP premium data because they represent the 
actual expense incurred by practitioners to obtain MP insurance. We 
obtained MP premium data primarily from state departments of insurance. 
When the state insurance departments did not provide data, we used 
state rate filing data from the Perr and Knight database, which derives 
its data from state insurance departments. We used information obtained 
from MP insurance rate filings with effective dates in 2011 and 2012. 
These were the most current data available during our data collection 
process.
    We collected MP insurance premium data from all 50 States, the 
District of Columbia, and Puerto Rico. Rate filings were not available 
in American Samoa, Guam, or the Virgin Islands. Premiums were for $1 
million/$3 million, mature, claims-made policies (policies covering 
claims made, rather than those covering services furnished, during the 
policy term). A $1 million/$3 million liability limit policy means that 
the most that would be paid on any claim is $1 million and the most 
that the policy would pay for claims over the timeframe of the policy 
is $3 million. We made adjustments to the premium data to reflect 
mandatory surcharges for patient compensation funds (funds to pay for 
any claim beyond the statutory amount, thereby limiting an individual 
physician's liability in cases of a large suit) in states where 
participation in such funds is mandatory. We attempted to collect 
premium data representing at least 50 percent of the medical MP 
premiums paid.
    We included premium information for all physician and NPP 
specialties, and all risk classifications available in the collected 
rate filings. Most insurance

[[Page 40350]]

companies provided crosswalks from insurance service office (ISO) codes 
to named specialties. We matched these crosswalks to Medicare primary 
specialty designations (specialty codes). We also used information we 
obtained regarding surgical and nonsurgical classes. Some companies 
provided additional surgical subclasses; for example, distinguishing 
family practice physicians who furnish obstetric services from those 
who do not.
    Although we collected premium data from all states and the District 
of Columbia, not all specialties had premium data in the rate filings 
from all states. Additionally, for some specialties, MP premiums were 
not available from the rate filings in any state. Therefore, for 
specialties for which there was not premium data for at least 35 
states, and specialties for which there was not distinct premium data 
in the rate filings, we crosswalked the specialty to a similar 
specialty, conceptually or by available premium data, for which we did 
have sufficient and reliable data. Additionally, we crosswalked three 
specialties-- physician assistant, registered dietitian and optometry--
for which we had data from at least 35 states to a similar specialty 
type because the available data contained such extreme variations in 
premium amounts that we found it to be unreliable. The range in premium 
amounts for registered dietitians is $85 to $20,813 (24,259 percent), 
for physician assistants is $614 to $35,404 (5,665 percent), and for 
optometry is $189 to $10,798 (5,614 percent). Given that the national 
average premium amount for registered dietitians, physician assistants 
and optometry is below the national average premium amount for allergy 
and immunology, we crosswalked these specialties to allergy and 
immunology, the specialty with the lowest premiums for which we had 
sufficient and reliable data.
    For the proposed CY 2015 MP RVU update, sufficient and reliable 
premium data were available for 41 specialty types, which we used to 
develop specialty-specific malpractice risk factors. (See Table 13 for 
a list of these specialties.)
    For specialties with insufficient or unreliable premium data, we 
assigned the premium amounts of a similar specialty type. These 
specialties and the specialty data that we propose to use are shown in 
Table 12.

                            Table 12--Crosswalk of Specialties to Similar Specialties
----------------------------------------------------------------------------------------------------------------
                                                  Crosswalk
   Specialty code     Medicare specialty name     specialty                   Crosswalk specialty
                                                    code
----------------------------------------------------------------------------------------------------------------
09..................  Interventional Pain                  05  Anesthesiology.
                       Management.
12..................  Osteopathic                          03  Allergy Immunology.
                       Manipulative Medicine.
15..................  Speech Language                      03  Allergy Immunology.
                       Pathology.
17..................  Hospice and Palliative               03  Allergy Immunology.
                       Care.
19..................  Oral Surgery (dental                 24  Plastic and Reconstructive Surgery.
                       only).
21..................  Cardiac                              06  Cardiology.
                       Electrophysiology.
23..................  Sports Medicine........              01  General Practice.
27..................  Geriatric Psychiatry...              26  Psychiatry.
32..................  Anesthesiologist                     05  Anesthesiology.
                       Assistant.
35..................  Chiropractic...........              03  Allergy Immunology.
41..................  Optometry..............              03  Allergy Immunology.
42..................  Certified Nurse Midwife              16  Obstetrics Gynecology.
43..................  Certified Registered                 05  Anesthesiology.
                       Nurse Anesthetist.
50..................  Nurse Practitioner.....              01  General Practice.
60..................  Public Health or                     03  Allergy Immunology.
                       Welfare Agency.
62..................  Psychologist...........              03  Allergy Immunology.
64..................  Audiologist............              03  Allergy Immunology.
65..................  Physical Therapist.....              03  Allergy Immunology.
67..................  Occupational Therapist.              03  Allergy Immunology.
68..................  Clinical Psychologist..              03  Allergy Immunology.
71..................  Registered Dietitian/                03  Allergy Immunology.
                       Nutrition Professional.
72..................  Pain Management........              05  Anesthesiology.
76..................  Peripheral Vascular                  77  Vascular Surgery.
                       Disease.
79..................  Addiction Medicine.....              03  Allergy Immunology.
80..................  Licensed Clinical                    03  Allergy Immunology.
                       Social Worker.
83..................  Hematology/Oncology....              90  Medical Oncology.
85..................  Maxillofacial Surgery..              24  Plastic and Reconstructive Surgery.
86..................  Neuropsychiatry........              26  Psychiatry.
89..................  Certified Clinical                   01  General Practice.
                       Nurse Specialist.
91..................  Surgical Oncology......              02  General Surgery.
94..................  Interventional                       30  Diagnostic Radiology.
                       Radiology.
97..................  Physician Assistant....              03  Allergy Immunology.
98..................  Gynecological/Oncology.              16  Obstetrics Gynecology.
99..................  Unknown Physician                    01  General Practice.
                       Specialty.
C0..................  Sleep Medicine.........              01  General Practice.
----------------------------------------------------------------------------------------------------------------

b. Steps for Calculating Proposed Malpractice RVUs
    Calculation of the proposed MP RVUs conceptually follows the 
specialty-weighted approach used in the CY 2010 final rule with comment 
period (74 FR 61758). The specialty-weighted approach bases the MP RVUs 
for a given service upon a weighted average of the risk factors of all 
specialties furnishing the service. This approach ensures that all 
specialties furnishing a given service are accounted for in the 
calculation of the MP RVUs. The steps for calculating the proposed MP 
RVUs are described below.
    Step (1): Compute a preliminary national average premium for each 
specialty.
    Insurance rating area MP premiums for each specialty are mapped to 
the

[[Page 40351]]

county level. The specialty premium for each county is then multiplied 
by the total county RVUs for that specialty (from the Medicare claims 
data for CY 2013). The product of the MP premiums and total county RVUs 
is then summed across all counties for each specialty and then divided 
by total national RVUs for the specialty. This calculation is then 
divided by the average MP GPCI across all counties for each specialty 
to yield a normalized national average premium for each specialty. The 
specialty premiums are normalized for geographic variation so that the 
locality cost differences (as reflected by the GPCIs) would not be 
counted twice. Without the geographic variation adjustment, the cost 
differences among fee schedule areas would be reflected once under the 
methodology used to calculate the MP RVUs and again when computing the 
service specific payment amount for a given fee schedule area.
    Step (2): Determine which premium class(es) to use within each 
specialty.
    Some specialties had premium rates that differed for surgery, 
surgery with obstetrics, and non-surgery. To account for the presence 
of different classes in the MP premium data and the task of mapping 
these premiums to procedures, we calculated distinct risk factors for 
surgical, surgical with obstetrics, and nonsurgical procedures. 
However, the availability of data by surgery and nonsurgery varied 
across specialties. Consistent with the CY 2010 MP RVU update, because 
no single approach accurately addressed the variability in premium 
classes among specialties, we employed several methods for calculating 
average premiums by specialty. These methods are discussed below.
    (a) Substantial Data for Each Class: For 13 out of 41 specialties, 
we determined that there was sufficient data for surgery and nonsurgery 
premiums, as well as sufficient differences in rates between classes. 
These specialties are listed in Table 13. Therefore, we calculated a 
national average surgical premium and nonsurgical premium.
    (b) Major Surgery Dominates: For 9 surgical specialties, rate 
filings that included nonsurgical premiums were relatively rare. For 
most of these surgical specialties, the rate filings did not include an 
``unspecified'' premium. When it did, the unspecified premium was lower 
than the major surgery rate. For these surgical specialties, we 
calculated only a surgical premium and used the premium for major 
surgery for all procedures furnished by this specialty.
    (c) Unspecified Dominates: Many MP rate filings did not include 
surgery or nonsurgery classes for some specialties; we refer to these 
instances as unspecified MP rates. For 7 specialty types (listed in 
Table 13), we selected the unspecified premium as the premium 
information to use for the specialty. For these specialties, at least 
35 states (and as many as 48 states) had MP premium amounts that were 
not identified as surgery or nonsurgery in rate filings for the 
specialty.
    (d) Blend All Available: For the remaining specialties, there was 
wide variation across the rate filings in terms of whether or not 
premium classes were reported and which categories were reported. 
Because there was no clear strategy for these remaining specialties, we 
blended the available rate information into one general premium rate. 
For these specialties, we developed a weighted average ``blended'' 
premium at the national level, according to the percentage of work RVUs 
correlated with the premium classes within each specialty. For example, 
the surgical premiums for a given specialty were weighted by that 
specialty's work RVUs for surgical services; the nonsurgical premiums 
were weighted by the work RVUs for nonsurgical services and the 
unspecified premiums were weighted by all work RVUs for the specialty 
type.
    The four methods for calculating premiums by specialty type are 
summarized in Table 13. (See Table 14: ``Risk Factors by Specialty 
Type'' for the specialty names associated with the specialty codes 
listed in Table 13.)

                        Table 13--Proposed Premium Calculation Approach by Specialty Type
----------------------------------------------------------------------------------------------------------------
              Method                                          Medicare specialty codes
----------------------------------------------------------------------------------------------------------------
(a) Substantial Data for Each      01, 04, 06, 07, 08 (non[dash]OB), 10, 13, 18, 34, 38, 39, 46, 93
 Class (13).
(b) Major Surgery Dominates (9)..  02, 14, 20, 24, 28, 33, 40, 77, 78
(c) Unspecified Dominates (7)....  03, 05, 16 (non[dash]OB), 25, 26, 36, 81
(d) Blend All Available (12).....  11, 22, 29, 30, 37, 44, 48, 66, 82, 84, 90, 92
----------------------------------------------------------------------------------------------------------------

    (e) Premium Calculation for Neurosurgery: For neurosurgery, premium 
data were available from 24 states; therefore, we did not have 
sufficient data to calculate a national average premium amount for 
neurosurgery. As explained above, we typically crosswalk a specialty 
with insufficient premium data (less than 35 states) to a similar 
specialty for which we have sufficient data, conceptually or by 
reported premiums. We considered cross-walking neurosurgery directly to 
the national average premium for a similar specialty that had 
sufficient data such as neurology or to another surgical specialty. We 
did not crosswalk neurosurgery directly to another surgical specialty 
because no other surgical specialty had similar premium values reported 
in the rate filings. For instance, the surgical premium for 
neurosurgery is $123,400 while the surgical premium for the next 
highest surgical specialty (surgical oncology) is $59,808. We also did 
not crosswalk neurosurgery directly to neurology because the rate 
filings for neurology include substantial premium data for both surgery 
and non-surgery while the rate filings for neurosurgery are dominated 
by major surgery premiums. We do not believe that it would be 
appropriate to assign non-surgical premiums reported for neurology to 
neurosurgery.
    However, the national average surgical premium amount for neurology 
($96,970) and the surgical premium amount for neurosurgery are similar. 
Therefore, we blended the surgical premium data for neurology and 
neurosurgery instead of crosswalking directly to neurology or directly 
to another surgical specialty. In other words, we calculated a combined 
national average surgical premium for neurosurgery and neurology. The 
reasons as to why we are proposing to blend surgical premiums for 
neurology and neurosurgery, instead of crosswalking neurosurgery 
directly to neurology or directly to another surgical specialty, are 
further explained below.
     The rate filings for neurosurgery are dominated by major 
surgery premiums.
     The rate filings identifying nonsurgical premiums for 
neurosurgery are sparse.
     The rate filings for neurology include substantial premium 
data for both surgery and nonsurgery.

[[Page 40352]]

     Neurology is similar to neurosurgery both conceptually and 
by reported surgical premium amounts.
     Surgical premiums from the rate filings for other surgical 
specialties are lower than for neurosurgery and neurology.
    Given that the rate filings for neurosurgery are dominated by major 
surgical premiums and that surgical premium amounts for neurology are 
similar to neurosurgery, we believe that combining the surgical premium 
data for neurosurgery and neurology is a better representation of the 
MP premium amounts paid by neurosurgeons than crosswalking neurosurgery 
directly to neurology or to another surgical specialty.
    Step (3): Calculate a risk factor for each specialty.
    The relative differences in national average premiums between 
specialties are expressed in our methodology as a specialty risk 
factor. These risk factors are an index calculated by dividing the 
national average premium for each specialty by the national average 
premium for the specialty with the lowest premiums for which we had 
sufficient and reliable data, allergy and immunology. For specialties 
with sufficient surgical and nonsurgical premium data, we calculated 
both a surgical and nonsurgical risk factor. For specialties with rate 
filings that distinguished surgical premiums with obstetrics from those 
without, we calculated a separate surgical with obstetrics risk factor. 
For all other specialties we calculated a single risk factor and 
applied the specialty risk factor to both surgery and nonsurgery 
services.
    We note that for determining the risk factor for suppliers of TC-
only services, we were not able to obtain more recent premium data than 
what was used for the CY 2010 update. Therefore, we updated the premium 
data for IDTFs that we used in the CY 2010 update. These data were 
obtained from a survey conducted by the Radiology Business Management 
Association (RBMA) in 2009. We updated the RBMA survey data by the 
change in non-surgical premiums for all specialty types since the 
previous MP RVU update and calculated an updated TC specialty risk 
factor. We applied the updated TC specialty risk factor to suppliers of 
TC-only services. Table 14 shows the risk factors by specialty type.

                Table 14--Risk Factors by Specialty Type
------------------------------------------------------------------------
                        Medicare        Non-surgical      Surgical risk
  Specialty code     specialty name      risk factor         factor
------------------------------------------------------------------------
01................  General Practice              1.83              4.11
02................  General Surgery.  ................              7.30
03................  Allergy                       1.00              1.00
                     Immunology.
04................  Otolaryngology..              1.95              4.47
05................  Anesthesiology..              2.42              2.42
06................  Cardiology......              2.11              7.10
07................  Dermatology.....              1.25              4.11
08................  Family Practice.              1.77              4.18
08 OB.............  Family Practice   ................              3.95
                     w/OB.
09................  Interventional                2.42              2.42
                     Pain Management.
10................  Gastroenterology              2.16              4.45
11................  Internal                      2.07              2.07
                     Medicine.
12................  Osteopathic                   1.00              1.00
                     Manipulative
                     Medicine.
13................  Neurology.......              2.59             13.04
14................  Neurosurgery....  ................             13.04
15................  Speech Language               1.00              1.00
                     Pathology.
16................  Obstetrics                    3.80              3.80
                     Gynecology.
16 OB.............  Obstetrics        ................              8.05
                     Gynecology w/OB.
17................  Hospice and                   1.00              1.00
                     Palliative Care.
18................  Ophthalmology...              1.22              2.21
19................  Oral Surgery      ................              5.11
                     (dental only).
20................  Orthopedic        ................              6.38
                     Surgery.
21................  Cardiac                       2.11              7.10
                     Electrophysiolo
                     gy.
22................  Pathology.......              1.79              1.79
23................  Sports Medicine.              1.83              4.11
24................  Plastic and       ................              5.11
                     Reconstructive
                     Surgery.
25................  Physical                      1.39              1.39
                     Medicine and
                     Rehabilitation.
26................  Psychiatry......              1.13              1.13
27................  Geriatric                     1.13              1.13
                     Psychiatry.
28................  Colorectal        ................              4.08
                     Surgery
                     (formerly
                     Proctology).
29................  Pulmonary                     2.33              2.33
                     Disease.
30................  Diagnostic                    2.99              2.99
                     Radiology.
32................  Anesthesiologist              2.42              2.42
                     Assistant.
33................  Thoracic Surgery  ................              7.27
34................  Urology.........              1.61              3.39
35................  Chiropractic....              1.00              1.00
36................  Nuclear Medicine              1.41              1.41
37................  Pediatric                     1.82              1.82
                     Medicine.
38................  Geriatric                     1.78              4.83
                     Medicine.
39................  Nephrology......              1.71              4.27
40................  Hand Surgery....  ................              4.71
41................  Optometry.......              1.00              1.00
42................  Certified Nurse               3.80              3.80
                     Midwife.
42 OB.............  Certified Nurse   ................              8.05
                     Midwife w/OB.
43................  Certified                     2.42              2.42
                     Registered
                     Nurse
                     Anesthetist
                     (CRNA).
44................  Infectious                    2.41              2.41
                     Disease.
45................  Mammography                   0.90  ................
                     Screening
                     Center.

[[Page 40353]]

 
46................  Endocrinology...              1.65              4.23
47................  Independent                   0.90  ................
                     Diagnostic
                     Testing
                     Facility.
48................  Podiatry........              2.22              2.22
50................  Nurse                         1.83              4.11
                     Practitioner.
60................  Public Health or              1.00              1.00
                     Welfare Agency.
62................  Psychologist....              1.00              1.00
63................  Portable X-Ray                0.90  ................
                     Supplier.
64................  Audiologist.....              1.00              1.00
65................  Physical                      1.00              1.00
                     Therapist.
66................  Rheumatology....              1.77              1.77
67................  Occupational                  1.00              1.00
                     Therapist.
68................  Clinical                      1.00              1.00
                     Psychologist.
69................  Clinical                      0.90  ................
                     Laboratory.
71................  Registered                    1.00              1.00
                     Dietitian/
                     Nutrition
                     Professional.
72................  Pain Management.              2.42              2.42
74................  Radiation                     0.90  ................
                     Therapy Center.
75................  Slide                         0.90  ................
                     Preparation
                     Facilities.
76................  Peripheral        ................              7.19
                     Vascular
                     Disease.
77................  Vascular Surgery  ................              7.19
78................  Cardiac Surgery.  ................              7.23
79................  Addiction                     1.00              1.00
                     Medicine.
80................  Licensed                      1.00              1.00
                     Clinical Social
                     Worker.
81................  Critical Care                 2.83              2.83
                     (Intensivists).
82................  Hematology......              1.81              1.81
83................  Hematology/                   1.89              1.89
                     Oncology.
84................  Preventive                    1.44              1.44
                     Medicine.
85................  Maxillofacial     ................              5.11
                     Surgery.
86................  Neuropsychiatry.              1.13              1.13
89................  Certified                     1.83              4.11
                     Clinical Nurse
                     Specialist.
90................  Medical Oncology              1.89              1.89
91................  Surgical          ................              7.30
                     Oncology.
92................  Radiation                     2.36              2.36
                     Oncology.
93................  Emergency                     3.29              5.17
                     Medicine.
94................  Interventional                2.99              2.99
                     Radiology.
97................  Physician                     1.00              1.00
                     Assistant.
98................  Gynecological/                3.80              3.80
                     Oncology.
98 OB.............  Gynecological/    ................              8.05
                     Oncology w/OB.
99................  Unknown                       1.83              4.11
                     Physician
                     Specialty.
C0................  Sleep Medicine..              1.83              4.11
TC................  IDTFs (TC only).              0.90  ................
------------------------------------------------------------------------

    (a) Invasive Cardiology: Consistent with the previous MP RVU 
update, we continued to classify invasive cardiology services (cardiac 
catheterizations and angioplasties) that are outside of the surgical 
HCPCS code range as surgery for purposes of assigning specialty-
specific risk factors. We note that since the previous MP RVU update 
some invasive cardiology service HCPCS codes have been revised. 
Therefore, we modified the list of invasive cardiology services outside 
the surgical HCPCS code range that are to be considered surgery in 
order to correspond conceptually to the list of service codes used for 
the CY 2010 MP RVU update. We continue to believe that the malpractice 
risk for cardiac catheterization and angioplasty services are more 
similar to the risk of surgical procedures than most nonsurgical 
service codes. As such, we applied the higher cardiology surgical risk 
factor to cardiology catheterization and angioplasty services.
    For the CY 2015 MP RVU update, we examined the possibility of 
classifying injection procedures used in conjunction with cardiac 
catheterization as surgery (for purposes of assigning service specific 
risk factors). After careful consideration, we believe that injection 
procedures, when furnished in conjunction with cardiac catheterization, 
are more akin to the malpractice risk of surgical procedures than most 
non-surgical services. Therefore we applied the surgical risk factor to 
injection procedures used in conjunction with cardiac catheterization. 
Table 15 shows the invasive cardiology services and injection services 
furnished in conjunction with cardiac catheterization to be considered 
as surgery for purposes of assigning specialty-specific risk factors.

   Table 15--Services Outside of Surgical HCPCS Code Range Considered
                                 Surgery
------------------------------------------------------------------------
            HCPCS  code                       Short descriptor
------------------------------------------------------------------------
92920.............................  Prq cardiac angioplast 1 art.
92921.............................  Prq cardiac angio addl art.
92924.............................  Prq card angio/athrect 1 art.
92925.............................  Prq card angio/athrect addl.
92928.............................  Prq card stent w/angio 1 vsl.
92929.............................  Prq card stent w/angio addl.
92933.............................  Prq card stent/ath/angio.
92934.............................  Prq card stent/ath/angio.
92937.............................  Prq revasc byp graft 1 vsl.
92938.............................  Prq revasc byp graft addl.
92941.............................  Prq card revasc mi 1 vsl.
92943.............................  Prq card revasc chronic 1vsl.
92944.............................  Prq card revasc chronic addl.
92970.............................  Cardioassist internal.
92971.............................  Cardioassist external.
92973.............................  Prq coronary mech thrombect.
92974.............................  Cath place cardio brachytx.
92975.............................  Dissolve clot heart vessel.
92977.............................  Dissolve clot heart vessel.
92978.............................  Intravasc us heart add-on.

[[Page 40354]]

 
92979.............................  Intravasc us heart add-on.
93451.............................  Right heart cath.
93452.............................  Left hrt cath w/ventrclgrphy.
93453.............................  R&l hrt cath w/ventriclgrphy.
93454.............................  Coronary artery angio s&i.
93455.............................  Coronary art/grft angio s&i.
93456.............................  R hrt coronary artery angio.
93457.............................  R hrt art/grft angio.
93458.............................  L hrt artery/ventricle angio.
93459.............................  L hrt art/grft angio.
93460.............................  R&l hrt art/ventricle angio.
93461.............................  R&l hrt art/ventricle angio.
93462.............................  L hrt cath trnsptl puncture.
93503.............................  Insert/place heart catheter.
93505.............................  Biopsy of heart lining.
93530.............................  Rt heart cath congenital.
93531.............................  R & l heart cath congenital.
93532.............................  R & l heart cath congenital.
93533.............................  R & l heart cath congenital.
93580.............................  Transcath closure of asd.
93581.............................  Transcath closure of vsd.
93582.............................  Perq transcath closure pda.
93583.............................  Perq transcath septal reduxn.
93600.............................  Bundle of his recording.
93602.............................  Intra-atrial recording.
93603.............................  Right ventricular recording.
93609.............................  Map tachycardia add-on.
93610.............................  Intra-atrial pacing.
93612.............................  Intraventricular pacing.
93613.............................  Electrophys map 3d add-on.
93618.............................  Heart rhythm pacing.
93619.............................  Electrophysiology evaluation.
93620.............................  Electrophysiology evaluation.
93621.............................  Electrophysiology evaluation.
93622.............................  Electrophysiology evaluation.
93623.............................  Stimulation pacing heart.
93624.............................  Electrophysiologic study.
93631.............................  Heart pacing mapping.
93640.............................  Evaluation heart device.
93641.............................  Electrophysiology evaluation.
93642.............................  Electrophysiology evaluation.
93650.............................  Ablate heart dysrhythm focus.
93653.............................  Ep & ablate supravent arrhyt.
93654.............................  Ep & ablate ventric tachy.
93655.............................  Ablate arrhythmia add on.
93656.............................  Tx atrial fib pulm vein isol.
93657.............................  Tx l/r atrial fib addl.
93563.............................  Inject congenital card cath.
93564.............................  Inject hrt congntl art/grft.
93565.............................  Inject l ventr/atrial angio.
93566.............................  Inject r ventr/atrial angio.
93567.............................  Inject suprvlv aortography.
93568.............................  Inject pulm art hrt cath.
93571.............................  Heart flow reserve measure.
93572.............................  Heart flow reserve measure.
------------------------------------------------------------------------

    Step (4): Calculate malpractice RVUs for each HCPCS code.
    Resource-based MP RVUs were calculated for each HCPCS code that has 
work or PE RVUs. The first step was to identify the percentage of 
services furnished by each specialty for each respective HCPCS code. 
This percentage was then multiplied by each respective specialty's risk 
factor as calculated in Step 3. The products for all specialties for 
the HCPCS code were then added together, yielding a specialty-weighted 
service specific risk factor reflecting the weighted malpractice costs 
across all specialties furnishing that procedure. The service specific 
risk factor was multiplied by the greater of the work RVU or PE 
clinical labor index for that service to reflect differences in the 
complexity and risk-of-service between services.
    (a) Low volume service codes: As discussed previously in this 
section, service-specific MP RVUs are determined based on the weighted 
average risk factor(s) of the specialties that furnish the service. For 
rarely-billed Medicare services (that is, when CY 2013 claims data 
reflected allowed services of less than 100), we used only the risk 
factor of the dominant specialty as reflected in our claims data. 
Approximately 2,000 services met the criteria for ``low volume.'' The 
dominant specialty for each ``low volume'' service was also determined 
from CY 2013 Medicare claims data. We continue to believe that a 
balanced approach between including all of the specialties in our 
claims data and the application of the dominant specialty for each low 
volume service is the most appropriate approach to the development of 
malpractice RVUs.
    Step (5): Rescale for budget neutrality.
    The statute requires that changes to fee schedule RVUs must be 
budget neutral. The current resource-based MP RVUs and the proposed 
resource-based MP RVUs were constructed using different malpractice 
premium data. Thus, the last step is to adjust for budget neutrality by 
rescaling the proposed MP RVUs so that the total proposed resource-
based MP RVUs equal the total current resource-based MP RVUs.
    The proposed resource-based MP RVUs are shown in Addendum B, which 
is available on the CMS Web site under the supporting documents section 
of the CY 2015 PFS rule at http://www.cms.gov/PhysicianFeeSched/. These 
values have been adjusted for budget neutrality on the basis of the 
most recent 2013 utilization data available. We will make a final 
budget neutrality adjustment in the final rule on the basis of the 
available 2013 utilization data at that time. We do not believe, 
however, that the final values will change significantly from the 
proposed values as a result of the final budget-neutrality adjustment.
    Because of the differences in the sizes of the three fee schedule 
components, implementation of the resource-based MP RVU update will 
have much smaller payment effects than implementing updates of 
resource-based work RVUs and resource-based PE RVUs. On average, work 
represents about 50.9 percent of payment for a service under the fee 
schedule, PE about 44.8 percent, and MP about 4.3 percent. Therefore, a 
25 percent change in PE RVUs or work RVUs for a service would result in 
a change in payment of about 11 to 13 percent. In contrast, a 
corresponding 25 percent change in MP values for a service would yield 
a change in payment of only about 1 percent. Estimates of the effects 
on payment by specialty type can be found in section VI. of this 
proposed rule.
    Additional information on our proposed methodology for updating the 
MP RVUs may be found in our contractor's report, ``Report on the CY 
2015 Update of the Malpractice RVUs,'' which is available on the CMS 
Web site. It is located under the supporting documents section of the 
CY 2015 PFS proposed rule located at http://www.cms.gov/PhysicianFeeSched/.
3. MP RVU Update for Anesthesia Services
    Since payment for anesthesia services under the PFS is based upon a 
separate fee schedule, routine updates must be calculated in a 
different way than those for services for which payment is calculated 
based upon work, PE and MP RVUs. To apply certain updates to the 
anesthesia fee schedule, we usually develop proxy RVUs for individual 
anesthesia services. However, because work RVUs are integral to the MP 
RVU methodology and anesthesia services do not have work RVUs, the MP 
update process for anesthesia services is more complex than for 
services with work RVUs and clinical labor inputs. Notwithstanding 
these challenges, we believe that payment rates for anesthesia should 
reflect relative MP resource costs, including updates to reflect 
changes over time, as do other PFS payment rates. We are not proposing 
to include such an adjustment at this time because we believe it would 
be helpful to receive input from stakeholders on how we could address 
these challenges and develop a proposal to appropriately update the MP 
resource costs for anesthesia through future rulemaking. Therefore, we 
intend to propose an anesthesia adjustment for MP in the CY 2016 PFS 
proposed rule and are seeking comment in this rule about how to best do 
so.
    An example of one possible approach would be to calculate imputed 
work RVUs and MP RVUs for the anesthesia fee schedule services using 
the work, PE, and MP shares of the anesthesia conversion factor. To 
reflect differences in the complexity and risk between

[[Page 40355]]

anesthesia fee schedule services we would then multiply the service-
specific risk factor for each anesthesia fee schedule service by the 
imputed proxy work RVUs (both CY 2015 and Cy 2016 would be based on the 
same work RVUs) developed for each anesthesia service to determine 
updated proxy MP RVUs for the CY 2016 year. The aggregate difference 
between the imputed MP RVUs for CY 2015 the proxy MP RVUs for CY 2016 
(both based on the same work RVUs) would be applied to the portion of 
the anesthesia conversion factor attributable to MP. However, we 
believe there may be drawbacks to this approach since it relies heavily 
on the proxy work and MP RVUs for individual anesthesia services. We 
are requesting public comments on this approach specifically, as well 
as comments on alternative approaches or methods for updating MP for 
services paid on the anesthesia fee schedule.

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 relative cost 
differences among localities compared to the national average for each 
of the three fee schedule components (that is, work, PE, and MP). 
Although the statute requires 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 (as defined in section 
1848(e)(1)(I) of the Act) beginning January 1, 2011. Additionally, 
section 1848(e)(1)(E) of the Act provided for a 1.0 floor for the work 
GPCIs, which was set to expire on March 31, 2014. However, section 102 
of the PAMA extended application of the 1.0 floor to the work GPCI 
through March 31, 2015.
    Section 1848(e)(1)(C) of the Act requires us to review and, if 
necessary, adjust the GPCIs at least every 3 years. Section 
1848(e)(1)(C) of the Act requires that ``if more than 1 year has 
elapsed since the date of the last previous adjustment, the adjustment 
to be applied in the first year of the next adjustment shall be \1/2\ 
of the adjustment that otherwise would be made.'' We completed a review 
and finalized updated GPCIs in the CY 2014 PFS final rule with comment 
period (78 FR 74390). Since the last GPCI update had been implemented 
over 2 years, CY 2011 and CY 2012, we phased in \1/2\ of the latest 
GPCI adjustment in CY 2014. We also revised the cost share weights that 
correspond to all three GPCIs in the CY 2014 PFS final rule. We 
calculated a corresponding geographic adjustment factor (GAF) for each 
PFS locality. The GAFs are a weighted composite of each area's work, PE 
and MP GPCIs using the national GPCI cost share weights. Although the 
GAFs are not used in computing the fee schedule payment for a specific 
service, we provide them because they are useful in comparing overall 
areas costs and payments. The actual effect on payment for any actual 
service will deviate from the GAF to the extent that the proportions of 
work, PE and MP RVUs for the service differ from those of the GAF.
    As previously noted, section 102 of the PAMA extended the 1.0 work 
GPCI floor through March 31, 2015. Therefore, the CY 2015 work GPCIs 
and summarized GAFs have been revised to reflect the 1.0 work floor. 
Additionally, as required by sections 1848(e)(1)(G) and 1848(e)(1)(I) 
of the Act, the 1.5 work GPCI floor for Alaska and the 1.0 PE GPCI 
floor for frontier states are permanent, and therefore, applicable in 
CY 2015. See Addenda D and E for the CY 2015 GPCIs and summarized GAFs.
    As discussed in the CY 2014 PFS final rule with comment period (78 
FR 74380) the updated GPCIs were calculated by a contractor to CMS. We 
used updated Bureau of Labor and Statistics Occupational Employment 
Statistics (BLS OES) data (2009 through 2011) as a replacement for 2006 
through 2008 data for purposes of calculating the work GPCI and the 
employee compensation component and purchased services component of the 
PE GPCI. We also used updated U.S. Census Bureau American Community 
Survey (ACS) data (2008 through 2010) as a replacement for 2006 through 
2008 data for calculating the office rent component of the PE GPCI. To 
calculate the MP GPCI we used updated malpractice premium data (2011 
and 2012) from state departments of insurance as a replacement for 2006 
through 2007 premium data. We also noted that we do not adjust the 
medical equipment, supplies and other miscellaneous expenses component 
of the PE GPCI because we continue to believe there is a national 
market for these items such that there is not a significant geographic 
variation in relative costs. Additionally, we updated the GPCI cost 
share weights consistent with the modifications made to the 2006-based 
MEI cost share weights in the CY 2014 final rule. As discussed in the 
CY 2014 final rule with comment period, use of the revised GPCI cost 
share weights changed the weighting of the subcomponents within the PE 
GPCI (employee wages, office rent, purchased services, and medical 
equipment and supplies). For a detailed explanation of how the GPCI 
update was developed, see the CY 2014 final rule with comment period 
(78 FR 74380 through 74391).
2. Proposed Changes to the GPCI Values for the Virgin Islands Payment 
Locality
    The current methodology for calculating locality level GPCIs relies 
on the acquisition of county level data (when available). Where data 
for a specific county are not available, we assign the data from a 
similar county within the same payment locality. The Virgin Islands 
have county level equivalents identified as districts. Specifically, 
the Virgin Islands are divided into 3 districts: Saint Croix; Saint 
Thomas; and Saint John. These districts are, in turn, subdivided into 
20 sub-districts. Although the Virgin Islands are divided into these 
county equivalents, county level data for the Virgin Islands are not 
represented in the BLS OES wage data. Additionally, the ACS, which is 
used to calculate the rent component of the PE GPCI, is not conducted 
in the Virgin Islands, and we have not been able to obtain malpractice 
insurance premium data for the Virgin Islands payment locality. Given 
the absence of county level wage and rent data and the insufficient 
malpractice premium data by specialty type, we have historically set 
the three GPCI values for the Virgin Islands payment locality at 1.0.
    For CY 2015, we explored using the available data from the Virgin 
Islands to more accurately reflect the geographic cost differences for 
the Virgin Islands payment locality as compared to other PFS 
localities. Although county level data for the Virgin Islands are not 
represented in the BLS OES wage data, aggregate territory level BLS OES 
wage data are available. We believe that using aggregate territory 
level data is a better reflection of the relative cost differences of 
operating a medical practice in the Virgin Islands payment locality as 
compared to other PFS localities than the current approach of assigning 
a value of 1.0. At our request, our contractor calculated the work 
GPCI, and the employee wage component and purchased services component 
of the PE

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GPCI, for the Virgin Islands payment locality using aggregated 2009 
through 2011 BLS OES data.
    As discussed above, the ACS is not conducted in the Virgin Islands 
and we have not been able to obtain malpractice premium data for the 
Virgin Islands payment locality. Therefore, we assigned a value of 1.0 
for the rent index of the PE GPCI and to the MP GPCI.
    Table 16 illustrates the percentage change in GPCI values and 
summarized GAF for the Virgin Islands payment locality resulting from 
using BLS OES wage data to calculate the work GPCI and PE GPCI.

                  TABLE 16--Impact of Using Territory-Level Virgin Islands Data on GPCI Values for the Virgin Islands Payment Locality
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          1/1/2015 through 3/31/2015 (with 1.0 work GPCI   4/1/2015 through 12/31/2015 (without 1.0 work
                                                                              floor)                                        GPCI floor)
                                                         -----------------------------------------------------------------------------------------------
                        GPCI/GAF                            Existing CY     Proposed CY                     Existing CY     Proposed CY
                                                             2015 GPCI       2015 GPCI    Percent change     2015 GPCI       2015 GPCI    Percent change
                                                              values*         values                          values*         values
--------------------------------------------------------------------------------------------------------------------------------------------------------
Work GPCI...............................................           1.000           1.000           0.00%           0.998           0.975           -2.30
PE GPCI.................................................           1.005           0.960          -4.48%           1.005           0.960           -4.48
MP GPCI.................................................           0.996           0.996           0.00%           0.996           0.996            0.00
GAF.....................................................           1.002           0.982          -2.00%           1.001           0.969           -3.20
--------------------------------------------------------------------------------------------------------------------------------------------------------
*CY 2015 GPCIs and GAF reflect CMS OACT BN adjustment.

    Using aggregate territory-level BLS OES wage data results in a -2.3 
percent decrease in the work GPCI, a -4.48 percent decrease in the PE 
GPCI, and a -3.2 percent decrease to the GAF for the Virgin Islands 
payment locality. However, with the application of the 1.0 work GPCI 
floor, there is no change to the work GPCI and the overall impact of 
using actual BLS OES wage data on the Virgin Islands payment locality 
is only reflected by the change in PE GPCI (-4.48 percent) resulting in 
a -2.00 percent decrease to the GAF. As mentioned previously in this 
section, since we have not been able to obtain malpractice premium data 
for the Virgin Islands payment locality we maintained the MP GPCI at 
1.0. As such, there is no change in the MP GPCI. We propose to use 
aggregate BLS OES wage data to calculate the work GPCI and employee 
wage component of the PE GPCI for the Virgin Islands payment locality 
beginning for CY 2015, and for future GPCI updates. We are specifically 
requesting public comments on this proposal. Additional information on 
our proposal to calculate GPCI values for the Virgin Islands payment 
locality may be found in our contractor's report, ``Revised Final 
Report on the CY 2014 Update of the Geographic Practice Cost Index for 
the Medicare Physician Fee Schedule,'' which is available on the CMS 
Web site. It is located under the supporting documents section of the 
CY 2015 PFS proposed rule located at http://www.cms.gov/PhysicianFeeSched/.

E. Medicare Telehealth Services

1. Billing and Payment for Telehealth Services
    Generally, for Medicare payments to be made for telehealth services 
under the PFS several conditions must be met. Specifically, the service 
must be on the Medicare list of telehealth services and meet all of the 
following other requirements for coverage:
     The service must be furnished via an interactive 
telecommunications system.
     The practitioner furnishing the service must meet the 
telehealth requirements, as well as the usual Medicare requirements.
     The service must be furnished to an eligible telehealth 
individual.
     The individual receiving the services must be in an 
eligible originating site.
    When all of these conditions are met, Medicare pays an originating 
site fee to the originating site and provides separate payment to the 
distant site practitioner for furnishing the service.
    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 
furnished via a telecommunications system. We first implemented this 
provision, which was effective October 1, 2001, in the CY 2002 PFS 
final rule with comment period (66 FR 55246). We established a process 
in the CY 2003 PFS final rule with comment period (67 FR 79988) for 
annual updates to the list of Medicare telehealth services as required 
by section 1834(m)(4)(F)(ii) of the Act.
    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 distant site physician or practitioner. 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 allows the use of 
asynchronous ``store-and-forward'' technology when the originating site 
is part of 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 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.
    Practitioners furnishing Medicare telehealth services are reminded 
that the telehealth service provision is subject to the same non-
discrimination laws as other services, including the effective 
communication requirements for persons with disabilities of section 504 
of the Rehabilitation Act and language

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access for persons with limited English proficiency, as required under 
Title VI of the Civil Rights Act of 1964. For more information, see 
http://www.hhs.gov/ocr/civilrights/resources/specialtopics/hosptialcommunication.
    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.
    Originating sites, which are 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,'' are 
paid under the PFS for serving as an originating site for telehealth 
services. The statute specifies both the types of entities that can 
serve as originating sites and geographic qualifications for 
originating sites. With regard to geographic qualifications, our 
regulations at Sec.  410.78 (b)(4) limit originating sites to those 
located in rural health professional shortage areas (HPSAs) or in a 
county that is not included in a metropolitan statistical areas (MSAs). 
Historically, we have defined rural HPSAs to be those located outside 
of, MSAs. Effective January 1, 2014, we modified the regulations 
regarding originating sites to define rural HPSAs as those located in 
rural census tracts as determined by the Office of Rural Health Policy 
(ORHP) of the Health Resources and Services Administration (HRSA) (78 
FR 74811). Defining ``rural'' to include geographic areas located in 
rural census tracts within MSAs allows for broader inclusion of sites 
within HPSAs as telehealth originating sites. Adopting the more precise 
definition of ``rural'' for this purpose expands access to health care 
services for Medicare beneficiaries located in rural areas. HRSA has 
developed a Web site tool to provide assistance to potential 
originating sites to determine their geographic status. To access this 
tool, see the CMS Web site at www.cms.gov/teleheath/.
    An entity participating in a federal telemedicine demonstration 
project that has been approved by, or received funding from, the 
Secretary as of December 31, 2000 is eligible to be an originating site 
regardless of its geographic location.
    Effective January 1, 2014, we also changed our policy so that 
geographic eligibility for an originating site would be established and 
maintained on an annual basis, consistent with other telehealth payment 
policies (78 FR 74400). Geographic eligibility for Medicare telehealth 
originating sites for each calendar year is now based upon the status 
of the area as of December 31 of the prior calendar year.
    For a detailed history of telehealth payment policy, see 78 FR 
74399.
2. 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 qualifying 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, a practitioner with the 
beneficiary in the originating site. 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 furnished 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 furnishing 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 (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.
    For the list of covered telehealth services, see the CMS Web site 
at www.cms.gov/teleheath/. 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, qualifying requests submitted before the 
end of CY 2014 will be considered for the CY 2016 proposed rule. 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. 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, see the CMS Web site at www.cms.gov/telehealth/.
3. Submitted Requests to the List of Telehealth Services for CY 2015
    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

[[Page 40358]]

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.
a. Submitted Requests
    We received several requests in CY 2013 to add various services as 
Medicare telehealth services effective for CY 2015. The following 
presents a discussion of these requests, and our proposals for 
additions to the CY 2015 telehealth list. Of the requests received, we 
find that the following services are sufficiently similar to 
psychiatric diagnostic procedures or office/outpatient visits currently 
on the telehealth list to qualify on a category one basis. Therefore, 
we propose to add the following services to the telehealth list on a 
category 1 basis for CY 2015:
     CPT codes 90845 (Psychoanalysis); 90846 (family 
psychotherapy (without the patient present); and 90847 (family 
psychotherapy (conjoint psychotherapy) (with patient present);
     CPT codes 99354 (prolonged service in the office or other 
outpatient setting requiring direct patient contact beyond the usual 
service; first hour (list separately in addition to code for office or 
other outpatient evaluation and management service); and, 99355 
(prolonged service in the office or other outpatient setting requiring 
direct patient contact beyond the usual service; each additional 30 
minutes (list separately in addition to code for prolonged service); 
and,
     HCPCS codes G0438 (annual wellness visit; includes a 
personalized prevention plan of service (pps), initial visit; and, 
G0439 (annual wellness visit, includes a personalized prevention plan 
of service (pps), subsequent visit).
    We also received requests to add services to the telehealth list 
that do not meet our criteria for being on the Medicare telehealth 
list. We are not proposing to add the following procedures for the 
reasons noted:
     CPT codes 92250 (fundus photography with interpretation 
and report); 93010 (electrocardiogram, routine ECG with at least 12 
leads; interpretation and report only), 93307 (echocardiography, 
transthoracic, real-time with image documentation (2d), includes m-mode 
recording, when performed, complete, without spectral or color Doppler 
echocardiography; 93308 (echocardiography, transthoracic, real-time 
with image documentation (2d), includes m-mode recording, when 
performed, follow-up or limited study); 93320 (Doppler 
echocardiography, pulsed wave and/or continuous wave with spectral 
display (list separately in addition to codes for echocardiographic 
imaging); complete); 93321 (Doppler echocardiography, pulsed wave and/
or continuous wave with spectral display (list separately in addition 
to codes for echocardiographic imaging); follow-up or limited study 
(list separately in addition to codes for echocardiographic imaging); 
and 93325 (Doppler echocardiography color flow velocity mapping (list 
separately in addition to codes for echocardiography).
    These services include a technical component (TC) and a 
professional component (PC). By definition the TC portion of these 
services needs to be furnished in the same location as the patient and 
thus cannot be furnished via telehealth. The PC portion of these 
services could be furnished without the patient being present in the 
same location. (Note: Sometimes an entirely different code may be used 
when only the PC portion of the service is being furnished and other 
times the same CPT code is used with a -26 modifier.) For example, the 
interpretation by a physician of an actual electrocardiogram or 
electroencephalogram tracing that has been transmitted electronically, 
can be furnished without the patient being present in the same location 
as the physician. It is not necessary to consider including the PC of 
these services on the telehealth list for these services to be covered 
when furnished remotely. Moreover, when these services are furnished 
remotely they do not meet the definition of Medicare telehealth 
services under section 1834(m) of the Act. Rather, these remote 
services 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 
as other physicians' services (that is, without the -GT or -GQ 
modifiers).
     CPT codes 96103 (psychological testing (includes 
psychodiagnostic assessment of emotionality, intellectual abilities, 
personality and psychopathology, eg, MMPI), administered by a computer, 
with qualified health care professional interpretation and report); 
and, 96120 (neuropsychological testing (eg, Wisconsin Card Sorting 
Test), administered by a computer, with qualified health care 
professional interpretation and report). These services involve testing 
by computer, can be furnished remotely without the patient being 
present, and are payable in the same way as other physicians' services. 
These remote services are not Medicare telehealth services as defined 
under the Act, therefore, telehealth restrictions do not apply to these 
services.
     CPT codes 90887 (interpretation or explanation of results 
of psychiatric, other medical examinations and procedures, or other 
accumulated data to family or other responsible persons, or advising 
them how to assist patient); 99090 (analysis of clinical data stored in 
computers (eg, ECGs, blood pressures, hematologic data); 99091 
(collection and interpretation of physiologic data (eg, ECG, blood 
pressure, glucose monitoring) digitally stored and/or transmitted by 
the patient and/or caregiver to the physician or other qualified health 
care professional, qualified by education, training, licensure/
regulation (when applicable) requiring a minimum of 30 minutes of 
time); 99358 (prolonged evaluation and management service before and/or 
after direct patient care; first hour); and 99359 (prolonged evaluation 
and management service before and/or after direct patient care; each 
additional 30 minutes (list separately in addition to code for 
prolonged service). These services are not separately payable by 
Medicare. It would be inappropriate to include services as telehealth 
services when Medicare does not otherwise make a separate payment for 
them.
     CPT codes 96101 (psychological testing (includes 
psychodiagnostic assessment of emotionality, intellectual abilities, 
personality and psychopathology, eg, MMPI, Rorschach, WAIS), per hour 
of the psychologist's or physician's time, both face-to-face time 
administering tests to the patient and time interpreting these test 
results and preparing the report); 96102 (psychological testing 
(includes psychodiagnostic assessment of emotionality, intellectual 
abilities, personality and psychopathology, eg, MMPI and WAIS), with 
qualified health care professional interpretation and report, 
administered by technician, per hour of technician time, face-to-face); 
96118 (neuropsychological testing (eg, Halstead-Reitan 
Neuropsychological Battery, Wechsler Memory Scales and Wisconsin Card 
Sorting Test), per hour of the psychologist's or physician's time, both 
face-to-face time administering tests to the patient and time 
interpreting these test results and preparing the report); and, 96119 
(neuropsychological testing (eg, Halstead-Reitan Neuropsychological

[[Page 40359]]

Battery, Wechsler Memory Scales and Wisconsin Card Sorting Test), with 
qualified health care professional interpretation and report, 
administered by technician, per hour of technician time, face-to-face). 
These services are not similar to other services on the telehealth 
list, as they require close observation of how a patient responds. The 
requestor did not submit evidence supporting the clinical benefit of 
furnishing these services on a category 2 basis. As such, we are not 
proposing to add these services to the list of telehealth services.
     CPT codes 57452 (colposcopy of the cervix including upper/
adjacent vagina; 57454 colposcopy of the cervix including upper/
adjacent vagina; with biopsy(s) of the cervix and endocervical 
curettage); and, 57460 (colposcopy of the cervix including upper/
adjacent vagina; with loop electrode biopsy(s) of the cervix). These 
services are not similar to other services on the telehealth service 
list. Therefore, it would not be appropriate to add them on a category 
1 basis. The requestor did not submit evidence supporting the clinical 
benefit of furnishing these services on a category 2 basis. As such, we 
are not proposing to add these services to the list of telehealth 
services.
     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) is being deleted for 
CY 2015. This code was created specifically to describe a service that 
is not subject to the statutory outpatient mental health limitation, 
which limited payment amounts for certain mental health services. 
Section 102 of the Medicare Improvements for Patients and Providers Act 
(Pub. L. 110-275, enacted on July 15, 2008) (MIPPA) required that the 
62.5 percent outpatient mental health treatment limitation, in effect 
since the inception of the Medicare program, be reduced over four 
years. This limitation limits the percentage of allowed charges that 
the Medicare program paid for mental health treatment services, thus 
creating a larger share of beneficiary coinsurance for these services 
than other Medicare PFS services. Effective January 1, 2014, the 
limitation percentage is 100 percent, of which Medicare pays 80 percent 
and the beneficiary pays 20 percent, resulting in the same beneficiary 
cost sharing as other PFS services. Since the statute was amended to 
phase out the limitation, and the phase-out was complete effective 
January 1, 2014, Medicare no longer has a need to distinguish services 
subject to the mental health limitation from those that are not. 
Accordingly, the appropriate CPT code can now be used to bill Medicare 
for the services that would have otherwise been reported using M0064 
and M0064 will be eliminated as a telehealth service, effective January 
1, 2015.
     Urgent Dermatologic Problems and Wound Care--The American 
Telehealth Association (ATA) cited several studies to support adding 
dermatology services to the telehealth list. However, the request did 
not include specific codes. Since we did not have specific codes to 
consider for this request, we cannot evaluate whether the services are 
appropriate for addition to the Medicare telehealth services list. We 
note that some of the services that the requester had in mind may be 
billed under the telehealth office visit codes or the telehealth 
consultation G-codes.
    In summary, we are proposing to add the following codes to the 
telehealth list on a category 1 basis:
     Psychotherapy services CPT codes 90845, 90846 and 90847.
     Prolonged service office CPT codes 99354 and 99355.
     Annual wellness visit HCPCS codes G0438 and G0439.
3. Modifying Sec.  410.78 Regarding List of Telehealth Services
    As discussed in section II.E.2. of this proposed rule, under the 
statute, we created an annual process for considering the addition of 
services to the Medicare telehealth list. Under this process, we 
propose services to be added to the list in the proposed rule in 
response to public nominations or our own initiative and seek public 
comments on our proposals. After consideration of public comments, we 
finalize additions to the list in the final rule. We also amended the 
regulation at Sec.  410.78(b) each year to include the description of 
the added services. Because the list of Medicare telehealth services 
has grown quite lengthy, and given the many other mechanisms by which 
we can make the public aware of the list of Medicare telehealth 
services for each year, we are proposing to revise Sec.  410.78(b) by 
deleting the description of the individual services for which Medicare 
payment can be made when furnished via telehealth. We would continue 
our current policy to address requests to add to the list of telehealth 
services through the PFS rulemaking process so that the public would 
have the opportunity to comment on additions to the list. We are also 
proposing to revise Sec.  410.78(f) to indicate that a list of Medicare 
telehealth codes and descriptors is available on the CMS Web site.

F. Valuing New, Revised and Potentially Misvalued Codes

    Establishing valuations for newly created and revised CPT codes is 
a routine part of maintaining the PFS. Since its inception it has also 
been a priority to revalue services regularly to assure that the 
payment rates reflect the changing trends in the practice of medicine 
and current prices for inputs used in the PE calculations. Initially 
this was accomplished primarily through the five-year review process, 
which resulted in revised RVUs for CY 1997, CY 2002, CY 2007, and CY 
2012. Under the five-year review process, revisions in RVUs were 
proposed in a proposed rule and finalized in a final rule. In addition 
to the five-year reviews, in each year beginning with CY 2009, CMS and 
the RUC have identified a number of potentially misvalued codes using 
various identification screens, such as codes with high growth rates, 
codes that are frequently billed together, and high expenditure codes. 
Section 3134 of the Affordable Care Act codified the potentially 
misvalued code initiative under section 1848(c)(2)(K) of the Act.
    In the CY 2012 rulemaking process, we proposed and finalized 
consolidation of the five-year review and the potentially misvalued 
code activities into an annual review of potentially misvalued codes in 
order to avoid redundancies in these efforts and better accomplish our 
goal of assuring regular assessment of code values. Under the 
consolidated process, we issue interim final RVUs for all revaluations 
and new codes in the PFS final rule with comment period, and make 
payment based upon those values during the calendar year covered by the 
final rule. (Changes in the PFS methodology that may affect valuations 
of a variety of codes are issued as proposals in the proposed rule). We 
consider and respond to any public comments on the interim final values 
in the final rule with comment period for the subsequent year. When 
consolidating these processes, we indicated that it was appropriate to 
establish interim values for new, revised and potentially misvalued 
codes because of the incongruity between the PFS rulemaking cycle and 
the release of codes by the AMA CPT Editorial Panel and the RUC review 
process. We stated that if we did not establish interim final values 
for revalued codes in the final rule with comment period, ``a delay in 
implementing revised values for codes that have been identified as 
misvalued would perpetuate payment for the services at a rate that does 
not appropriately reflect the relative

[[Page 40360]]

resources involved in furnishing the service and would continue 
unwarranted distortion in the payment for other services across the 
PFS.'' We also reiterated that if we did not establish interim final 
values for new and revised codes, we would either have to delay the use 
of new and revised codes for one year, or permit each Medicare 
contractor to establish its own payment rate for these codes. We 
stated, ``We believe it would be contrary to the public interest to 
delay adopting values for new and revised codes for the initial year, 
especially since we have an opportunity to receive significant input 
from the medical community [through the RUC] before adopting the 
values, and the alternatives could produce undesirable levels of 
uncertainty and inconsistency in payment for a year.''
1. Current Process for Valuing New, Revised, and Potentially Misvalued 
Codes
    Under the process finalized in the CY 2012 PFS final rule with 
comment period, in each year's proposed rule, we propose specific codes 
and/or groups of codes that we believe may be appropriate to consider 
under our potentially misvalued code initiative. As part of our process 
for developing the list of proposed potentially misvalued codes, we 
consider public nominations for potentially misvalued codes under a 
process also established in the CY 2012 PFS final rule with comment 
period. If appropriate, we include such codes in our proposed 
potentially misvalued code list. In the proposed rule, we solicit 
comments on the proposed potentially misvalued codes. We then respond 
to comments and establish a final list of potentially misvalued codes 
in the final rule for that year. These potentially misvalued codes are 
reviewed and revalued, if appropriate, in subsequent years. In 
addition, the RUC regularly identifies potentially misvalued codes 
using screens that have previously been identified by CMS, such as 
codes performed together more than 75 percent of the time.
    Generally, the first step in revaluing codes that have been 
identified as potentially misvalued is for the RUC to review these 
codes through its standard process, which includes active involvement 
of national specialty societies for the specialties that ordinarily use 
the codes. Frequently, the RUC's discussion of potentially misvalued 
codes will lead the CPT Editorial Panel to make adjustments to the 
codes involved, such as bundling of codes, creation of new codes or 
revisions of code descriptors. The AMA has estimated that 75 percent of 
all annual CPT coding changes result from the potentially misvalued 
code initiative.
    The RUC provides CMS with recommendations for the work values and 
direct PE inputs for the codes we have identified as potentially 
misvalued codes or, in the case of a coding revision, for the new or 
revised codes that will replace these potentially misvalued codes. 
(This process is also applied to codes that the RUC identifies using 
code screens that we have identified, and to new or revised codes that 
are issued for reasons unrelated to the potentially misvalued code 
process). Generally, we receive the RUC recommendations concurrently 
for all codes in the same family as the potentially misvalued code(s). 
We believe it is important to evaluate and establish appropriate work 
and MP RVUs and direct PE inputs for an entire code family at the same 
time to avoid rank order anomalies and to maintain appropriate 
relativity among codes. We generally receive the RUC recommendations 
for the code or replacement code(s) within a year or two following the 
identification of the code as potentially misvalued.
    We consider the RUC recommendations along with other information 
that we have, including information submitted by other stakeholders, 
and establish interim final RVUs for the potentially misvalued codes, 
new codes, and any other codes for which there are coding changes in 
the final rule with comment period for a year. There is a 60-day period 
for the public to comment on those interim final values after we issue 
the final rule. For services furnished during the calendar year 
following the publication of interim final rates, we pay for services 
based upon the interim final values established in the final rule. In 
the final rule with comment period for the subsequent year, we consider 
and respond to public comments received on the interim final values, 
and make any appropriate adjustments to values based on those comments. 
We then typically finalize the values for the codes.
    As we discussed in the CY 2012 PFS final rule with comment period, 
we adopted this consolidated review process to combine all coding 
revaluations into one annual process allowing for appropriate 
consideration of relativity in and across code families. In addition, 
this process assures that we have the benefit of the RUC 
recommendations for all codes being valued.
2. Concerns With Current Process.
    Some stakeholders who have experienced reductions in payments as 
the result of interim final valuations have objected to the process by 
which we revise or establish values for new, revised, and potentially 
misvalued codes. Some have stated that they did not receive notice of 
the possible reductions before they occurred. Generally, stakeholders 
are aware that we are considering changes in the payment rates for 
particular services either because CPT has made changes to codes or 
because we have identified the codes as potentially misvalued. As the 
RUC considers the appropriate value for a service, representatives of 
the specialties that use the codes are involved in the process. The RUC 
usually surveys physicians or other practitioners who furnish the 
services described by the codes regarding the time it takes to furnish 
the services, and representatives of the specialty(ies) also 
participate in the RUC meetings where recommendations for work RVUs and 
direct PE inputs are considered. Through this process, representatives 
of the affected specialties are generally aware of the RUC 
recommendations.
    Some stakeholders have asserted that even when they are aware that 
the RUC has made recommendations, they have no opportunity to respond 
to the RUC recommendations before we consider them in adopting interim 
final values because the RUC actions and recommendations are not 
public. Some stakeholders have also said that the individuals who 
participate in the RUC review process are not able to share the 
recommendations because they have signed a confidentiality agreement. 
We note, however, that at least one specialty society has raised funds 
via its Web site to fight a ``pending cut'' based upon its knowledge of 
RUC recommendations for specific codes prior to CMS action on the 
recommendation. Additionally, some stakeholders have pointed out that 
some types of suppliers that are paid under the PFS are not permitted 
to participate in the RUC process at all.
    We recognize that some stakeholders, including those practitioners 
represented by societies that are not participants in the RUC process, 
may not be aware of the specifics of the RUC recommendations before we 
consider them in establishing interim final values for new, revised, 
and potentially misvalued codes. We note that, as described above, 
before we review a service as a potentially misvalued code, we go 
through notice and comment rulemaking to identify it as a potentially 
misvalued code. Thus, the public has

[[Page 40361]]

notice and an opportunity to comment on whether we should review the 
values for a code before we finalize the code as potentially misvalued 
and begin the valuation process. As a result, all stakeholders should 
be aware that a particular code is being considered as potentially 
misvalued and that we may establish revised interim final values in a 
subsequent final rule with comment period. As noted above, there may be 
some codes for which we receive RUC recommendations based upon their 
identification by the RUC through code screens that we establish. These 
codes are not specifically identified by CMS through notice and comment 
rulemaking as potentially misvalued codes. We recognize that if 
stakeholders are not monitoring RUC activities or evaluating Medicare 
claims data, they may be unaware that these codes are being reviewed 
and could be revalued on an interim final basis in a final rule with 
comment period for a year.
    In recent years, we have increased our scrutiny of the RUC 
recommendations and have increasingly found cause to modify the values 
recommended by the RUC in establishing interim final values under the 
PFS. Sometimes we also find it appropriate, on an interim final basis, 
to refine how the CPT codes are to be used for Medicare services or to 
create G-codes for reporting certain services to Medicare. Some 
stakeholders have objected to such interim final decisions because they 
do not learn of the CMS action until the final rule with comment period 
is issued. They believe they do not have an opportunity to meaningfully 
comment and for CMS to address their comments before the coding or 
valuation decision takes effect.
    We received comments on the CY 2014 PFS final rule with comment 
period suggesting that the existing process for review and adoption of 
interim final values for new, revised, and misvalued codes violates 
section 1871(a)(2) of the Act, which prescribes the rulemaking 
requirements for the agency in establishing payment rates. In response 
to those commenters, we note that the process we use to establish 
interim final rates is in full accordance with the statute and we do 
not find this a persuasive reason to consider modifying the process 
that we use to establish PFS rates.
    Our recent revaluation of the four epidural injection codes 
provides an example of the concerns that have been expressed with the 
existing process. In the CY 2014 PFS final rule with comment period, we 
established interim final values for four epidural injection codes, 
which resulted in payment reductions for the services when furnished in 
the office setting of between 35 percent and 56 percent. (In the 
facility setting, the reductions range from 17 percent to 33 percent). 
One of these codes had been identified as a potentially misvalued code 
2 years earlier. The affected specialties had been involved in the RUC 
process and were generally aware that the family of codes would be 
revalued on an as interim basis in an upcoming rule. They were also 
aware that the RUC had made significant changes to the direct PE 
inputs, including removal of the radiographic-fluoroscopy room, which 
explains, in large part, the reduction to values in the office setting. 
The societies representing the affected specialty were also aware of 
significant reductions in the RUC-recommended ``time'' to furnish the 
procedures based on the most recent survey of practitioners who furnish 
the services, which resulted in reductions in both the work and PE 
portion of the values. Although the specialties were aware of the 
changes that the RUC was recommending to direct PE inputs, they were 
not specifically aware of how those changes would affect the values and 
payment rate. In addition, we decreased the work RVUs for these 
procedures because we found the RUC-recommended work RVUs did not 
adequately reflect the RUC-recommended decreases in time. This decision 
is consistent with our general practice when the best available 
information shows that the time involved in furnishing the service has 
gone down, and in the absence of information suggesting an increase in 
work intensity. Since the interim final values for these codes were 
issued in the CY 2014 PFS final rule with comment period, we have 
received numerous comments that will be useful to us as we consider 
finalizing values for these codes. If we had followed a process that 
involved proposing values for these codes in a proposed rule, we would 
have been able to consider the additional information contained in 
these comments prior to making payments for the services based upon 
revised values. (See section II.B.3.b.2 of this proposed rule for a 
discussion of proposed valuation of these epidural injection codes for 
CY 2015).
3. Alternatives to the Current Process
    Although we continue to believe the existing process for new, 
revised and potentially misvalued codes is an appropriate one given the 
incongruity between our rulemaking schedule and the CPT and RUC 
schedules, given our heightened review of the RUC recommendations and 
the increased concerns expressed by some stakeholders, we believe that 
an assessment of our process for valuing these codes is warranted. To 
that end, we have considered potential alternatives to address the 
timing and rulemaking issues associated with establishing values for 
new, revised and potentially misvalued codes (as well as for codes 
within the same families as these codes). Specifically, we have 
explored three alternatives to our current approach:
     Propose work and MP RVUs and direct PE inputs for all new, 
revised and potentially misvalued codes in a proposed rule.
     Propose changes in work and MP RVUs and direct PE inputs 
in the proposed rule for new, revised, and potentially misvalued codes 
for which we receive RUC recommendations in time; continue to establish 
interim final values in the final rule for other new, revised, and 
potentially misvalued codes.
     Increase our efforts to make available more information 
about the specific issues being considered in the course of developing 
values for new, revised and potentially misvalued codes to increase 
transparency, but without making changes to the existing process for 
establishing values.
    A discussion of each of these alternatives follows.
    (a) Propose work and MP RVUs and direct PE inputs for new, revised 
and potentially misvalued codes in the proposed rule:
    Under this approach, we would evaluate the RUC recommendations for 
all new, revised, and potentially misvalued codes, and include proposed 
work and MP RVUs and direct PE inputs for the codes in the first 
available PFS proposed rule. We would receive and consider public 
comments on those proposals and establish final values in the final 
rule. The primary obstacle to this approach relates to the current 
timing of the CPT coding changes and RUC activities. Under the current 
calendar, all CPT coding changes and most RUC recommendations are not 
available to us in time to include proposed values for all codes in the 
proposed rule for that year.
    Therefore, if we were to adopt this proposal, which would require 
us to propose changes in inputs before we revalue codes based upon 
those values, we would need a mechanism to pay for services for which 
the existing codes would no longer be available or for which there 
would be changes for a given year.
    As we noted in the CY 2012 PFS final rule with comment period, the 
RUC recommendations are an essential

[[Page 40362]]

element that we consider when valuing codes. Likewise, we recognize the 
significant contribution that the CPT Editorial Panel makes to the 
success of the potentially misvalued code initiative through its 
consideration and adoption of coding changes. Although we have 
increased our scrutiny of the RUC recommendations in recent years and 
accepted fewer of the recommendations without making our own 
refinements, the CPT codes and the RUC recommendations continue to play 
a major role in our valuations. For many codes, the surveys conducted 
by specialty societies as part of the RUC process are the best data 
that we have regarding the time and intensity of work. The RUC 
determines the criteria and the methodology for those surveys. It also 
reviews the survey results. This process allows for development of 
survey data that are more reliable and comparable across specialties 
and services than would be possible without having the RUC at the 
center of the survey vetting process. In addition, the debate and 
discussion of the services at the RUC meetings in which CMS staff 
participate provides a good understanding of what the service entails 
and how it compares to other services in the family, and to services 
furnished by other specialties. The debate among the specialties is 
also an important part of this process. Although we increasingly 
consider data and information from many other sources, and we intend to 
expand the scope of those data and sources, the RUC recommendations 
remain a vital part of our valuation process.
    Thus, if we were to adopt this approach, we would need to address 
how to make payment for the services for which new or revised codes 
take effect for the following year but for which we did not receive RUC 
recommendations in time to include proposed work values and PE inputs 
in the proposed rule. Because the annual coding changes are effective 
on January 1st of a year, we would need a mechanism for practitioners 
to report services and be paid appropriately during the interval 
between the date the code takes effect and the time that we receive RUC 
recommendations and complete rulemaking to establish values for the new 
and revised codes. One option would be to establish G-codes with 
identical descriptors to the predecessors of the new and revised codes 
and, to the fullest extent possible, carry over the existing values for 
those codes. This would effectively preserve the status quo for one 
year.
    The primary advantage of this approach would be that the RVUs for 
all services under the PFS would be established using a full notice and 
comment procedure, including consideration of the RUC recommendations, 
before they take effect. In addition to having the benefit of the RUC 
recommendations, this would provide the public the opportunity to 
comment on a specific proposal prior to it being implemented. This 
would be a far more transparent process, and would assure that we have 
the full benefit of stakeholder comments before establishing values.
    One drawback to such a process is that the use of G-codes for a 
significant number of codes may create an administrative burden for CMS 
and for practitioners. Presumably, practitioners would need to use the 
G-codes to report certain services for purposes of Medicare, but would 
use the new or revised CPT codes to report the same services to private 
insurers. The number of G-codes needed each year would depend on the 
number of CPT code changes for which we do not receive the RUC 
recommendations in time to formulate a proposal to be included in the 
proposed rule for the year. To the extent that we receive the RUC 
recommendations for all new and revised codes in time to develop 
proposed values for inclusion in the proposed rule, there would be no 
need to use G-codes for this purpose.
    Another drawback is that we would need to delay for at least one 
year the revision of values for any misvalued codes for which we do not 
receive RUC recommendations in time to include a proposal in the 
proposed rule. For a select set of codes, we would be continuing to use 
the RVUs for the codes for an additional year even though we know they 
do not reflect the most accurate resources. Since the PFS is a budget 
neutral system, misvalued services affect payments for all services 
across the fee schedule. On the other hand, if we were to take this 
approach, we would have the full benefit of public comments received on 
the proposed values for potentially misvalued services before 
implementing any revisions.
    (b) Propose changes in work and MP RVUs and PE inputs in the 
proposed rule for new, revised, and potentially misvalued codes for 
which we receive RUC recommendations in time; continue to establish 
interim final values in the final rule for other new, revised, and 
potentially misvalued codes:
    This alternative approach would allow for notice and comment 
rulemaking before we adopt values for some new, revised and potentially 
misvalued codes (those for which we receive RUC recommendations in time 
to include a proposal in the proposed rule), while others would be 
valued on an interim final basis (those for which we do not receive the 
RUC recommendations in time). Under this approach, we would establish 
values in a year for all new, revised, and potentially misvalued codes, 
and there would be no need to provide for a mechanism to continue 
payment for outdated codes pending receipt of the RUC recommendations 
and completion of a rulemaking cycle. For codes for which we do not 
receive the RUC recommendations in time to include a proposal in the 
proposed rule for a year, there would be no change from the existing 
valuation process.
    This would be a balanced approach that recognizes the benefits of a 
full opportunity for notice and comment rulemaking before establishing 
rates when timing allows, and the importance of establishing 
appropriate values for the current version of CPT codes and for 
potentially misvalued codes when the timing of the RUC recommendations 
does not allow for a full notice and comment procedure.
    However, this alternative would go only part of the way toward 
addressing concerns expressed by some stakeholders. For those codes for 
which the RUC recommendations are not received in time for us to 
include a proposal in the proposed rule, Medicare payment for one year 
would still be based on inputs established without the benefit of full 
public notice and comment. Another concern with this approach is that 
it could lead to the valuation of codes within the same family at 
different times depending on when we receive RUC recommendations for 
each code within a family. As discussed previously, we believe it is 
important to value an entire code family together in order to make 
adjustments to account appropriately for relativity within the family 
and between the family and other families. If we receive RUC 
recommendations in time to propose values for some, but not for all, 
codes within a family, we would respond to comments in the final rule 
to establish final values for some of the codes while adopting interim 
final values for other codes within the same family. The differences in 
the treatment of codes within the same family could limit our ability 
to value codes within the same family with appropriate relativity. 
Moreover, under this alternative, the main determinant of how a code 
would be handled would be the timing of our receipt of the RUC 
recommendation for the code. Although

[[Page 40363]]

this approach would offer stakeholders the opportunity to comment on 
specific proposals in the proposed rule, the adoption of changes for a 
separate group of codes in the final rule could significantly change 
the proposed values simply due to the budget neutrality adjustments due 
to additional codes being valued in the final rule.
    (c) Increase our efforts to make available more information about 
the specific issues being considered in the course of developing values 
for new, revised and potentially misvalued codes in order to increase 
transparency, but without a change to the existing process for 
establishing values:
    The main concern with continuing our current approach is that 
stakeholders have expressed the desire to have adequate and timely 
information to permit the provision of relevant feedback to CMS for our 
consideration prior to establishing a payment rate for new, revised, 
and potentially misvalued codes. We could address some aspects of this 
issue by increasing the transparency of the current process. 
Specifically, we could make more information available on the CMS Web 
site before interim final values are established for codes. Examples of 
such information include an up-to-date list of all codes that have been 
identified as potentially misvalued, a list of all codes for which RUC 
recommendations have been received, and the RUC recommendations for all 
codes for which we have received them.
    Although the posting of this information would significantly 
increase transparency for all stakeholders, it still would not allow 
for full notice and comment rulemaking procedures before values are 
established for payment purposes. Nor would it provide the public with 
advance information about whether or how we will make refinements to 
the RUC recommendations or coding decisions in the final rule with 
comment period. Thus, stakeholders would not have an opportunity to 
provide input on our potential modifications before interim final 
values are adopted.
4. Proposal To Modify the Process for Establishing Values for New, 
Revised, and Potentially Misvalued Codes
    After considering the current process, including its strengths and 
weaknesses, and the alternatives to the current process described 
previously, we are proposing to modify our process to make all changes 
in the work and MP RVUs and the direct PE inputs for new, revised and 
potentially misvalued services under the PFS by proposing the changes 
in the proposed rule, beginning with the PFS proposed rule for CY 2016. 
We propose to include proposed values for all new, revised and 
potentially misvalued codes for which we have complete RUC 
recommendations by January 15th of the preceding year. For the CY 2016 
rulemaking process, we would include in the proposed rule proposed 
values for all services for which we have RUC recommendations by 
January 15, 2015.
    For those codes for which we do not receive the RUC recommendations 
by January 15th of a year, we would delay revaluing the code for one 
year (or until we receive RUC recommendations for the code before 
January 15th of a year) and include proposed values in the following 
year's rule. Thus, we would include proposed values prior to using the 
new code (in the case of new or revised codes) or revising the value 
(in the case of potentially misvalued codes). Due to the complexities 
involved in code changes and rate setting, there could be some 
circumstances where, even when we receive the RUC recommendations by 
January 15th of a year, we are not able to propose values in that 
year's proposed rule. For example, we might not have recommendations 
for the whole family or we might need additional information to 
appropriately value these codes. In situations where it would not be 
appropriate or possible to propose values for certain new, revised, or 
potentially misvalued codes, we would treat them in the same way as 
those for which we did not receive recommendations before January 15th.
    For new, revised, and potentially misvalued codes for which we do 
not receive RUC recommendations before January 15th of a year, we 
propose to adopt coding policies and payment rates that conform, to the 
extent possible, to the policies and rates in place for the previous 
year. We would adopt these conforming policies on an interim basis 
pending our consideration of the RUC recommendations and the completion 
of notice and comment rulemaking to establish values for the codes. For 
codes for which there is no change in the CPT code, it is a simple 
matter to continue the current valuation. For services for which there 
are CPT coding changes, it is more complicated to maintain the current 
payment rates until the codes can be valued through the notice and 
comment rulemaking process. Since the changes in CPT codes are 
effective on January 1st of a year, and we would not have established 
values for the new or revised codes (or other codes within the code 
family), it would not be practicable for Medicare to use those CPT 
codes. For codes that were revised or deleted as part of the annual CPT 
coding changes, when the changes could affect the value of a code and 
we have not had an opportunity to consider the relevant RUC 
recommendations prior to the proposed rule, we propose to create G-
codes to describe the predecessor codes to these codes. If CPT codes 
are revised in a manner that would not affect the resource inputs used 
to value the service, (for example, a grammatical changes to CPT code 
descriptors,) we could use these revised codes and continue to pay at 
the rate developed through the use of the same resource inputs. For 
example, if a single CPT code was separated into two codes and we did 
not receive RUC recommendations for the two codes before January 15th 
of the year, we would assign each of those new codes an ``I'' status 
indicator (which denotes that the codes are ``not valid for Medicare 
purposes''), and those codes could not be used for Medicare payment 
during the year. Instead we would create a G-code with the same 
description as the single predecessor CPT code and continue to use the 
same inputs as the predecessor CPT code for that G-code during the 
year.
    For new codes that describe wholly new services, as opposed to new 
or revised codes that describe services which are already on the PFS, 
we would make every effort to work with the RUC to ensure that we 
receive recommendations in time to include proposed values in the 
proposed rule. However, if we do not receive timely recommendations 
from the RUC for such a code and we determine that it is in the public 
interest for Medicare to use a new code during the code's initial year, 
we would need to establish values for the code's initial year. As we do 
under our current policy, if we receive the RUC recommendations in time 
to consider them for the final rule, we propose to establish values for 
the initial year on an interim final basis subject to comment in the 
final rule. In the event we do not receive RUC recommendations in time 
to consider them for the final rule, or in other situations where it 
would not be appropriate to establish interim final values (for 
example, because of a lack of necessary information about the work or 
the price of the PE inputs involved), we would contractor price the 
code for the initial year.
    We propose to modify the regulation at Sec.  414.24 to codify the 
process described above.
    We recognize that the use of G-codes, especially if there are many 
of them in a given year, may place an administrative burden on those 
who bill

[[Page 40364]]

for services under the PFS. We also recognize that, to the extent we do 
not receive RUC recommendations in time to include proposed values in 
the proposed rule, the most updated version of some CPT codes would not 
be used by the Medicare program for the first year. The AMA has been 
working to develop timeframes that would allow a much greater 
percentage of codes to be addressed in the proposed rule and has shared 
with us some plans to achieve this goal. We appreciate AMA's efforts 
and are hopeful that if this proposal is adopted the CPT Editorial 
Panel and the RUC ultimately will be able to adjust their timelines and 
processes so that most, if not all, of the annual coding changes and 
valuation recommendations can be addressed in the proposed rule prior 
to the effective date of the coding changes.
    As discussed previously, the work of the AMA through the CPT 
Editorial Panel and the RUC are critical elements in the appropriate 
valuation of services under the PFS. We have proposed implementation of 
the revised CMS process for establishing values for new, revised, and 
potentially misvalued codes for CY 2016; but would consider alternative 
implementation dates to allow time for the CPT Editorial Panel and the 
RUC to adjust their schedules to avoid the necessity to use G-codes.
    With regard to this proposal, we would be specifically interested 
in comments on the following topics:
     Is this proposal preferable to the present process? Is 
another one of the alternatives better?
     If we were to implement this proposal, is it better to 
move forward with the changes, or is more time needed to make the 
transition such that implementation should be delayed beyond CY 2016? 
What factors should we consider in selecting an implementation date?
     Are there alternatives other than the use of G-codes that 
would allow us to address the annual CPT changes through notice and 
comment rather than interim final rulemaking?
5. Refinement Panel
    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.
    Following enactment of section 1848(c)(2)(K) of the Act, which 
required the Secretary periodically 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 continued using the established 
refinement panel process with some modifications.
    As we consider changes to the processes for valuing codes, we are 
reassessing the role that the refinement panel process plays in the 
code valuation process. As we note in the discussion above, the current 
refinement panel process is tied to interim final values. It provides 
an opportunity for stakeholders to provide new clinical information 
that was not available at the time of the RUC valuation that might 
affect work RVU values that are adopted in the interim final value 
process. If our proposal to modify the valuation process for new, 
revised and potentially misvalued codes is adopted, there would no 
longer be interim final values except for a very few codes that 
describe totally new services. Thus, we are proposing to eliminate the 
refinement panel process. By using the proposed process for new, 
revised, and potentially misvalued codes, we believe that the 
consideration of additional clinical information and any other issues 
associated with the CMS proposed values could be addressed through the 
notice and public comment process. Similarly, prior to CY 2012 when we 
consolidated the five-year valuation, changes made as part of the five-
year review process were addressed in the proposed rule and those codes 
were generally not subject to the refinement process. The notice and 
comment process would provide stakeholders with complete information on 
the basis and rationale for our proposed inputs and any relating coding 
policies. We also note that an increasing number of requests for 
refinement do not include new clinical information that was not 
available at the time of the RUC meeting that would justify a change in 
the work RVUs, in accordance with the current requirements for 
refinement. Thus, we do not believe the elimination of the refinement 
panel process would negatively affect the code valuation process. We 
believe the proposed process, which includes a full notice and comment 
procedure before values are used for purposes of payment, offers 
stakeholders a better mechanism for providing any additional data for 
our consideration and discussing any concerns with our proposed values 
than the current refinement process.

G. Chronic Care Management (CCM)

    As we discussed in the CY 2013 PFS final rule with comment period, 
we are committed to supporting primary care and we have increasingly 
recognized care management as one of the critical components of primary 
care that contributes to better health for individuals and reduced 
expenditure growth (77 FR 68978). Accordingly, we have prioritized the 
development and implementation of a series of initiatives designed to 
improve payment for, and encourage long-term investment in, 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 November 2, 2011 
Federal Register (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 
http://innovation.cms.gov/initiatives/Pioneer-ACO-Model/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 http://innovation.cms.gov/initiatives/Advance-Payment-ACO-Model/).
     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).

[[Page 40365]]

     The Federally Qualified Health Center (FQHC) Advanced 
Primary Care Practice demonstration (described on the CMS Web site at 
http://www.cms.gov/Medicare/Demonstration-Projects/DemoProjectsEvalRpts/Downloads/FQHC_APCP_Demo_FAQsOct2011.pdf and 
the Innovation Center's Web site at www.innovations.cms.gov/initiatives/FQHCs/index.html).
     The Comprehensive Primary Care (CPC) initiative (described 
on the Innovation Center's Web site at http://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 addition, HHS leads a broad initiative focused on optimizing 
health and quality of life for individuals with multiple chronic 
conditions. HHS's Strategic Framework on Multiple Chronic Conditions 
outlines specific objectives and strategies for HHS and private sector 
partners centered on strengthening the health care and public health 
systems; empowering the individual to use self-care management with the 
assistance of a healthcare provider who can assess the patient's health 
literacy level; equipping care providers with tools, information, and 
other interventions; and supporting targeted research about individuals 
with multiple chronic conditions and effective interventions. Further 
information on this initiative is available on the HHS Web site at 
http://www.hhs.gov/ash/initiatives/mcc/index.html.
    In coordination with all of these initiatives, we also have 
continued to explore potential refinements to the PFS that would 
appropriately value care management within Medicare's statutory 
structure for fee-for-service physician payment and quality reporting. 
For example, in the CY 2013 PFS final rule with comment period, we 
adopted a policy to pay separately for care management involving the 
transition of a beneficiary from care furnished by a treating physician 
during a hospital stay to care furnished by the beneficiary's primary 
physician in the community (77 FR 68978 through 68993).
    In the CY 2014 PFS final rule with comment period, we finalized a 
policy to pay separately for care management services furnished to 
Medicare beneficiaries with two or more chronic conditions beginning in 
CY 2015 (78 FR 74414).
1. Valuation of CCM Services--GXXX1
    CCM is a unique PFS service designed to pay separately for non-
face-to-face care coordination services furnished to Medicare 
beneficiaries with two or more chronic conditions. (See 78 FR 74414 for 
a more complete description of the beneficiaries for whom this service 
may be billed.) In the CY 2014 PFS final rule with comment period, we 
indicated that, to recognize the additional resources required to 
provide CCM services to patients with multiple chronic conditions, we 
were creating the following code to use for reporting this service (78 
FR 74422):
     GXXX1 Chronic care management services furnished to 
patients with multiple (two or more) chronic conditions expected to 
last at least 12 months, or until the death of the patient, that place 
the patient at significant risk of death, acute exacerbation/
decompensation, or functional decline; 20 minutes or more; per 30 days.
    Although this service is unique in that it was created to 
separately pay for care management services, other codes include care 
management components. To value CCM, we compared it to other codes that 
involve care management. In doing so, we concluded that the CCM 
services were similar in work (time and intensity) to that of the non-
face-to-face portion of transitional care management (TCM) services 
(CPT code 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)).
    Accordingly, we used the work RVU and work time associated with the 
non-face-to-face portion of CPT code 99495 as a foundation to determine 
our proposed values for CCM services. Specifically, we are proposing a 
work RVU for GXXX1 of 0.61, which is the portion of the work RVU for 
CPT code 99495 that remains after subtracting the work attributable to 
the face-to-face visit. (CPT code 99214 (office/outpatient visit est) 
was used to value CPT code 99495), which has a work RVU of 1.50.) 
Similarly, we are proposing a work time of 15 minutes for HCPCS code 
GXXX1 for CY 2015 based on the time attributable to the non-face-to-
face portion of CPT 99495. The work time file associated with this PFS 
proposed rule is available on the CMS Web site in the Downloads section 
for the CY 2015 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    For direct PE inputs, we are proposing 20 minutes of clinical labor 
time. As established in the CY 2014 PFS final rule with comment period, 
in order to bill for this code, at least 20 minutes of CCM services 
must be furnished during the 30-day billing interval (78 FR 74422). 
Based upon input from stakeholders and the nature of care management 
services, we believe that many aspects of this service will be provided 
by clinical staff, and thus, clinical staff will be involved in the 
typical service for the full 20 minutes. The proposed CY 2015 direct PE 
input database reflects this input and is available on the CMS Web site 
under the supporting data files for the CY 2015 PFS proposed rule at 
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. The proposed PE 
RVUs included in Addendum B to this proposed rule reflect the RVUs that 
result from using these inputs to establish PE RVUs.
    The proposed MP RVU was calculated using the weighted risk factors 
for the specialties that we believe will furnish this service. We 
believe this malpractice risk factor appropriately reflects the 
relative malpractice risk associated with furnishing CCM services. The 
MP RVU included in Addendum B of this proposed rule reflects the RVU 
that results from the application of this proposal.
2. CCM and TCM Services Furnished Incident to a Physician's Service 
Under General Physician Supervision
    In the CY 2014 PFS final rule with comment period (75 FR 74425 
through 74427), we discussed how the policies relating to services 
furnished incident to a practitioner's professional services apply to 
CCM services. (In this discussion, the term practitioner means both 
physicians and NPPs who are permitted to bill for services furnished 
incident to their own professional services.) Specifically, we 
addressed the policy for counting clinical staff time for services 
furnished incident to the billing practitioner's services toward the 
minimum amount of service time required to bill for CCM services.
    We established an exception to the usual rules that apply to 
services furnished incident to the services of a billing practitioner. 
Generally, under the ``incident to'' rules, practitioners may bill for 
services furnished incident to their own services if the services meet 
the requirements specified in our

[[Page 40366]]

regulations at Sec.  410.26. One of these requirements is that the 
``incident to'' services must be furnished under direct supervision, 
which means that the supervising practitioner must be present in the 
office suite and be immediately available to provide assistance and 
direction throughout the service (but does not mean that the 
supervising practitioner must be present in the room where the service 
is furnished). We noted in last year's PFS final rule with comment 
period that because one of the required elements of the CCM service is 
the availability to a beneficiary 24-hours-a-day, 7-days-a-week to 
address the patient's chronic care needs (78 FR 74426) that we expect 
the beneficiary to be provided with a means to make timely contact with 
health care providers in the practice whenever necessary to address 
chronic care needs regardless of the time of day or day of the week. In 
those cases when the need for contact arises outside normal business 
hours, it is likely that the patient's initial contact would be with 
clinical staff employed by the practice (for example, a nurse) and not 
necessarily with a practitioner. Under these circumstances, it would be 
unlikely that a practitioner would be available to provide direct 
supervision of the service.
    Therefore, in the CY 2014 PFS final rule with comment period, we 
created an exception to the generally applicable requirement that 
``incident to'' services must be furnished under direct supervision. 
Specifically, we finalized a policy to require only general, rather 
than direct, supervision when CCM services are furnished incident to a 
practitioner's services outside of the practice's normal business hours 
by clinical staff who are direct employees of the practitioner or 
practice. We explained that, given the potential risk to patients that 
the exception to direct supervision could create, we believed that it 
was appropriate to design the exception as narrowly as possible (78 FR 
74426). The direct employment requirement was intended to balance the 
less stringent general supervision requirement by ensuring that there 
is a direct oversight relationship between the supervising practitioner 
and the clinical staff personnel who provide after hours services.
    In this rule, we are proposing to revise the policy that we adopted 
in the CY 2014 PFS final rule with comment period, and to amend our 
regulations to codify the requirements for CCM services furnished 
incident to a practitioner's services. Specifically, we are proposing 
to remove the requirement that, in order to count the time spent by 
clinical staff providing aspects of CCM services toward the CCM time 
requirement, the clinical staff person must be a direct employee of the 
practitioner or the practitioner's practice. (We note that the existing 
requirement that these services be provided by clinical staff, 
specifically, rather than by other auxiliary personnel is an element of 
the service for both CCM and TCM services, rather than a requirement 
imposed by the ``incident to'' rules themselves.) We are also proposing 
to remove the restriction that services provided by clinical staff 
under general (rather than direct) supervision may be counted only if 
they are provided outside of the practice's normal business hours. 
Under our proposed revised policy, then, the time spent by clinical 
staff providing aspects of CCM services can be counted toward the CCM 
time requirement at any time, provided that the clinical staff are 
under the general supervision of a practitioner and all requirements of 
the ``incident to'' regulations at Sec.  410.26 are met.
    We are proposing to revise these aspects of the policy for several 
reasons. First, one of the required elements of the CCM service is the 
availability of a means for the beneficiary to make contact with health 
care practitioners in the practice to address a patient's urgent 
chronic care needs (78 FR 74418 through 74419). Other elements within 
the scope of CCM services are similarly required to be furnished by 
practitioners or clinical staff. We believe that these elements of the 
CCM scope of service require the presence of an organizational 
infrastructure sufficient to adequately support CCM services, 
irrespective of the nature of the employment or contractual 
relationship between the clinical staff and the practitioner or 
practice. We also believe that the elements of the CCM scope of 
service, such as the requirement of a care plan, ensure a close 
relationship between a practitioner furnishing ongoing care for a 
beneficiary and clinical staff providing aspects of CCM services under 
general supervision; and that this close working relationship is 
sufficient to render a requirement of a direct employment relationship 
or direct supervision unnecessary. Under our proposal, CCM services 
could be furnished ``incident to'' under general supervision if the 
auxiliary personnel providing the services in conjunction with CCM 
services are clinical staff, and whether or not they are direct 
employees of the practitioner or practice billing for the service; but 
the clinical staff must meet the requirements for auxiliary personnel 
contained in Sec.  410.26(a)(1). Other than the exception to permit 
general supervision for clinical staff, the same requirements apply to 
CCM services furnished incident to a practitioner's professional 
services as apply to other ``incident to'' services. Furthermore, since 
last year's final rule, we have had many consultations with physicians 
and others about the organizational structures and other factors that 
contribute to effective provision of CCM services. These consultations 
have convinced us that, for purposes of clinical staff providing 
aspects of CCM services, it does not matter whether the practitioner is 
directly available to supervise because the nature of the services are 
such that they can be, and frequently are, provided outside of normal 
business hours or while the physician is away from the office during 
normal business hours. This is because, unlike most other services to 
which the ``incident to'' rules apply, the CCM services are 
intrinsically non-face-to-face care coordination services.
    In conjunction with this proposed revision to the requirements for 
CCM services provided by clinical staff incident to the services of a 
practitioner, we are also proposing to adopt the same requirements for 
equivalent purposes in relation to TCM services. As in the case of CCM, 
TCM explicitly includes separate payment for services that are not 
necessarily furnished face-to-face, such as coordination with other 
providers and follow-up with patients. It would also not be uncommon 
for auxiliary personnel to provide elements of the TCM services when 
the physician was not in the office. Generally, we believe that it is 
appropriate to treat separately billable care coordination services 
similarly whether in the form of CCM or TCM. We also believe that it 
would be appropriate to apply the same ``incident to'' rules that we 
are proposing for CCM services to TCM services. We are not proposing to 
extend this policy to the E/M service that is a required element of 
TCM. Rather, the required E/M service must still be furnished under 
direct supervision.
    Therefore, we are proposing to revise our regulation at Sec.  
410.26, which sets out the applicable requirements for ``incident to'' 
services, to permit TCM and CCM services provided by clinical staff 
incident to the services of a practitioner to be furnished under the 
general supervision of a physician or other practitioner. As with other 
``incident to'' services, the physician (or other practitioner) 
supervising the auxiliary personnel need not be the same physician (or 
other practitioner) upon whose professional service the

[[Page 40367]]

``incident to'' service is based. We note that all other ``incident 
to'' requirements continue to apply and that documentation of services 
provided must be included in the medical record.
3. Scope of Services and Standards for CCM Services
    In the CY 2014 final rule with comment period (78 FR 74414 through 
74428), we defined the elements of the scope of service for CCM 
services required in order for a practitioner to bill Medicare for CCM 
services. In addition, we indicated that we intended to develop 
standards for practices that furnish CCM services to ensure that the 
practitioners who bill for these services have the capability to fully 
furnish them (78 FR 74415, 74418). At that time, we anticipated that we 
would propose these standards in this proposed rule. We actively sought 
input toward development of these standards by soliciting public 
comments on the CY 2014 PFS final rule with comment period, through 
outreach to stakeholders in meetings, by convening a Technical Expert 
Panel, and by collaborating with federal partners such as the Office of 
the Assistant Secretary for Planning and Evaluation, the Office of the 
Assistant Secretary for Health, the Office of the National Coordinator 
for Health Information Technology, and the Health Resources and 
Services Administration. Our goal is to recognize the trend toward 
practice transformation and overall improved quality of care, while 
preventing unwanted and unnecessary care.
    As we worked to develop appropriate practice standards that would 
meet this goal, we consistently found that many of the standards we 
thought were important overlapped in significant ways with the scope of 
service or with the billing requirements for the CCM services that had 
been finalized in the CY 2014 final rule with comment period. In cases 
where the standards we identified were not unique to CCM requirements, 
we found that the standards overlapped with other Medicare requirements 
or other federal requirements that apply generally to health care 
practitioners. Based upon the feedback we had received, we sought to 
avoid duplicating other requirements or, worse, imposing conflicting 
requirements on practitioners that would furnish CCM services. Given 
the standards and requirements already in place for health care 
practitioners and that will apply to those who furnish and bill for CCM 
services, we have decided not to propose an additional set of standards 
that must be met in order for practitioners to furnish and bill for CCM 
services. Instead of proposing a new set of standards applicable to 
only CCM services, we have decided to emphasize that certain 
requirements are inherent in the elements of the existing scope of 
service for CCM services, and clarify that these must be met in order 
to bill for CCM services.
    In one area--that of electronic health records--we are concerned 
that the existing elements of the CCM service could leave some gaps in 
assuring that beneficiaries consistently receive care management 
services that offer the benefits of advanced primary care as it was 
envisioned when this service was created. It is clear that effective 
care management can be accomplished only through regular monitoring of 
the patient's health status, needs, and services, and through frequent 
communication and exchange of information with the beneficiary and 
among health care practitioners treating the beneficiary. As a part of 
the CY 2014 PFS final rule with comment period (78 FR 43338 through 
43339), we specified that the electronic health record for a patient 
receiving CCM services should include a full list of problems, 
medications and medication allergies in order to inform the care plan, 
care coordination, and ongoing clinical care. Furthermore, those 
furnishing CCM services must be able to facilitate communication of 
relevant patient information through electronic exchange of a summary 
care record with other health care providers as a part of managing 
health care transitions. We believe that if care is to be coordinated 
effectively, all communication must be timely, and it must include the 
information that each team member needs to know to furnish care that is 
congruent with a patient's needs and preferences. In addition, those 
furnishing CCM services need to establish reliable flows of information 
from emergency departments, hospitals, and providers of post-acute care 
services to track their CCM patients receiving care in those settings. 
Reliable information flow supports care transitions, and can be used to 
assess the need for modifications of the care plan that will reduce the 
risk of readmissions, increased morbidity, or mortality.
    After gathering input from stakeholders, we believe that requiring 
those who furnish CCM services to utilize electronic health record 
technology that has been certified by a certifying body authorized by 
the National Coordinator for Health Information Technology will ensure 
that practitioners have adequate capabilities to allow members of the 
interdisciplinary care team to have immediate access to the most 
updated information informing the care plan. Furthermore, we believe 
that requiring those that furnish CCM services to maintain and share an 
electronic care plan will alleviate the development of duplicative care 
plans or updates and the associated errors that can occur when care 
plans are not systematically reconciled. To ensure that practices 
offering CCM services meet these needs, we are proposing a new scope of 
service requirement for electronic care planning capabilities and 
electronic health records. Specifically, we are proposing that CCM 
services must be furnished with the use of an electronic health record 
or other health IT or health information exchange platform that 
includes an electronic care plan that is accessible to all providers 
within the practice, including being accessible to those who are 
furnishing care outside of normal business hours, and that is available 
to be shared electronically with care team members outside of the 
practice. To ensure all practices have adequate capabilities to meet 
electronic health record requirements, the practitioner must utilize 
EHR technology certified by a certifying body authorized by the 
National Coordinator for Health Information Technology to an edition of 
the electronic health record certification criteria identified in the 
then-applicable version of 45 CFR part 170. At a minimum, the practice 
must utilize EHR technology that meets the certification criteria 
adopted at 45 CFR 170.314(a)(3), 170.314(a)(4), 170.314(a)(5), 
170.314(a)(6), 170.314(a)(7) and 170.314(e)(2) pertaining to the 
capture of demographics, problem lists, medications, and other key 
elements related to the ultimate creation of an electronic summary care 
record. For example, practitioners furnishing CCM services beginning in 
CY 2015 would be required to utilize an electronic health record 
certified to at least those 2014 Edition certification criteria. Given 
these certification criteria, EHR technology would be certified to 
capture data and ultimately produce summary records according to the 
HL7 Consolidated Clinical Document Architecture standard (see 45 CFR 
170.205(a)(3)). When any of the CCM scope of service requirements 
include a reference to a health or medical record, a system meeting 
these requirements is required.
    We believe this scope of service element will ensure that 
practitioners have adequate capabilities to fully

[[Page 40368]]

furnish CCM services, allow practitioners to innovate around the 
systems that they use to furnish these services, and avoid 
overburdening small practices. We believe that allowing flexibility as 
to how providers capture, update, and share care plan information is 
important at this stage given the maturity of current electronic health 
record standards and other electronic tools in use in the market today 
for care planning.
    In addition to seeking comment on this new proposed scope of 
service element, we are seeking comment on any changes to the scope of 
service or billing requirements for CCM services that may be necessary 
to ensure that the practitioners who bill for these services have the 
capability to furnish them and that we can appropriately monitor 
billing for these services.
    To assist stakeholders in commenting, we remind you of the elements 
of the current scope of service for CCM services that are required in 
order for a practitioner to bill Medicare for CCM services as finalized 
in the CY 2014 final rule with comment period. We would note that 
additional explanation of these elements can be found at 78 FR 74414 
through 74428. The CCM service includes:
     Access to care management services 24-hours-a-day, 7-days-
a-week, which means providing beneficiaries with a means to make timely 
contact with health care providers in the practice to address the 
patient's urgent chronic care needs regardless of the time of day or 
day of the week.
     Continuity of care with a designated practitioner or 
member of the care team with whom the patient is able to get successive 
routine appointments.
     Care management for chronic conditions including 
systematic assessment of patient's medical, functional, and 
psychosocial needs; system-based approaches to ensure timely receipt of 
all recommended preventive care services; medication reconciliation 
with review of adherence and potential interactions; and oversight of 
patient self-management of medications.
     Creation of a patient-centered care plan document to 
assure that care is provided in a way that is congruent with patient 
choices and values. A plan of care is based on a physical, mental, 
cognitive, psychosocial, functional and environmental (re)assessment 
and an inventory of resources and supports. It is a comprehensive plan 
of care for all health issues.
     Management of care transitions between and among health 
care providers and settings, including referrals to other clinicians, 
follow-up after a beneficiary visit to an emergency department, and 
follow-up after discharges from hospitals, skilled nursing facilities, 
or other health care facilities.
     Coordination with home and community based clinical 
service providers as appropriate to support a beneficiary's 's 
psychosocial needs and functional deficits.
     Enhanced opportunities for a beneficiary and any relevant 
caregiver to communicate with the practitioner regarding the 
beneficiary's care through, not only telephone access, but also through 
the use of secure messaging, internet or other asynchronous non face-
to-face consultation methods.
    Similarly, we remind stakeholders that in the CY 2014 final rule, 
we established particular billing requirements for CCM services that 
require the practitioner to:
     Inform the beneficiary about the availability of the CCM 
services from the practitioner and obtain his or her written agreement 
to have the services provided, including the beneficiary's 
authorization for the electronic communication of the patient's medical 
information with other treating providers as part of care coordination.
     Document in the patient's medical record that all of the 
CCM services were explained and offered to the patient, and note the 
beneficiary's decision to accept or decline these services.
     Provide the beneficiary a written or electronic copy of 
the care plan and document in the electronic medical record that the 
care plan was provided to the beneficiary.
     Inform the beneficiary of the right to stop the CCM 
services at any time (effective at the end of a 30-day period) and the 
effect of a revocation of the agreement on CCM services.
     Inform the beneficiary that only one practitioner can 
furnish and be paid for these services during the 30-day period.
    With the addition of the electronic health record element that we 
are proposing, we believe that these elements of the scope of service 
for CCM services, when combined with other important federal health and 
safety regulations, provide sufficient assurance that Medicare 
beneficiaries receiving CCM services will receive appropriate services. 
However, we remain interested in receiving public feedback regarding 
any meaningful elements of the CCM service or beneficiary protections 
that may be missing from these scope of service elements and billing 
requirements. We encourage commenters, in recommending additional 
possible elements or safeguards, to provide as much specific detail as 
possible regarding their recommendations and how they can be applied to 
the broad complement of practitioners who may furnish CCM services 
under the PFS.
4. Payment of CCM Services in CMS Models and Demonstrations
    As discussed above, several CMS models and demonstrations address 
payment for care management services. The Multi-payer Advanced Primary 
Care Practice Demonstration and the Comprehensive Primary Care 
Initiative both include payments for care management services that 
closely overlap with the scope of service for the new chronic care 
management services code. In these two initiatives, primary care 
practices are receiving per beneficiary per month payments for care 
management services furnished to Medicare fee-for-service beneficiaries 
attributed to their practices. We propose that practitioners 
participating in one of these two models may not bill Medicare for CCM 
services furnished to any beneficiary attributed to the practice for 
purposes of participating in one of these initiatives, as we believe 
the payment for CCM services would be a duplicative payment for 
substantially the same services for which payment is made through the 
per beneficiary per month payment. However, we propose that these 
practitioners may bill Medicare for CCM services furnished to eligible 
beneficiaries who are not attributed to the practice for the purpose of 
the practice's participation as part of one of these initiatives. As 
the Innovation Center implements new models or demonstrations that 
include payments for care management services, or as changes take place 
affecting existing models or demonstrations, we will address potential 
overlaps with CCM and seek to implement appropriate reimbursement 
policies. We welcome comments on this proposal. We also solicit 
comments on the extent to which these services may not actually be 
duplicative and, if so, how our reimbursement policy could be tailored 
to address those situations.

H. Definition of Colorectal Cancer Screening Tests

    Section 1861(pp) of the Act defines ``colorectal cancer screening 
tests'' and, under section 1861(pp)(1)(C), a ``screening colonoscopy'' 
is one of the recognized procedures. Among other things, section 
1861(pp)(1)(D) of the Act authorizes the Secretary to modify the tests 
and procedures covered under this subsection, ``with such frequency and 
payment limits, as the Secretary

[[Page 40369]]

determines appropriate,'' in consultation with appropriate 
organizations. The current definition of ``colorectal cancer screening 
tests'' at Sec.  410.37(a)(1) includes ``screening colonoscopies.'' 
Until recently, the prevailing standard of care for screening 
colonoscopies has been moderate sedation provided intravenously by the 
endoscopist, without resort to separately provided anesthesia.\1\ Based 
on this standard of care, payment for moderate sedation has accordingly 
been bundled into the payment for the colorectal cancer screening 
tests, (for example, G0104, G0105). For these procedures, because 
moderate sedation is bundled into the payment, the same physician 
cannot also report a sedation code. An anesthesia service can be billed 
by a second physician.
---------------------------------------------------------------------------

    \1\ Faulx, A.L. et al. (2005). The changing landscape of 
practice patterns regarding unsedated colonoscopy and propofol use: 
A national web survey. Gastrointestinal Endoscopy, 62. 9-15.
---------------------------------------------------------------------------

    However, a recent study in The Journal of the American Medical 
Association (JAMA) cited an increase in the percentage of colonoscopies 
and upper endoscopy procedures furnished using an anesthesia 
professional, from 13.5 percent in 2003 to 30.2 percent in 2009 within 
the Medicare population, with a similar increase in the commercially-
insured population.\2\ A 2010 study projected that the percentage of 
this class of procedures involving an anesthesia professional would 
grow to 53.4 percent by 2015.\3\ These studies suggest that the 
prevailing standard of care for endoscopies in general and screening 
colonoscopies in particular is undergoing a transition, and that 
anesthesia separately provided by an anesthesia professional is 
becoming the prevalent practice. After reviewing these studies, we 
analyzed Medicare claims data and found that the same trend was 
observed in screening colonoscopies for Medicare beneficiaries. We 
found that in 53 percent of screening colonoscopies for which Medicare 
claims were submitted in 2013 a separate anesthesia claim was reported.
---------------------------------------------------------------------------

    \2\ Liu H, Waxman DA, Main R, Mattke S. Utilization of 
Anesthesia Services during Outpatient Endoscopies and Colonoscopies 
and Associated Spending in 2003-2009. (2012). JAMA, 307(11):1178-
1184.
    \3\ Inadomi, J.M. et al. (2010). Projected increased growth rate 
of anesthesia professional-delivered sedation for colonoscopy and 
EGD in the United States: 2009 to 2015. Gastrointestinal Endoscopy, 
72, 580-586.
---------------------------------------------------------------------------

    In light of these developments, we are concerned that the mere 
reference to ``screening colonoscopies'' in the definition of 
``colorectal cancer screening tests'' has become inadequate. Indeed, we 
are convinced that the growing prevalence of separately provided 
anesthesia services in conjunction with screening colonoscopies 
reflects a change in practice patterns. Therefore, consistent with the 
authority delegated by section 1861(pp)(1)(D) of the Act, we believe it 
is appropriate to revise the definition of ``colorectal cancer 
screening tests'' to adequately reflect these new patterns. 
Accordingly, we are proposing to revise the definition of ``colorectal 
cancer screening tests'' at Sec.  410.37(a)(1)(iii) to include 
anesthesia that is separately furnished in conjunction with screening 
colonoscopies.
    Our proposal to revise the definition of ``colorectal cancer 
screening tests'' in this manner would further reduce our 
beneficiaries' cost-sharing obligations under Part B. Screening 
colonoscopies have been recommended with a grade of A by the United 
States Preventive Services Task Force (USPSTF) and Sec.  410.152(l)(5) 
provides that Medicare Part B pays 100 percent of the Medicare payment 
amount established under the PFS for colorectal cancer screening tests 
except for barium enemas (which do not have a grade A or B 
recommendation from the USPSTF). This regulation is based on section 
4104 of the Affordable Care Act, which amended section 1833(a)(1) of 
the Act to require 100 percent Medicare payment of the fee schedule 
amount for those ``preventive services'' that are appropriate for the 
individual and are recommended with a grade of A or B by the USPSTF. 
Section 4104 effectively waives any Part B coinsurance that would 
otherwise apply under section 1833(a)(1) of the Act for certain 
recommended preventive services, including screening colonoscopies. For 
additional discussion of the impact of section 4104 of the Affordable 
Care Act, and our prior rulemaking based on this provision see the CY 
2011 PFS final rule with comment period (75 FR 73412 through 73431). We 
also note that under Sec.  410.160(b)(7) colorectal cancer screening 
tests are not subject to the Part B annual deductible and do not count 
toward meeting that deductible.
    In implementing the amendments made by section 4104 of the 
Affordable Care Act, we did not provide at that time for waiving the 
Part B deductible and coinsurance for covered anesthesia services 
separately furnished in conjunction with screening colonoscopies. At 
that time, we believed that our payment for the screening colonoscopy, 
which included payment for moderate sedation services, reflected the 
typical screening colonoscopy. Under the current regulations, Medicare 
beneficiaries who receive anesthesia from a different professional than 
the one furnishing the screening colonoscopy would be incurring costs 
for the coinsurance and deductible under Part B for those separate 
services. With the changes in the standard of care and shifting 
practice patterns toward increased use of anesthesia in conjunction 
with screening colonoscopy, beneficiaries who receive covered 
anesthesia services from a different professional than the one 
furnishing the colonoscopy would incur costs for any coinsurance and 
any unmet part of the deductible for this component of the service. 
However, our proposed revision to the definition of ``colorectal cancer 
screening tests'' would lead to Medicare paying 100 percent of the fee 
schedule amounts for screening colonoscopies, including any portion 
attributable to anesthesia services furnished by a separate 
practitioner in conjunction with such tests, under Sec.  410.152(l)(5). 
Similarly, this revision would also mean that expenses incurred for a 
screening colonoscopy, and the anesthesia services furnished in 
conjunction with such tests, will not be subject to the Part B 
deductible and will not count toward meeting that deductible under 
Sec.  410.160(b)(7). If adopted, we believe this proposal will 
encourage more beneficiaries to obtain a screening colonoscopy, which 
is consistent with the intent of the statutory provision to waive 
Medicare cost-sharing for certain recommended preventive services, and 
is consistent with the authority delegated to the Secretary in section 
1861(pp)(1)(D) of the Act.
    In light of the changing practice patterns for screening 
colonoscopies, continuing to require Medicare beneficiaries to bear the 
deductible and coinsurance expenses for separately billed anesthesia 
services furnished and covered by Medicare in conjunction with 
screening colonoscopies could become a significant barrier to these 
essential preventive services. As we noted when we implemented the 
provisions of the Affordable Care Act waiving the Part B deductible and 
coinsurance for these preventive services, the goal of these provisions 
was to eliminate financial barriers so that beneficiaries would not be 
deterred from receiving them (75 FR 73412). Therefore, we are 
exercising our authority under section 1861(pp)(1)(D) of the Act to 
propose a revision to the definition of colorectal cancer screening 
tests to encourage beneficiaries to seek these services by extending 
the waiver of coinsurance and deductible to anesthesia or sedation 
services

[[Page 40370]]

furnished in conjunction with a screening colonoscopy.
    We note that, in implementing these proposed revisions to the 
regulations, it will be necessary to establish a modifier for use when 
billing the relevant anesthesia codes for services that are furnished 
in conjunction with a screening colonoscopy and, thus, qualify for the 
waiver of the Part B deductible and coinsurance. If we adopt this 
proposal in the final rule, we will provide appropriate and timely 
information on this new modifier and its proper use so that physicians 
will be able to bill correctly for these services when the revised 
regulations become effective. We also note that the valuation of 
colonoscopy codes, which include moderate sedation, will be subject to 
the same proposed review as other codes that include moderate sedation, 
as discussed in section II.B.6 of this proposed rule.

I. Payment of Secondary Interpretation of Images

    In general, Medicare makes one payment for the professional 
component of an imaging service for each technical component service 
that is furnished. Section 100.1, Chapter 13, of the Medicare Claims 
Processing Manual (Pub. 100-04) explains this policy in the context of 
EKGs and X-rays furnished in an Emergency Room. The manual section 
discusses the distinction between a ``review'' of an X-ray or EKG for 
which payment is included in the payment for the emergency department 
E/M payment, and the ``interpretation and report'' of an X-ray or EKG 
which can be billed separately and includes a written report addressing 
``the findings, relevant clinical issues, and comparative data (when 
available).'' The section makes clear that a ``professional component'' 
interpretation service should only be billed for a full interpretation 
and report. The manual section goes on to explain that, in general, 
Medicare pays for only one interpretation of an EKG or X-ray service 
furnished to an emergency room patient. However, Medicare can pay for a 
second interpretation (which is billed using modifier -77) under 
``unusual circumstances (for which documentation is provided).'' For 
instance, if an emergency room physician conducts an interpretation, 
identifies a questionable finding, and believes another physician's 
expertise is needed, then a second claim for an interpretation can be 
paid when furnished, for example, by a radiologist. The second 
interpretation must directly contribute to the diagnosis and treatment 
of the individual patient (rather than serving as a quality control 
measure), and the second interpretation must also be accompanied by a 
written report.
    While a separate payment for the professional component for a 
radiology service is contingent upon meeting the conditions described 
in this section, practitioners bill Medicare and are paid for reviews 
of radiology images in other ways. For instance, review of a patient's 
previous radiology images is included and paid as part of the review of 
previous documentation in conjunction with E/M services. Reviews of 
extensive documentation and efforts to obtain previous documentation 
including existing imaging studies are considerations in deciding the 
appropriate level of complexity for evaluation and management 
services.\4\
---------------------------------------------------------------------------

    \4\ See, for example, 1997 Documentation Guidelines for 
Evaluation and Management Service, p. 45.
---------------------------------------------------------------------------

    In recent years, technological advances such as the integration of 
picture and archiving communications systems across health systems, 
growth in image sharing networks and health information exchange 
platforms through which providers can share images, and consumer-
mediated exchange of images, have greatly increased physicians' access 
to existing diagnostic-quality radiology images. These advances offer 
new opportunities for physicians to reduce duplicative imaging, 
particularly with respect to high cost advanced diagnostic imaging 
modalities. For instance, a trauma patient transferred from a community 
hospital to a tertiary care center may arrive with high quality CT 
images sufficient to support an additional professional interpretation 
service. By accessing and utilizing these images to inform the 
diagnosis and record an interpretation in the medical record at the 
tertiary care facility, the provider and physicians may be able to 
avoid ordering substantially duplicative tests.
    Questions have arisen as to whether and under what circumstances it 
would be appropriate for Medicare to permit payment under the PFS when 
physicians furnish subsequent interpretations of existing images, and 
whether uncertainty associated with payment for secondary 
interpretations inhibits physicians from seeking out, accessing, and 
utilizing existing images in cases where avoidance of a new study would 
result in savings to Medicare. We are seeking comment to assess whether 
there is an expanded set of circumstances under which it would be 
appropriate to allow more routine Medicare payment for a second 
professional component for radiology services, and whether such a 
policy would be likely to reduce the incidence of duplicative advanced 
imaging studies.
    Specifically we are seeking comment on the following questions:
     For which radiology services are physicians currently 
conducting secondary interpretations, and what, if any, institutional 
policies are in place to determine when existing images are utilized? 
To what extent are physicians seeking payment for these secondary 
interpretations from Medicare or other payers?
     Should routine payment for secondary interpretations be 
restricted to certain high-cost advanced diagnostic imaging services, 
such as those defined as such under section 1834(e)(1)(B) of the Act, 
for example, diagnostic magnetic resonance imaging, computed 
tomography, and nuclear medicine (including positron emission 
tomography)?
     How should the value of routine secondary interpretations 
be determined? Is it appropriate to apply a modifier to current codes 
or are new HCPCS codes for secondary interpretations necessary?
     We believe most secondary interpretations would be likely 
to take place in the hospital setting. Are there other settings in 
which claims for secondary interpretations would be likely to reduce 
duplicative imaging services?
     Is there a limited time period within which an existing 
image should be considered adequate to support a secondary 
interpretation?
     Would allowing for more routine payment for secondary 
interpretations be likely to generate cost savings to Medicare by 
avoiding potentially duplicative imaging studies?
     What operational steps could Medicare take to ensure that 
any routine payment for secondary interpretations is limited to cases 
where a new imaging study has been averted while minimizing undue 
burden on providers or Part B contractors? For instance, steps might 
include restricting physicians' ability to refer multiple 
interpretations to another physician that is part of their network or 
group practice, requiring that physicians attach a physician's order 
for an averted imaging study to a claim for a secondary interpretation, 
or requiring physicians to identify the technical component of the 
existing image supporting the claim.
    We seek comments on these questions, and welcome input on any 
additional considerations not mentioned here regarding the potential

[[Page 40371]]

impact of allowing payment for secondary interpretation of images under 
other circumstances. Upon reviewing the comments received, we will 
consider whether any further action is appropriate, for instance, 
proposing under a future rulemaking to allow for payment of subsequent 
interpretations of advanced diagnostic images in lieu of duplicative 
studies.

J. Conditions Regarding Permissible Practice Types for Therapists in 
Private Practice

    Section 1861(p) of the Act defines outpatient therapy services to 
include physical therapy, occupational therapy, and speech-language 
pathology services furnished by qualified occupational therapists, 
physical therapists, and speech-language pathologists in their offices 
and in the homes of beneficiaries. The regulations at Sec. Sec.  
410.59(c), 410.60(c), and 410.62(c) set forth special provisions for 
services furnished by therapists in private practice, including basic 
qualifications necessary to qualify as a supplier of occupational 
therapy (OT), physical therapy (PT), and speech-language pathology 
(SLP), respectively. As part of these basic qualifications, the current 
regulatory language includes descriptions of the various practice types 
for therapists' private practices. Based on our recent review of these 
three sections of our regulations, we are concerned that the language 
is not as clear as it could be--especially with regard to the relevance 
of whether a practice is incorporated. The regulations appear to make 
distinctions between unincorporated and incorporated practices, and 
some practice types are listed twice. Accordingly, we are proposing 
changes to the regulatory language to remove unnecessary distinctions 
and redundancies within the regulations for OT, PT, and SLP. We note 
that these proposed changes are for clarification only, and do not 
reflect any proposed change in our current policy.
    To consistently specify the permissible practice types (a solo 
practice, partnership, or group practice; or as an employee of one of 
these) for suppliers of outpatient therapy services in private practice 
(for occupational therapists, physical therapists and speech-language 
pathologists), we propose to replace the regulatory text at Sec.  
410.59(c)(1)(ii)(A) through (E), Sec.  410.60(c)(1)(ii)(A) though (E), 
and Sec.  410.62(c)(1)(ii)(A) through (E).

K. Payments for Physicians and Practitioners Managing Patients on Home 
Dialysis

    In the CY 2005 PFS final rule with comment period (69 FR 66357 
through 66359), we established criteria for furnishing outpatient per 
diem ESRD-related services in partial month scenarios. We specified 
that use of per diem ESRD-related services is intended to accommodate 
unusual circumstances when the outpatient ESRD-related services would 
not be paid for under the monthly capitation payment (MCP), and that 
use of the per diem services are limited to the circumstances listed 
below.
     Transient patients--Patients traveling away from home 
(less than full month);
     Home dialysis patients (less than full month);
     Partial month where there were one or more face-to-face 
visits without the comprehensive visit and either the patient was 
hospitalized before a complete assessment was furnished, dialysis 
stopped due to death, or the patient received a kidney transplant.
     Patients who have a permanent change in their MCP 
physician during the month.
    Additionally, we provided billing guidelines for partial month 
scenarios in the Medicare claims processing manual, publication 100-04, 
chapter 8, section 140.2.1. For center-based patients, we specified 
that if the MCP physician or practitioner furnishes a complete 
assessment of the ESRD beneficiary, the MCP physician or practitioner 
should bill for the full MCP service that reflects the number of visits 
furnished during the month. However, we did not extend this policy to 
home dialysis (less than a full month) because the home dialysis MCP 
service did not include a specific frequency of required patient 
visits. In other words, unlike the ESRD MCP service for center-based 
patients, a visit was not required for the home dialysis MCP service as 
a condition of payment.
    In the CY 2011 PFS final rule with comment period (75 FR 73295 
through 73296), we changed our policy for the home dialysis MCP service 
to require the MCP physician or practitioner to furnish at least one 
face-to-face patient visit per month as a condition of payment. 
However, we inadvertently did not modify our billing guidelines for 
home dialysis (less than a full month) to be consistent with partial 
month scenarios for center-based dialysis patients. Stakeholders have 
recently brought this inconsistency to our attention. After reviewing 
this issue, we are proposing to allow the MCP physician or practitioner 
to bill for the age appropriate home dialysis MCP service (as described 
by HCPCS codes 90963 through 90966) for the home dialysis (less than a 
full month) scenario if the MCP physician or practitioner furnishes a 
complete monthly assessment of the ESRD beneficiary and at least one 
face-to-face patient visit. For example, if a home dialysis patient was 
hospitalized during the month and at least one face-to-face outpatient 
visit and complete monthly assessment was furnished, the MCP physician 
or practitioner should bill for the full home dialysis MCP service. We 
believe that this proposed change to home dialysis (less than a full 
month) provides consistency with our policy for partial month scenarios 
pertaining to patients dialyzing in a dialysis center. If this proposal 
is adopted, we would modify the Medicare Claims Processing Manual to 
reflect the revised billing guidelines for home dialysis in the less 
than a full month scenario.

III. Other Provisions of the Proposed Regulations

A. Ambulance Extender Provisions

1. Amendment to Section 1834(l)(13) of the Act
    Section 146(a) of the MIPPA amended section 1834(l)(13)(A) of the 
Act to specify that, effective for ground ambulance services furnished 
on or after July 1, 2008 and before January 1, 2010, the ambulance fee 
schedule amounts for ground ambulance services shall be increased as 
follows:
     For covered ground ambulance transports that originate in 
a rural area or in a rural census tract of a metropolitan statistical 
area, the fee schedule amounts shall be increased by 3 percent.
     For covered ground ambulance transports that do not 
originate in a rural area or in a rural census tract of a metropolitan 
statistical area, the fee schedule amounts shall be increased by 2 
percent.
    The payment add-ons under section 1834(l)(13) of the Act have been 
extended several times. Recently, section 1104(a) of the Pathway for 
SGR Reform Act of 2013, enacted on December 26, 2013, as Division B 
(Medicare and Other Health Provisions) of Pub L. 113-67, amended 
section 1834(l)(13)(A) of the Act to extend the payment add-ons 
described above through March 31, 2014. Subsequently, section 104(a) of 
the Protecting Access to Medicare Act of 2014 (Pub. L. 113-93, enacted 
on April 1, 2014) amended section 1834(l)(13)(A) of the Act to extend 
the payment add-ons again

[[Page 40372]]

through March 31, 2015. Thus, these payment add-ons also apply to 
covered ground ambulance transports furnished before April 1, 2015. We 
are proposing to revise Sec.  414.610(c)(1)(ii) to conform the 
regulations to these statutory requirements. (For a discussion of past 
legislation extending section 1834(l)(13) of the Act, please see the CY 
2014 PFS final rule (78 FR 74438 through 74439)).
    These statutory requirements are self-implementing. A plain reading 
of the statute requires only a ministerial application of the mandated 
rate increase, and does not require any substantive exercise of 
discretion on the part of the Secretary.
2. Amendment to Section 1834(l)(12) of the Act
    Section 414(c) of the Medicare Prescription Drug, Improvement and 
Modernization Act of 2003 (Pub. L. 108-173, enacted on December 8, 
2003) (MMA) added section 1834(l)(12) to the Act, which specified that 
in the case of ground ambulance services furnished on or after July 1, 
2004, and before January 1, 2010, for which transportation originates 
in a qualified rural area (as described in the statute), the Secretary 
shall provide for a percent increase in the base rate of the fee 
schedule for such transports. The statute requires this percent 
increase to be based on the Secretary's estimate of the average cost 
per trip for such services (not taking into account mileage) in the 
lowest quartile of all rural county populations as compared to the 
average cost per trip for such services (not taking into account 
mileage) in the highest quartile of rural county populations. Using the 
methodology specified in the July 1, 2004 interim final rule (69 FR 
40288), we determined that this percent increase was equal to 22.6 
percent. As required by the MMA, this payment increase was applied to 
ground ambulance transports that originated in a ``qualified rural 
area''; that is, to transports that originated in a rural area included 
in those areas comprising the lowest 25th percentile of all rural 
populations arrayed by population density. For this purpose, rural 
areas included Goldsmith areas (a type of rural census tract). This 
rural bonus is sometimes referred to as the ``Super Rural Bonus'' and 
the qualified rural areas (also known as ``super rural'' areas) are 
identified during the claims adjudicative process via the use of a data 
field included on the CMS-supplied ZIP code File.
    The Super Rural Bonus under section 1834(l)(12) of the Act has been 
extended several times. Recently, section 1104(b) of the Pathway for 
SGR Reform Act of 2013, enacted on December 26, 2013, as Division B 
(Medicare and Other Health Provisions) of Public Law 113-67, amended 
section 1834(l)(12)(A) of the Act to extend this rural bonus through 
March 31, 2014. Subsequently, section 104(b) of the Protecting Access 
to Medicare Act of 2014 (Pub. L. 113-93, enacted on April 1, 2014) 
amended section 1834(l)(12)(A) of the Act to extend this rural bonus 
again through March 31, 2015. Therefore, we are continuing to apply the 
22.6 percent rural bonus described above (in the same manner as in 
previous years), to ground ambulance services with dates of service 
before April 1, 2015 where transportation originates in a qualified 
rural area. Accordingly, we are proposing to revise Sec.  
414.610(c)(5)(ii) to conform the regulations to these statutory 
requirements. (For a discussion of past legislation extending section 
1834(l)(12) of the Act, please see the CY 2014 PFS final rule (78 FR 
74439 through 74440)).
    These statutory provisions are self-implementing. Together, these 
statutory provisions require a 15-month extension of this rural bonus 
(which was previously established by the Secretary) through March 31, 
2015, and do not require any substantive exercise of discretion on the 
part of the Secretary.

B. Proposed Changes in Geographic Area Delineations for Ambulance 
Payment

1. Background
    Under the ambulance fee schedule, the Medicare program pays for 
ambulance transportation services for Medicare beneficiaries when other 
means of transportation are contraindicated by the beneficiary's 
medical condition, and all other coverage requirements are met. 
Ambulance services are classified into different levels of ground 
(including water) and air ambulance services based on the medically 
necessary treatment provided during transport.
    These services include the following levels of service:
     For Ground--

++ Basic Life Support (BLS) (emergency and non-emergency)
++ Advanced Life Support, Level 1 (ALS1) (emergency and non-emergency)
++ Advanced Life Support, Level 2 (ALS2)
++ Paramedic ALS Intercept (PI)
++ Specialty Care Transport (SCT)

     For Air--

++ Fixed Wing Air Ambulance (FW)
++ Rotary Wing Air Ambulance (RW)
a. Statutory Coverage of Ambulance Services
    Under sections 1834(l) and 1861(s)(7) of the Act, Medicare Part B 
(Supplemental Medical Insurance) covers and pays for ambulance 
services, to the extent prescribed in regulations, when the use of 
other methods of transportation would be contraindicated by the 
beneficiary's medical condition.
    The House Ways and Means Committee and Senate Finance Committee 
Reports that accompanied the 1965 Social Security Amendments suggest 
that the Congress intended that--
     The ambulance benefit cover transportation services only 
if other means of transportation are contraindicated by the 
beneficiary's medical condition; and
     Only ambulance service to local facilities be covered 
unless necessary services are not available locally, in which case, 
transportation to the nearest facility furnishing those services is 
covered (H.R. Rep. No. 213, 89th Cong., 1st Sess. 37 and Rep. No. 404, 
89th Cong., 1st Sess. Pt 1, 43 (1965)).
    The reports indicate that transportation may also be provided from 
one hospital to another, to the beneficiary's home, or to an extended 
care facility.
b. Medicare Regulations for Ambulance Services
    Our regulations relating to ambulance services are set forth at 42 
CFR part 410, subpart B and 42 CFR part 414, subpart H. Section 
410.10(i) lists ambulance services as one of the covered medical and 
other health services under Medicare Part B. Therefore, ambulance 
services are subject to basic conditions and limitations set forth at 
Sec.  410.12 and to specific conditions and limitations included at 
Sec.  410.40 and Sec.  410.41. Part 414, subpart H, describes how 
payment is made for ambulance services covered by Medicare.
2. Provisions of the Proposed Rule
    Historically, the Medicare ambulance fee schedule has used the same 
geographic area designations as the acute care hospital inpatient 
prospective payment system (IPPS) and other Medicare payment systems to 
take into account appropriate urban and rural differences. This 
promotes consistency across the Medicare program, and it provides for 
use of consistent geographic standards for Medicare payment purposes.
    The current geographic areas used under the ambulance fee schedule 
are based on OMB standards published on

[[Page 40373]]

December 27, 2000 (65 FR 82228 through 82238) and Census 2000 data and 
Census Bureau population estimates for 2007 and 2008 (OMB Bulletin No. 
10-02). For a discussion of OMB's delineation of Core-Based Statistical 
Areas (CBSAs) and our implementation of the CBSA definitions under the 
ambulance fee schedule, we refer readers to the preamble of the CY 2007 
Ambulance Fee Schedule proposed rule (71 FR 30358 through 30361) and 
the CY 2007 PFS final rule (71 FR 69712 through 69716). On February 28, 
2013, OMB issued OMB Bulletin No. 13-01, which established revised 
delineations for Metropolitan Statistical Areas (MSAs), Micropolitan 
Statistical Areas, and Combined Statistical Areas, and provided 
guidance on the use of the delineations of these statistical areas. A 
copy of this bulletin may be obtained at http://www.whitehouse.gov/sites/default/files/omb/bulletins/2013/b-13-01.pdf. According to OMB, 
``[t]his bulletin provides the delineations of all Metropolitan 
Statistical Areas, Metropolitan Divisions, Micropolitan Statistical 
Areas, Combined Statistical Areas, and New England City and Town Areas 
in the United States and Puerto Rico based on the standards published 
on June 28, 2010, in the Federal Register (75 FR 37246-37252) and 
Census Bureau data.'' OMB defines an MSA as a CBSA associated with at 
least one urbanized area that has a population of at least 50,000, and 
a Micropolitan Statistical Area (referred to in this discussion as a 
Micropolitan Area) as a CBSA associated with at least one urban cluster 
that has a population of at least 10,000 but less than 50,000 (75 FR 
37252). Counties that do not qualify for inclusion in a CBSA are deemed 
``Outside CBSAs.'' We note that, when referencing the new OMB 
geographic boundaries of statistical areas, we are using the term 
``delineations'' consistent with OMB's use of the term (75 FR 37249).
    While the revisions OMB published on February 28, 2013 are not as 
sweeping as the changes made when we adopted the CBSA geographic 
designations for CY 2007, the February 28, 2013 OMB bulletin does 
contain a number of significant changes. For example, if we adopt the 
revised OMB delineations, there would be new CBSAs, urban counties that 
would become rural, rural counties that would become urban, and 
existing CBSAs that would be split apart. Because the bulletin was not 
issued until February 28, 2013, with supporting data not available 
until later, and because the changes made by the bulletin and their 
ramifications needed to be extensively reviewed and verified, we were 
unable to undertake such a lengthy process before publication of the CY 
2014 PFS proposed rule, and thus, did not implement the changes to the 
OMB delineations under the ambulance fee schedule for CY 2014. We have 
reviewed our findings and impacts relating to the new OMB delineations, 
and find no compelling reason to further delay implementation. We 
believe it is important for the ambulance fee schedule to use the 
latest labor market area delineations available as soon as reasonably 
possible in order to maintain a more accurate and up-to-date payment 
system that reflects the reality of population shifts.
    Additionally, in the FY 2015 IPPS proposed rule (79 FR 28055), we 
also proposed to adopt OMB's revised delineations to identify urban 
areas and rural areas for purposes of the IPPS wage index. For the 
reasons discussed above, we believe it would be appropriate to adopt 
the same geographic area delineations for use under the ambulance fee 
schedule as are used under the IPPS and other Medicare payment systems. 
Thus, we are proposing to implement the new OMB delineations as 
described in the February 28, 2013 OMB Bulletin No. 13-01 beginning in 
CY 2015 to more accurately identify urban and rural areas for ambulance 
fee schedule payment purposes. We believe that the updated OMB 
delineations more realistically reflect rural and urban populations, 
and that the use of such delineations under the ambulance fee schedule 
would result in more accurate payment. Under the ambulance fee 
schedule, consistent with our current definitions of urban and rural 
areas (Sec.  414.605), MSAs would continue to be recognized as urban 
areas, while Micropolitan and other areas outside MSAs, and rural 
census tracts within MSAs (as discussed below), would be recognized as 
rural areas.
    In addition to the OMB's statistical area delineations, the current 
geographic areas used in the ambulance fee schedule also are based on 
the most recent version of the Goldsmith Modification. Section 1834(l) 
of the Act requires that we use the most recent version of the 
Goldsmith Modification to determine rural census tracts within MSAs. 
These rural census tracts are considered rural areas under the 
ambulance fee schedule (see Sec.  414.605). In the CY 2007 PFS final 
rule (71 FR 69714 through 69716), we adopted the most recent (at that 
time) version of the Goldsmith Modification, designated as Rural-Urban 
Commuting Area (RUCA) codes. RUCA codes use urbanization, population 
density, and daily commuting data to categorize every census tract in 
the country. For a discussion about RUCA codes, we refer the reader to 
the CY 2007 PFS final rule (71 FR 69714 through 69716). As stated 
previously, on February 28, 2013, OMB issued OMB Bulletin No. 13-01, 
which established revised delineations for Metropolitan Statistical 
Areas, Micropolitan Statistical Areas, and Combined Statistical Areas, 
and provided guidance on the use of the delineations of these 
statistical areas. Several modifications of the RUCA codes were 
necessary to take into account updated commuting data and the revised 
OMB delineations. We refer readers to the U.S. Department of 
Agriculture's Economic Research Service Web site for a detailed listing 
of updated RUCA codes found at http://www.ers.usda.gov/data-products/rural-urban-commuting-area-codes.aspx. The updated RUCA code 
definitions were introduced in late 2013 and are based on data from the 
2010 decennial census and the 2006-10 American Community Survey. We are 
proposing to adopt the most recent modifications of the RUCA codes 
beginning in CY 2015, to recognize levels of rurality in census tracts 
located in every county across the nation, for purposes of payment 
under the ambulance fee schedule. If we adopt the most recent RUCA 
codes, many counties that are designated as urban at the county level 
based on population would have rural census tracts within them that 
would be recognized as rural areas through our use of RUCA codes.
    The 2010 Primary RUCA codes are as follows:
    (1) Metropolitan area core: primary flow with an urbanized area 
(UA).
    (2) Metropolitan area high commuting: primary flow 30 percent or 
more to a UA.
    (3) Metropolitan area low commuting: primary flow 10 to 30 percent 
to a UA.
    (4) Micropolitan area core: primary flow within an Urban Cluster of 
10,000 to 49,999 (large UC).
    (5) Micropolitan high commuting: primary flow 30 percent or more to 
a large UC.
    (6) Micropolitan low commuting: primary flow 10 to 30 percent to a 
large UC.
    (7) Small town core: primary flow within an Urban Cluster of 2,500 
to 9,999 (small UC).
    (8) Small town high commuting: primary flow 30 percent or more to a 
small UC.

[[Page 40374]]

    (9) Small town low commuting: primary flow 10 to 30 percent to a 
small UC.
    (10) Rural areas: primary flow to a tract outside a UA or UC.
    Based on this classification, and consistent with our current 
policy (71 FR 69715), we would continue to designate any census tracts 
falling at or above RUCA level 4.0 as rural areas for purposes of 
payment for ambulance services under the ambulance fee schedule. As 
discussed in the CY 2007 PFS final rule (71 FR 69715), the Office of 
Rural Health Policy within the Health Resources and Services 
Administration (HRSA) determines eligibility for its rural grant 
programs through the use of the RUCA code methodology. Under this 
methodology, HRSA designates any census tract that falls in RUCA level 
4.0 or higher as a rural census tract. In addition to designating any 
census tracts falling at or above RUCA level 4.0 as rural areas, under 
the updated RUCA code definitions, HRSA has also designated as rural 
census tracts, those census tracts with RUCA codes 2 or 3 that are at 
least 400 square miles in area with a population density of no more 
than 35 people. We refer readers to HRSA's Web site: ftp://ftp.hrsa.gov/ruralhealth/Eligibility2005.pdf for additional 
information. Consistent with the HRSA guidelines discussed above, we 
are proposing, beginning in CY 2015, to designate as rural areas (1) 
those census tracts that fall at or above RUCA level 4.0, and (2) those 
census tracts that fall within RUCA levels 2 or 3 that are at least 400 
square miles in area with a population density of no more than 35 
people. As discussed in the CY 2007 PFS final rule (71 FR 69715), we 
continue to believe that HRSA's guidelines accurately identify rural 
census tracts throughout the country, and thus would be appropriate to 
apply for ambulance payment purposes. We invite comments on this 
proposal.
    The adoption of the most current OMB delineations and the updated 
RUCA codes would affect whether certain areas are recognized as rural 
or urban. The distinction between urban and rural is important for 
ambulance payment purposes because urban and rural transports are paid 
differently. The determination of whether a transport is urban or rural 
is based on the point of pick-up for the transport, and thus a 
transport is paid differently depending on whether the point of pick-up 
is in an urban or a rural area. During claims processing, geographic 
designation of urban, rural, or super rural is assigned to each claim 
for an ambulance transport based on the point of pick-up ZIP code that 
is indicated on the claim.
    Currently, section 1834(l)(12) of the Act (as amended by section 
104(b) of the PAMA) specifies that, for services furnished during the 
period July 1, 2004 through March 31, 2015, the payment amount for the 
ground ambulance base rate is increased by a ``percent increase'' 
(Super Rural Bonus) where the ambulance transport originates in a 
``qualified rural area,'' which is a rural area that we determine to be 
in the lowest 25th percentile of all rural populations arrayed by 
population density (also known as a ``super rural area''). We implement 
this Super Rural Bonus in Sec.  414.610(c)(5)(ii). Adoption of the 
revised OMB delineations and the updated RUCA codes would have no 
negative impact on ambulance transports in super rural areas, as none 
of the current super rural areas would lose their status due to the 
revised OMB delineations and the updated RUCA codes.
    The adoption of the new OMB delineations and the updated RUCA codes 
would affect whether or not transports would be eligible for other 
rural adjustments under the ambulance fee schedule statute and 
regulations. For ground ambulance transports where the point of pick-up 
is in a rural area, the mileage rate is increased by 50 percent for 
each of the first 17 miles (Sec.  414.610(c)(5)(i)). For air ambulance 
services where the point of pick-up is in a rural area, the total 
payment (base rate and mileage rate) is increased by 50 percent (Sec.  
414.610(c)(5)(i)). Furthermore, under section 1834(l)(13) of the Act 
(as amended by section 104(a) of the PAMA), for ground ambulance 
transports furnished through March 31, 2015, transports originating in 
rural areas are paid based on a rate (both base rate and mileage rate) 
that is 3 percent higher than otherwise is applicable. (See also Sec.  
414.610(c)(1)(ii)).
    If we adopt OMB's revised delineations and the updated RUCA codes, 
ambulance providers and suppliers that pick up Medicare beneficiaries 
in areas that would be Micropolitan or otherwise outside of MSAs based 
on OMB's revised delineations or in a rural census tract of an MSA 
based on the updated RUCA codes (but are currently within urban areas) 
may experience increases in payment for such transports because they 
may be eligible for the rural adjustment factors discussed above, while 
those ambulance providers and suppliers that pick up Medicare 
beneficiaries in areas that would be urban based on OMB's revised 
delineations and the updated RUCA codes (but are currently in 
Micropolitan Areas or otherwise outside of MSAs, or in a rural census 
tract of an MSA) may experience decreases in payment for such 
transports because they would no longer be eligible for the rural 
adjustment factors discussed above.
    The use of the revised OMB delineations and the updated RUCA codes 
would mean the recognition of new urban and rural boundaries based on 
the population migration that occurred over a 10-year period, between 
2000 and 2010. Based on the latest United States Postal Service (USPS) 
ZIP code file, there are a total of 42,914 ZIP codes in the U.S. The 
geographic designations for approximately 99.48 percent of ZIP codes 
would be unchanged by OMB's revised delineations and the updated RUCA 
codes. There are a similar number of ZIP codes that would change from 
rural to urban (122, or 0.28 percent) and from urban to rural (100, or 
0.23 percent). In general, it is expected that ambulance providers and 
suppliers in 100 ZIP codes within 11 states may experience payment 
increases if we adopt the revised OMB delineations and the updated RUCA 
codes, as these areas would be redesignated from urban to rural. The 
state of Ohio would have the most ZIP codes changing from urban to 
rural with a total of 40, or 2.69 percent. Ambulance providers and 
suppliers in 122 ZIP codes within 22 states may experience payment 
decreases if we adopt the revised OMB delineations and the updated RUCA 
codes, as these areas would be redesignated from rural to urban. The 
state of West Virginia would have the most ZIP codes changing from 
rural to urban (17, or 1.82 percent), while Connecticut would have the 
greatest percentage of ZIP codes changing from rural to urban (15 ZIP 
codes, or 3.37 percent). Our findings are illustrated in Table 17.

[[Page 40375]]



                                 Table 17--ZIP Codes Analysis Based on OMB's Revised Delineations and Updated RUCA Codes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                           Percentage of
                                             Total ZIP       Total ZIP     Percentage of     Total ZIP     Percentage of     Total ZIP       total ZIP
                  State                        codes       codes changed     total ZIP     codes changed     total ZIP       codes not       codes not
                                                          rural to urban       codes      urban to rural       codes          changed         changed
--------------------------------------------------------------------------------------------------------------------------------------------------------
AK......................................             276               0            0.00               0            0.00             276          100.00
AL......................................             854               0            0.00               0            0.00             854          100.00
AR......................................             725               0            0.00               3            0.41             722           99.59
AS......................................               1               0            0.00               0            0.00               1          100.00
AZ......................................             569               0            0.00               0            0.00             569          100.00
CA......................................            2723               0            0.00               0            0.00            2723          100.00
CO......................................             677               0            0.00               0            0.00             677          100.00
CT......................................             445              15            3.37               0            0.00             430           96.63
DC......................................             301               0            0.00               0            0.00             301          100.00
DE......................................              99               1            1.01               0            0.00              98           98.99
EK......................................              63               0            0.00               0            0.00              63          100.00
EM......................................             856               0            0.00               3            0.35             853           99.65
FL......................................            1513               5            0.33               0            0.00            1508           99.67
FM......................................               4               0            0.00               0            0.00               4          100.00
GA......................................            1032               4            0.39               0            0.00            1028           99.61
GU......................................              21               0            0.00               0            0.00              21          100.00
HI......................................             143               0            0.00               0            0.00             143          100.00
IA......................................            1080               5            0.46               0            0.00            1075           99.54
ID......................................             335               0            0.00               0            0.00             335          100.00
IL......................................            1628               0            0.00               0            0.00            1628          100.00
IN......................................            1000               1            0.10              14            1.40             985           98.50
KY......................................            1030               0            0.00               0            0.00            1030          100.00
LA......................................             739               2            0.27               0            0.00             737           99.73
MA......................................             751               0            0.00               4            0.53             747           99.47
MD......................................             630               9            1.43               0            0.00             621           98.57
ME......................................             505               0            0.00               0            0.00             505          100.00
MH......................................               2               0            0.00               0            0.00               2          100.00
MI......................................            1185               4            0.34               8            0.68            1173           98.99
MN......................................            1043               1            0.10               0            0.00            1042           99.90
MP......................................               3               0            0.00               0            0.00               3          100.00
MS......................................             541               0            0.00               0            0.00             541          100.00
MT......................................             411               0            0.00               0            0.00             411          100.00
NC......................................            1101              12            1.09               5            0.45            1084           98.46
ND......................................             418               0            0.00               0            0.00             418          100.00
NE......................................             632               0            0.00               0            0.00             632          100.00
NH......................................             292               0            0.00               0            0.00             292          100.00
NJ......................................             747               0            0.00               0            0.00             747          100.00
NM......................................             438               0            0.00               0            0.00             438          100.00
NV......................................             257               0            0.00               0            0.00             257          100.00
NY......................................            2246               4            0.18               0            0.00            2242           99.82
OH......................................            1487               6            0.40              40            2.69            1441           96.91
OK......................................             791               0            0.00               0            0.00             791          100.00
OR......................................             494               6            1.21               0            0.00             488           98.79
PA......................................            2244               8            0.36               0            0.00            2236           99.64
PR......................................             177               0            0.00               0            0.00             177          100.00
PW......................................               2               0            0.00               0            0.00               2          100.00
RI......................................              91               0            0.00               0            0.00              91          100.00
SC......................................             543               7            1.29               0            0.00             536           98.71
SD......................................             418               0            0.00               0            0.00             418          100.00
TN......................................             814               2            0.25               0            0.00             812           99.75
TX......................................            2726               0            0.00               1            0.04            2725           99.96
UT......................................             359               0            0.00               0            0.00             359          100.00
VA......................................            1277               8            0.63              17            1.33            1252           98.04
VI......................................              16               0            0.00               0            0.00              16          100.00
VT......................................             309               0            0.00               0            0.00             309          100.00
WA......................................             744               2            0.27               0            0.00             742           99.73
WI......................................             919               3            0.33               0            0.00             916           99.67
WK......................................             711               0            0.00               2            0.28             709           99.72
WM......................................             342               0            0.00               0            0.00             342          100.00
WV......................................             936              17            1.82               3            0.32             916           97.86
WY......................................             198               0            0.00               0            0.00             198          100.00
                                         ---------------------------------------------------------------------------------------------------------------
    Totals..............................           42914             122            0.28             100            0.23           42692           99.48
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We believe that the most current OMB statistical area delineations, 
coupled with the updated RUCA codes, more accurately reflect the 
contemporary urban and rural nature of areas across the country, and 
thus we believe that use of the most current OMB delineations and RUCA 
codes under the ambulance fee schedule would enhance

[[Page 40376]]

the accuracy of ambulance fee schedule payments. We invite comments on 
our proposal to implement the new OMB delineations and the updated RUCA 
codes as discussed above beginning in CY 2015, for purposes of payment 
under the Medicare ambulance fee schedule.

C. Clinical Laboratory Fee Schedule

    In the CY 2014 PFS final rule with comment period (78 FR 74440-
74445, 74820), we finalized a process under which we would reexamine 
the payment amounts for test codes on the Clinical Laboratory Fee 
Schedule (CLFS) for possible payment revision based on technological 
changes beginning with the CY 2015 proposed rule, and we codified this 
process at Sec.  414.511. After we finalized this process, Congress 
enacted the PAMA. Section 216 of the PAMA creates new section 1834A of 
the Act, which requires us to implement a new Medicare payment system 
for clinical diagnostic laboratory tests based on private payor rates. 
Section 216 of the PAMA also rescinds the statutory authority in 
section 1833(h)(2)(A)(i) of the Act for adjustments based on 
technological changes for tests furnished on or after April 1, 2014 
(PAMA's enactment date). As a result of these provisions, we are not 
proposing any revisions to payment amounts for test codes on the CLFS 
based on technological changes and are proposing to remove Sec.  
414.511. Instead, we will establish through rulemaking the parameters 
for the collection of private payor rate information and other 
requirements to implement section 216 of the PAMA.

D. Removal of Employment Requirements for Services Furnished ``Incident 
to'' Rural Health Clinics (RHC) and Federally Qualified Health Center 
(FQHC) Visits

1. Background
    Rural Health Clinics (RHCs) and Federally Qualified Health Centers 
(FQHCs) furnish physicians' services; services and supplies incident to 
the services of physicians; nurse practitioner (NP), physician 
assistant (PA), certified nurse-midwife (CNM), clinical psychologist 
(CP), and clinical social worker (CSW) services; and services and 
supplies incident to the services of NPs, PAs, CNMs, CPs, and CSWs. 
They may also furnish diabetes self-management training and medical 
nutrition therapy (DSMT/MNT), transitional care management services, 
and in some cases, visiting nurse services furnished by a registered 
professional nurse or a licensed practical nurse. (For additional 
information on requirements for furnishing services in RHCs and FQHCs, 
see Chapter 13 of the CMS Benefit Policy Manual.)
    In the May 2, 2014 final rule with comment period (79 FR 25436) 
entitled ``Prospective Payment System for Federally Qualified Health 
Centers; Changes to Contracting Policies for Rural Health Clinics; and 
Changes to Clinical Laboratory Improvement Amendments of 1988 
Enforcement Actions for Proficiency Testing Referral,'' we removed the 
regulatory requirements that NPs, PAs, CNMs, CSWs, and CPs furnishing 
services in a RHC must be employees of the RHC. RHCs are now allowed to 
contract with NPs, PAs, CNMs, CSWs, and CPs, as long as at least one NP 
or PA is employed by the RHC, as required under section 
1861(aa)(2)(iii) of the Act.
    Services furnished in RHCs and FQHCs by nurses, medical assistants, 
and other auxiliary personnel are considered ``incident to'' a RHC or 
FQHC visit furnished by a RHC or FQHC practitioner. The regulations at 
Sec.  405.2413(a)(6), Sec.  405.2415(a)(6), and Sec.  405.2452(a)(6) 
state that services furnished incident to an RHC or FQHC visit must be 
furnished by an employee of the RHC or FQHC. Since there is no separate 
benefit under Medicare law that specifically authorizes payment to 
nurses, medical assistants, and other auxiliary personnel for their 
professional services, they cannot bill the program directly and 
receive payment for their services, and can only be remunerated when 
furnishing services to Medicare patients in an ``incident to'' 
capacity.
2. Provisions of Proposed Rule
    To provide RHCs and FQHCs with as much flexibility as possible to 
meet their staffing needs, we are proposing to revise Sec.  
405.2413(a)(5), Sec.  405.2415(a)(5) and Sec.  405.2452(a)(5) and 
delete Sec.  405.2413(a)(6), Sec.  405.2415(a)(6) and Sec.  
405.2452(a)(6) to remove the requirement that services furnished 
incident to an RHC or FQHC visit must be furnished by an employee of 
the RHC or FQHC to allow nurses, medical assistants, and other 
auxiliary personnel to furnish incident to services under contract in 
RHCs and FQHCs. We believe that removing the requirements will provide 
RHCs and FQHCs with additional flexibility without adversely impacting 
the quality or continuity of care.

E. Access to Identifiable Data for the Center for Medicare and Medicaid 
Innovation Models

1. Background and Statutory Authority
    Section 3021 of the Affordable Care Act amended the Social Security 
Act to include a new section 1115A, which established the Center for 
Medicare and Medicaid Innovation (Innovation Center). Section 1115A 
tasks the Innovation Center with testing innovative payment and service 
delivery models that could reduce program expenditures while preserving 
and/or enhancing the quality of care furnished to individuals under 
titles XVIII, XIX, and XX of the Act. The Secretary is also required to 
conduct an evaluation of each model tested.
    Evaluations will typically include quantitative and qualitative 
methods to assess the impact of the model on quality of care and health 
care expenditures. To comply with the statutory requirement to evaluate 
all models conducted under section 1115A of the Act, we will conduct 
rigorous quantitative analyses of the impact of the model test on 
health care expenditures, as well as an assessment of measures of the 
quality of care furnished under the model test. Evaluations will also 
include qualitative analyses to capture the qualitative differences 
between model participants, and to form the context within which to 
interpret the quantitative findings. Through the qualitative analyses, 
we will assess the experiences and perceptions of model participants, 
providers, and individuals affected by the model.
    In the evaluations we use advanced statistical methods to measure 
effectiveness. Our methods are intended to provide results that meet a 
high standard of evidence, even when randomization is not feasible. To 
successfully carry out evaluations of Innovation Center models, we must 
be able to determine specifically which individuals are receiving 
services from or are the subject of the intervention being tested by 
the entity participating in the model test. Identification of such 
individuals is necessary for a variety of purposes, including the 
construction of control groups against which model performance can be 
compared. In addition, to determine whether the observed impacts are 
due to the model being tested and not due to differences between the 
intervention and comparison groups, our evaluations will have to 
account for potential confounding factors at the individual level, 
which will require the ability to identify every individual associated

[[Page 40377]]

with the model test, control or comparison groups, and the details of 
the intervention at the individual level.
    Evaluations will need to consider such factors as outcomes, 
clinical quality, adverse effects, access, utilization, patient and 
provider satisfaction, sustainability, potential for the model to be 
applied on a broader scale, and total cost of care. Individuals 
receiving services from or who are the subjects of the intervention 
will be compared to clinically, socio-demographically, and 
geographically similar matched individuals along various process, 
outcome, and patient-reported measures. Research questions in a typical 
evaluation will include, but are not limited to, the following:

     Clinical Quality:

++ Did the model improve or have a negative impact on clinical process 
measures, such as adherence to evidence-based guidelines? If so, how, 
how much, and for which individuals?
++ Did the model improve or have a negative impact on clinical outcome 
measures, such as mortality rates, and the incidence and prevalence of 
chronic conditions? If so, how, how much, and for which individuals?
++ Did the model improve or have a negative impact on access to care? 
If so, how, how much, and for which individuals?
++ Did the model improve or have a negative impact on care coordination 
among providers? If so, how, how much, and for which individuals?
++ Did the model improve or have a negative impact on medication 
management? If so, how, how much, and for which individuals?

     Patient Experience:

++ Did the model improve or have a negative impact on patient-provider 
communication? If so, how, how much, and for which individuals?
++ Did the model improve or have a negative impact on patient 
experiences of care, quality of life, or functional status? If so, how, 
how much, and for which individuals?

     Utilization/Expenditures:

++ Did the model result in decreased utilization of emergency 
department visits, hospitalizations, and readmissions? If so how, how 
much, and for which individuals?
++ Did the model result in increased utilization of physician or 
pharmacy services? If so how, how much, and for which individuals?
++ Did the model result in decreased total cost of care? Were changes 
in total costs of care driven by changes in utilization for specific 
types of settings or health care services? What specific aspects of the 
model led to these changes? Were any savings due to improper cost-
shifting to the Medicaid program?

    To carry out this research we must have access to patient records 
not generally available to us. As such, we propose to exercise our 
authority in section 1115A(b)(4)(B) of the Act to establish 
requirements for states and other entities participating in the testing 
of past, present, and future models under section 1115A of the Act to 
collect and report information that we have determined is necessary to 
monitor and evaluate such models. Thus, we propose to require model 
participants, and providers and suppliers working under the models 
operated by such participants to produce such individually identifiable 
health information and such other information as the Secretary 
identifies as being necessary to conduct the statutorily mandated 
research described above. Such research will include the monitoring and 
evaluation of such models. Further, we view engagement with other 
payers, both public and private, as a critical driver of the success of 
these models. CMS programs constitute only a share of any provider's 
revenue. Therefore, efforts to improve quality and reduce cost are more 
likely to be successful if signals are aligned across payers. Section 
1115A of the Act specifically allows the Secretary of Health and Human 
Services to consider, in selecting which models to choose for testing, 
``whether the model demonstrates effective linkage with other public 
sector or private sector payers.'' Multi-payer models, such as but not 
limited to the Comprehensive Primary Care model, will conduct quality 
measurement across all patients regardless of payer in order to 
maximize alignment and increase efficiency. Construction of multi-payer 
quality measures requires the ability to identify all individuals 
subject to the model test regardless of payer. In addition, section 
1115A also permits the Secretary to consider models that allow states 
to test and evaluate systems of all-payer payment reform for the 
medical care of residents of the state, including dual eligible 
individuals. Under the State Innovation Model (SIM), the Innovation 
Center is testing the ability for state governments to accelerate 
transformation. The premise of the SIM initiative is to support 
Governor-sponsored, multi-payer models that are focused on public and 
private sector collaboration to transform the state's delivery system. 
States have policy and regulatory authorities, as well as ongoing 
relationships with private payers, health plans, and providers that can 
accelerate delivery system reform. SIM models must impact the 
preponderance of care in the state and are expected to work with public 
and private payers to create multi-payer alignment. The evaluation of 
SIM will include all populations and payers involved in the state 
initiative, which in many cases includes private payers. The absence of 
identifiable data from private payers would result in considerable 
limitations on the level of evaluation conducted. Therefore, under this 
authority, we also propose to require the submission of identifiable 
health and utilization information for patients of private payers 
treated by providers/suppliers participating in the testing of a model 
under section 1115A of the Act when an explicit purpose of the model 
test is to engage private sector payers. If finalized, this regulation 
will provide clear legal authority for HIPAA Covered Entities to 
disclose any required protected health information. Identifiable data 
submitted by entities participating in the testing of models under 
section 1115A of the Act will meet CMS Acceptable Risks Safe Guards 
(ARS) guidelines. When data is expected to be exchanged over the 
internet such exchange will also meet all E-Gov requirements. In 
accordance with the requirements of the Privacy Act of 1974, these data 
will be covered under a CMS established system of records (System No. 
09-70-0591), which serves as the Master system for all demonstrations, 
evaluations, and research studies administered by the Innovation 
Center. These data will be stored until the evaluation is complete and 
all necessary policy deliberations have been finalized.
2. Provisions of the Proposed Regulations
    Wherever possible, evaluations will make use of claims, assessment, 
and enrollment data available through CMS' existing administrative 
systems. However, evaluations will generally also need to include 
additional data not available through existing CMS administrative 
systems. As such, depending on the particular project, CMS or its 
contractor will require the production of the minimum data necessary to 
carry out the statutorily mandated research work described in section 
E.1. of this proposed rule. Such data may include the identities of the 
patients served under the model, relevant clinical details about the 
services furnished and outcomes

[[Page 40378]]

achieved, and any confounding factors that might influence the 
evaluation results achieved through the delivery of such services. For 
illustrative purposes, below are examples of some of the types of 
information that could be required to carry out an evaluation, and for 
which the evaluator would need patient level identifiers.
     Utilization data not otherwise available through existing 
Center for Medicare & Medicaid Services (CMS) systems.
     Beneficiary, patient, participant, family, and provider 
experiences.
     Beneficiary, patient, participant, and provider rosters 
with identifiers that allow linkages across time and datasets.
     Beneficiary, patient, participant, and family socio-
demographic and ethnic characteristics.
     Care management details, such as details regarding the 
provision of services, payments or goods to beneficiaries, patients, 
participants, families, or other providers.
     Beneficiary, patient, and participant functional status 
and assessment data.
     Beneficiary, patient, and participant health behaviors.
     Clinical data, such as, but not limited to lab values and 
information from EHRs.
     Beneficiary, patient, participant quality data not 
otherwise available through claims.
     Other data relevant to identified outcomes--for example, 
participant employment status, participant educational degrees pursued/
achieved, and income.
    We invite public comment on this proposal to mandate the production 
of the individually identifiable information necessary to conduct the 
statutorily mandated research under section 1115A of the Act.
    In addition, we are proposing a new subpart K in part 403 to 
implement section 1115A of the Act.

F. Local Coverage Determination Process for Clinical Diagnostic 
Laboratory Testing

1. Background
    On April 1, 2014, the PAMA was enacted and section 216 addresses 
Medicare payment and coverage policies for clinical diagnostic 
laboratory testing. In regard to coverage policies, section 216 amended 
the statute by adding section 1834A(g) of the Act, which establishes 
mandates related to issuance of local coverage policies by the Medicare 
Administrative Contractors (MACs) for clinical diagnostic laboratory 
tests. The law states: ``A medicare administrative contractor shall 
only issue a coverage policy with respect to a clinical diagnostic 
laboratory test in accordance with the process for making a local 
coverage determination (as defined in section 1869(f)(2)(B)), including 
the appeals and review process for local coverage determinations under 
part 426 of title 42, Code of Federal Regulations (or successor 
regulations).''
    Section 1869(f)(2)(B) of the Act defines a local coverage 
determination (LCD) as ``a determination by a fiscal intermediary or a 
carrier under Part A or Part B, as applicable, respecting whether or 
not a particular item or service is covered on an intermediary-or 
carrier-wide basis under such parts, in accordance with section 
1862(a)(1)(A) of the Act.''
    Since the new law requires that the process for making local 
coverage determinations be used as the vehicle for local coverage 
policies for clinical diagnostic laboratory tests, it is important that 
we carefully consider the LCD process that is used today and determine 
if there are certain, limited aspects of the LCD process that may 
provide an opportunity to better fit the needs of this particular area 
of medicine. In addition to the current LCD process, we will examine 
how the LCD process was applied to a pilot project for molecular 
diagnostic tests as we are learning important lessons from this ongoing 
pilot. We believe lessons learned from this project can be applied to 
all clinical diagnostic laboratory testing and not just molecular 
diagnostic tests (which are encompassed under the PAMA requirement for 
local coverage policies). In this proposed process, we will review the 
current LCD process, as well as the pilot in support of a proposal to 
create, consistent with the requirements set forth under the PAMA, an 
expedited LCD process for clinical diagnostic laboratory testing.
    The current LCD process (Table 18) requires that a draft LCD be 
published in the Medicare Coverage Database (MCD). This serves as a 
public announcement that an LCD is being developed. Once a draft LCD is 
published, at least 45 calendar days are provided for public comment. 
We note that the National Coverage Determination (NCD) process only 
requires a 30-day public comment period after a proposed NCD is 
published. This timeframe is based on the NCD statutory requirements 
under 1862(l) of the Act and in our experience at the national policy 
level, 30 days is generally adequate to allow for robust public 
comment.
    After the draft LCD is made public, MACs are required to hold an 
open meeting to discuss the draft LCD with stakeholders. In addition to 
the open meeting, the MACs present the draft policy to the Carrier 
Advisory Committee (CAC). These two aspects of LCD development can be 
time-consuming and may involve logistical complications that extend the 
length of time it takes to reach a final policy. We note that unlike 
the national advisory committee, the Medicare Evidence Development and 
Coverage Advisory Committee (MEDCAC), the CAC meetings and open 
stakeholder meetings are scheduled to discuss many LCD policies at a 
time as opposed to narrowly focusing on one policy. Due to the 
resources required, the constant development of LCDs and scheduling 
considerations, MACs do not hold ad hoc meetings. Both the open 
stakeholder meetings and the CAC meetings are scheduled far in advance, 
generally at the start of the calendar year before MACs know which 
policies will be presented in these forums. The timing of the open 
stakeholder meeting, CAC meeting, and public release of the draft LCD 
are all factors in determining which LCDs are on the agendas. Because 
of these scheduling issues, some LCDs may not have to wait as long for 
a CAC meeting or an open stakeholder meeting while others could have 
lengthy delays. In contrast, at the national level, MEDCACs are not 
convened for every NCD and separate open meetings are also not a part 
of the NCD process. Based on our experience with the NCD process over 
the past decade, we believe that public input is now readily available 
through more technologically advanced mechanisms of collecting public 
comment. For example, the information gathered and knowledge gained 
from the LCD open stakeholder meetings may now be acquired more broadly 
through the collection of public comments via web-based applications. 
CMS and its contractors are receiving more input on their policies 
because of these technology advances, which were not as available to 
the public when the LCD manual was originally written approximately 25 
years ago. Medical literature, clinical practice guidelines, 
complicated charts and graphs can now be easily submitted 
electronically through the public comment process. Questions or follow-
up information from a specific commenter can be addressed through 
conference calls or email. In addition, through these processes, all 
public comments are available to everyone rather than to the few people 
who attend meetings in

[[Page 40379]]

person. In addition to publishing a draft LCD, MACs publish a document 
that provides a summary of all of the comments received and responses 
to those comments. This allows the public to understand the reasoning 
behind the final LCD and to know that all of the public comments were 
taken under consideration as the MAC developed the final policy. Since 
this information is made readily available in writing, an open meeting 
is no longer necessary for the public to be heard. There are more 
efficient methods available to the public to submit comments and 
additional evidence that supports or rejects the application of a draft 
LCD.
    Somewhat different considerations apply to CACs, which are state-
specific bodies representing the clinical expertise of a geographic 
area. CACs allow a unique opportunity for CAC members to provide 
practical information regarding a draft policy since they are the 
entities actually delivering services in the community. However, like 
MEDCACs, a CAC may not be needed in all instances for the creation or 
revision of an LCD. CAC meeting agendas can quickly fill up with draft 
LCDs since the CAC meetings are scheduled far in advance. We believe 
CACs may be a better resource and used more efficiently in the 
development of LCDs if the MAC is able to select which draft LCDs are 
presented to a CAC for discussion, as opposed to taking all LCDs to the 
CAC. Of note, NCDs that go before the MEDCAC are selected by the agency 
and it is not part of the process for every NCD.
    Under the current LCD process, after the close of the comment 
period and the required meetings, the MAC publishes a final LCD. As 
stated earlier, the MAC must also respond to any comments received, via 
a comment/response document. A notice period of at least 45 calendar 
days is then required before the LCD can take effect. While it takes 
time for the provider community and the claims processing systems to 
adapt to changes in coverage, a notice period delays the date of when 
coverage may be become effective.
    In addition to evaluating the effectiveness of certain aspects of 
the LCD implementation process, we are also examining a pilot project 
that CMS launched with a single MAC, Palmetto GBA, on November 1, 2011. 
While the pilot discussed in this section only includes molecular 
diagnostic (genetic) laboratory tests, a subset of all clinical 
diagnostic lab tests, we believe the pilot's design and some of the 
lessons learned from the pilot can be applied to all clinical 
diagnostic laboratory tests
    For background, the universe of molecular diagnostic laboratory 
tests is vast and the current LCD process can be lengthy for some of 
these innovative tests, which are technically complex. For example, 
multiple molecular diagnostic tests designated to diagnose the same 
disease may rely on different underlying technologies and, therefore, 
have significantly different performance characteristics. It would not 
be appropriate to assume that all tests for a particular condition 
behave the same. Because of these complexities, we have an obligation 
to consider the evidence at a granular level; that is, to ensure 
coverage of the appropriate test for the appropriate Medicare 
beneficiary.
    The pilot project's long-term goal was to assist clinicians by 
determining whether the molecular diagnostic tests they order actually 
perform as expected and, thus, ultimately improve clinical care. This 
goal stemmed from concerns that some tests were being marketed directly 
to physicians without information regarding the test's performance. The 
pilot project sought to achieve this goal by identifying all of the 
molecular diagnostic tests that Medicare was covering in the Palmetto 
MAC jurisdiction. This required the ability to uniquely identify tests 
through test registration and assignment of an identifier. In addition, 
the MAC reviewed clinical statements made by the manufacturer for each 
molecular diagnostic test to ensure the test was delivering what was 
being claimed. Essentially, the pilot project facilitated claims 
processing, tracked utilization, and determined clinical validity, 
utility and coverage through technical assessments of published test 
data.
    As part of the pilot project, Palmetto wrote a single molecular 
diagnostic laboratory testing LCD that outlined the framework they 
would follow in determining coverage of all molecular diagnostic tests 
in their jurisdiction. Additionally, that LCD included a list of 
covered molecular diagnostic tests. Moreover, Palmetto issued several 
articles addressing various other aspects of the LCD implementation 
process, including coding guidelines, billing and medical review 
procedures. There is much information that is not contained in the body 
of an LCD that is necessary for consistent and predictable claims 
processing and payment.
    We believe a process that ensures transparency and stakeholder 
participation can be achieved without utilizing the current LCD process 
in its entirety. Some key aspects of the process should be maintained 
such as allowing public comment on draft LCDs and requiring MAC 
responses to public comments. However, we believe other aspects could 
be streamlined to allow more timely decisions and a more efficient 
process.
2. Proposed New LCD Process for Clinical Diagnostic Laboratory Tests
    After assessment of the current LCD process, the Palmetto pilot 
project, the requirements of the PAMA, and the vast field of clinical 
diagnostic laboratory tests, including molecular diagnostic tests, we 
are proposing a revised LCD process for all new draft clinical 
diagnostic laboratory test LCDs published on or after January 1, 2015. 
This process would carefully balance the need for an expedited process 
to handle the vast number of clinical diagnostic laboratory tests, 
including the rapidly growing universe of molecular diagnostic tests. 
The National Institutes of Health (NIH)-sponsored Genetic Testing 
Registry (GTR) currently includes 16,000 registered genetic tests for 
over 4,000 conditions (www.ncbi.nlm.nih.gov/gtr/). We have a 
responsibility to ensure that appropriate tests are covered by Medicare 
and that coverage is limited to tests for which the test results are 
used by the ordering physician in the management of the beneficiary's 
specific medical problem (as required in Sec.  410.32(a)). Coverage for 
diagnostic laboratory tests may be achieved through various policy 
vehicles, including an NCD, LCD, or claim-by-claim adjudication at the 
local contractor level. For most molecular diagnostic tests, coverage 
has been determined by the MACs, through LCDs or claim-by-claim 
adjudication. Few such tests have been the subject of an NCD, to date. 
This concentration of coverage decisions at the local level, and the 
responsibility of the agency to allow coverage of appropriate tests 
provide additional reasons to provide MACs with a more streamlined LCD 
process.
    Based on these considerations, we are proposing a new LCD process 
that would apply only to clinical diagnostic laboratory tests. 
Specifically, we are proposing to establish a process MACs must follow 
when developing clinical diagnostic laboratory test LCDs and 
encouraging MACs to collaborate on such policies across jurisdictions. 
We propose that the process apply to all new clinical diagnostic 
laboratory testing draft LCDs published on or after January 1, 2015. 
Consistent with Chapter 13, section 13.7.3 of the Medicare Program 
Integrity Manual (PIM), however, we further propose that this process 
will not apply to clinical diagnostic laboratory testing LCDs that are 
being revised for the following

[[Page 40380]]

reasons: to liberalize an existing LCD; being issued for a compelling 
reason; making a non-substantive correction; providing a clarification; 
making a non-discretionary coverage or diagnosis coding update; making 
a discretionary diagnosis coding update that does not restrict; or 
revising to effectuate an Administrative Law Judge's decision on a 
Benefits Improvement and Protection Act (BIPA) 522 challenge.
    The proposed new process would allow any person or entity to 
request an LCD or the MAC to initiate an LCD regarding clinical 
diagnostic laboratory testing. After this external request or internal 
initiation, the MAC would publish a draft LCD in the Medicare Coverage 
Database (http://www.cms.gov/medicare-coverage-database/overview-and-quick-search.aspx), thereby making the draft LCD publicly available. 
Next, a minimum of 30 calendar days for public comment would be 
required. We note that in the event that stakeholders and/or members of 
the public are not able to submit comments within the 30 calendar day 
window, the MAC would have discretion to extend the comment period. We 
would expect the draft LCDs to outline the criteria the MAC would use 
when determining whether a specific clinical diagnostic laboratory test 
or a group of tests are covered or non-covered. The MAC would review, 
analyze, and take under consideration all public comments on the draft 
LCD. For draft LCDs where the MAC determines that a CAC meeting would 
contribute to the quality of the final policy, the MAC has discretion 
to take draft LCDs to the CAC. In the event the MAC involves the CAC in 
the development of an LCD, we would require that the public comment 
period be extended to allow for the CAC to be held before the final 
policy is issued. The MAC would be required to respond to all public 
comments in writing and post their responses on a public Web site. As a 
final step, the MAC would publish the final LCD in the Medicare 
Coverage Database no later than 45 calendar days after the close of the 
comment period. We believe 45 days to be an adequate time for the MAC 
to take all comments under consideration, prepare responses to those 
comments, and develop a final policy.
    The final LCD would be effective immediately upon publication. This 
effective date would be different than under the current LCD process 
(which includes a notice period of at least 45 calendar days before a 
final LCD is effective); however, based on our experience with NCDs, 
which are also effective upon publication, we believe this is an 
efficient mechanism to make tests available to beneficiaries more 
quickly.
3. Reconsideration Process
    The proposed process for developing clinical diagnostic laboratory 
testing LCDs would not change the LCD reconsideration process as 
outlined in the PIM in Chapter 13. This section of the manual allows 
interested parties the opportunity to request reconsideration of an 
LCD. Under the proposed process, the MACs would continue to implement 
all sections of the PIM that relate to the LCD reconsideration process.
4. LCD Challenge Process
    The proposed process for clinical diagnostic laboratory testing 
LCDs would also not change any of the current review processes 
available to an aggrieved party. An aggrieved party would continue to 
be able to challenge an LCD according to the requirements set out in 42 
CFR part 426.
    As discussed previously, we believe an administratively more 
efficient process is needed for local coverage determinations for 
clinical diagnostic laboratory testing. If we continue to require that 
MACs follow all steps in the current LCD process, we fear that LCDs 
will not be able to be finalized quickly enough for even a fraction of 
the thousands of new clinical diagnostic (particularly molecular) tests 
developed each year.
    We believe this proposed new process for clinical diagnostic 
laboratory tests will allow for public dialogue, notification of 
stakeholders, and expedited beneficiary access to covered tests. Table 
18 summarizes the differences between the current LCD process and the 
proposed new LCD process for the development of clinical diagnostic 
laboratory testing policies.

 Table 18--Comparison of Current LCD Process Versus Proposed LCD Process
                for Clinical Diagnostic Laboratory Tests
------------------------------------------------------------------------
                                             Proposed LCD process for
          Current LCD process             clinical diagnostic laboratory
                                                      tests
------------------------------------------------------------------------
Issue Draft LCD in Medicare Coverage     Issue Draft LCD in Medicare
 Database, which identifies criteria      Coverage Database, which
 used for determining coverage under      identifies criteria used for
 statutory ``reasonable and necessary''   determining coverage under
 standard.                                statutory ``reasonable and
                                          necessary'' standard.
Public comment period of 45 calendar     Public comment period of 30
 days.                                    calendar days with option to
                                          extend.
Present LCD at CAC & discussion at open  Optional CAC meeting. No
 stakeholder meetings.                    requirement for open
                                          stakeholder meeting.
Publication of Comment/Response          Publication of Comment/Response
 Document and final LCD (no specified     Document and final LCD within
 time of publication after the close of   45 calendar days of the close
 the comment period).                     of the draft LCD comment
                                          period.
Notice period of 45 calendar days with   Final LCD effective on the date
 the final LCD effective the 46th         of publication.
 calendar day.
Interested parties may request           Interested parties may request
 reconsideration of an LCD.               reconsideration of an LCD.
An aggrieved party may further           An aggrieved party may further
 challenge an LCD.                        challenge an LCD.
------------------------------------------------------------------------

    In summary, we believe this proposed process would meet all the 
requirements of the PAMA, would be open and transparent, would allow 
for public input, and would be administratively efficient. We are 
proposing this process only for clinical diagnostic laboratory testing 
when coverage policies are developed by a MAC through an LCD; it would 
not apply to the NCD process or other vehicles of coverage including 
claim-by-claim adjudication. We believe the proposed process would 
balance stakeholders' concerns about ensuring an open and transparent 
process with the ability to efficiently review clinical laboratory 
tests for coverage. We encourage public comment on all aspects of this 
proposed process.

G. Private Contracting/Opt-Out

1. Background
    Effective January 1, 1998, section 1802(b) of the Act permits 
certain physicians and practitioners to opt-out of Medicare if certain 
conditions are met, and to furnish through private contracts services 
that would otherwise be covered by Medicare. For those physicians and 
practitioners who opt-

[[Page 40381]]

out of Medicare in accordance with section 1802(b) of the Act, the 
mandatory claims submission and limiting charge rules of section 
1848(g) of the Act would not apply. As a result, if the conditions 
necessary for an effective opt-out are met, physicians and 
practitioners are permitted to privately contract with Medicare 
beneficiaries and to charge them without regard to Medicare's limiting 
charge rules. Regulations governing the requirements and procedures for 
private contracts appear at 42 CFR part 405, subpart D.
a. Opt-Out Determinations (Sec.  405.450)
    The private contracting regulation at Sec.  405.450 describes 
certain opt-out determinations made by Medicare, and the process that 
physicians, practitioners, and beneficiaries may use to appeal those 
determinations. Section 405.450(a) describes the process available for 
physicians or practitioners to appeal Medicare enrollment 
determinations related to opting out of the program, and Sec.  
405.450(b) describes the process available to challenge payment 
determinations related to claims for services furnished by physicians 
who have opted out. Both provisions refer to Sec.  405.803, the Part B 
claims appeals process that was in place at the time the opt-out 
regulations were issued (November 2, 1998). When those regulations were 
issued, a process for a physician or practitioner to appeal enrollment 
related decisions had not been implemented in regulation. Thus, to 
ensure an appeals process was available to physicians and practitioners 
for opt-out related issues, we chose to utilize the existing claims 
appeals process in Sec.  405.803 for both enrollment and claims related 
appeals.
    In May 16, 2012 Federal Register (77 FR 29002), we published a 
final rule entitled ``Medicare and Medicaid Program; Regulatory 
Provisions to Promote Program Efficiency, Transparency and Burden 
Reduction.'' In that final rule, we deleted the provisions relating to 
initial determinations, appeals, and reopenings of Medicare Part A and 
Part B claims, and relating to determinations and appeals regarding an 
individual's entitlement to benefits under Medicare Part A and Part B, 
which were contained in part 405, subparts G and H (including Sec.  
405.803) because these provisions were obsolete and had been replaced 
by the regulations at part 405, subpart I. We inadvertently neglected 
to revise the cross-reference in Sec.  405.450(a) and (b) of the 
private contracting regulations to direct appeals of opt-out 
determinations through the current appeal process. However, it is 
important to note that our policy regarding the appeal of opt-out 
determinations did not change when the appeal regulations at part 405, 
subpart I were finalized.
    The procedures set forth in current part 498 establish the appeals 
procedures regarding decisions made by Medicare that affect enrollment 
in the program. We believe this process, and not the appeal process in 
part 405, subpart I, is the appropriate channel for physicians and 
practitioners to challenge an enrollment related opt-out decision made 
by Medicare. There are now two different sets of appeal regulations for 
initial determinations; and the appeal of enrollment related opt-out 
determinations is more like the types of determinations now addressed 
under part 498 than those under part 405, subpart I. Specifically, the 
appeal process under part 405, subpart I focus on reviews of 
determinations regarding beneficiary entitlement to Medicare and claims 
for benefits for particular services. The appeal process under part 498 
is focused on the review of determinations regarding the participation 
or enrollment status of providers and suppliers. Enrollment related 
opt-out determinations involve only the status of particular physician 
or practitioners under Medicare, and do not involve beneficiary 
eligibility or claims for specific services. As such, the appeal 
process under part 498 is better suited for the review of enrollment 
related opt-out determinations.
    However, we do not believe the enrollment appeals process 
established in part 498 is the appropriate mechanism for challenging 
payment decisions on claims for services furnished by a physician and 
practitioner who has opted out of the program. Appeals for such claims 
should continue to follow the appeals procedures now set forth in part 
405 subpart I.
b. Definitions, Requirements of the Opt Out Affidavit, Effects of 
Opting Out of Medicare, Application to Medicare Advantage Contracts 
(Sec. Sec.  405.400, 405.420(e), 405.425(a), and 405.455)
    Section 405.400 sets forth certain definitions for purposes of the 
private contracting regulations. Among the defined terms is ``Emergency 
care services'' which means services furnished to an individual for 
treatment of an ``emergency medical condition'' as that term is defined 
in Sec.  422.2. The cross-referenced regulation at Sec.  422.2 included 
within the definition of emergency care services was deleted on June 
29, 2000 (65 FR 40314) and at that time we inadvertently neglected to 
revise that cross-reference. The cross-reference within the definition 
of emergency care services should have been amended at that time to 
cite the definition of ``emergency services'' in Sec.  424.101.
    The private contracting regulations at Sec.  405.420(e), Sec.  
405.425(a) and Sec.  405.455 all use the term Medicare+Choice when 
referring to Part C plans. However, we no longer use the term 
Medicare+Choice when referring to Part C plans; instead the plans are 
referred to as Medicare Advantage plans. When part 422 of the 
regulations was updated on January 28, 2005 (70 FR 4741), we 
inadvertently neglected to revise Sec.  405.420(e), Sec.  405.425(a) 
and Sec.  405.455 to replace the term Medicare+Choice with Medicare 
Advantage plan.
2. Provisions of the Proposed Regulation
    For the reasons discussed above, we propose that a determination 
described in Sec.  405.450(a) (relating to the status of opt-out or 
private contracts) is an initial determination for purposes of Sec.  
498.3(b), and a physician or practitioner who is dissatisfied with a 
Medicare determination under Sec.  405.450(a) may utilize the 
enrollment appeals process currently available for providers and 
suppliers in part 498. In addition, we propose that a determination 
described in Sec.  405.450(b) (that payment cannot be made to a 
beneficiary for services furnished by a physician or practitioner who 
has opted out) is an initial determination for the purposes of Sec.  
405.924 and may be challenged through the existing claims appeals 
procedures in part 405 subpart I. Accordingly, we propose that the 
cross reference to Sec.  405.803 in Sec.  405.450(a) be replaced with a 
cross reference to Sec.  498.3(b). We also propose that the cross 
reference to Sec.  405.803 in Sec.  405.450(b) be replaced with a cross 
reference to Sec.  405.924. We also propose corresponding edits to 
Sec.  498.3(b) and Sec.  405.924 to note that the determinations under 
Sec.  405.450(a) and (b), respectively, are initial determinations.
    For the reasons discussed above, we also propose that the 
definition of Emergency care services at Sec.  405.400 be revised to 
cite the definition of Emergency services in Sec.  424.101 and that all 
references to Medicare+Choice in Sec.  405.420(e), Sec.  405.425(a) and 
Sec.  405.455 be replaced with the term ``Medicare Advantage.''

[[Page 40382]]

H. Solicitation of Comments on the Payment Policy for Substitute 
Physician Billing Arrangements

1. Background
    In accordance with section 1842(b)(6) of the Act, no payment under 
Medicare Part B may be made to anyone other than to the beneficiary to 
whom a service was furnished or to the physician or other person who 
furnished the service. However, there are certain limited exceptions to 
this general prohibition. For example, section 1842(b)(6)(D) of the Act 
describes an exception for substitute physician billing arrangements, 
which states that ``payment may be made to a physician for physicians' 
services (and services furnished incident to such services) furnished 
by a second physician to patients of the first physician if (i) the 
first physician is unavailable to provide the services; (ii) the 
services are furnished pursuant to an arrangement between the two 
physicians that (I) is informal and reciprocal, or (II) involves per 
diem or other fee-for-time compensation for such services; (iii) the 
services are not provided by the second physician over a continuous 
period of more than 60 days or are provided over a longer continuous 
period during all of which the first physician has been called or 
ordered to active duty as a member of a reserve component of the Armed 
Forces; and (iv) the claim form submitted to the [contractor] for such 
services includes the second physician's unique identifier . . . and 
indicates that the claim meets the requirements of this subparagraph 
for payment to the first physician.'' Section 1842(b)(6) of the Act is 
self-implementing and we have not interpreted the statutory provisions 
through regulations.
    In practice, section 1842(b)(6)(D) of the Act generally allows for 
two types of substitute physician billing arrangements: (1) An informal 
reciprocal arrangement where doctor A substitutes for doctor B on an 
occasional basis and doctor B substitutes for doctor A on an occasional 
basis; and (2) an arrangement where the services of the substitute 
physician are paid for on a per diem basis or according to the amount 
of time worked. Substitute physicians in the second type of arrangement 
are sometimes referred to as ``locum tenens'' physicians. It is our 
understanding that locum tenens physicians are substitute physicians 
who often do not have a practice of their own, are geographically 
mobile, and work on an as-needed basis as independent contractors. They 
are utilized by physician practices, hospitals, and health care 
entities enrolled in Part B as Medicare suppliers to cover for 
physicians who are absent for reasons such as illness, pregnancy, 
vacation, or continuing medical education. Also, we have heard 
anecdotally that locum tenens physicians are used to fill staffing 
needs (for example, in physician shortage areas) or, on a temporary 
basis, to replace physicians who have permanently left a medical group 
or employer.
    We are concerned about the operational and program integrity issues 
that result from the use of substitute physicians to fill staffing 
needs or to replace a physician who has permanently left a medical 
group or employer. For example, although our Medicare enrollment rules 
require physicians and physician groups or organizations to notify us 
promptly of any enrollment changes (including reassignment changes) 
(see Sec.  424.516(d)), processing delays or miscommunication between 
the departing physician and his or her former medical group or employer 
regarding which party would report the change to Medicare could result 
in the Provider Transaction Access Number (PTAN) that links the 
departed physician and his or her former medical group remaining 
``open'' or ``attached'' for a period of time. During such period, both 
the departed physician and the departed physician's former medical 
group might bill Medicare under the departed physician's National 
Provider Identifier (NPI) for furnished services. This could occur 
where a substitute physician is providing services in place of the 
departed physician in the departed physician's former medical group, 
while the departed physician is also providing services to 
beneficiaries following departure from the former group. Operationally, 
either or both types of claims could be rejected or denied, even though 
the claims filed by the departed physician were billed appropriately. 
Moreover, the continued use of a departed physician's NPI to bill for 
services furnished to beneficiaries by a substitute physician raises 
program integrity issues, particularly if the departed physician is 
unaware of his or her former medical group or employer's actions.
    Finally, as noted above, section 1842(b)(6)(D)(iv) of the Act 
requires that the claim form submitted to the contractor include the 
substitute physician's unique identifier. Currently, the unique 
identifier used to identify a physician is the physician's NPI. Prior 
to the implementation of the NPI, the Unique Physician Identification 
Number (UPIN) was used. Because a substitute physician's NPI is not 
captured on the CMS-1500 claim form or on the appropriate electronic 
claim, physicians and other entities that furnish services to 
beneficiaries through the use of a substitute physician are required to 
enter a modifier on the CMS-1500 claim form or on the appropriate 
electronic claim indicating that the services were furnished by a 
substitute physician; and to keep a record of each service provided by 
the substitute physician, associated with the substitute physician's 
UPIN or NPI; and to make this record available to the contractor upon 
request. (See Medicare Claims Processing Manual (Pub. 100-4), Chapter 
1, Sections 30.2.10 and 30.2.11) However, having a NPI or UPIN does not 
necessarily mean that the substitute physician is enrolled in the 
Medicare program. Without being enrolled in Medicare, we do not know 
whether the substitute physician has the proper credentials to furnish 
the services being billed under section 1842(b)(6)(D) of the Act or if 
the substitute physician is sanctioned or excluded from Medicare. The 
importance of enrollment and the resulting transparency afforded the 
Medicare program and its beneficiaries was recognized by the Congress 
when it included in the Affordable Care Act a requirement that 
physicians and other eligible NPPs enroll in the Medicare program if 
they wish to order or refer certain items or services for Medicare 
beneficiaries. This includes those physicians and other eligible NPPs 
who do not and will not submit claims to a Medicare contractor for the 
services they furnish. We are seeking comments regarding how to achieve 
similar transparency in the context of substitute physician billing 
arrangements for the identity of the individual actually furnishing the 
service to a beneficiary.
2. Solicitation of Comments
    To help inform our decision whether and, if so, how to address the 
issues discussed in section III.H.1., and whether to adopt regulations 
interpreting section 1842(b)(6)(D) of the Act, we are soliciting 
comments on the policy for substitute physician billing arrangements. 
We note that any regulations would be proposed in a future rulemaking 
with opportunity for public comment. Through this solicitation, we hope 
to understand better current industry practices with respect to the use 
of substitute physicians and the impact that policy changes limiting 
the use of substitute physicians might have on beneficiary access to 
physician services. Therefore,

[[Page 40383]]

we are soliciting comments on the following:
    (1) How physicians and other entities are currently utilizing the 
services of substitute physicians and billing for such services. We are 
interested in specific examples, including the circumstances that give 
rise to the need for the substitute physician, the types of services 
furnished by the substitute physician, the billing for the services of 
the substitute physician, the length of time that the substitute 
physician's services are needed or used, and any other information 
relevant to the substitute physician billing arrangement.
    (2) When a physician is ``unavailable'' to provide services for 
purposes of section 1842(b)(6)(D) of the Act. We are particularly 
interested in comments from physicians, medical groups and other 
entities that utilize the services of substitute physicians regarding 
when a regular physician is ``unavailable.''
    (3) Whether we should limit substitute physician billing 
arrangements to those ``between the two physicians'' (rather than 
between a medical group, employer or other entity and the substitute 
physician) as stated in section 1842(b)(6)(D)(ii) of the Act.
    (4) Whether we should permit the sequential use of multiple 
substitute physicians provided that each substitute physician furnishes 
services for the unavailable physician for no more than 60 continuous 
days.
    (5) Whether we should have identical or different criteria for 
substitute physician billing arrangements under sections 
1842(b)(6)(D)(ii)(I) and (II) of the Act; that is, whether we should 
treat reciprocal substitute physician billing arrangements differently 
than paid (or locum tenens) substitute physician billing arrangements.
    (6) Whether substitute physicians furnishing services to Medicare 
beneficiaries should be required to enroll in the Medicare program.
    (7) Whether entities submitting claims for services furnished by 
substitute physicians should include on the CMS-1500 claim form or on 
the appropriate electronic claim the identity of the substitute 
physician and, if so, whether the CMS-1500 claim form or the 
appropriate electronic claim should be revised to accommodate such a 
requirement.
    (8) Whether we should place limitations on the use of the 
substitute physician and billing for his or her services (for example, 
limits on the length of time that an individual substitute physician 
may provide services to replace a particular departed physician; limits 
on the overall length of time that substitute physicians may provide 
services to replace a particular departed physician; a requirement that 
the departing physician be a party to the substitute physician billing 
arrangement; or permitting the use of a substitute physician only where 
a demonstrated staffing need can be shown). We are also seeking 
comments regarding whether these limitations should be different 
depending on the circumstances underlying or requiring the use of the 
substitute physician.
    (9) Whether we should limit or prohibit the use of substitute 
physician billing arrangements in certain programs or for certain 
purposes (for example, the Medicare Shared Savings Program or 
determining whether a physician is a member of a group practice for 
purposes of the physician self-referral law).
    (10) The impact of substitute physician billing arrangements on CMS 
programs that rely on the Provider Enrollment, Chain and Ownership 
System (PECOS) (for example, the Medicare Shared Savings Program), 
enforcement of the physician self-referral law, and program integrity 
oversight.
    (11) Additional program integrity safeguards that should be 
included in our substitute physician billing policy to protect against 
program and patient abuse. These could include, but are not limited to, 
qualifications for substitute physicians related to exclusion status, 
quality of care, or licensure and certifications.
    (12) Any other issues that we should consider in determining 
whether to propose regulations interpreting section 1842(b)(6)(D) of 
the Act.

I. Reports of Payments or Other Transfers of Value to Covered 
Recipients

1. Background
    In the February 8, 2013 Federal Register (78 FR 9458), we published 
the ``Transparency Reports and Reporting of Physician Ownership or 
Investment Interests'' final rule which implemented section 1128G to 
the Act, as added by section 6002 of the Affordable Care Act. Under 
section 1128G(a)(1) of the Act, manufacturers of covered drugs, 
devices, biologicals, and medical supplies (applicable manufacturers) 
are required to submit on an annual basis information about certain 
payments or other transfers of value made to physicians and teaching 
hospitals (collectively called covered recipients) during the course of 
the preceding calendar year. Section 1128G(a)(2) of the Act requires 
applicable manufacturers and applicable group purchasing organizations 
(GPOs) to disclose any ownership or investment interests in such 
entities held by physicians or their immediate family members, as well 
as information on any payments or other transfers of value provided to 
such physician owners or investors. The implementing regulations are at 
42 CFR Part 402, subpart A, and Part 403, subpart I. We have organized 
these reporting requirements under the ``Open Payments (Sunshine Act)'' 
program.
    The Open Payments program creates transparency around the nature 
and extent of relationships that exist between drug, device, 
biologicals and medical supply manufacturers, and physicians and 
teaching hospitals (covered recipients and physician owner or 
investors). The implementing regulations describe procedures for 
applicable manufacturers and applicable GPOs to submit electronic 
reports detailing payments or other transfers of value and ownership or 
investment interests provided to covered recipients and physician 
owners or investors are codified at Sec.  403.908.
    Since the publication and implementation of the February 8, 2013 
final rule, various stakeholders have provided feedback to CMS 
regarding certain aspects of these reporting requirements. 
Specifically, Sec.  403.904(g)(1) excludes the reporting of payments 
associated with certain continuing education events, and Sec.  
403.904(c)(8) requires reporting of the marketed name for drugs and 
biologicals but makes reporting the marketed name of devices or medical 
supplies optional. We are proposing a change to Sec.  403.904(g) to 
correct an unintended consequence of the current regulatory text. 
Additionally, at Sec.  403.904(c)(8), we are proposing to make the 
reporting requirements consistent by requiring the reporting of the 
marketed name for drugs, devices, biologicals, or medical supplies 
which are associated with a payment or other transfer of value.
    Additionally, at Sec.  403.902, we propose to remove the definition 
of a ``covered device'' because we believe it is duplicative of the 
definition of ``covered drug, device, biological or medical supply'' 
which is codified in the same section. We also propose to require the 
reporting of the following distinct forms of payment: stock; stock 
option; or any other ownership interests specified in Sec.  
403.904(d)(3) to collect more specific data regarding the forms of 
payment.

[[Page 40384]]

2. Continuing Education Exclusion (Sec.  403.904(g)(1))
    In the February 8, 2013 final rule, many commenters recommended 
that accredited or certified continuing education payments to speakers 
should not be reported because there are safeguards already in place, 
and they are not direct payments to a covered recipient. In the final 
rule preamble, we noted that ``industry support for accredited or 
certified continuing education is a unique relationship'' (78 FR 9492). 
Section 403.904(g)(1) states that payments or other transfers of value 
provided as compensation for speaking at a continuing education program 
need not be reported if the following three conditions are met:
     The event at which the covered recipient is speaking must 
meet the accreditation or certification requirements and standards for 
continuing education for one of the following organizations: the 
Accreditation Council for Continuing Medical Education (ACCME); the 
American Academy of Family Physicians (AAFP); the American Dental 
Association's Continuing Education Recognition Program (ADA CERP); the 
American Medical Association (AMA); or the American Osteopathic 
Association (AOA).
     The applicable manufacturer does not pay the covered 
recipient speaker directly.
     The applicable manufacturer does not select the covered 
recipient speaker or provide the third party (such as a continuing 
education vendor) with a distinct, identifiable set of individuals to 
be considered as speakers for the continuing education program.
    Since the implementation of Sec.  403.904(g)(1), other accrediting 
organizations have requested that payments made to speakers at their 
events also be exempted from reporting. These organizations have stated 
that they follow the same accreditation standards as the organizations 
specified in Sec.  403.904(g)(1)(i). Other stakeholders have 
recommended that the exemption be removed in its entirety stating 
removal of the exclusion will allow for consistent reporting for 
compensation provided to physician speakers at all continuing education 
events, as well as transparency regarding compensation paid to 
physician speakers. Many stakeholders raised concerns that the 
reporting requirements are inconsistent because certain continuing 
education payments are reportable, while others are not. CMS' apparent 
endorsement or support to organizations sponsoring continuing education 
events was an unintended consequence of the final rule.
    After consideration of these comments, we propose to remove the 
language in Sec.  403.904(g) in its entirety, in part because it is 
redundant with the exclusion in Sec.  403.904(i)(1). That provision 
excludes indirect payments or other transfers of value where the 
applicable manufacturer is ``unaware'' of, that is, ``does not know,'' 
the identity of the covered recipient during the reporting year or by 
the end of the second quarter of the following reporting year. When an 
applicable manufacturer or applicable GPO provides funding to a 
continuing education provider, but does not either select or pay the 
covered recipient speaker directly, or provide the continuing education 
provider with a distinct, identifiable set of covered recipients to be 
considered as speakers for the continuing education program, CMS will 
consider those payments to be excluded from reporting under Sec.  
403.904(i)(1). This approach is consistent with our discussion in the 
preamble to the final rule, in which we explained that if an applicable 
manufacturer conveys ``full discretion'' to the continuing education 
provider, those payments are outside the scope of the rule (78 FR 
9492). In contrast, when an applicable manufacturer conditions its 
financial sponsorship of a continuing education event on the 
participation of particular covered recipients, or pays a covered 
recipient directly for speaking at such an event, those payments are 
subject to disclosure.
    We considered two alternative approaches to address this issue. 
First, we explored expanding the list of organizations in Sec.  
403.904(g)(1)(i) by name, however, we believe that this approach might 
imply CMS's endorsement of the named continuing education providers 
over others. Second, we considered expansion of the organizations in 
Sec.  403.904(g)(1)(i) by articulating accreditation or certification 
standards that would allow a CME program to qualify for the exclusion. 
This approach is not easily implemented because it would require 
evaluating both the language of the standards, as well as the 
enforcement of the standards of any organization professing to meet the 
criteria. We seek comments on both alternatives presented, including 
commenters' suggestions about what standards, if any, CMS should 
incorporate.
3. Reporting of Marketed Name (Sec.  403.904(c)(8))
    Section 1128G(a)(1)(A)(vii) of the Act requires applicable 
manufacturers to report the name of the covered drug, device, 
biological or medical supply associated with that payment, if the 
payment is related to ``marketing, education, or research'' of a 
particular covered drug, device, biological, or medical supply. Section 
403.904(c)(8)(i) requires applicable manufacturers to report the 
marketed name for each drug or biological related to a payment or other 
transfer of value. At Sec.  403.904(c)(8)(ii), we require an applicable 
manufacturer of devices or medical supplies to report one of the 
following: the marketed name; product category; or therapeutic area. In 
the February 8, 2013, final rule, we provided applicable manufactures 
with flexibility when it was determined that the marketed name for all 
devices and medical supplies may not be useful for the general 
audience. We did not define product categories or therapeutic areas in 
Sec.  403.904(c). However, since implementation of the February 8, 2013 
final rule and the development of the Open Payments system, we have 
determined that making the reporting requirements for marketed name 
across drugs, biologics, devices and medical supplies will make the 
data fields consistent within the system, and also enhance consumer's 
use of the data.
    Accordingly, we propose to revise Sec.  403.904(c)(8) to require 
applicable manufacturers to report the marketed name for all covered 
and non-covered drugs, devices, biologicals or medical supplies. We 
believe this would facilitate consistent reporting for the consumers 
and researchers using the data displayed publicly on the Open Payments. 
Manufacturers would still have the option to report product category or 
therapeutic area, in addition to reporting the market name, for devices 
and medical supplies.
    Section 403.904(d)(3) requires the reporting of stock, stock option 
or any other ownership interest. We are proposing to require applicable 
manufacturers to report such payments as distinct categories. This will 
enable us to collect more specific data regarding the forms of payment 
made by applicable manufacturers. After issuing the February 8, 2013 
final rule and the development of the Open Payments system, we 
determined that this specificity will increase the ease of data 
aggregation within the system, and also enhance consumer's use of the 
data. We seek comments on the extent to which users of this data set 
find this disaggregation to be useful, and whether this change presents 
operational or other issues on the part of applicable manufacturers.

[[Page 40385]]

4. Summary of Proposed Changes
    As noted above in this section, we propose the following changes to 
Part 403, subpart I:
     Deleting the definition of ``covered device'' at Sec.  
403.902.
     Deleting Sec.  403.904(g) and redesignating the remaining 
paragraphs in that section.
     Revising Sec.  403.904(c)(8) to require the reporting of 
the marketed name of the related covered and non-covered drugs, 
devices, biologicals, or medical supplies, unless the payment or other 
transfer of value is not related to a particular covered or non-covered 
drug, device, biological or medical supply.
     Revising Sec.  403.904(d) to require the reporting of the 
reporting of stock, stock option or any other options as distinct 
categories.
    Data collection requirements would begin January 1, 2015 according 
to this proposed rule for applicable manufacturers and applicable group 
purchasing organizations.

J. Physician Compare Web site

1. Background and Statutory Authority
    Section 10331(a)(1) of the Affordable Care Act, required that, by 
no later than January 1, 2011, we develop a Physician Compare Internet 
Web site with information on physicians enrolled in the Medicare 
program under section 1866(j) of the Act, as well as information on 
other eligible professionals (EPs) who participate in the Physician 
Quality Reporting System (PQRS) under section 1848 of the Act.
    CMS launched the first phase of Physician Compare on December 30, 
2010 (http://www.medicare.gov/physiciancompare). In the initial phase, 
we posted the names of EPs that satisfactorily submitted quality data 
for the 2009 PQRS, as required by section 1848(m)(5)(G) of the Act.
    Section 10331(a)(2) of the Affordable Care Act also required that, 
no later than January 1, 2013, and for reporting periods that began no 
earlier than January 1, 2012, we implement a plan for making publicly 
available through Physician Compare information on physician 
performance that provides comparable information on quality and patient 
experience measures. We met this requirement in advance of January 1, 
2013, as outlined below, and plan to continue addressing elements of 
the plan through rulemaking.
    To the extent that scientifically sound measures are developed and 
are available, we are required to include, to the extent practicable, 
the following types of measures for public reporting:
     Measures collected under the Physician Quality Reporting 
System (PQRS).
     An assessment of patient health outcomes and functional 
status of patients.
     An assessment of the continuity and coordination of care 
and care transitions, including episodes of care and risk-adjusted 
resource use.
     An assessment of efficiency.
     An assessment of patient experience and patient, 
caregiver, and family engagement.
     An assessment of the safety, effectiveness, and timeliness 
of care.
     Other information as determined appropriate by the 
Secretary.

As required under section 10331(b) of the Affordable Care Act, in 
developing and implementing the plan, we must include, to the extent 
practicable, the following:
     Processes to ensure that data made public are 
statistically valid, reliable, and accurate, including risk adjustment 
mechanisms used by the Secretary.
     Processes for physicians and eligible professionals whose 
information is being publicly reported to have a reasonable 
opportunity, as determined by the Secretary, to review their results 
before posting to Physician Compare. We have established a 30-day 
preview period for all measurement performance data that will allow 
physicians and other EPs to view their data as it will appear on the 
Web site in advance of publication on Physician Compare (77 FR 69166 
and 78 FR 74450). Details of the preview process will be communicated 
directly to those with measures to preview and will also be published 
on the Physician Compare Initiative page (http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/physician-compare-initiative/) in advance of the preview period.
     Processes to ensure the data published on Physician 
Compare provides a robust and accurate portrayal of a physician's 
performance.
     Data that reflects the care provided to all patients seen 
by physicians, under both the Medicare program and, to the extent 
applicable, other payers, to the extent such information would provide 
a more accurate portrayal of physician performance.
     Processes to ensure appropriate attribution of care when 
multiple physicians and other providers are involved in the care of the 
patient.
     Processes to ensure timely statistical performance 
feedback is provided to physicians concerning the data published on 
Physician Compare.
     Implementation of computer and data infrastructure and 
systems used to support valid, reliable and accurate reporting 
activities.
    Section 10331(d) of the Affordable Care Act requires us to consider 
input from multi-stakeholder groups when selecting quality measures for 
Physician Compare. We also continue to get input from stakeholders 
through a variety of means including rulemaking and different forms of 
stakeholder outreach (Town Hall meetings, Open Door Forums, webinars, 
education and outreach, Technical Expert Panels, etc.). In developing 
the plan for making information on physician performance publicly 
available through Physician Compare, section 10331(e) of the Affordable 
Care Act requires the Secretary, as the Secretary determines 
appropriate, to consider the plan to transition to value-based 
purchasing for physicians and other practitioners that was developed 
under section 131(d) of the MIPPA.
    Under section 10331(f) of the Affordable Care Act, we are required 
to submit a report to the Congress by January 1, 2015, on Physician 
Compare development, and include information on the efforts and plans 
to collect and publish data on physician quality and efficiency and on 
patient experience of care in support of value-based purchasing and 
consumer choice. Section 10331(g) of the Affordable Care Act provides 
that any time before that date, we may continue to expand the 
information made available on Physician Compare.
    We believe section 10331 of the Affordable Care Act supports our 
overarching goals of providing consumers with quality of care 
information that will help them make informed decisions about their 
health care, while encouraging clinicians to improve the quality of 
care they provide to their patients. In accordance with section 10331 
of the Affordable Care Act, we plan to publicly report physician 
performance information on Physician Compare.
2. Public Reporting of Performance and Other Data
    Since the initial launch of the Web site, we have continued to 
build on and improve Physician Compare. On June 27, 2013, we launched a 
full redesign of Physician Compare bringing significant improvements 
including a complete overhaul of the underlying database and a new 
Intelligent Search feature, addressing two of our stakeholders' primary 
critiques of the site--the accuracy and currency of the database and 
the limitations of the search

[[Page 40386]]

function--and considerably improving Web site functionality and 
usability. PECOS, as the sole source of verified Medicare professional 
information, is the primary source of administrative information on 
Physician Compare. With the redesign, however, we incorporated the use 
of Medicare Fee-For-Service claims information to verify the 
information in PECOS to help ensure only the most current and accurate 
information is included on the site.
    Currently, Web site users can view information about approved 
Medicare professionals such as name, primary and secondary specialties, 
practice locations, group affiliations, hospital affiliations that link 
to the hospital's profile on Hospital Compare as available, Medicare 
Assignment status, education, languages spoken, and American Board of 
Medical Specialties (ABMS) board certification information. In 
addition, for group practices, users can also view group practice 
names, specialties, practice locations, Medicare assignment status, and 
affiliated professionals.
    We post on the Web site the names of individual EPs who 
satisfactorily report under the PQRS, as well as those EPs who are 
successful electronic prescribers under the Medicare Electronic 
Prescribing (eRx) Incentive Program. Physician Compare contains a link 
to a downloadable database of all information on Physician Compare 
(https://data.medicare.gov/data/physician-compare), including 
information on this quality program participation. In addition, there 
is a section on each Medicare professional's profile page indicating 
with a green check mark the quality programs under which the EP 
satisfactorily or successfully reported. We propose to continue to 
include this information annually in the year following the year it is 
reported (for example, 2015 PQRS reporting will be included on the Web 
site in 2016).
    With the Physician Compare redesign, we added a quality programs 
section to each group practice profile page in order to indicate which 
group practices are satisfactorily participating in the Group Practice 
Reporting Option (GPRO) under the PQRS or are successful electronic 
prescribers under the eRx Incentive Program. We have also included a 
notation and check mark for individuals that successfully participate 
in the Medicare EHR Incentive Program, as authorized by section 
1848(o)(3)(D) of the Act. We propose to continue to include this 
information annually in the year following the year it is reported (for 
example, 2015 data will be included on the Web site in 2016).
    As we finalized in the 2014 PFS final rule with comment period (78 
FR 74450), we will publicly report the names of those EPs who report 
the 2014 PQRS Cardiovascular Prevention measures group in support of 
the Million Hearts Initiative on Physician Compare in 2015 by including 
a check mark in the quality programs section of the profile page. We 
propose to also continue to include this information annually in the 
year following the year it is reported (for example, 2015 data will be 
included on Physician Compare in 2016). Finally, we will also indicate 
with a green check mark those individuals who have earned the 2014 PQRS 
Maintenance of Certification Incentive (Additional Incentive) on the 
Web site in 2015 (78 FR 74450).
    We continue to implement our plan for a phased approach to public 
reporting performance information on Physician Compare. The first phase 
of this plan was finalized with the CY 2012 PFS final rule with comment 
period (76 FR 73419-73420), where we established that PQRS GPRO 
measures collected through the GPRO web interface for 2012 would be 
publicly reported on Physician Compare. The plan was expanded with the 
CY 2013 PFS final rule with comment period (77 FR 69166), where we 
established that the specific GPRO web interface measures that would be 
posted on Physician Compare would include the PQRS GPRO measures for 
Diabetes Mellitus (DM) and Coronary Artery Disease (CAD), and we noted 
that we would report composite measures for these measure groups in 
2014, if technically feasible.\5\ The 2012 PQRS GPRO measures were 
publicly reported on Physician Compare in February 2014. Data reported 
in 2013 on the GPRO DM and GPRO CAD measures and composites collected 
via the GPRO web interface that meet the minimum sample size of 20 
patients and prove to be statistically valid and reliable will be 
publicly reported on Physician Compare in late CY 2014, if technically 
feasible. If the minimum threshold is not met for a particular measure, 
or the measure is otherwise deemed not to be suitable for public 
reporting, the group's performance rate on that measure will not be 
publicly reported. We will only publish on Physician Compare those 
measures that are statistically valid and reliable and therefore most 
likely to help consumers make informed decisions about the Medicare 
professionals they choose to meet their health care needs.
---------------------------------------------------------------------------

    \5\ By ``technically feasible'' we mean that there are no 
operational constraints inhibiting us from moving forward on a given 
public reporting objective. Operational constraints include delays 
and/or issues related to data collection which render a set of 
quality data unavailable in the timeframe necessary for public 
reporting.
---------------------------------------------------------------------------

    Measures must be based on reliable and valid data elements to be 
useful to consumers and thus included on Physician Compare. A reliable 
data element is consistently measuring the same thing regardless of 
when or where it is collected, while a valid data element is measuring 
what it is meant to measure. To address the reliability of performance 
scores, CMS will measure the extent to which differences in each 
quality measure are due to actual differences in clinician performance 
versus variation that arises from measurement error. Statistically, 
reliability depends on performance variation for a measure across 
clinicians (``signal''), the random variation in performance for a 
measure within a clinician's panel of attributed beneficiaries 
(``noise''), and the number of beneficiaries attributed to the 
clinician. High reliability for a measure suggests that comparisons of 
relative performance across clinicians are likely to be stable over 
different performance periods and that the performance of one clinician 
on the quality measure can confidently be distinguished from another. 
Potential reliability values range from zero to one, where one (highest 
possible reliability) means that all variation in the measure's rates 
is the result of variation in differences in performance, while zero 
(lowest possible reliability) means that all variation is a result of 
measurement error. Reliability testing methods included in the CMS 
Measures Management System Blueprint include test-retest reliability 
and analysis of variance (ANOVA). Reliability tests endorsed by the NQF 
include the beta-binomial model test.
    The validity of a measure refers to the ability to record or 
quantify what it claims to measure. To analyze validity, CMS can 
investigate the extent to which each quality measure is correlated with 
related, previously validated, measures. CMS can assess both concurrent 
and predictive validity. Predictive validity is most appropriate for 
process measures or intermediate outcome measures, in which a cause-
and-effect relationship is hypothesized between the measure in question 
and a validated outcome measure. Therefore, the measure in question is 
computed first, and the validated measure is computed using data from a 
later period. To examine concurrent validity, the measure in question 
and a previously validated

[[Page 40387]]

measure are computed using contemporaneous data. In this context, the 
previously validated measure should measure a health outcome related to 
the outcome of interest.
    In the November 2011 Medicare Shared Savings Program final rule (76 
FR 67948), we noted that because Accountable Care Organization (ACO) 
providers/suppliers that are EPs are considered to be a group practice 
for purposes of qualifying for a PQRS incentive under the Shared 
Savings Program, we would publicly report ACO performance on quality 
measures on Physician Compare in the same way as we report performance 
on quality measures for PQRS GPRO group practices. Public reporting of 
performance on these measures is presented at the ACO level only. The 
first sub-set of ACO measures was also published on the Web site in 
February 2014. ACO measures can be viewed by following the link for 
Accountable Care Organization (ACO) Quality Data on the homepage of the 
Physician Compare Web site (http://medicare.gov/physiciancompare/aco/search.html).
    As part of our public reporting plan for Physician Compare, in the 
CY 2013 PFS final rule with comment period (77 FR 69166-69167), we also 
finalized the decision to publicly report Clinician and Group Consumer 
Assessment of Healthcare Providers and Systems (CG-CAHPS) data for 
group practices of 100 or more eligible professionals reporting data in 
2013 under the GPRO and for ACOs participating in the Shared Savings 
Program, if technically feasible. We anticipate posting these data on 
Physician Compare in late 2014, if available.
    We continued to expand our plan for public reporting data on 
Physician Compare in the CY 2014 PFS final rule with comment period (78 
FR 74449). In that final rule we finalized a decision that all measures 
collected through the GPRO web interface for groups of two or more EPs 
participating in 2014 under the PQRS GPRO and for ACOs participating in 
the Medicare Shared Savings Program are available for public reporting 
in CY 2015. As with all measures we finalized with regard to Physician 
Compare, these data would include measure performance rates for 
measures reported that meet the minimum sample size of 20 patients and 
prove to be statistically valid and reliable. We also finalized a 30-
day preview period prior to publication of quality data on Physician 
Compare. This will allow group practices to view their data as it will 
appear on Physician Compare before it is publicly reported. We decided 
that we will detail the process for the 30-day preview and provide a 
detailed timeline and instructions for preview in advance of the start 
of the preview period. ACOs will be able to view their quality data 
that will be publicly reported on Physician Compare through the ACO 
Quality Reports, which will be made available to ACOs for review at 
least 30 days prior to the start of public reporting on Physician 
Compare.
    We also finalized a decision to publicly report in CY 2015 on 
Physician Compare performance on certain measures that group practices 
report via registries and EHRs in 2014 for the PQRS GPRO (78 FR 74451). 
Specifically, we finalized making available for public reporting 
performance on 16 registry measures and 13 EHR measures (78 FR 74451). 
These measures are consistent with the measures available for public 
reporting via the web interface. We will indicate the mechanism by 
which these data were collected and only those data deemed 
statistically comparable, valid, and reliable would be published on the 
site.\7\
    We also finalized publicly reporting patient experience survey-
based measures from the CG-CAHPS measures for groups of 100 or more 
eligible professionals who participate in PQRS GPRO, regardless of GPRO 
submission method, and for Shared Savings Program ACOs reporting 
through the GPRO web interface or other CMS-approved tool or interface 
(78 FR 74452). For 2014 data, we finalized publicly reporting data for 
the 12 summary survey measures also finalized for groups of 25 to 99 
for PQRS reporting requirements (78 FR 74452). These summary survey 
measures would be available for public reporting 100 or more EPs 
participating in PQRS GPRO as well as group practices of 25 to 99 EPs 
when collected via any certified CAHPS vendor regardless of PQRS 
participation, as technically feasible. For ACOs participating in the 
Shared Savings Program, the patient experience measures that are 
included in the Patient/Caregiver Experience domain of the Quality 
Performance Standard under the Shared Savings Program (78 FR 74452) are 
available for public reporting in 2015.
    For 2014, we also finalized publicly reporting 2014 PQRS measure 
data reported by individual EPs in late CY 2015 for individual PQRS 
quality measures specifically identified in the final rule with comment 
period, if technically feasible. Specifically, we finalized to make 
available for public reporting 20 individual measures collected through 
a registry, EHR, or claims (78 FR 74453 through 74454). These are 
measures that are in line with those measures reported by groups via 
the GPRO web interface.
    Finally, in support of the HHS-wide Million Hearts Initiative, we 
finalized a decision to publicly report, no earlier than CY 2015, 
performance rates on measures in the PQRS Cardiovascular Prevention 
measures group at the individual EP level for data collected in 2014 
for the PQRS (78 FR 74454). See Table 19 for a summary of our final 
policies for public reporting data on Physician Compare.

          Table 19--Summary of Previously Finalized Policies for Public Reporting on Physician Compare
----------------------------------------------------------------------------------------------------------------
                                                                                      Quality measures and data
       Data collection year          Public reporting year   Reporting mechanism(s)      for public reporting
----------------------------------------------------------------------------------------------------------------
2012..............................  2013...................  Web Interface (WI),     Include an indicator for
                                                              EHR, Registry, Claims.  satisfactory reporters
                                                                                      under PQRS and PQRS GPRO,
                                                                                      successful e-prescribers
                                                                                      under eRx, and
                                                                                      participants in EHR for
                                                                                      groups and individuals as
                                                                                      applicable.
2012..............................  2014...................  WI....................  5 Diabetes Mellitus (DM)
                                                                                      and Coronary Artery
                                                                                      Disease (CAD) measures
                                                                                      collected via the WI for
                                                                                      group practices with a
                                                                                      minimum sample size of 25
                                                                                      patients and Shared
                                                                                      Savings Program ACOs.

[[Page 40388]]

 
2013..............................  2014...................  WI, EHR, Registry,      Include an indicator for
                                                              Claims.                 satisfactory reporters
                                                                                      under PQRS and PQRS GPRO,
                                                                                      successful e-prescribers
                                                                                      under eRx, and
                                                                                      participants in EHR, as
                                                                                      well as for EPs who earn a
                                                                                      Maintenance of
                                                                                      Certification (MOC)
                                                                                      Incentive and EPs who
                                                                                      report the PQRS
                                                                                      Cardiovascular
                                                                                     Prevention measures group
                                                                                      in support of Million
                                                                                      Hearts.
2013..............................  Expected to be December  WI....................  Up to 6 DM and 2 CAD
                                     2014.                                            measures collected via the
                                                                                      WI for groups of 25 or
                                                                                      more EPs with a minimum
                                                                                      sample size of 20
                                                                                      patients.
                                                                                     Will include composites for
                                                                                      DM and CAD, if feasible.
2013..............................  Expected to be December  WI....................  5 CG-CAHPS summary measures
                                     2014.                                            for groups of 100 or more
                                                                                      EPs reporting via the WI
                                                                                      and 6 ACO CAHPS summary
                                                                                      measures for Shared
                                                                                      Savings Program ACOs.
2014..............................  Expected to be 2015....  WI, EHR, Registry,      Include an indicator for
                                                              Claims.                 satisfactory reporters
                                                                                      under PQRS and PQRS GPRO,
                                                                                      participants in EHR, as
                                                                                      well as for EPs who earn a
                                                                                      Maintenance of
                                                                                      Certification (MOC)
                                                                                      Incentive and EPs who
                                                                                      report the PQRS
                                                                                      Cardiovascular
                                                                                     Prevention measures group
                                                                                      in support of Million
                                                                                      Hearts.
2014..............................  Expected to be late      WI, EHR, Registry.....  All measures reported via
                                     2015.                                            the GPRO WI, 13 EHR, and
                                                                                      16 Registry GPRO measures
                                                                                      are also available for
                                                                                      group practices of 2 or
                                                                                      more EPs and Shared
                                                                                      Savings Program ACOs with
                                                                                      a minimum sample size of
                                                                                      20 patients.
                                                                                     Include composites for DM
                                                                                      and CAD, if feasible.
2014..............................  Expected to be late      WI, Certified Survey    Up to 12 CG-CAHPS summary
                                     2015.                    Vendor.                 measures for groups of 100
                                                                                      or more EPs reporting via
                                                                                      the WI and group practices
                                                                                      of 25 to 99 EPs reporting
                                                                                      via a CMS-approved
                                                                                      certified survey vendor,
                                                                                      as well as 6 ACO CAHPS
                                                                                      summary measures for
                                                                                      Shared Savings Program
                                                                                      ACOs reporting through the
                                                                                      GPRO web interface or
                                                                                      other CMS-approved tool or
                                                                                      interface.
2014..............................  Expected to be late      Registry, EHR, or       A sub-set of 20 PQRS
                                     2015.                    Claims.                 measures submitted by
                                                                                      individual EPs that align
                                                                                      with those available for
                                                                                      group reporting via the WI
                                                                                      that are collected through
                                                                                      a Registry, EHR, or claims
                                                                                      with a minimum sample size
                                                                                      of 20 patients.
2014..............................  Expected to be late      Registry, EHR, or       Measures from the
                                     2015.                    Claims.                 Cardiovascular Prevention
                                                                                      measures group reported by
                                                                                      individual EPs in support
                                                                                      of the Million Hearts
                                                                                      Initiative with a minimum
                                                                                      sample size of 20
                                                                                      patients.
----------------------------------------------------------------------------------------------------------------

3. Proposals for Public Data Disclosure on Physician Compare in 2015 
and 2016
    We are continuing the expansion of public reporting on Physician 
Compare by proposing to make an even broader set of quality measures 
available for publication on the Web site. We started the phased 
approach with a small number of possible PQRS GPRO web interface 
measures for 2012, and have been steadily building on this to provide 
Medicare consumers with more information to help them make informed 
health care decisions. As a result, we are now proposing to increase 
the measures available for public reporting.
    We previously finalized in the CY 2014 PFS final rule with comment 
period (78 FR 74450) to make available for public reporting all PQRS 
GPRO measures collected in 2014 via the web interface. We now propose 
to expand public reporting of group-level measures by making all 2015 
PQRS GPRO measure sets across group reporting mechanisms--GPRO web 
interface, registry, and EHR--available for public reporting on 
Physician Compare in CY 2016 for groups of 2 or more EPs, as 
appropriate by reporting mechanism.\6\ Similarly, all measures reported 
by Shared Savings Program ACOs would be

[[Page 40389]]

available for public reporting on Physician Compare. As with all 
quality measures proposed for inclusion on Physician Compare, only 
measures that prove to be valid, reliable, and accurate upon analysis 
and review at the conclusion of data collection will be included on the 
Web site. Also, we propose that measures must meet the public reporting 
criteria of a minimum sample size of 20 patients. We propose to include 
an indicator of which reporting mechanism was used and only measures 
deemed statistically comparable would be included on the site.\7\ We 
propose to publicly report all measures submitted and reviewed and 
found to be statistically valid and reliable in the Physician Compare 
downloadable file. However, we propose that not all of these measures 
necessarily would be included on the Physician Compare profile pages. 
Consumer testing has shown including too much information and/or 
measures that are not well understood by consumers on these pages can 
negatively impact a consumer's ability to make informed decisions. Our 
analysis of the measure data once collected, consumer testing, and 
stakeholder feedback would determine specifically which measures are 
published on profile pages on the Web site. Statistical analyses will 
ensure the measures included are statistically valid and reliable and 
comparable across data collection mechanisms. And, stakeholder feedback 
will ensure all measures meet current clinical standards. CMS will 
continue to reach out to stakeholders in the professional community, 
such as specialty societies, to ensure that the measures under 
consideration for public reporting remain clinically relevant and 
accurate. As measures are finalized significantly in advance of moment 
they are collected, it is possible that clinical guidelines can change 
rendering a measure no longer relevant. Publishing that measure can 
lead to consumer confusion regarding what best practices their health 
care professional should be subscribing to.
---------------------------------------------------------------------------

    \6\ Tables Q1-Q27 detail proposed changes to available PQRS 
measures. Additional information on PQRS measures can be found on 
the CMS.gov PQRS Web site at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/index.html.
    \7\ By statistically comparable, CMS means that the quality 
measures are analyzed and proven to measure the same phenomena in 
the same way regardless of the mechanism through which they were 
collected.
---------------------------------------------------------------------------

    The primary goal of Physician Compare is to help consumers make 
informed health care decisions. If a consumer does not properly 
interpret a quality measure and thus misunderstands what the quality 
score represents, the consumer cannot use this information to make an 
informed decision. Through concept testing, CMS will test with 
consumers how well they understand each measure under consideration for 
public reporting. If a measure is not consistently understood and/or if 
consumers do not understand the relevance of the measure to their 
health care decision making process, CMS will not include the measure 
on the Physician Compare profile page as inclusion will not aid 
informed decision making. Finally, consumer testing will help ensure 
the measures included on the profile pages are accurately understood 
and relevant to consumers, thus helping them make informed decisions. 
This will be done to ensure that the information included on Physician 
Compare is consumer friendly and consumer focused.
    As is the case for all measures published on Physician Compare, 
group practices will be given a 30-day preview period to view their 
measures as they will appear on Physician Compare prior to the measures 
being published. As in previous years, we will detail the process for 
the 30-day preview and provide a detailed timeline and instructions for 
preview in advance of the start of the preview period. ACOs will be 
able to view their quality data that will be publicly reported on 
Physician Compare through the ACO Quality Reports, which will be made 
available to ACOs for review at least 30 days prior to the start of 
public reporting on Physician Compare.
    In addition to making all 2015 PQRS GPRO measures available for 
public reporting, we seek comment on creating composites using 2015 
data and publishing composite scores in 2016 by grouping measures based 
on the PQRS GPRO measure groups, if technically feasible. We will 
analyze the data collected in 2015 and conduct psychometric and 
statistical analyses, looking at how the measures best fit together and 
how accurately they are measuring the composite concept, to create 
composites for certain PQRS GPRO measure groups, including but not 
limited to:

 Care Coordination/Patient Safety (CARE) Measures
 Coronary Artery Disease (CAD) Disease Module
 Diabetes Mellitus (DM) Disease Module
 Preventive (PREV) Care Measures

    We would analyze the component measures that make up each of these 
measure groups to see if a statistically viable composite can be 
constructed with the data reported for 2015. We have received ample 
feedback from stakeholders indicating such scores are strongly desired. 
Composite scores, generally, have also proven to be critical for 
providing consumers a better way to understand quality measure data as 
composites provide a more concise, easy to understand picture of 
physician quality. Therefore, we plan to analyze the data once 
collected to establish the best possible composite, which would help 
consumers use these quality data to make informed health care 
decisions.
    Similar to composite scores, benchmarks are also important to 
ensuring that the quality data published on Physician Compare are 
accurately interpreted and appropriately understood. A benchmark will 
allow consumers to more easily evaluate the information published by 
providing a point of comparison between groups. We continue to receive 
requests from all stakeholders, but especially consumers, to add this 
information to Physician Compare. As a result, we propose to publicly 
report on Physician Compare in 2016 benchmarks for 2015 PQRS GPRO data 
using the same methodology currently used under the Shared Savings 
Program. This ACO benchmark methodology was previously finalized in the 
November 2011 Shared Savings Program final rule (76 FR 67898), as 
amended in the CY 2014 PFS final rule with comment period (78 FR 
74759). Details on this methodology can be found on CMS.gov at http://cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/Downloads/MSSP-QM-Benchmarks.pdf. We propose to follow this methodology 
using the 2014 PQRS GPRO data, however.
    As outlined for the Shared Savings Program, we propose to calculate 
benchmarks using data at the group practice TIN level for all EPs who 
have at least 20 cases in the denominator. A benchmark per this 
methodology is the performance rate a group practice must achieve to 
earn the corresponding quality points for each measure. Benchmarks 
would be established for each percentile, starting with the 30th 
percentile (corresponding to the minimum attainment level) and ending 
with the 90th percentile (corresponding to the maximum attainment 
level). A quality scoring points systems would then be determined. 
Quality scoring would be based on the group practice's actual level of 
performance on each measure. A group practice would earn quality points 
on a sliding scale based on level of performance: Performance below the 
minimum attainment level (the 30th percentile) for a measure would 
receive zero points for that measure; performance at or above the 90th 
percentile of the performance

[[Page 40390]]

benchmark would earn the maximum points available for the measure. The 
total points earned for measures in each measure group would be summed 
and divided by the total points available for that measure group to 
produce an overall measure group score of the percentage of points 
earned versus points available. The percentage score for each measure 
group would be averaged together to generate a final overall quality 
score for each group practice. The goal of including such benchmarks 
would be to help consumers see how each group practice performs on each 
measure, measure group, and overall in relation to other group 
practices.
    Understanding the value consumers place on patient experience data 
and the commitment to reporting these data on Physician Compare, we 
propose publicly reporting in CY 2016 patient experience data from 2015 
for all group practices of 2 or more EPs, who meet the specified sample 
size requirements and collect data via a CMS-specified certified CAHPS 
vendor. The patient experience data available are specifically the 
CAHPS for PQRS and CAHPS for ACO measures, which include the CG-CAHPS 
core measures. For group practices, we propose to publicly report for 
2015 data on Physician Compare in 2016 the 12 summary survey measures 
previously finalized for 2014 data:

 Getting Timely Care, Appointments, and Information
 How Well Providers Communicate
 Patient's Rating of Provider
 Access to Specialists
 Health Promotion & Education
 Shared Decision Making
 Health Status/Functional Status
 Courteous and Helpful Office Staff
 Care Coordination
 Between Visit Communication
 Helping You to Take Medication as Directed
 Stewardship of Patient Resources

    We propose that these 12 summary survey measures would be available 
for public reporting for all group practices. For ACOs participating in 
the Shared Savings Program, we propose that the patient experience 
measures that are included in the Patient/Caregiver Experience domain 
of the Quality Performance Standard under the Shared Savings Program in 
2015 would be available for public reporting in 2016. We would review 
all quality measures after they are collected to ensure that only those 
measures deemed valid and reliable are included on the Web site.
    We previously finalized in the 2014 PFS final rule with comment 
period (78 FR 74454) that 20 2014 PQRS measures for individual EPs 
collected via registry, EHR, or claims would be available for public 
reporting in late 2015, if technically feasible. We propose to expand 
on this in two ways. First, we propose to publicly report these same 20 
measures for 2013 PQRS data in early 2015. Publicly reporting these 
2013 individual measures will help ensure individual level measures are 
made available as soon as possible. Consumers are looking for measures 
about individual doctors and other health care professionals, and this 
would make these quality data available to the public sooner.
    Second, we propose to make all individual EP-level PQRS measures 
collected via registry, EHR, or claims available for public reporting 
on Physician Compare for data collected in 2015 to be publicly reported 
in late CY 2016, if technically feasible.\8\ This will provide the 
opportunity for more EPs to have measures included on Physician 
Compare, and it will provide more information to consumers to make 
informed decisions about their health care. As with group-level 
measures, we propose to publicly report all measures submitted and 
reviewed and deemed valid and reliable in the Physician Compare 
downloadable file. However, not all of these measures necessarily would 
be included on the Physician Compare profile pages. Our analysis of the 
measure data once collected, consumer testing, and stakeholder feedback 
would determine specifically which measures are published on profile 
pages on the Web site. In this way, quality information at the 
individual practitioner level would be available, as has been regularly 
requested by Medicare consumers, but consumers will not be overwhelmed 
with too much information on each EPs profile page.
---------------------------------------------------------------------------

    \8\ Tables Q1-Q27 detail proposed changes to available PQRS 
measures. Additional information on PQRS measures can be found on 
the CMS.gov PQRS Web site at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/index.html.
---------------------------------------------------------------------------

    As noted above for group-level reporting, composite scores and 
benchmarks are critical in helping consumers best understand the 
quality measure information presented. For that reason, in addition to 
making all 2015 PQRS measures available for public reporting, we seek 
comment to create composites and publish composite scores by grouping 
measures based on the PQRS measure groups, if technically feasible. We 
will analyze the data collected in 2015 and conduct psychometric and 
statistical analyses to create composites for PQRS measure groups to be 
published in 2016, including:

 Coronary Artery Disease (CAD) (see Table 30)
 Diabetes Mellitus (DM) (see Table 32)
 General Surgery (see Table 33)
 Oncology (see Table 38)
 Preventive Care (see Table 41)
 Rheumatoid Arthritis (RA) (see Table 42)
 Total Knee Replacement (TKR) (see Table 45)

    We would analyze the component measures that make up each of these 
measure groups to see if a statistically viable composite can be 
constructed with the data reported for 2015. In addition, we propose to 
use the same methodology outlined above for group practices to develop 
benchmarks for individual practitioners. As noted for group practices, 
we believe that providing composite scores and benchmarks will give 
consumers the tools needed to most accurately interpret the quality 
data published on Physician Compare.
    Previously, we indicated an interest in including specialty society 
measures on Physician Compare. We now seek comment on posting these 
measures on the Web site. We also seek comment on the option of linking 
from Physician Compare to specialty society Web sites that publish non-
PQRS measures. Including specialty society measures on the site or 
linking to specific specialty society measures would provide the 
opportunity for more eligible professionals to have measures included 
on Physician Compare and thus help Medicare consumers make more 
informed choices. The quality measures developed by specialty societies 
that would be considered for future posting on Physician Compare are 
those that have been comprehensively vetted and tested, and are trusted 
by the physician community. These measures would provide access to 
available specialty specific quality measures that are often highly 
regarded and trusted by the stakeholder community and, most 
importantly, by the specialties they represent. We are working to 
identify possible societies to reach out to, and seek comment on the 
concept, as well as potential specific society measures of interest.
    Finally, we propose to make available on Physician Compare, 2015 
Qualified Clinical Data Registry (QCDR) measure data collected at the 
individual level or aggregated to a higher level of the QCDR's 
choosing--such as the group practice level, if technically feasible. 
QCDRs are able to collect both PQRS

[[Page 40391]]

measures and non-PQRS measures.\9\ We believe that making QCDR data 
available on Physician Compare further supports the expansion of 
quality measure data available for EPs and group practices regardless 
of specialty therefore providing more quality data to consumers to help 
them make informed decisions. The QCDR would be required to declare 
during their self-nomination if they plan to post data on their own Web 
site and allow Physician Compare to link to it or if they will provide 
data to us for public reporting on Physician Compare. We propose that 
measures collected via QCDRs must also meet the established public 
reporting criteria, including a 20 patient minimum sample size. As with 
PQRS data, we propose to publicly report all measures submitted and 
reviewed and deemed valid and reliable in the Physician Compare 
downloadable file. However, not all of these measures necessarily would 
be included on the Physician Compare profile pages. Our analysis of the 
measure data once collected, consumer testing, and stakeholder feedback 
would determine specifically which measures are published on profile 
pages on the Web site.
---------------------------------------------------------------------------

    \9\ http://www.cms.gov/apps/ama/license.asp?file=/PQRS/downloads/2014_PQRS_IndClaimsRegistry_MeasureSpecs_SupportingDocs_12132013.zip.
---------------------------------------------------------------------------

    Table 20 summarizes the Physician Compare proposals detailed in 
this section. We solicit comments on all proposals. Increasing the 
measures available for public reporting on Physician Compare at both 
the individual and group level will help accomplish the Web site's 
twofold purpose:
     Provide more information for consumers to encourage 
informed patient choice.
     Create explicit incentives for physicians to maximize 
performance.

                             Table 20--Summary of Proposed Data for Public Reporting
----------------------------------------------------------------------------------------------------------------
                                                                                       Proposed quality measures
   Data collection year      Publication         Data type        Reporting mechanism     and data for public
                                year                                                           reporting
----------------------------------------------------------------------------------------------------------------
2013.....................            2015  PQRS................  Registry, EHR, or     Twenty 2013 PQRS
                                                                  Claims.               individual measures
                                                                                        collected through a
                                                                                        Registry, EHR, or claims
                                                                                        mirroring the measures
                                                                                        finalized for 2014 (78
                                                                                        FR 74454).
2015.....................            2016  Multiple............  Web Interface, EHR,   Include an indicator for
                                                                  Registry, Claims.     satisfactory reporters
                                                                                        under PQRS and PQRS
                                                                                        GPRO, participants in
                                                                                        EHR, and EPs who report
                                                                                        the PQRS Cardiovascular
                                                                                        Prevention measures
                                                                                        group in support of
                                                                                        Million Hearts.
2015.....................            2016  PQRS GPRO & ACO GPRO  Web Interface, EHR,   All 2015 PQRS GPRO
                                                                  & Registry.           measures reported via
                                                                                        the Web Interface, EHR,
                                                                                        and Registry are
                                                                                        available for public
                                                                                        reporting for group
                                                                                        practices of 2 or more
                                                                                        EPs and all measures
                                                                                        reported by ACOs with a
                                                                                        minimum sample size of
                                                                                        20 patients.
2015.....................            2016  CAHPS for PQRS &      CMS-Specified         2015 CAHPS for PQRS for
                                            CAHPS for ACOs.       Certified CAHPS       groups of 2 or more EPs
                                                                  Vendor.               and CAHPS for ACOs for
                                                                                        those who meet the
                                                                                        specified sample size
                                                                                        requirements and collect
                                                                                        data via a CMS-specified
                                                                                        certified CAHPS vendor.
2015.....................            2016  PQRS................  Registry, EHR, or     All 2015 PQRS measures
                                                                  Claims.               for individual EPs
                                                                                        collected through a
                                                                                        Registry, EHR, or
                                                                                        claims.
2015.....................            2016  QCDR data...........  QCDR................  All 2015 QCDR data
                                                                                        available for public
                                                                                        report on Physician
                                                                                        Compare at the
                                                                                        individual level or
                                                                                        aggregated to a higher
                                                                                        level of the QCDR's
                                                                                        choosing.
----------------------------------------------------------------------------------------------------------------

K. Physician Payment, Efficiency, and Quality Improvements--Physician 
Quality Reporting System

    This section contains the proposed requirements for the Physician 
Quality Reporting System (PQRS). The PQRS, as set forth in sections 
1848(a), (k), and (m) of the Act, is a quality reporting program that 
provides incentive payments (ending with 2014) and payment adjustments 
(beginning in 2015) to eligible professionals and group practices based 
on whether they satisfactorily report data on quality measures for 
covered professional services furnished during a specified reporting 
period or to individual eligible professionals that satisfactorily 
participate in a qualified clinical data registry (QCDR).
    The proposed requirements will primarily focus on our proposals 
related to the 2017 PQRS payment adjustment, which will be based on an 
eligible professional's or a group practice's reporting of quality 
measures data during the 12-month calendar year reporting period 
occurring in 2015 (that is, January 1 through December 31, 2015). 
Please note that, in developing these proposals, we focused on aligning 
our requirements with other quality reporting programs, such as the 
Medicare EHR Incentive Program for Eligible Professionals, the 
Physician Value-Based Payment Modifier (VM), and the Medicare Shared 
Savings Program, where and to the extent appropriate and feasible. In 
previous years, we have made various strides in our ongoing efforts to 
align the reporting requirements in CMS' various quality reporting 
programs to reduce burden on the eligible professionals and group 
practices that participate in these programs. Particularly through the 
QCDR option, we are exploring opportunities to align with quality 
reporting programs that exist outside of CMS where and to the extent 
appropriate and feasible. We continued to focus on alignment as we 
developed our proposals for the 2017 PQRS payment adjustment below.
    The PQRS regulation is located at 42 CFR 414.90. The program 
requirements for the 2007 through 2014 PQRS incentives and the 2015 and 
2016 PQRS payment adjustment that were previously established, as well 
as

[[Page 40392]]

information on the PQRS, including related laws and established 
requirements, are available at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/index.html. In 
addition, the 2012 PQRS and eRx Experience Report, which provides 
information about eligible professional participation in PQRS, is 
available for download at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/2012-PQRS-and-eRx-Experience-Report.zip.
    We note that eligible professionals in critical access hospitals 
(CAHs) were previously not able to participate in the PQRS. Due to a 
change we made in the manner in which eligible professionals in CAHs 
are reimbursed by Medicare, it is now feasible for eligible 
professionals in CAHs to participate in the PQRS. Although eligible 
professionals in CAHs are not able to use the claims-based reporting 
mechanism to report PQRS quality measures data in 2014, beginning in 
2015, these eligible professionals in CAHs may participate in the PQRS 
using ALL reporting mechanisms available, including the claims-based 
reporting mechanism. Finally, please note that in accordance with 
section 1848(a)(8) of the Act, all eligible professionals who do not 
meet the criteria for satisfactory reporting or satisfactory 
participation for the 2017 PQRS payment adjustment will be subject to 
the 2017 PQRS payment adjustment with no exceptions.
    In addition, in the CY 2013 PFS final rule with comment period, we 
introduced the reporting of the Agency for Healthcare Research and 
Quality's (AHRQ's) Clinician & Group (CG) Consumer Assessment of 
Healthcare Providers and Systems (CAHPS) survey measures, referenced at 
https://cahps.ahrq.gov/Surveys-Guidance/CG/index.html. AHRQ's CAHPS 
Clinician & Group Survey Version 2.0 (CG-CAHPS) includes 34 core CG-
CAHPS survey questions. In addition to these 34 core questions, the 
CAHPS survey measures that are used in the PQRS include supplemental 
questions from CAHPS Patient-Centered Medical Home Survey, Core CAHPS 
Health Plan Survey Version 5.0, other CAHPS supplemental items, and 
some additional questions. Since the CAHPS survey used in the PQRS 
covers more than just the 34 core CG-CAHPS survey measures, we will 
refer to the CG-CAHPS survey measures used in the PQRS as ``CAHPS for 
PQRS.'' We propose to make this revision throughout Sec.  414.90.
1. Requirements for the PQRS Reporting Mechanisms
    The PQRS includes the following reporting mechanisms: Claims; 
qualified registry; EHR (including direct EHR products and EHR data 
submission vendor products); the Group Practice Reporting Option (GPRO) 
web interface; certified survey vendors, for CG-CAHPS survey measures; 
and the QCDR. Under the existing PQRS regulation, Sec.  414.90(h) 
through (k) govern which reporting mechanisms are available for use by 
individuals and group practices for the PQRS incentive and payment 
adjustment. This section III.K.1 contains our proposals to change the 
qualified registry, direct EHR and EHR data submission vendor products, 
QCDR, and GPRO web interface reporting mechanisms. Please note that we 
are not proposing to make changes to the claims-based reporting 
mechanism.
a. Proposed Changes to the Requirements for the Qualified Registry
    In the CY 2013 and 2014 PFS final rules with comment period, we 
established certain requirements for entities to become qualified 
registries for the purpose of verifying that a qualified registry is 
prepared to submit data on PQRS quality measures for the reporting 
period in which the qualified registry seeks to be qualified (77 FR 
69179 through 69180 and 78 FR 74456). Specifically, in the CY 2014 PFS 
final rule with comment period, in accordance with the satisfactory 
reporting criterion we finalized for individual eligible professionals 
or group practices reporting PQRS quality measures via qualified 
registry, we finalized the following requirement that a qualified 
registry must be able to collect all needed data elements and transmit 
to CMS the data at the TIN/NPI level for at least 9 measures covering 
at least 3 of the National Quality Strategy (NQS) domains (78 FR 
74456).
    As we explain in further detail in this section III.K, we are 
proposing that--in addition to proposing to require that an eligible 
professional or group practice report on at least 9 measures covering 3 
NQS domains--an eligible professional or group practice who sees at 
least 1 Medicare patient in a face-to-face encounter, as we propose to 
define that term in section III.K.2.a., and wishes to meet the proposed 
criterion for satisfactory reporting of PQRS quality measures via a 
qualified registry for the 2017 PQRS payment adjustment would be 
required to report on at least 2 cross-cutting PQRS measures specified 
in Table 21. In accordance with this proposal, we are proposing to 
require that, in addition to being required to be able to collect all 
needed data elements and transmit to CMS the data at the TIN/NPI level 
for at least 9 measures covering at least 3 of the NQS domains for 
which a qualified registry transmits data, a qualified registry would 
be required to be able to collect all needed data elements and transmit 
to CMS the data at the TIN/NPI level for ALL cross-cutting measures 
specified in Table 21 for which the registry's participating eligible 
professionals are able to report. We are proposing to require that 
qualified registries be able to report on all cross-cutting measures 
specified in Table 21 for which the registry's participating eligible 
professionals are able to report, rather than proposing to require a 
minimum of 2, so that eligible professionals and group practices using 
qualified registries to report PQRS measures would have the flexibility 
in choosing which cross-cutting measures to report, and to report on as 
many cross-cutting measures specified in Table 21 as they are able.
    Furthermore, in the CY 2013 PFS final rule, we noted that qualified 
registries have until the last Friday of February following the 
applicable reporting period (for example, February 28, 2014, for 
reporting periods ending in 2013) to submit quality measures data on 
behalf of its eligible professionals (77 FR 69182). We continue to 
receive stakeholder feedback, particularly from qualified registries 
currently participating in the PQRS, urging us to extend this 
submission deadline due to the time it takes for these qualified 
registries to collect and analyze the quality measures data received 
after the end of the reporting period. While, at the time, we 
emphasized the need to have quality measures data received by CMS no 
later than the last Friday of the February occurring after the end of 
the applicable reporting period, we believe it is now feasible to 
extend this deadline. Therefore, we propose to extend the deadline for 
qualified registries to submit quality measures data, including, but 
not limited to, calculations and results, to March 31 following the end 
of the applicable reporting period (for example, March 31, 2016, for 
reporting periods ending in 2015).
    In addition, we seek comment on whether to propose in future 
rulemaking to allow more frequent submissions of data, such as 
quarterly or year-round submissions, rather than having only one 
opportunity to submit quality measures data as is our current process.
    We invite public comment on these proposals.

[[Page 40393]]

b. Proposed Changes to the Requirements for the Direct EHR and EHR Data 
Submission Vendor Products That Are CEHRT
    In the CY 2013 PFS final rule with comment period, we finalized 
requirements that although EHR vendors and their products would no 
longer be required to undergo the previously existing qualification 
process, we would only accept the data if the data are: (1) Transmitted 
in a CMS-approved XML format utilizing a Clinical Document Architecture 
(CDA) standard such as Quality Reporting Data Architecture (QRDA) level 
1 (and for EHR data submission vendor products that intend to report 
for purposes of the proposed PQRS-Medicare EHR Incentive Program Pilot, 
if the aggregate data are transmitted in a CMS-approved XML format); 
and (2) in compliance with a CMS-specified secure method for data 
submission (77 FR 69183 through 69187). To further clarify, EHR vendors 
and their products must be able to submit data in the form and manner 
specified by CMS. Accordingly, direct EHRs and EHR data submission 
vendors must comply with CMS Implementation Guides for both the QRDA-I 
and QRDA-III data file formats. The Implementation Guides for 2014 are 
available at http://www.cms.gov/Regulations-and-Guidance/Legislation/EHRIncentivePrograms/Downloads/Guide_QRDA_2014eCQM.pdf. Updated 
guides for 2015, when available, will be posted on the CMS EHR 
Incentive Program Web site at http://www.cms.gov/Regulations-and-Guidance/Legislation/EHRIncentivePrograms. These implementation guides 
further describe the technical requirements for data submission to 
ensure the data elements required for measure calculation and 
verification are provided. We propose to continue applying these 
requirements to direct EHR products and EHR data submission vendor 
products for 2015 and beyond. For 2015 and beyond, we also propose to 
have the eligible professional or group practice provide the CMS EHR 
Certification Number of the product used by the eligible professional 
or group practice for direct EHRs and EHR data submission vendors.
    We believe this requirement is necessary to ensure that the 
eligible professionals and group practices that are using EHR 
technology are using a product that is certified EHR technology (CEHRT) 
and will allow CMS to ensure that the eligible professional or group 
practice's data is derived from a product that is CEHRT.
    Additionally, we seek comment on whether to propose in future 
rulemaking to allow more frequent submissions of data, such as 
quarterly or year-round submissions, rather than having only one 
opportunity to submit quality measures data as is our current process.
    We invite public comment on these proposals.
c. Proposed Changes to the Requirements for the QCDR
    In the CY 2014 PFS final rule with comment period, we established 
certain requirements for entities to become QCDRs for the purpose of 
having their participating eligible professionals meet the criteria for 
satisfactory participation in a QCDR for purposes of the PQRS 
incentives and payment adjustments (78 FR 74465 through 74474).
    Specifically, in accordance with the final criterion that required 
eligible professionals to report on at least 1 outcome measure, we 
required that an entity possess at least 1 outcome measure for which 
its participating eligible professionals may report (78 FR 74470). As 
we explain in further detail in section III.K. of this proposed rule, 
we are proposing that an eligible professional wishing to meet the 
proposed criterion for satisfactory participation in a QCDR for the 
2017 PQRS payment adjustment report on at least 3 outcome measures (or 
if less than 3 outcome measures are available for reporting, report on 
at least 2 outcome measures and at least 1 of the following types of 
measures: resource use; patient experience of care; or efficiency/
appropriate use). Accordingly, we are proposing to amend the 
requirement for the 2017 PQRS payment adjustment to require a QCDR to 
possess at least 3 outcome measures (or, in lieu of 3 outcome measures, 
at least 2 outcome measures and at least 1 of the following other types 
of measures--resource use, patient experience of care, or efficiency/
appropriate use).
    To establish the minimum number of measures (9 measures covering at 
least 3 NQS domains) a QCDR may report for the PQRS, we placed a limit 
on the number of non-PQRS measures (20) that a QCDR may submit on 
behalf of an eligible professional at this time (78 FR 74476). Although 
we believe such a limit is still necessary because the QCDR option is 
still new and we are still gaining familiarity with the measures 
available for reporting under the QCDRs, we believe it is appropriate 
to increase the number of non-PQRS that may be reported by QCDRs. We 
have received comments from entities currently undergoing the QCDR 
qualification process who wish to submit data on additional measures 
and we believe that accepting additional quality measures data is 
important, as it provides a better and more complete picture of the 
quality of care provided by eligible professionals. Therefore, we are 
proposing to change this limit from 20 measures to 30. In other words, 
beginning with the criteria for satisfactory participation for the 2017 
PQRS payment adjustment, a QCDR may submit quality measures data for a 
maximum of 30 non-PQRS measures. Please note that this proposed limit 
does not apply to measures contained in the PQRS measure set, as QCDRs 
can report on as many measures in the PQRS measure set as they wish.
    Additionally, CMS' experience during the 2014 self-nomination 
process shed light on clarifications needed on what is considered a 
non-PQRS measure. Therefore, to clarify the definition of non-PQRS 
measures, we propose the following parameters for a measure to be 
considered a non-PQRS measure:
     A measure that is not contained in the PQRS measure set 
for the applicable reporting period.
     A measure that may be in the PQRS measure set but has 
substantive differences in the manner it is reported by the QCDR. For 
example, PQRS measure 319 is reportable only via the GPRO web 
interface. A QCDR wishes to report this measure on behalf of its 
eligible professionals. However, as CMS has only extracted the data 
collected from this quality measure using the GPRO web interface, in 
which CMS utilizes a claims-based assignment and sampling methodology 
to inform the groups on which patients they are to report, the 
reporting of this measure would require changes to the way that the 
measure is calculated and reported to CMS via a QCDR instead of through 
the GPRO web interface. Therefore, due to the substantive changes 
needed to report this measure via a QCDR, PQRS measure 319 would be 
considered a non-PQRS measure. In addition, CAHPS for PQRS is currently 
reportable only via a CMS-certified survey vendor. However, although 
CAHPS for PQRS is technically contained in the PQRS measure set, we 
consider the changes that will need to be made to be available for 
reporting by individual eligible professionals (and not as a part of a 
group practice) significant enough as to treat CAHPS for PQRS as a non-
PQRS measure for purposes of reporting CAHPS for PQRS via a QCDR.
    Furthermore, under our authority to establish the requirements for 
an entity to be considered a QCDR under section 1848(m)(3)(E)(i) of the 
Act, we established certain requirements for an

[[Page 40394]]

entity to be considered a QCDR in the CY 2014 PFS final rule with 
comment period (78 FR 74467 through 74473). Under this same authority, 
we are proposing here to add the following requirement that an entity 
must meet to serve as a QCDR under the PQRS for reporting periods 
beginning in 2015:
     Require that the entity make available to the public the 
quality measures data for which its eligible professionals report.
    In the CY 2014 PFS proposed rule, we proposed that, to be 
considered a QCDR, an entity would be required to demonstrate that it 
has a plan to publicly report its quality data through a mechanism 
where the public and registry participants can view data about 
individual eligible professionals, as well as view regional and 
national benchmarks (78 FR 43363). Due to stakeholder feedback against 
this proposal, as well as comments requesting more details surrounding 
this proposal, we did not finalize this proposed requirement in the CY 
2014 PFS final rule with comment period. However, we noted that we 
would revisit this proposal in future years (78 FR 74471). Because of 
our ongoing interest in providing transparency to the public for 
quality measures data that is reported under the PQRS, we again propose 
the requirement that an entity make available to the public the quality 
measures data for which its eligible professionals report. To clarify 
this proposal, we propose that, at a minimum, the QCDR publicly report 
the following quality measures data information that we believe will 
give patients adequate information on the care provided by an eligible 
professional:
     The title and description of the measures that a QCDR 
reports for purposes of the PQRS, as well as the performance results 
for each measure the QCDR reports.
    With respect to when the quality measures data must be publicly 
reported, we propose that the QCDR must have the quality measures data 
by April 31 of the year following the applicable reporting period (that 
is, April 31, 2016, for reporting periods occurring in 2015). The 
proposed deadline of April 31 will provide QCDRs with one month to post 
quality measures data and information following the March 31 deadline 
for the QCDRs to transmit quality measures data for purposes of the 
PQRS payment adjustments. We also propose that this data be available 
on a continuous basis and be continuously updated as the measures 
undergo changes in measure title and description, as well as when new 
performance results are calculated.
    Please note that, in making this proposal, we defer to the entity 
in terms of the method it will use to publicly report the quality 
measures data it collects for the PQRS. For example, to meet this 
proposed requirement, it would be sufficient for a QCDR to publicly 
report performance rates of eligible professionals through means such 
as, but not excluding, board or specialty Web sites, performance or 
feedback reports, or listserv dashboards or announcements. We also note 
that a QCDR would meet this public reporting requirement if the QCDR's 
measures data were posted on Physician Compare. In addition, we defer 
to the QCDR to determine whether to report performance results at the 
individual eligible professional level or aggregate the results for 
certain sets of eligible professionals who are in the same practice 
together (but we are not registered as a group practice for the 
purposes of PQRS reporting). We believe it is appropriate to allow a 
QCDR to publicly report performance results at an aggregate level for 
certain eligible professionals when those who are in the same practice 
contribute to the overall care provided to a patient.
    Based on CMS experience with the qualifying entities wishing to 
become QCDRs for reporting periods occurring in 2014, we received 
feedback from many organizations who expressed concern that the entity 
wishing to become a QCDR may not meet the requirements of a QCDR solely 
on its own. Therefore, we provide the following proposals beginning in 
2015 on situations where an entity may not meet the requirements of a 
QCDR solely on its own but, in conjunction with another entity, may be 
able to meet the requirements of a QCDR and therefore be eligible for 
qualification:
     We propose to allow that an entity that uses an external 
organization for purposes of data collection, calculation or 
transmission may meet the definition of a QCDR so long as the entity 
has a signed, written agreement that specifically details the 
relationship and responsibilities of the entity with the external 
organizations effective as of January 1 the year prior to the year for 
which the entity seeks to become a QCDR (for example, January 1, 2014, 
to be eligible to participate for purposes of data collected in 2015). 
We are adding this proposal because we received questions from entities 
wishing to become QCDRs who are engaged in quality improvement 
activities but use an external organization for purposes of quality 
measures data collection, calculation, and transmission. We believe 
that it may be appropriate to classify the entity as a QCDR so long as 
the entity meets the definition of a QCDR by the date for which we 
require that a QCDR must be in existence (that is, January 1 the year 
prior to the year for which the entity seeks to become a QCDR (78 FR 
74467)). Entities that have a mere verbal, non-written agreement to 
work together to become a QCDR by January 1 the year prior to the year 
for which the entity seeks to become a QCDR would not fulfill this 
proposed requirement.
     In addition, we propose that an entity that has broken off 
from a larger organization may be considered to be in existence for the 
purposes of QCDR qualification as of the earliest date the larger 
organization begins continual existence. We received questions from 
entities who used to be part of a larger organization but have recently 
become independent from the larger organization as to whether the 
entities would meet the requirement established in the CY 2014 PFS 
final rule with comment period that the entity be in existence as of 
January 1 the year prior to the year for which the entity seeks to 
become a QCDR (78 FR 74467). For example, a registry that was 
previously a part of a larger medical society as of January 1, 2013, 
could have broken off from the medical society and become an 
independent registry in 2014. Likewise, a member of a medical society 
could create a registry separate from the medical society. As such, 
there would be concern as to whether that entity would meet the 
requirement of being in existence prior to January 1, 2013, to be 
considered for qualification for reporting periods occurring in 2014. 
In these examples, for purposes of meeting the requirement that the 
entity be in existence as of January 1 the year prior to the year for 
which the entity seeks to become a QCDR, we may consider this entity as 
being in existence as of the date the larger medical society was in 
existence.
    In the CY 2014 PFS final rule with comment period, in accordance 
with the submission deadline of quality measures data for qualified 
registries, we noted a deadline of the last Friday in February 
occurring after the end of the applicable reporting period to submit 
quality measures data to CMS (78 FR 74471). In accordance with our 
proposal to extend this deadline for qualified registries, we propose 
to extend the deadline for QCDRs to submit quality measures data 
calculations and results by March 31 following the end of the 
applicable reporting period (that is, March 31,

[[Page 40395]]

2016, for reporting periods occurring in 2015).
    Additionally, we seek comment on whether to propose in future 
rulemaking to allow more frequent submissions of data, such as 
quarterly or year-round submissions, rather than having only one 
opportunity to submit quality measures data as is our current process.
    We seek public comment on these proposed changes to the 
requirements for the QCDR.
d. Proposed Changes to the GPRO Web Interface
    In the CY 2014 PFS final rule with comment period (78 FR 74456), we 
finalized our proposal to require ``that group practices register to 
participate in the GPRO by September 30 of the year in which the 
reporting period occurs (that is September 30, 2014 for reporting 
periods occurring in 2014), as proposed.'' However, we noted that, in 
order ``to respond to the commenters concerns to provide timelier 
feedback on performance on CG CAHPS in the future, we anticipate 
proposing an earlier deadline for group practices to register to 
participate in the GPRO in future years'' (78 FR 74456). Indeed, to 
provide timelier feedback on performance on CAHPS for PQRS, we propose 
to modify the deadline that a group practice must register to 
participate in the GPRO to June 30 of the year in which the reporting 
period occurs (that is, June 30, 2015, for reporting periods occurring 
in 2015). Although this proposed GPRO registration deadline would 
provide less time for a group practice to decide whether to participate 
in the GPRO, we believe the benefit of providing timelier feedback 
reports outweighs this concern.
    Furthermore, we seek comment on whether to allow more frequent 
submissions of data, such as quarterly or year-round submissions, 
rather than having only one opportunity to submit quality measures data 
as is our current process.
    We seek public comment on these proposals.
2. Proposed Criteria for the Satisfactory Reporting for Individual 
Eligible Professionals for the 2017 PQRS Payment Adjustment
    Section 1848(a)(8) of the Act, as added by section 3002(b) of the 
Affordable Care Act, provides that for covered professional services 
furnished by an eligible professional during 2015 or any subsequent 
year, if the eligible professional does not satisfactorily report data 
on quality measures for covered professional services for the quality 
reporting period for the year, the fee schedule amount for services 
furnished by such professional during the year (including the fee 
schedule amount for purposes of determining a payment based on such 
amount) shall be equal to the applicable percent of the fee schedule 
amount that would otherwise apply to such services. For 2016 and 
subsequent years, the applicable percent is 98.0 percent.
a. Proposed Criterion for the Satisfactory Reporting of Individual 
Quality Measures via Claims and Registry for Individual Eligible 
Professionals for the 2017 PQRS Payment Adjustment
    In the CY 2014 PFS final rule with comment period (see Table 47 at 
78 FR 74479), we finalized the following criteria for satisfactory 
reporting for the submission of individual quality measures via claims 
and registry for the 2014 PQRS incentive: For the 12-month reporting 
period for the 2014 PQRS incentive, the eligible professional would 
report at least 9 measures, covering at least 3 of the NQS domains, OR, 
if less than 9 measures apply to the eligible professional, report 1-8 
measures, AND report each measure for at least 50 percent of the 
Medicare Part B FFS patients seen during the reporting period to which 
the measure applies. Measures with a 0 percent performance rate would 
not be counted. For an eligible professional who reports fewer than 9 
measures covering less than 3 NQS domains via the claims- or registry-
based reporting mechanism, the eligible professional would be subject 
to the measure application validity (MAV) process, which would allow us 
to determine whether the eligible professional should have reported 
quality data codes for additional measures.
    To be consistent with the satisfactory reporting criterion we 
finalized for the 2014 PQRS incentive, we are proposing to modify Sec.  
414.90(j) and propose the following criterion for individual eligible 
professionals reporting via claims and registry: For the 12-month 
reporting period for the 2017 PQRS payment adjustment, the eligible 
professional would report at least 9 measures, covering at least 3 of 
the NQS domains AND report each measure for at least 50 percent of the 
eligible professional's Medicare Part B FFS patients seen during the 
reporting period to which the measure applies. Of the measures 
reported, if the eligible professional sees at least 1 Medicare patient 
in a face-to-face encounter, as we propose to define that term below, 
the eligible professional would report on at least 2 measures contained 
in the proposed cross-cutting measure set specified in Table 21. If 
less than 9 measures apply to the eligible professional, the eligible 
professional would report up to 8 measure(s), AND report each measure 
for at least 50 percent of the Medicare Part B FFS patients seen during 
the reporting period to which the measure applies. Measures with a 0 
percent performance rate would not be counted.
    We note that, unlike the criterion we finalized for the 2014 PQRS 
incentive, we are proposing to require an eligible professional who 
sees at least 1 Medicare patient in a face-to-face encounter, as we 
propose to define that term below, during the 12-month 2017 PQRS 
payment adjustment reporting period to report at least 2 measures 
contained in the proposed cross-cutting measure set specified in Table 
21. As we noted in the CY 2014 PFS proposed rule (78 FR 43359), we are 
dedicated to collecting data that provides us with a better picture of 
the overall quality of care furnished by eligible professionals, 
particularly for the purpose of having PQRS reporting being used to 
assess quality performance under the VM. We believe that requiring an 
eligible professional to report on at least 2 broadly applicable, 
cross-cutting measures will provide us with quality data on more varied 
aspects of an eligible professional's practice. We also note that in 
its 2014 pre-rulemaking final report (available at http://www.qualityforum.org/Publications/2014/01/MAP_Pre-Rulemaking_Report__2014_Recommendations_on_Measures_for_More_than_20_Federal_Programs.aspx), the Measure Applications Partnership (MAP) encouraged 
the development of a core measure set (see page 16 of the ``MAP Pre-
Rulemaking Report: 2014 Recommendations on Measures for More than 20 
Federal Programs''). The MAP stated ``a core [measure set] would 
address critical improvement gaps, align payment incentives across 
clinician types, and reduce reporting burden.''
    For what defines a ``face-to-face'' encounter, for purposes of 
proposing to require reporting of at least 2 cross-cutting measures 
specified in Table 21, we propose to determine whether an eligible 
professional had a ``face-to-face'' encounter by seeing whether the 
eligible professional billed for services under the PFS that are 
associated with face-to-face encounters, such as whether an eligible 
professional billed general office visit codes, outpatient visits, and 
surgical procedures. We would not include telehealth visits as face-to-
face encounters for purposes of the proposals

[[Page 40396]]

require reporting of at least 2 cross-cutting measures specified in 
Table 21.
    In addition, we understand that there may be instances where an 
eligible professional may not have at least 9 measures applicable to an 
eligible professional's practice. In this instance, like the criterion 
we finalized for the 2014 PQRS incentive (see Table 47 at 78 FR 74479), 
an eligible professional reporting on less than 9 measures would still 
be able to meet the satisfactory reporting criterion via claims and 
registry if the eligible professional reports on 1-8 measures, as 
applicable, to the eligible professional's practice. If an eligible 
professional reports on 1-8 measures, the eligible professional would 
be subject to the MAV process, which would allow us to determine 
whether an eligible professional should have reported quality data 
codes for additional measures. In addition, the MAV will also allow us 
to determine whether a group practice should have reported on any of 
the proposed cross-cutting measures specified in Table 21. The MAV 
process we are proposing to implement for claims and registry is the 
same process that was established for reporting periods occurring in 
2014 for the 2014 PQRS incentive. For more information on the claims 
MAV process, please visit http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/2014_PQRS_Claims_MeasureApplicabilityValidation_12132013.zip. For more 
information on the registry MAV process, please visit http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/2014_PQRS_Registry_MeasureApplicabilityValidation_12132013.zip.
    We seek public comment on our proposed satisfactory reporting 
criterion for individual eligible professionals reporting via claims or 
registry for the 2017 PQRS payment adjustment.
b. Proposed Criterion for Satisfactory Reporting of Individual Quality 
Measures via EHR for Individual Eligible Professionals for the 2017 
PQRS Payment Adjustment
    In the CY 2013 PFS final rule with comment period, we finalized the 
following criterion for the satisfactory reporting for individual 
eligible professionals reporting individual measures via a direct EHR 
that is CEHRT or an EHR data submission vendor that is CEHRT for the 
2014 PQRS incentive: Report 9 measures covering at least 3 of the NQS 
domains. If an eligible professional's CEHRT does not contain patient 
data for at least 9 measures covering at least 3 domains, then the 
eligible professional must report all of the measures for which there 
is Medicare patient data. An eligible professional must report on at 
least 1 measure for which there is Medicare patient data (see Table 47 
at 78 FR 74479).
    To be consistent with the criterion we finalized for the 2014 PQRS 
incentive, as well as to continue to align with the final criterion for 
meeting the clinical quality measure (CQM) component of achieving 
meaningful use under the Medicare EHR Incentive Program, we are 
proposing to modify Sec.  414.90(j) and propose the following criterion 
for the satisfactory reporting for individual eligible professionals to 
report individual measures via a direct EHR that is CEHRT or an EHR 
data submission vendor that is CEHRT for the 2017 PQRS payment 
adjustment: The eligible professional would report 9 measures covering 
at least 3 of the NQS domains. If an eligible professional's CEHRT does 
not contain patient data for at least 9 measures covering at least 3 
domains, then the eligible professional would be required to report all 
of the measures for which there is Medicare patient data. An eligible 
professional would be required to report on at least 1 measure for 
which there is Medicare patient data.
    We seek public comment on this proposal.
c. Proposed Criterion for Satisfactory Reporting of Measures Groups via 
Registry for Individual Eligible Professionals for the 2017 PQRS 
Payment Adjustment
    In the CY 2013 PFS final rule with comment period, we finalized the 
following criterion for the satisfactory reporting for individual 
eligible professionals to report measures groups via registry for the 
2014 PQRS incentive: For the 12-month reporting period for the 2014 
PQRS incentive, report at least 1 measures group AND report each 
measures group for at least 20 patients, the majority (11 patients) of 
which must be Medicare Part B FFS patients. Measures groups containing 
a measure with a 0 percent performance rate will not be counted (see 
Table 47 at 78 FR 74479).
    To be consistent with the criterion we finalized for the 2014 PQRS 
incentive, we are proposing to modify Sec.  414.90(j) to indicate the 
following criterion for the satisfactory reporting for individual 
eligible professionals to report measures groups via registry for the 
2017 PQRS payment adjustment: For the 12-month reporting period for the 
2017 PQRS payment adjustment, the eligible professional would report at 
least 1 measures group AND report each measures group for at least 20 
patients, the majority (11 patients) of which would be required to be 
Medicare Part B FFS patients. Measures groups containing a measure with 
a 0 percent performance rate would not be counted.
    Although we are proposing satisfactory reporting criterion for 
individual eligible professionals to report measures groups via 
registry for the 2017 PQRS payment adjustment that is consistent with 
criterion finalized for the 2014 PQRS incentive, please note, however, 
in this section III.K of this proposed rule, we are proposing to change 
the definition of a PQRS measures group.
    We seek public comment on our proposed satisfactory reporting 
criterion for individual eligible professionals reporting measures 
groups via registry for the 2017 PQRS payment adjustment.
3. Satisfactory Participation in a QCDR by Individual Eligible 
Professionals
    Section 601(b) of the ATRA amended section 1848(m)(3) of the Act, 
by redesignating subparagraph (D) as subparagraph (F) and adding new 
subparagraphs (D) and (E), to provide for a new standard for individual 
eligible professionals to satisfy the PQRS beginning in 2014, based on 
satisfactory participation in a QCDR.
a. Proposed Criterion for the Satisfactory Participation for Individual 
Eligible Professionals in a QCDR for the 2017 PQRS Payment Adjustment
    Section 1848(a)(8) of the Act provides that for covered 
professional services furnished by an eligible professional during 2015 
or any subsequent year, if the eligible professional does not 
satisfactorily report data on quality measures for covered professional 
services for the quality reporting period for the year, the fee 
schedule amount for services furnished by such professional during the 
year shall be equal to the applicable percent of the fee schedule 
amount that would otherwise apply to such services. For 2016 and 
subsequent years, the applicable percent is 98.0 percent.
    Section 1848(m)(3)(D) of the Act, as added by section 601(b) of the 
ATRA, authorizes the Secretary to treat an individual eligible 
professional as satisfactorily submitting data on quality measures 
under section 1848(m)(3)(A) of the Act if, in lieu of reporting 
measures under section 1848(k)(2)(C) of the Act, the eligible 
professional is satisfactorily participating in a QCDR for the year. 
``Satisfactory participation'' is a new standard under the PQRS and

[[Page 40397]]

is a substitute for the underlying standard of ``satisfactory 
reporting'' data on covered professional services that eligible 
professionals must meet to avoid the PQRS payment adjustment. 
Currently, Sec.  414.90(e)(2) states that individual eligible 
professionals must be treated as satisfactorily reporting data on 
quality measures if the individual eligible professional satisfactorily 
participates in a QCDR.
    In the CY 2014 PFS final rule with comment period, although we 
finalized satisfactory participation criteria for the 2016 PQRS payment 
adjustment that are less stringent than the satisfactory participation 
criteria we finalized for the 2014 PQRS incentive, we noted that it was 
``our intention to fully move towards the reporting of 9 measures 
covering at least 3 domains to meet the criteria for satisfactory 
participation for the 2017 PQRS payment adjustment'' (78 FR 74477). 
Specifically, we finalized the following two criteria for the 
satisfactory participation in a QCDR for the 2014 PQRS incentive at 
Sec.  414.90(i)(3): For the 12-month 2014 reporting period, report at 
least 9 measures available for reporting under the QCDR covering at 
least 3 of the NQS domains, and report each measure for at least 50 
percent of the eligible professional's applicable patients. Of the 
measures reported via a QCDR, the eligible professional must report on 
at least 1 outcome measure.
    To be consistent with the number of measures reported for the 
satisfactory participation criterion we finalized for the 2014 PQRS 
incentive, for purposes of the 2017 PQRS payment adjustment (which 
would be based on data reported during the 12-month period that falls 
in CY 2015), we propose to modify Sec.  414.90(k) to add the following 
criteria for individual eligible professionals to satisfactorily 
participate in a QCDR for the 2017 PQRS payment adjustment: For the 12-
month reporting period for the 2017 PQRS payment adjustment, the 
eligible professional would report at least 9 measures available for 
reporting under a QCDR covering at least 3 of the NQS domains, AND 
report each measure for at least 50 percent of the eligible 
professional's patients. Of these measures, the eligible professional 
would report on at least 3 outcome measures, OR, if 3 outcomes measures 
are not available, report on at least 2 outcome measures and at least 1 
of the following types of measures--resource use, patient experience of 
care, or efficiency/appropriate use.
    Unlike the satisfactory participation criteria that were 
established for the 2014 PQRS incentive, we are proposing to modify 
Sec.  414.90(k)(4) to require that an eligible professional report on 
not only 1 but at least 3 outcome measures (or, 2 outcome measures and 
at least 1 resource use, patient experience of care, or efficiency/
appropriate use if 3 outcomes measures are not available). We are 
proposing this increase because it is our goal to, when appropriate, 
move towards the reporting of more outcome measures. We believe the 
reporting of outcome measures (for example, unplanned hospital 
readmission after a procedure) better captures the quality of care an 
eligible professional provides than, for example, process measures (for 
example, whether a Hemoglobin A1c test was performed for diabetic 
patients). In establishing this proposal, we understand that a QCDR may 
not have 3 outcomes measures within its quality measure data set. 
Therefore, as an alternative to a third outcome measure, we are 
allowing an eligible professional to report on at least 1 resource use, 
patient experience of care, or efficiency/appropriate use measure in 
lieu of an outcome measure.
    We seek public comment on these proposals.
4. Proposed Criteria for Satisfactory Reporting for Group Practices 
Selected to Participate in the Group Practice Reporting Option (GPRO)
    In lieu of reporting measures under section 1848(k)(2)(C) of the 
Act, section 1848(m)(3)(C) of the Act provides the Secretary with the 
authority to establish and have in place a process under which eligible 
professionals in a group practice (as defined by the Secretary) shall 
be treated as satisfactorily submitting data on quality measures. 
Accordingly, this section III.K.4 contains our proposed satisfactory 
reporting criteria for group practices selected to participate in the 
GPRO. Please note that, for a group practice to participate in the PQRS 
GPRO in lieu of participating as individual eligible professionals, a 
group practice is required to register to participate in the PQRS GPRO. 
For more information on GPRO participation, please visit http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Group_Practice_Reporting_Option.html. For more 
information on registration, please visit http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeedbackProgram/Self-Nomination-Registration.html.
    In the CY 2014 PFS final rule with comment period, we established a 
deadline of September 30 of the applicable reporting period (that is, 
September 30, 2014, for reporting periods occurring in 2014) for a 
group practice to register to participate in the GPRO (78 FR 74456). 
While we still seek to provide group practices with as much time as 
feasible to decide whether to register to participate in the PQRS as a 
GPRO, we weigh this priority with others, such as our desire to provide 
more timely feedback to participants of the PQRS, as well as other CMS 
quality reporting programs such as the VM. Since participation in the 
VM is tied to PQRS participation as discussed in section III.N. of this 
proposed rule, we have found that having a GPRO registration deadline 
so late in time would not allow us to collect information related to 
group practice participation in time to provide PQRS and VM 
participants with feedback reports earlier in time. Therefore, in an 
effort to provide timelier feedback, we are proposing to change the 
deadline by which a group practice must register to participate in the 
GPRO to June 30 of the applicable 12-month reporting period (that is, 
June 30, 2015, for reporting periods occurring in 2015). This proposed 
change would allow us to provide timelier feedback while still 
providing group practices with over 6 months to determine whether they 
should participate in the PQRS GPRO or, in the alternative, participate 
in the PQRS as individual eligible professionals. We invite public 
comment on this proposal.
a. Proposed Criteria for Satisfactory Reporting on PQRS Quality 
Measures Via the GPRO Web Interface for the 2017 PQRS Payment 
Adjustment
    Consistent with the group practice reporting requirements under 
section 1848(m)(3)(C) of the Act, we propose to modify Sec.  414.90(j) 
to incorporate the following criterion for the satisfactory reporting 
of PQRS quality measures for group practices registered to participate 
in the GPRO for the 12-month reporting period for the 2017 PQRS payment 
adjustment using the GPRO web interface for groups practices of 25-99 
eligible professionals: The group practice would report on all measures 
included in the web interface; AND populate data fields for the first 
248 consecutively ranked and assigned beneficiaries in the order in 
which they appear in the group's sample for each module or preventive 
care measure. If the pool of eligible assigned beneficiaries is less 
than 248, then the group practice would report on 100 percent of 
assigned beneficiaries. In other words, we understand that, in some 
instances, the sampling methodology CMS provides will not be able to 
assign at least 248 patients on which a group practice may report,

[[Page 40398]]

particularly those group practices on the smaller end of the range of 
25-99 eligible professionals. If the group practice is assigned less 
than 248 Medicare beneficiaries, then the group practice would report 
on 100 percent of its assigned beneficiaries. A group practice would be 
required to report on at least 1 measure for which there is Medicare 
patient data.
    In addition, we propose to modify Sec.  414.90(j) to incorporate 
the following criteria for the satisfactory reporting of PQRS quality 
measures for group practices that registered to participate in the GPRO 
for the 12-month reporting period for the 2017 PQRS payment adjustment 
using the GPRO web interface for groups practices of 100 or more 
eligible professionals: The group practice would report all CAHPS for 
PQRS survey measures via a certified survey vendor. In addition, the 
group practice would report on all measures included in the GPRO web 
interface; AND populate data fields for the first 248 consecutively 
ranked and assigned beneficiaries in the order in which they appear in 
the group's sample for each module or preventive care measure. If the 
pool of eligible assigned beneficiaries is less than 248, then the 
group practice would report on 100 percent of assigned beneficiaries. A 
group practice would be required to report on at least 1 measure for 
which there is Medicare patient data.
    To maintain consistency in this reporting criteria, we note that 
this proposed criteria is similar to the criterion we finalized for the 
satisfactory reporting of PQRS quality measures for group practices 
selected to participate in the GPRO for the 12-month reporting periods 
for the 2013 and 2014 PQRS incentives for group practices of 100 or 
more eligible professionals in the CY 2013 PFS final rule with comment 
period (see Table 49 at 78 FR 74486). However, we are proposing to 
reduce the patient sample size a group practice is required to report 
quality measures data from 411 to 248. We examined the sample size of 
this reporting criterion and determined that the sample size we are 
proposing reduces provider reporting burden while still allowing for 
statistically valid and reliable performance results. For the 25-99 
sized groups reporting via the web interface, we recognize the proposal 
to move from reporting 218 to 248 patients per sample represents a 
slight increase in reporting. However, based on experience with the 218 
count and subsequent statistical analysis, we believe that there are 
increased performance reliabilities and validities gained when changing 
the minimum reporting requirement to 248. We believe statistical 
reliability and validity is extremely important when measuring provider 
performance, particularly given the implications of the Physician VM 
and Physician Compare public reporting, discussed in section III.N and 
section III.J respectively. Therefore, we believe this proposed 
criterion improves on the criterion previously finalized.
    For assignment of patients for group practices reporting via the 
GPRO web interface, in previous years, we have aligned with the 
Medicare Shared Savings Program methodology of beneficiary assignment 
(see 77 FR 69195). We note that, in section III.N. of this proposed 
rule, we are proposing to use a beneficiary attribution methodology for 
the VM for the claims-based quality measures and cost measures that is 
slightly different from the Medicare Shared Savings Program 
methodology, namely (1) eliminating the primary care service pre-step 
that is statutorily required for the Shared Savings Program and (2) 
including NPs, PA, and CNSs in step 1 rather than in step 2 of the 
attribution process. We believe that aligning with the VM's proposed 
method of attribution is appropriate, as the VM is directly tied to 
participation in the PQRS. Therefore, to achieve further alignment with 
the VM and for the reasons proposed in section III.N., we propose to 
adopt the attribution methodology changes proposed for the VM into the 
GPRO web interface beneficiary assignment methodology.
    In addition, we note that, in the past, we have not provided 
guidance on those group practices that choose the GPRO web interface to 
report PQRS quality measures but have seen no Medicare patients for 
which the GPRO measures are applicable, or if they have no (i.e., 0 
percent) responses for a particular module or measure. Since we are 
moving solely towards the implementation of PQRS payment adjustments, 
we seek to clarify this scenario here. If a group practice has no 
Medicare patients for which any of the GPRO measures are applicable, 
the group practice will not meet the criteria for satisfactory 
reporting using the GPRO web interface. Therefore, to meet the criteria 
for satisfactory reporting using the GPRO web interface, a group 
practice must be assigned and have sampled at least 1 Medicare patient 
for any of the applicable GPRO web interface measures (specified in 
Table 21). If a group practice does not typically see Medicare patients 
for which the GPRO web interface measures are applicable, we advise the 
group practice to participate in the PQRS via another reporting 
mechanism.
    We invite public comment on these proposals.
b. Proposed Criteria for Satisfactory Reporting on Individual PQRS 
Quality Measures for Group Practices Registered To Participate in the 
GPRO via Registry and EHR for the 2017 PQRS Payment Adjustment
    For registry reporting in the GPRO, in the CY 2014 PFS final rule 
with comment period (see Table 49 at 78 FR 74486), we finalized the 
following satisfactory reporting criteria for the submission of 
individual quality measures via registry for group practices comprised 
of 2 or more eligible professionals in the GPRO for the 2014 PQRS 
incentive: Report at least 9 measures, covering at least 3 of the NQS 
domains, OR, if less than 9 measures covering at least 3 NQS domains 
apply to the group practice, report 1--8 measures covering 1-3 NQS 
domains for which there is Medicare patient data, AND report each 
measure for at least 50 percent of the group practice's Medicare Part B 
FFS patients seen during the reporting period to which the measure 
applies. Measures with a 0 percent performance rate would not be 
counted. In the CY 2014 PFS final rule with comment period, we signaled 
that it was ``our intent to ramp up the criteria for satisfactory 
reporting for the 2017 PQRS payment adjustment to be on par or more 
stringent than the criteria for satisfactory reporting for the 2014 
PQRS incentive'' (78 FR 74465).
    Consistent with the criterion finalized for the 2014 PQRS incentive 
and the group practice reporting requirements under section 
1848(m)(3)(C) of the Act, for those group practices that choose to 
report using a qualified registry, we propose here to modify Sec.  
414.90(j) to include the following satisfactory reporting criterion via 
qualified registry for ALL group practices who select to participate in 
the GPRO for the 2017 PQRS payment adjustment: The group practice would 
report at least 9 measures, covering at least 3 of the NQS domains. Of 
these measures, if a group practice sees at least 1 Medicare patient in 
a face-to-face encounter, the group practice would report on at least 2 
measures in the cross-cutting measure set specified in Table 21. If 
less than 9 measures covering at least 3 NQS domains apply to the 
eligible professional, the group practice would report up to 8 measures 
covering 1-3 NQS domains for which there is Medicare patient data, AND 
report each measure for at least 50 percent of the eligible 
professional's Medicare Part B

[[Page 40399]]

FFS patients seen during the reporting period to which the measure 
applies. Measures with a 0 percent performance rate would not be 
counted.
    As with individual reporting, we understand that there may be 
instances where a group practice may not have at least 9 measures 
applicable to a group practice's practice. In this instance, like the 
criterion we finalized for the 2014 PQRS incentive (see Table 49 at 78 
FR 74486), a group practice reporting on less than 9 measures would 
still be able to meet the satisfactory reporting criterion via registry 
if the group practice reports on as many measures as are applicable to 
the group practice's practice. If a group practice reports on less than 
9 measures, the group practice would be subject to the MAV process, 
which would allow us to determine whether a group practice should have 
reported quality data codes for additional measures and/or measures 
covering additional NQS domains. In addition, if a group practice does 
not report on at least 1 cross-cutting measure and the group practice 
has at least 1 eligible professional who sees at least 1 Medicare 
patient in a face-to-face encounter, the MAV will also allow us to 
determine whether a group practice should have reported on any of the 
proposed cross-cutting measures specified in Table 21. The MAV process 
we are proposing to implement for registry reporting is the same 
process that was established for reporting periods occurring in 2014 
for the 2014 PQRS incentive. For more information on the registry MAV 
process, please visit http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/2014_PQRS_Registry_MeasureApplicabilityValidation_12132013.zip.
    For EHR reporting, consistent with the criterion finalized for the 
2014 PQRS incentive that aligns with the criteria established for 
meeting the CQM component of meaningful use under the EHR Incentive 
Program and in accordance with the group practice reporting 
requirements under section 1848(m)(3)(C) of the Act, for those group 
practices that choose to report using an EHR, we propose to modify 
Sec.  414.90(j) to indicate the following satisfactory reporting 
criterion via a direct EHR product that is CEHRT or an EHR data 
submission vendor that is CEHRT for ALL group practices who select to 
participate in the GPRO for the 2017 PQRS payment adjustment: For the 
12-month reporting period for the 2017 PQRS payment adjustment, the 
group practice would report 9 measures covering at least 3 domains. If 
the group practice's CEHRT does not contain patient data for at least 9 
measures covering at least 3 domains, then the group practice must 
report the measures for which there is patient data. A group practice 
must report on at least 1 measure for which there is Medicare patient 
data.
    We invite public comment on these proposals.
c. Proposed Criteria for Satisfactory Reporting on Individual PQRS 
Quality Measures for Group Practices Registered To Participate in the 
GPRO via a CMS-Certified Survey Vendor for the 2017 PQRS Payment 
Adjustment
    In the CY 2014 PFS final rule with comment period, we introduced 
satisfactory reporting criterion for the 2014 PQRS incentive related to 
reporting the CG CAHPS survey measures via a CMS-certified survey 
vendor (see Table 49 at 78 FR 74486). Consistent with the criterion 
finalized for the 2014 PQRS incentive and the group practice reporting 
requirements under section 1848(m)(3)(C) of the Act, we are proposing 
the following 3 options (of which a group practice would be able to 
select 1 out of the 3 options) for satisfactory reporting for the 2017 
PQRS payment adjustment for group practices comprised of 25 or more 
eligible professionals:
    Proposed Option 1: If a group practice chooses to use a qualified 
registry, in conjunction with reporting the CAHPS for PQRS survey 
measures, for the 12-month reporting period for the 2017 PQRS payment 
adjustment, the group practice would report all CAHPS for PQRS survey 
measures via a certified vendor, and report at least 6 additional 
measures, outside of CAHPS for PQRS, covering at least 2 of the NQS 
domains using the qualified registry. If less than 6 measures apply to 
the group practice, the group practice must report all applicable 
measures. Of these 6 measures, if any eligible professional in the 
group practice sees at least 1 Medicare patient in a face-to-face 
encounter, the group practice would be required to report on at least 1 
measure in the cross-cutting measure set specified in Table 21. We note 
that this proposed option to report 6 additional measures, including at 
least 1 cross-cutting measure if a group practice sees at least 1 
Medicare patient in a face-to-face encounter, is consistent with the 
proposed criterion for satisfactory reporting for the 2017 PQRS payment 
adjustment via qualified registry. However, unlike the proposed 
criterion for satisfactory reporting for the 2017 PQRS payment 
adjustment via qualified registry without CG-CAHPS, we are only 
proposing the requirement to report 1 measure in the cross-cutting 
measure set specified in Table 21 instead of 2 measures as the CAHPS 
for PQRS measures are contained in the cross-cutting measure set.
    Consistent with the proposed group practice reporting option solely 
using a qualified registry for the 2017 PQRS payment adjustment, we 
understand that there may be instances where a group practice may not 
have at least 6 measures applicable to a group practice's practice. In 
this instance, a group practice reporting on less than 6 measures would 
still be able to meet the satisfactory reporting criterion via registry 
if the group practice reports on as many measures as are applicable to 
the group practice's practice. If a group practice reports on less than 
6 individual measures using the qualified registry reporting mechanism 
in conjunction with a CMS-certified survey vendor to report CAHPS for 
PQRS, the group practice would be subject to a measure application 
validity process (MAV), which would allow us to determine whether a 
group practice should have reported quality data codes for additional 
measures and/or measures covering additional NQS domains.
    In addition, if a group practice does not report on at least 1 
cross-cutting measure and the group practice has at least 1 eligible 
professional who sees at least 1 Medicare patient in a face-to-face 
encounter, the MAV will also allow us to determine whether a group 
practice should have reported on any of the proposed cross-cutting 
measures specified in Table 21. The MAV process we are proposing to 
implement for registry reporting is the same process that was 
established for reporting periods occurring in 2014 for the 2014 PQRS 
incentive. For more information on the registry MAV process, please 
visit http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/2014_PQRS_Registry_MeasureApplicabilityValidation_12132013.zip.
    Proposed Option 2: If a group practice chooses to use a direct EHR 
product that is CEHRT or EHR data submission vendor that is CEHRT in 
conjunction with reporting the CAHPS for PQRS survey measures, for the 
12-month reporting period for the 2017 PQRS payment adjustment, the 
group practice would report all CAHPS for PQRS survey measures via a 
certified vendor, and report at least 6 additional measures, outside of 
CAHPS for PQRS, covering at least 2 of the NQS domains using the direct 
EHR product that is CEHRT or EHR data submission vendor that is CEHRT. 
If less than 6 measures

[[Page 40400]]

apply to the group practice, the group practice must report all 
applicable measures. Of the additional 6 measures that must be reported 
in conjunction with reporting the CAHPS for PQRS survey measures, a 
group practice would be required to report on at least 1 measure for 
which there is Medicare patient data. We note that this proposed option 
to report 6 additional measures is consistent with the proposed 
criterion for satisfactory reporting for the 2017 PQRS payment 
adjustment via EHR without CAHPS for PQRS, since the CAHPS for PQRS 
survey only addresses 1 NQS domain.
    Proposed Option 3: Alternatively, if a group practice chooses to 
use the GPRO web interface in conjunction with reporting the CAHPS for 
PQRS survey measures, we propose the following criterion for 
satisfactory reporting for the 2017 PQRS payment adjustment: For the 
12-month reporting period for the 2017 PQRS payment adjustment, the 
group practice would report all CAHPS for PQRS survey measures via a 
certified vendor. In addition, the group practice would report on all 
measures included in the GPRO web interface; AND populate data fields 
for the first 248 consecutively ranked and assigned beneficiaries in 
the order in which they appear in the group's sample for each module or 
preventive care measure. If the pool of eligible assigned beneficiaries 
is less than 248, then the group practice would report on 100 percent 
of assigned beneficiaries. A group practice would be required to report 
on at least 1 measure for which there is Medicare patient data.
    Furthermore, as was required for reporting periods occurring in 
2014 (78 FR 74485), we propose that all group practices comprised of 
100 or more eligible professionals that register to participate in the 
PQRS GPRO, regardless of the reporting mechanism the group practice 
chooses, would be required to select a CMS-certified survey vendor to 
administer the CAHPS for PQRS survey on their behalf. As such, for 
purposes of meeting the criteria for satisfactory reporting for the 
2017 PQRS payment adjustment, a group practice participating in the 
PQRS GPRO would be required to use 1 of these 3 proposed reporting 
options mentioned above. We note that, for reporting periods occurring 
in 2014, we stated that we would administer and fund the collection of 
(CG-CAHPS) data for these groups (of 100 or more eligible professionals 
using the GPRO web interface that are required to report on CAHPS for 
PQRS survey measures) (78 FR 74452). We stated that we would bear the 
cost of administering the CAHPS for PQRS survey measures, as we were 
requiring the group practices to report on CAHPS for PQRS survey 
measures. Unfortunately, beginning in 2015, it will no longer be 
feasible for CMS to continue to bear the cost of group practices of 100 
or more eligible professionals to report the CAHPS for PQRS survey 
measures. Therefore, the group practice would be required to bear the 
cost of administering the CAHPS for PQRS survey measures.
    However, as CAHPS for PQRS was optional for group practices 
comprised of 25-99 eligible professionals in 2014 (78 FR 74485) and 
whereas we are proposing to require reporting of CAHPS for PQRS for 
group practices comprised of 100 or more eligible professionals, we 
propose that CAHPS for PQRS would be optional for groups of 25-99 and 
2-24 eligible professionals. We note that all group practices that 
would be required to report or voluntarily elect to report CAHPS for 
PQRS would need to select and pay for a CMS-certified survey vendor to 
administer the CAHPS for PQRS survey on their behalf.
    We invite public comment on these proposals.
d. Proposed Criteria for Satisfactory Reporting on Individual PQRS 
Quality Measures for Group Practices Selected To Participate in the 
GPRO To Report the CAHPS for PQRS Survey Measures via a CMS-Certified 
Survey Vendor for the 2018 PQRS Payment Adjustment and Subsequent Years
    We believe these patient surveys are important tools for assessing 
beneficiary experience of care and outcomes and, moving forward, we 
would like to emphasize the importance of collecting patient experience 
of care data through the use of CAHPS for PQRS. Therefore, based on our 
authority under section 1848(m)(3)(C) of the Act to determine the 
criteria for satisfactory reporting for group practices under section 
1848(m)(3)(C) of the Act, we are proposing to require that, in 
conjunction with other satisfactory reporting criteria we establish in 
future years, beginning with the 12-month reporting period for the 2018 
PQRS payment adjustment, and for subsequent years, group practices 
comprised of 25 or more eligible professionals that are participating 
in the GPRO report and pay for the collection of the CAHPS for PQRS 
survey measures. We understand that the cost of administering the CAHPS 
for PQRS survey may be significant, so we are proposing this 
requirement well in advance of the year in which it would be first 
effective in order to provide group practices with early notice so that 
their practices may adjust accordingly.
    We invite public comment on these proposals.
e. The Consumer Assessment of Healthcare Providers Surgical Care Survey 
(S-CAHPS)
    In addition to CAHPS for PQRS, we received comments last year 
supporting the inclusion of the Consumer Assessment of Healthcare 
Providers Surgical Care Survey (S-CAHPS). The commenters stated that 
the CG-CAHPS survey would not accurately reflect the care provided by 
single- or multispecialty surgical or anesthesia groups. The commenters 
noted that S-CAHPS has been tested by the same standards as CG-CAHPS 
and follows the same collection mechanism as the CG-CAHPS. The S-CAHPS 
expands on the CG-CAHPS by focusing on aspects of surgical quality, 
which are important from the patient's perspective and for which the 
patient is the best source of information. The survey asks patients to 
provide feedback on surgical care, surgeons, their staff, and 
anesthesia care. It assesses patients' experiences with surgical care 
in both the inpatient and outpatient settings by asking respondents 
about their experience before, during and after surgery. We agree with 
the commenters on the importance of allowing for the administration of 
S-CAHPS reporting and wish to allow for reporting of S-CAHPS in the 
PQRS for reporting mechanisms other than the QCDR. However, at this 
time, due to the cost and time it would take to find vendors to collect 
S-CAHPS data, it is not technically feasible to implement the reporting 
of the S-CAHPS survey measures for the 2017 PQRS payment adjustment. We 
seek comments on how to allow for reporting of the S-CAHPS survey 
measures for the 2018 PQRS payment adjustment and beyond.
5. Statutory Requirements and Other Considerations for the Selection of 
PQRS Quality Measures for Meeting the Criteria for Satisfactory 
Reporting for 2015 and Beyond for Individual Eligible Professionals and 
Group Practices
    CMS undergoes an annual Call for Measures that solicits new 
measures from the public for possible inclusion in the PQRS. During the 
Call for Measures, we request measures for inclusion in PQRS that meet 
the following statutory and non-statutory criteria.
    Sections 1848(k)(2)(C) and 1848(m)(3)(C)(i) of the Act, 
respectively, govern the quality measures reported by individual 
eligible professionals and group practices under the PQRS. Under

[[Page 40401]]

section 1848(k)(2)(C)(i) of the Act, the PQRS quality measures shall be 
such measures selected by the Secretary from measures that have been 
endorsed by the entity with a contract with the Secretary under section 
1890(a) of the Act, which is currently the National Quality Forum 
(NQF). However, in the case of a specified area or medical topic 
determined appropriate by the Secretary for which a feasible and 
practical measure has not been endorsed by the NQF, section 
1848(k)(2)(C)(ii) of the Act authorizes the Secretary to specify a 
measure that is not so endorsed as long as due consideration is given 
to measures that have been endorsed or adopted by a consensus 
organization identified by the Secretary, such as the Ambulatory 
Quality Alliance (AQA). In light of these statutory requirements, we 
believe that, except in the circumstances specified in the statute, 
each PQRS quality measure must be endorsed by the NQF. Additionally, 
section 1848(k)(2)(D) of the Act requires that for each PQRS quality 
measure, ``the Secretary shall ensure that eligible professionals have 
the opportunity to provide input during the development, endorsement, 
or selection of measures applicable to services they furnish.'' The 
statutory requirements under section 1848(k)(2)(C) of the Act, subject 
to the exception noted previously, require only that the measures be 
selected from measures that have been endorsed by the entity with a 
contract with the Secretary under section 1890(a) of the Act (that is, 
the NQF) and are silent as to how the measures that are submitted to 
the NQF for endorsement are developed.
    The basic steps for developing measures applicable to physicians 
and other eligible professionals prior to submission of the measures 
for endorsement may be carried out by a variety of different 
organizations. We do not believe there need to be special restrictions 
on the type or make-up of the organizations carrying out this basic 
process of development of physician measures, such as restricting the 
initial development to physician-controlled organizations. Any such 
restriction would unduly limit the basic development of quality 
measures and the scope and utility of measures that may be considered 
for endorsement as voluntary consensus standards for purposes of the 
PQRS.
    In addition to section 1848(k)(2)(C) of the Act, section 1890A of 
the Act, which was added by section 3014(b) of the Affordable Care Act, 
requires that the Secretary establish a pre-rulemaking process under 
which certain steps occur with respect to the selection of certain 
categories of quality and efficiency measures, one of which is that the 
entity with a contract with the Secretary under section 1890(a) of the 
Act (that is, the NQF) convene multi-stakeholder groups to provide 
input to the Secretary on the selection of such measures. These 
categories are described in section 1890(b)(7)(B) of the Act, and 
include such measures as the quality measures selected for reporting 
under the PQRS. In accordance with section 1890A(a)(1) of the Act, the 
NQF convened multi-stakeholder groups by creating the Measure 
Applications Partnership (MAP). Section 1890A(a)(2) of the Act requires 
that the Secretary must make publicly available by December 1st of each 
year a list of the quality and efficiency measures that the Secretary 
is considering for selection through rulemaking for use in the Medicare 
program. The NQF must provide CMS with the MAP's input on the selection 
of measures by February 1st of each year. The lists of measures under 
consideration for selection through rulemaking in 2014 are available at 
http://www.qualityforum.org/map/.
    As we noted above, section 1848(k)(2)(C)(ii) of the Act provides an 
exception to the requirement that the Secretary select measures that 
have been endorsed by the entity with a contract under section 1890(a) 
of the Act (that is, the NQF). We may select measures under this 
exception if there is a specified area or medical topic for which a 
feasible and practical measure has not been endorsed by the entity, as 
long as due consideration is given to measures that have been endorsed 
or adopted by a consensus organization identified by the Secretary. 
Under this exception, aside from NQF endorsement, we requested that 
stakeholders apply the following considerations when submitting 
measures for possible inclusion in the PQRS measure set:
     Measures that are not duplicative of another existing or 
proposed measure.
     Measures that are further along in development than a 
measure concept.
     CMS is not accepting claims-based-only reporting measures 
in this process.
     Measures that are outcome-based rather than clinical 
process measures.
     Measures that address patient safety and adverse events.
     Measures that identify appropriate use of diagnosis and 
therapeutics.
     Measures that include the NQS domain for care coordination 
and communication.
     Measures that include the NQS domain for patient 
experience and patient-reported outcomes.
     Measures that address efficiency, cost and resource use.
a. Proposed PQRS Quality Measures
    Taking into consideration the statutory and non-statutory criteria 
we described previously, this section contains our proposals for the 
inclusion or removal of measures in PQRS for 2015 and beyond. We are 
classifying all proposed measures against six domains based on the 
NQS's six priorities, as follows:
    (1) Patient Safety. These are measures that reflect the safe 
delivery of clinical services in all healthcare settings. These 
measures may address a structure or process that is designed to reduce 
risk in the delivery of healthcare or measure the occurrence of an 
untoward outcome such as adverse events and complications of procedures 
or other interventions.
    (2) Person and Caregiver-Centered Experience and Outcomes. These 
are measures that reflect the potential to improve patient-centered 
care and the quality of care delivered to patients. They emphasize the 
importance of collecting patient-reported data and the ability to 
impact care at the individual patient level, as well as the population 
level. These are measures of organizational structures or processes 
that foster both the inclusion of persons and family members as active 
members of the health care team and collaborative partnerships with 
providers and provider organizations or can be measures of patient-
reported experiences and outcomes that reflect greater involvement of 
patients and families in decision making, self-care, activation, and 
understanding of their health condition and its effective management.
    (3) Communication and Care Coordination. These are measures that 
demonstrate appropriate and timely sharing of information and 
coordination of clinical and preventive services among health 
professionals in the care team and with patients, caregivers, and 
families to improve appropriate and timely patient and care team 
communication. They may also be measures that reflect outcomes of 
successful coordination of care.
    (4) Effective Clinical Care. These are measures that reflect 
clinical care processes closely linked to outcomes based on evidence 
and practice guidelines or measures of patient-centered outcomes of 
disease states.
    (5) Community/Population Health. These are measures that reflect 
the use of clinical and preventive services and achieve improvements in 
the health of the population served. They may be

[[Page 40402]]

measures of processes focused on primary prevention of disease or 
general screening for early detection of disease unrelated to a current 
or prior condition.
    (6) Efficiency and Cost Reduction. These are measures that reflect 
efforts to lower costs and to significantly improve outcomes and reduce 
errors. These are measures of cost, resource use and appropriate use of 
healthcare resources or inefficiencies in healthcare delivery.
    Please note that the PQRS quality measure specifications for any 
given proposed PQRS individual quality measure may differ from 
specifications for the same quality measure used in prior years. For 
example, for the proposed PQRS quality measures that were selected for 
reporting in 2014 and beyond, please note that detailed measure 
specifications, including the measure's title, for the proposed 
individual PQRS quality measures for 2013 and beyond may have been 
updated or modified during the NQF endorsement process or for other 
reasons.
    In addition, due to our desire to align measure titles with the 
measure titles that have been finalized for 2013, 2014, 2015, and 
potentially subsequent years of the EHR Incentive Program, we note that 
the measure titles for measures available for reporting via EHR may 
change. To the extent that the EHR Incentive Program updates its 
measure titles to include version numbers (77 FR 13744), we will use 
these version numbers to describe the PQRS EHR measures that will also 
be available for reporting for the EHR Incentive Program. We will 
continue to work toward complete alignment of measure specifications 
across programs whenever possible.
    Through NQF's measure maintenance process, NQF-endorsed measures 
are sometimes updated to incorporate changes that we believe do not 
substantively change the nature of the measure. Examples of such 
changes could be updated diagnosis or procedure codes or changes to 
exclusions to the patient population or definitions. We believe these 
types of maintenance changes are distinct from substantive changes to 
measures that result in what are considered new or different measures. 
Further, we believe that non-substantive maintenance changes of this 
type do not trigger the same agency obligations under the 
Administrative Procedure Act.
    In the CY 2013 PFS final rule with comment period, we finalized our 
proposal providing that if the NQF updates an endorsed measure that we 
have adopted for the PQRS in a manner that we consider to not 
substantively change the nature of the measure, we would use a 
subregulatory process to incorporate those updates to the measure 
specifications that apply to the program (77 FR 69207). We believe this 
adequately balances our need to incorporate non-substantive NQF updates 
to NQF-endorsed measures in the most expeditious manner possible, while 
preserving the public's ability to comment on updates that so 
fundamentally change an endorsed measure that it is no longer the same 
measure that we originally adopted. We also note that the NQF process 
incorporates an opportunity for public comment and engagement in the 
measure maintenance process. We will revise the Specifications Manual 
and post notices to clearly identify the updates and provide links to 
where additional information on the updates can be found. Updates will 
also be available on the CMS PQRS Web site at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/index.html.
    CMS is not the measure steward for most of the measures available 
for reporting under the PQRS. We rely on outside measure stewards and 
developers to maintain these measures. In Table 24, we are proposing 
that certain measures be removed from the PQRS measure set due to the 
measure owner/developer indicating that it will not be able to maintain 
the measure. We note that this proposal is contingent upon the measure 
owner/developer not being able to maintain the measure. Should we learn 
that a certain measure owner/developer is able to maintain the measure, 
or that another entity is able to maintain the measure in a manner that 
allows the measure to be available for reporting under the PQRS for the 
CY 2017 PQRS payment adjustment, we propose to keep the measure 
available for reporting under the PQRS and therefore not finalize our 
proposal to remove the measure. In addition, if, after the display of 
this proposed rule, we discover additional measures within the current 
PQRS measure set that a measure owner/developer can no longer maintain, 
we propose to remove these measures from reporting for the PQRS 
beginning in 2015. We will discuss any such instances in the CY 2015 
PFS final rule with comment period.
    In addition, we note that we have received feedback from 
stakeholders, particularly first-time participants who find it 
difficult to understand which measures are applicable to their 
particular practice. In an effort to aide eligible professionals and 
group practices to determine what measures best fit their practice, and 
in collaboration with specialty societies, we are beginning to group 
our final measures available for reporting according to specialty. The 
current listing of our measures by specialty can be found on our Web 
site at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/index.html. Please note that these groups 
of measures are meant to provide guidance to those eligible 
professionals seeking to determine what measures to report. Eligible 
professionals are not required to report measures according to these 
suggested groups of measures. In addition to group measures according 
to specialty, we also plan to have a measure subset for measures that 
specifically addresses multiple chronic conditions. As measures are 
adopted or revised, we will continue to update these groups to reflect 
the measures available under the PQRS, as well as add more specialties.
    In the CY 2014 PFS final rule with comment period, we stated that 
``unless there are errors discovered in updated electronic measure 
specifications, the PQRS intends to use the most recent, updated 
versions of electronically specified clinical quality measures for that 
year'' (78 FR 74489). We propose that, if we discover errors in the 
most recently updated electronic measure specifications for a certain 
measure, we would use the version of electronic measure specifications 
that immediately precedes the most recently updated electronic measure 
specifications.
    Additionally, we noted that, with respect to the following e-
measure CMS140v2, Breast Cancer Hormonal Therapy for Stage IC-IIIC 
Estrogen Receptor/Progesterone Receptor (ER/PR) Positive Breast Cancer 
(NQF 0387), a substantive error was discovered in the June 2013 version 
of this electronically specified clinical quality measure. Therefore, 
the PQRS required the use of the prior, December 2012 version of this 
measure, which is CMS140v1 (78 FR 74489). Please note that, consistent 
with other EHR measures, since a more recent and corrected version of 
this measure has been developed, we will require the reporting of the 
most recent, updated versions of the measure Breast Cancer Hormonal 
Therapy for Stage IC-IIIC Estrogen Receptor/Progesterone Receptor (ER/
PR) Positive Breast Cancer (NQF 0387)--currently version CMS140v3--for 
the year.
b. Proposed Cross-Cutting Measure Set for 2015 and Beyond
    In accordance with our proposed criteria for the satisfactory 
reporting of

[[Page 40403]]

PQRS measures for the 2017 PQRS payment adjustment via claims and 
registry that requires an eligible professional or group practice to 
report on at least 2 cross-cutting measures, we are proposing the 
following 18 cross-cutting measure set specified in Table 21 for 2015 
and beyond. Please note that our rationale for proposing each of these 
measures is found below the measure description. We have also indicated 
the PQRS reporting mechanism or mechanisms through which each proposed 
measure could be submitted. In addition to seeking comment on this 
proposed cross-cutting measure set specified in Table 21, we seek 
comment on other measures that commenters believe should be included in 
this proposed cross-cutting measure set for 2015 and beyond.
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c. Proposed New PQRS Measures Available for Reporting for 2015 and 
Beyond
    Table 22 contains the additional measures we are proposing to 
include in the PQRS measure set for CY 2015 and beyond. Please note 
that not all of the proposed cross-cutting measures may appear in Table 
22, as some of the propose cross-cutting measures specified in Table 21 
were finalized in the CY 2013 or CY 2014 PFS final rules with comment 
period. Please note that our rationale for proposing each of these 
measures is found below the measure description. We have also indicated 
the PQRS reporting mechanism or mechanisms through which each proposed 
measure could be submitted.

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    In Table 23, we specify the measures for which we are proposing a 
NQS domain change for reporting under the PQRS. Please note the 
rationale we have for each measure for which we are proposing a NQS 
domain change below.

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    In Table 24, we specify the measures we are proposing to remove 
from reporting under the PQRS. Please note that the rationale we have 
for each measure we are proposing to remove is specified after the 
measure title and description.

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    In Table 25 below, we specify our proposals to change the way in 
which previously established measures in the PQRS will be reported 
beginning in 2015. Please note that, in Table 25, we provide our 
explanation as to how we are proposing to change the way the measure is 
reported, as well as a corresponding rationale for this proposed 
change.

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BILLING CODE 4120-01-C

[[Page 40457]]

    We seek comment on these proposals.
d. PQRS Measures Groups
    Section 414.90(b) defines a measures group as a subset of four or 
more Physician Quality Reporting System measures that have a particular 
clinical condition or focus in common. The denominator definition and 
coding of the measures group identifies the condition or focus that is 
shared across the measures within a particular measures group.
    In the CY 2014 PFS proposed rule, we proposed (78 FR 43448) to 
increase the number of measures that may be included in a measures 
group from a minimum of 4 measures to a minimum of 6. We proposed 
increasing the minimum number of measures that may be contained in a 
measures group in accordance with increasing the number of individual 
measures to be reported via claims and registry. However, we did not 
finalize this proposal, stating that, although we still plan to 
increase the minimum number of measures in a measures group in the 
future, we would work with the measure developers and owners of these 
measures groups to appropriately add measures to measures groups that 
only contain four measures within the measures group (78 FR 74730). We 
have worked with the measure owners and developers and are again 
proposing to increase the number of measures that may be included in a 
measures group from a minimum of 4 measures to a minimum of 6.
    Specifically, we are proposing to modify section 414.90(b) to 
define a measures group as a subset of six or more Physician Quality 
Reporting System measures that have a particular clinical condition or 
focus in common.
    In addition, we are proposing two new measures groups that will be 
available for reporting in the PQRS beginning in 2015:
     The sinusitis measures group: We are proposing a new 
sinusitis measures group because this measures group represents a 
clinical gap within the measure group reporting option. The measures in 
the sinusitis measures group reflect a variety of measure types, and 
make up a clinically coherent and meaningful set of measures.
     The Acute Otits Externa (AOE) measures group: We are 
proposing the addition of the AOE measures group, as it focuses on the 
quality of care of patients with AOE by combining existing disease-
specific measures with relevant cross-cutting (generic) measures.
    Furthermore, we are proposing to remove the following measures 
groups for reporting beginning in 2015 for the following reasons:
     Perioperative care measures group: We are proposing to 
remove the perioperative care measures group from reporting in the PQRS 
beginning in 2015 because this measures group does not add value to the 
PQRS and eligible professionals are consistently meeting performance on 
this measure with performance rates close to 100 percent.
     Back pain measures group: We are proposing to remove the 
back pain measures group because the measure steward is not preparing 
these measures for re-endorsement by the National Quality Forum. We are 
also proposing to remove the measures group because it reflects 
clinical concepts that do not add clinical value to PQRS. Specifically, 
the measures in this group are entirely clinical process measures that 
do not meaningfully contribute to improved patient outcomes.
     Cardiovascular prevention measures group: We are proposing 
to remove the cardiovascular prevention measures group because a number 
of individual measures contained in this measures group are proposed to 
be removed from all PQRS program reporting options with the exception 
of EHR reporting.
     Ischemic Vascular Disease (IVD) measures group: We are 
proposing to remove the IVD measures group because a number of 
individual measures contained in this measures group are proposed to be 
removed from all PQRS program reporting options with the exception of 
EHR reporting.
     Sleep Apnea measures group: We are proposing to remove the 
Sleep Apnea measures group from reporting in the PQRS beginning in 2015 
because, for a number of measures included in this group, the measure 
steward has indicated they will no longer maintain those measures. 
Those measures and their associated measure groups are proposed for 
removal from the program. As a result, the measures group would have 
less than the 6 measures proposed to be required in a measures group. 
Please note that this proposal is contingent on the measure steward not 
being able to maintain ownership of certain measures. Should we learn 
that a measure owner/developer is able to maintain certain measures, or 
that another entity is able to maintain certain measures, such that the 
measure group maintains a sufficient number of measures for reporting 
under the PQRS for the CY 2017 PQRS payment adjustment, we propose to 
keep the measure group available for reporting under the PQRS and 
therefore not finalize our proposal to remove the measure group.
     Chronic obstructive pulmonary disease (COPD) measures 
group: We are proposing to remove the COPD measures group from 
reporting in the PQRS beginning in 2015 because, for a number of 
measures included in this group, the measure steward has indicated they 
will no longer maintain those measures. Those measures and their 
associated measure groups are proposed for removal from the program. As 
a result, the measures group would have less than the 6 measures 
proposed to be required in a measures group. Please note that this 
proposal is contingent on the measure steward not being able to 
maintain ownership of certain measures. Should we learn that a measure 
owner/developer is able to maintain certain measures, or that another 
entity is able to maintain certain measures, such that the measure 
group maintains a sufficient number of measures for reporting under the 
PQRS for the CY 2017 PQRS payment adjustment, we propose to keep the 
measure group available for reporting under the PQRS and therefore not 
finalize our proposal to remove the measure group.
    Tables 26 through 48 specify our proposed measures groups in light 
of our proposal to increase the minimum number of measures in a 
measures group in previously established measures groups, so that each 
measures group contains at least 6 measures. We invite public comment 
on these proposals.

                          Table 26--Proposed Asthma Measures Group for 2015 and Beyond
----------------------------------------------------------------------------------------------------------------
        NQF/ PQRS                    Measure title and description                    Measure  developer
----------------------------------------------------------------------------------------------------------------
0047/053.................  Asthma: Pharmacologic Therapy for Persistent       AMA-PCPI/NCQA
                            Asthma--Ambulatory Care Setting: Percentage of
                            patients aged 5 through 64 years with a
                            diagnosis of persistent asthma who were
                            prescribed long-term control medication.

[[Page 40458]]

 
0041/110.................  Preventive Care and Screening: Influenza           AMA-PCPI
                            Immunization: Percentage of patients aged 6
                            months and older seen for a visit between
                            October 1 and March 31 who received an influenza
                            immunization OR who reported previous receipt of
                            an influenza immunization.
0419/130.................  Documentation of Current Medications in the        CMS/QIP
                            Medical Record: Percentage of visits for
                            patients aged 18 years and older for which the
                            eligible professional attests to documenting a
                            list of current medications using all immediate
                            resources available on the date of the
                            encounter. This list must include ALL known
                            prescriptions, over-the-counters, herbals, and
                            vitamin/mineral/dietary (nutritional)
                            supplements AND must contain the medications'
                            name, dosage, frequency and route of
                            administration.
0028/226.................  Preventive Care and Screening: Tobacco Use:        AMA-PCPI
                            Screening and Cessation Intervention: Percentage
                            of patients aged 18 years and older who were
                            screened for tobacco use one or more times
                            within 24 months AND who received cessation
                            counseling intervention if identified as a
                            tobacco user.
N/A/N/A..................  Tobacco Use and Help with Quitting Among           NCQA/NCIQM
                            Adolescents: Percentage of adolescents 13 to 20
                            years of age with a primary care visit during
                            the measurement period for whom tobacco use
                            status was documented and received help quitting
                            if identified as a tobacco user.
0421/128.................  Preventive Care and Screening: Body Mass Index     CMS/QIP
                            (BMI) Screening and Follow-Up: Percentage of
                            patients aged 18 years and older with a
                            documented BMI during the current encounter or
                            during the previous 6 months AND when the BMI is
                            outside of normal parameters, a follow-up plan
                            is documented during the encounter or during the
                            previous 6 months of the encounter.
                           Normal Parameters: Age 65 years and older BMI >=
                            23 and < 30; Age 18-64 years BMI >= 18.5 and <
                            25.
----------------------------------------------------------------------------------------------------------------


                Table 27--Proposed Acute Otitis Externa (AOE) Measures Group for 2015 and Beyond
----------------------------------------------------------------------------------------------------------------
        NQF/ PQRS                    Measure title and description                    Measure  developer
----------------------------------------------------------------------------------------------------------------
0653/091.................  Acute Otitis Externa (AOE): Topical Therapy:       AMA-PCPI
                            Percentage of patients aged 2 years and older
                            with a diagnosis of AOE who were prescribed
                            topical preparations.
0654/093.................  Acute Otitis Externa (AOE): Systemic               AMA-PCPI
                            Antimicrobial Therapy--Avoidance of
                            Inappropriate Use: Percentage of patients aged 2
                            years and older with a diagnosis of AOE who were
                            not prescribed systemic antimicrobial therapy.
0419/130.................  Documentation of Current Medications in the        CMS/QIP
                            Medical Record: Percentage of visits for
                            patients aged 18 years and older for which the
                            eligible professional attests to documenting a
                            list of current medications using all immediate
                            resources available on the date of the
                            encounter. This list must include ALL known
                            prescriptions, over-the-counters, herbals, and
                            vitamin/mineral/dietary (nutritional)
                            supplements AND must contain the medications'
                            name, dosage, frequency and route of
                            administration.
0420/131.................  Pain Assessment and Follow-Up: Percentage of       CMS/QIP
                            visits for patients aged 18 years and older with
                            documentation of a pain assessment using a
                            standardized tool(s) on each visit AND
                            documentation of a follow-up plan when pain is
                            present.
0101/154.................  Falls: Risk Assessment: Percentage of patients     AMA-PCPI
                            aged 65 years and older with a history of falls
                            who had a risk assessment for falls completed
                            within 12 months.
0101/155.................  Falls: Plan of Care: Percentage of patients aged   AMA-PCPI
                            65 years and older with a history of falls who
                            had a plan of care for falls documented within
                            12 months.
0028/226.................  Preventive Care and Screening: Tobacco Use:        AMA-PCPI
                            Screening and Cessation Intervention: Percentage
                            of patients 18 years and older who were screened
                            for tobacco use one or more times within 24
                            months AND who received cessation counseling
                            intervention if identified as a tobacco user.
N/A/317..................  Preventive Care and Screening: Screening for High  CMS/QIP
                            Blood Pressure and Follow-Up Documented:
                            Percentage of patients aged 18 years and older
                            seen during the reporting period who were
                            screened for high blood pressure (BP) AND a
                            recommended follow-up plan is documented based
                            on the current blood pressure reading as
                            indicated.
----------------------------------------------------------------------------------------------------------------


                         Table 28--Proposed Cataracts Measures Group for 2015 and Beyond
----------------------------------------------------------------------------------------------------------------
        NQF/  PQRS                   Measure title and description                     Measure developer
----------------------------------------------------------------------------------------------------------------
0419/130.................  Documentation of Current Medications in the        CMS/QIP
                            Medical Record: Percentage of visits for
                            patients aged 18 years and older for which the
                            eligible professional attests to documenting a
                            list of current medications using all immediate
                            resources available on the date of the
                            encounter. This list must include ALL known
                            prescriptions, over-the-counters, herbals, and
                            vitamin/mineral/dietary (nutritional)
                            supplements AND must contain the medications'
                            name, dosage, frequency and route of
                            administration.
0565/191.................  Cataracts: 20/40 or Better Visual Acuity within    AMA-PCPI/NCQA
                            90 Days Following Cataract Surgery: Percentage
                            of patients aged 18 years and older with a
                            diagnosis of uncomplicated cataract who had
                            cataract surgery and no significant ocular
                            conditions impacting the visual outcome of
                            surgery and had best-corrected visual acuity of
                            20/40 or better (distance or near) achieved
                            within 90 days following the cataract surgery.

[[Page 40459]]

 
0564/192.................  Cataracts: Complications within 30 Days Following  AMA-PCPI/NCQA
                            Cataract Surgery Requiring Additional Surgical
                            Procedures: Percentage of patients aged 18 years
                            and older with a diagnosis of uncomplicated
                            cataract who had cataract surgery and had any of
                            a specified list of surgical procedures in the
                            30 days following cataract surgery which would
                            indicate the occurrence of any of the following
                            major complications: retained nuclear fragments,
                            endophthalmitis, dislocated or wrong power IOL,
                            retinal detachment, or wound dehiscence.
0028/226.................  Preventive Care and Screening: Tobacco Use:        AMA-PCPI
                            Screening and Cessation Intervention: Percentage
                            of patients 18 years and older who were screened
                            for tobacco use one or more times within 24
                            months AND who received cessation counseling
                            intervention if identified as a tobacco user.
N/A/303..................  Cataracts: Improvement in Patient's Visual         AAO
                            Function within 90 Days Following Cataract
                            Surgery: Percentage of patients aged 18 years
                            and older in sample who had cataract surgery and
                            had improvement in visual function achieved
                            within 90 days following the cataract surgery,
                            based on completing a pre-operative and post-
                            operative visual function survey.
N/A/304..................  Cataracts: Patient Satisfaction within 90 Days     AAO
                            Following Cataract Surgery: Percentage of
                            patients aged 18 years and older in sample who
                            had cataract surgery and were satisfied with
                            their care within 90 days following the cataract
                            surgery, based on completion of the Consumer
                            Assessment of Healthcare Providers and Systems
                            Surgical Care Survey.
N/A/358..................  Patient-Centered Surgical Risk Assessment and      ACS
                            Communication: Percentage of patients who
                            underwent a non-emergency surgery who had their
                            personalized risks of postoperative
                            complications assessed by their surgical team
                            prior to surgery using a clinical data-based,
                            patient-specific risk calculator and who
                            received personal discussion of those risks with
                            the surgeon.
N/A/N/A..................  Cataract Surgery with Intra-Operative              AAEECE/ACHS
                            Complications (Unplanned Rupture of Posterior
                            Capsule requiring unplanned vitrectomy): Rupture
                            of the posterior capsule during anterior segment
                            surgery requiring vitrectomy.
N/A/N/A..................  Cataract Surgery: Difference Between Planned and   AAEECE/ACHS
                            Final Refraction: Percentage of patients who
                            achieve planned refraction within +-1,0 D.
----------------------------------------------------------------------------------------------------------------


               Table 29--Proposed Chronic Kidney Disease (CKD) Measures Group for 2015 and Beyond
----------------------------------------------------------------------------------------------------------------
        NQF/  PQRS                   Measure title and description                     Measure developer
----------------------------------------------------------------------------------------------------------------
0326/047.................  Care Plan: Percentage of patients aged 65 years    AMA-PCPI/NCQA
                            and older who have an care plan or surrogate
                            decision maker documented in the medical record
                            or documentation in the medical record that an
                            care plan was discussed but the patient did not
                            wish or was not able to name a surrogate
                            decision maker or provide an care plan.
0041/110.................  Preventive Care and Screening: Influenza           AMA-PCPI
                            Immunization: Percentage of patients aged 6
                            months and older seen for a visit between
                            October 1 and March 31 who received an influenza
                            immunization OR who reported previous receipt of
                            an influenza immunization.
1668/121.................  Adult Kidney Disease: Laboratory Testing (Lipid    AMA-PCPI
                            Profile): Percentage of patients aged 18 years
                            and older with a diagnosis of chronic kidney
                            disease (CKD) (stage 3, 4, or 5, not receiving
                            Renal Replacement Therapy [RRT]) who had a
                            fasting lipid profile performed at least once
                            within a 12-month period.
N/A/122..................  Adult Kidney Disease: Blood Pressure Management:   AMA-PCPI
                            Percentage of patient visits for those patients
                            aged 18 years and older with a diagnosis of
                            chronic kidney disease (CKD) (stage 3, 4, or 5,
                            not receiving Renal Replacement Therapy [RRT])
                            and proteinuria with a blood pressure < 130/80
                            mmHg OR >= 130/80 mmHg with a documented plan of
                            care.
0419/130.................  Documentation of Current Medications in the        CMS/QIP
                            Medical Record: Percentage of visits for
                            patients aged 18 years and older for which the
                            eligible professional attests to documenting a
                            list of current medications using all immediate
                            resources available on the date of the
                            encounter. This list must include ALL known
                            prescriptions, over-the-counters, herbals, and
                            vitamin/mineral/dietary (nutritional)
                            supplements AND must contain the medications'
                            name, dosage, frequency and route of
                            administration.
0028/226.................  Preventive Care and Screening: Tobacco Use:        AMA-PCPI
                            Screening and Cessation Intervention: Percentage
                            of patients 18 years and older who were screened
                            for tobacco use one or more times within 24
                            months AND who received cessation counseling
                            intervention if identified as a tobacco user.
----------------------------------------------------------------------------------------------------------------


[[Page 40460]]


       Table 30--Proposed Chronic Obstructive Pulmonary Disorder (COPD) Measures Group for 2015 and Beyond
[Please note that we are proposing to remove this measure group contingent on the measure steward not being able
    to maintain certain measures contained in these measures group. If a measure steward is able to maintain
    ownership of these measures, we plan to keep this measures group in the PQRS measure set. This Table Q10
  indicates the measures that we propose will be available in this measures group should we keep this measures
                                         group in the PQRS measure set.]
----------------------------------------------------------------------------------------------------------------
        NQF/  PQRS                   Measure title and description                     Measure developer
----------------------------------------------------------------------------------------------------------------
0326/047.................  Care Plan: Percentage of patients aged 65 years    AMA-PCPI/NCQA
                            and older who have an care plan or surrogate
                            decision maker documented in the medical record
                            or documentation in the medical record that an
                            care plan was discussed but the patient did not
                            wish or was not able to name a surrogate
                            decision maker or provide an care plan.
0091/051.................  Chronic Obstructive Pulmonary Disease (COPD):      AMA-PCPI
                            Spirometry Evaluation: Percentage of patients
                            aged 18 years and older with a diagnosis of COPD
                            who had spirometry evaluation results documented.
0102/052.................  Chronic Obstructive Pulmonary Disease (COPD):      AMA-PCPI
                            Inhaled Bronchodilator Therapy: Percentage of
                            patients aged 18 years and older with a
                            diagnosis of COPD and who have an FEV1/FVC less
                            than 60% and have symptoms who were prescribed
                            an inhaled bronchodilator.
0041/110.................  Preventive Care and Screening: Influenza           AMA-PCPI
                            Immunization: Percentage of patients aged 6
                            months and older seen for a visit between
                            October 1 and March 31 who received an influenza
                            immunization OR who reported previous receipt of
                            an influenza immunization.
0043/111.................  Pneumonia Vaccination Status for Older Adults:     NCQA
                            Percentage of patients 65 years of age and older
                            who have ever received a pneumococcal vaccine.
0419/130.................  Documentation of Current Medications in the        CMS/QIP
                            Medical Record: Percentage of visits for
                            patients aged 18 years and older for which the
                            eligible professional attests to documenting a
                            list of current medications using all immediate
                            resources available on the date of the
                            encounter. This list must include ALL known
                            prescriptions, over-the-counters, herbals, and
                            vitamin/mineral/dietary (nutritional)
                            supplements AND must contain the medications'
                            name, dosage, frequency and route of
                            administration.
0028/226.................  Preventive Care and Screening: Tobacco Use:        AMA-PCPI
                            Screening and Cessation Intervention: Percentage
                            of patients 18 years and older who were screened
                            for tobacco use one or more times within 24
                            months AND who received cessation counseling
                            intervention if identified as a tobacco user.
----------------------------------------------------------------------------------------------------------------


            Table 31--Proposed Coronary Artery Bypass Graft (CABG) Measures Group for 2015 and Beyond
----------------------------------------------------------------------------------------------------------------
        NQF/  PQRS                   Measure title and description                     Measure developer
----------------------------------------------------------------------------------------------------------------
0134/043.................  Coronary Artery Bypass Graft (CABG): Use of        STS
                            Internal Mammary Artery (IMA) in Patients with
                            Isolated CABG Surgery: Percentage of patients
                            aged 18 years and older undergoing isolated CABG
                            surgery who received an IMA graft.
0236/044.................  Coronary Artery Bypass Graft (CABG): Preoperative  CMS/QIP
                            Beta-Blocker in Patients with Isolated CABG
                            Surgery: Percentage of isolated Coronary Artery
                            Bypass Graft (CABG) surgeries for patients aged
                            18 years and older who received a beta-blocker
                            within 24 hours prior to surgical incision.
0129/164.................  Coronary Artery Bypass Graft (CABG): Prolonged     STS
                            Intubation: Percentage of patients aged 18 years
                            and older undergoing isolated CABG surgery who
                            require postoperative intubation > 24 hours.
0130/165.................  Coronary Artery Bypass Graft (CABG): Deep Sternal  STS
                            Wound Infection Rate: Percentage of patients
                            aged 18 years and older undergoing isolated CABG
                            surgery who, within 30 days postoperatively,
                            develop deep sternal wound infection involving
                            muscle, bone, and/or mediastinum requiring
                            operative intervention.
0131/166.................  Coronary Artery Bypass Graft (CABG): Stroke:       STS
                            Percentage of patients aged 18 years and older
                            undergoing isolated CABG surgery who have a
                            postoperative stroke (i.e., any confirmed
                            neurological deficit of abrupt onset caused by a
                            disturbance in blood supply to the brain) that
                            did not resolve within 24 hours.
0114/167.................  Coronary Artery Bypass Graft (CABG):               STS
                            Postoperative Renal Failure: Percentage of
                            patients aged 18 years and older undergoing
                            isolated CABG surgery (without pre-existing
                            renal failure) who develop postoperative renal
                            failure or require dialysis.
----------------------------------------------------------------------------------------------------------------


               Table 32--Proposed Coronary Artery Disease (CAD) Measures Group for 2015 and Beyond
----------------------------------------------------------------------------------------------------------------
        NQF/ PQRS                    Measure title and description                     Measure developer
----------------------------------------------------------------------------------------------------------------
0067/006.................  Coronary Artery Disease (CAD): Antiplatelet        AMA-PCPI/ACCF/AHA
                            Therapy: Percentage of patients aged 18 years
                            and older with a diagnosis of coronary artery
                            disease seen within a 12 month period who were
                            prescribed aspirin or clopidogrel.
0070/007.................  Coronary Artery Disease (CAD): Beta-Blocker        AMA-PCPI
                            Therapy--Prior Myocardial Infarction (MI) or
                            Left Ventricular Systolic Dysfunction (LVEF <
                            40%: Percentage of patients aged 18 years and
                            older with a diagnosis of coronary artery
                            disease seen within a 12 month period who also
                            have prior MI OR a current or LVEF < 40% who
                            were prescribed beta-blocker therapy.

[[Page 40461]]

 
0421/128.................  Preventive Care and Screening: Body Mass Index     CMS/QIP
                            (BMI) Screening and Follow-Up: Percentage of
                            patients aged 18 years and older with a
                            documented BMI during the current encounter or
                            during the previous 6 months AND when the BMI is
                            outside of normal parameters, a follow-up plan
                            is documented during the encounter or during the
                            previous 6 months of the encounter.
                           Normal Parameters: Age 65 years and older BMI >=
                            23 and < 30; Age 18-64 years BMI >= 18.5 and <
                            25.
0419/130.................  Documentation of Current Medications in the        CMS/QIP
                            Medical Record: Percentage of visits for
                            patients aged 18 years and older for which the
                            eligible professional attests to documenting a
                            list of current medications using all immediate
                            resources available on the date of the
                            encounter. This list must include ALL known
                            prescriptions, over-the-counters, herbals, and
                            vitamin/mineral/dietary (nutritional)
                            supplements AND must contain the medications'
                            name, dosage, frequency and route of
                            administration.
0028/226.................  Preventive Care and Screening: Tobacco Use:        AMA-PCPI
                            Screening and Cessation Intervention: Percentage
                            of patients 18 years and older who were screened
                            for tobacco use one or more times within 24
                            months AND who received cessation counseling
                            intervention if identified as a tobacco user.
N/A/242..................  Coronary Artery Disease (CAD): Symptom             AMA-PCPI/ACCF/AHA
                            Management: Percentage of patients aged 18 years
                            and older with a diagnosis of coronary artery
                            disease seen within a 12 month period with
                            results of an evaluation of level of activity
                            and an assessment of whether anginal symptoms
                            are present or absent with appropriate
                            management of anginal symptoms within a 12 month
                            period.
----------------------------------------------------------------------------------------------------------------


                         Table 33--Proposed Dementia Measures Group for 2015 and Beyond
----------------------------------------------------------------------------------------------------------------
        NQF/ PQRS                    Measure title and description                     Measure developer
----------------------------------------------------------------------------------------------------------------
0326/047.................  Care Plan: Percentage of patients aged 65 years    AMA-PCPI/NCQA
                            and older who have an care plan or surrogate
                            decision maker documented in the medical record
                            or documentation in the medical record that an
                            care plan was discussed but the patient did not
                            wish or was not able to name a surrogate
                            decision maker or provide an care plan.
N/A/280..................  Dementia: Staging of Dementia: Percentage of       AMA-PCPI
                            patients, regardless of age, with a diagnosis of
                            dementia whose severity of dementia was
                            classified as mild, moderate or severe at least
                            once within a 12 month period.
N/A/281..................  Dementia: Cognitive Assessment: Percentage of      AMA-PCPI
                            patients, regardless of age, with a diagnosis of
                            dementia for whom an assessment of cognition is
                            performed and the results reviewed at least once
                            within a 12 month period.
N/A/282..................  Dementia: Functional Status Assessment:            AMA-PCPI
                            Percentage of patients, regardless of age, with
                            a diagnosis of dementia for whom an assessment
                            of functional status is performed and the
                            results reviewed at least once within a 12 month
                            period.
N/A/283..................  Dementia: Neuropsychiatric Symptom Assessment:     AMA-PCPI
                            Percentage of patients, regardless of age, with
                            a diagnosis of dementia and for whom an
                            assessment of neuropsychiatric symptoms is
                            performed and results reviewed at least once in
                            a 12 month period.
N/A/284..................  Dementia: Management of Neuropsychiatric           AMA-PCPI
                            Symptoms: Percentage of patients, regardless of
                            age, with a diagnosis of dementia who have one
                            or more neuropsychiatric symptoms who received
                            or were recommended to receive an intervention
                            for neuropsychiatric symptoms within a 12 month
                            period.
N/A/285..................  Dementia: Screening for Depressive Symptoms:       AMA-PCPI
                            Percentage of patients, regardless of age, with
                            a diagnosis of dementia who were screened for
                            depressive symptoms within a 12 month period.
N/A/286..................  Dementia: Counseling Regarding Safety Concerns:    AMA-PCPI
                            Percentage of patients, regardless of age, with
                            a diagnosis of dementia or their caregiver(s)
                            who were counseled or referred for counseling
                            regarding safety concerns within a 12 month
                            period.
N/A/287..................  Dementia: Counseling Regarding Risks of Driving:   AMA-PCPI
                            Percentage of patients, regardless of age, with
                            a diagnosis of dementia or their caregiver(s)
                            who were counseled regarding the risks of
                            driving and the alternatives to driving at least
                            once within a 12 month period.
N/A/288..................  Dementia: Caregiver Education and Support:         AMA-PCPI
                            Percentage of patients, regardless of age, with
                            a diagnosis of dementia whose caregiver(s) were
                            provided with education on dementia disease
                            management and health behavior changes AND
                            referred to additional sources for support
                            within a 12 month period.
----------------------------------------------------------------------------------------------------------------


                         Table 34--Proposed Diabetes Measures Group for 2015 and Beyond
----------------------------------------------------------------------------------------------------------------
        NQF/ PQRS                    Measure title and description                     Measure developer
----------------------------------------------------------------------------------------------------------------
0059/001.................  Diabetes: Hemoglobin A1c Poor Control: Percentage  NCQA
                            of patients 18-75 years of age with diabetes who
                            had hemoglobin A1c > 9.0% during the measurement
                            period.
0041/110.................  Preventive Care and Screening: Influenza           AMA-PCPI
                            Immunization: Percentage of patients aged 6
                            months and older seen for a visit between
                            October 1 and March 31 who received an influenza
                            immunization OR who reported previous receipt of
                            an influenza immunization.
0055/117.................  Diabetes: Eye Exam: Percentage of patients 18      NCQA
                            through 75 years of age with a diagnosis of
                            diabetes (type 1 and type 2) who had a retinal
                            or dilated eye exam in the measurement period or
                            a negative retinal or dilated eye exam (negative
                            for retinopathy) in the year prior to the
                            measurement period.

[[Page 40462]]

 
0062/119.................  Diabetes: Medical Attention for Neuropathy: The    NCQA
                            percentage of patients 18-75 years of age with
                            diabetes who had a nephropathy screening test or
                            evidence of nephropathy during the measurement
                            period.
0056/163.................  Diabetes: Foot Exam: Percentage of patients aged   NCQA
                            18-75 years of age with diabetes who had a foot
                            exam during the measurement period.
0028/226.................  Preventive Care and Screening: Tobacco Use:        AMA-PCPI
                            Screening and Cessation Intervention: Percentage
                            of patients 18 years and older who were screened
                            for tobacco use one or more times within 24
                            months AND who received cessation counseling
                            intervention if identified as a tobacco user.
----------------------------------------------------------------------------------------------------------------


                      Table 35--Proposed General Surgery Measures Group for 2015 and Beyond
----------------------------------------------------------------------------------------------------------------
        NQF/ PQRS                    Measure title and description                     Measure developer
----------------------------------------------------------------------------------------------------------------
0419/130.................  Documentation of Current Medications in the        CMS/QIP
                            Medical Record: Percentage of visits for
                            patients aged 18 years and older for which the
                            eligible professional attests to documenting a
                            list of current medications using all immediate
                            resources available on the date of the
                            encounter. This list must include ALL known
                            prescriptions, over-the-counters, herbals, and
                            vitamin/mineral/dietary (nutritional)
                            supplements AND must contain the medications'
                            name, dosage, frequency and route of
                            administration.
0028/226.................  Preventive Care and Screening: Tobacco Use:        AMA-PCPI
                            Screening and Cessation Intervention: Percentage
                            of patients 18 years and older who were screened
                            for tobacco use one or more times within 24
                            months AND who received cessation counseling
                            intervention if identified as a tobacco user.
N/A/354..................  Anastomotic Leak Intervention: Percentage of       ACS
                            patients aged 18 years and older who required an
                            anastomotic leak intervention following gastric
                            bypass or colectomy surgery.
N/A/355..................  Unplanned Reoperation within the 30 Day            ACS
                            Postoperative Period: Percentage of patients
                            aged 18 years and older who had any unplanned
                            reoperation within the 30 day postoperative
                            period.
N/A/356..................  Unplanned Hospital Readmission within 30 Days of   ACS
                            Principal Procedure: Percentage of patients aged
                            18 years and older who had an unplanned hospital
                            readmission within 30 days of principal
                            procedure.
N/A/357..................  Surgical Site Infection (SSI): Percentage of       ACS
                            patients aged 18 years and older who had a
                            surgical site infection (SSI).
N/A/358..................  Patient-Centered Surgical Risk Assessment and      ACS
                            Communication: Percentage of patients who
                            underwent a non-emergency surgery who had their
                            personalized risks of postoperative
                            complications assessed by their surgical team
                            prior to surgery using a clinical data-based,
                            patient-specific risk calculator and who
                            received personal discussion of those risks with
                            the surgeon.
----------------------------------------------------------------------------------------------------------------


                    Table 36--Proposed Heart Failure (HF) Measures Group for 2015 and Beyond
----------------------------------------------------------------------------------------------------------------
          NQF/ PQRS                       Measure title and description                   Measure developer
----------------------------------------------------------------------------------------------------------------
0081/005....................  Heart Failure (HF): Angiotensin-Converting Enzyme     AMA-PCPI/ACCF/AHA
                               (ACE) Inhibitor or Angiotensin Receptor Blocker
                               (ARB) Therapy for Left Ventricular Systolic
                               Dysfunction (LVSD): Percentage of patients aged 18
                               years and older with a diagnosis of heart failure
                               (HF) with a current or prior left ventricular
                               ejection fraction (LVEF) < 40% who were prescribed
                               ACE inhibitor or ARB therapy either within a 12
                               month period when seen in the outpatient setting OR
                               at each hospital discharge.
0083/008....................  Heart Failure (HF): Beta-Blocker Therapy for Left     AMA-PCPI/ACCF/AHA
                               Ventricular Systolic Dysfunction (LVSD): Percentage
                               of patients aged 18 years and older with a
                               diagnosis of heart failure (HF) with a current or
                               prior left ventricular ejection fraction (LVEF) <
                               40% who were prescribed beta-blocker therapy either
                               within a 12 month period when seen in the
                               outpatient setting OR at each hospital discharge.
0326/047....................  Care Plan: Percentage of patients aged 65 years and   AMA-PCPI/NCQA
                               older who have an care plan or surrogate decision
                               maker documented in the medical record or
                               documentation in the medical record that an care
                               plan was discussed but the patient did not wish or
                               was not able to name a surrogate decision maker or
                               provide an care plan.
0041/110....................  Preventive Care and Screening: Influenza              AMA-PCPI
                               Immunization: Percentage of patients aged 6 months
                               and older seen for a visit between October 1 and
                               March 31 who received an influenza immunization OR
                               who reported previous receipt of an influenza
                               immunization.
0419/130....................  Documentation of Current Medications in the Medical   CMS/QIP
                               Record: Percentage of visits for patients aged 18
                               years and older for which the eligible professional
                               attests to documenting a list of current
                               medications using all immediate resources available
                               on the date of the encounter. This list must
                               include ALL known prescriptions, over-the-counters,
                               herbals, and vitamin/mineral/dietary (nutritional)
                               supplements AND must contain the medications' name,
                               dosage, frequency and route of administration.
0028/226....................  Preventive Care and Screening: Tobacco Use:           AMA-PCPI
                               Screening and Cessation Intervention: Percentage of
                               patients 18 years and older who were screened for
                               tobacco use one or more times within 24 months AND
                               who received cessation counseling intervention if
                               identified as a tobacco user.
----------------------------------------------------------------------------------------------------------------


[[Page 40463]]


                        Table 37--Proposed Hepatitis C Measures Group for 2015 and Beyond
----------------------------------------------------------------------------------------------------------------
        NQF/ PQRS                    Measure title and description                     Measure developer
----------------------------------------------------------------------------------------------------------------
0395/084.................  Hepatitis C: Ribonucleic Acid (RNA) Testing        AMA-PCPI
                            Before Initiating Treatment: Percentage of
                            patients aged 18 years and older with a
                            diagnosis of chronic hepatitis C who started
                            antiviral treatment within the 12 month
                            reporting period for whom quantitative hepatitis
                            C virus (HCV) RNA testing was performed within
                            12 months prior to initiation of antiviral
                            treatment.
0396/085.................  Hepatitis C: HCV Genotype Testing Prior to         AMA-PCPI
                            Treatment: Percentage of patients aged 18 years
                            and older with a diagnosis of chronic hepatitis
                            C who started antiviral treatment within the 12
                            month reporting period for whom hepatitis C
                            virus (HCV) genotype testing was performed
                            within 12 months prior to initiation of
                            antiviral treatment.
0398/087.................  Hepatitis C: Hepatitis C Virus (HCV) Ribonucleic   AMA-PCPI
                            Acid (RNA) Testing Between 4-12 Weeks After
                            Initiation of Treatment: Percentage of patients
                            aged 18 years and older with a diagnosis of
                            chronic hepatitis C who are receiving antiviral
                            treatment for whom quantitative hepatitis C
                            virus (HCV) RNA testing was performed between 4-
                            12 weeks after the initiation of antiviral
                            treatment.
0419/130.................  Documentation of Current Medications in the        CMS/QIP
                            Medical Record: Percentage of visits for
                            patients aged 18 years and older for which the
                            eligible professional attests to documenting a
                            list of current medications using all immediate
                            resources available on the date of the
                            encounter. This list must include ALL known
                            prescriptions, over-the-counters, herbals, and
                            vitamin/mineral/dietary (nutritional)
                            supplements AND must contain the medications'
                            name, dosage, frequency and route of
                            administration.
0399/183.................  Hepatitis C: Hepatitis A Vaccination in Patients   AMA-PCPI
                            with Hepatitis C Virus (HCV): Percentage of
                            patients aged 18 years and older with a
                            diagnosis of chronic hepatitis C who have
                            received at least one injection of hepatitis A
                            vaccine, or who have documented immunity to
                            hepatitis A.
0028/226.................  Preventive Care and Screening: Tobacco Use:        AMA-PCPI
                            Screening and Cessation Intervention: Percentage
                            of patients 18 years and older who were screened
                            for tobacco use one or more times within 24
                            months AND who received cessation counseling
                            intervention if identified as a tobacco user.
N/A/N/A..................  Screening for Hepatocellular Carcinoma (HCC) in    AGA/AASLD/AMA-PCPI
                            patients with Hepatitis C Cirrhosis: Percentage
                            of patients aged 18 years and older with a
                            diagnosis of chronic hepatitis C cirrhosis who
                            were screened with either ultrasound, triple-
                            contrast CT or triple-contrast MRI for
                            hepatocellular carcinoma (HCC) at least once
                            within the 12 month reporting period.
N/A/N/A..................  Discussion and Shared Decision Making Surrounding  AGA/AASLD/AMA-PCPI
                            Treatment Options: Percentage of patients aged
                            18 years and older with a diagnosis of hepatitis
                            C with whom a physician or other clinician
                            reviewed the range of treatment options
                            appropriate to their genotype and demonstrated a
                            shared decision making approach with the
                            patient. To meet the measure, there must be
                            documentation in the patient record of a
                            discussion between the physician/clinician and
                            the patient that includes all of the following:
                            Treatment choices appropriate to
                            genotype.
                            Risks and benefits......................
                            Evidence of effectiveness...............
                            Patient preferences toward the outcome
                            of the treatment.
----------------------------------------------------------------------------------------------------------------


                         Table 38--Proposed HIV/AIDS Measures Group for 2015 and Beyond
----------------------------------------------------------------------------------------------------------------
        NQF/ PQRS                    Measure title and description                     Measure developer
----------------------------------------------------------------------------------------------------------------
0326/047.................  Care Plan: Percentage of patients aged 65 years    AMA-PCPI/NCQA
                            and older who have an care plan or surrogate
                            decision maker documented in the medical record
                            or documentation in the medical record that an
                            care plan was discussed but the patient did not
                            wish or was not able to name a surrogate
                            decision maker or provide an care plan.
0418/134.................  Preventive Care and Screening: Screening for       CMS/QIP
                            Clinical Depression and Follow-Up Plan:
                            Percentage of patients aged 12 years and older
                            screened for clinical depression on the date of
                            the encounter using an age appropriate
                            standardized depression screening tool AND if
                            positive, a follow-up plan is documented on the
                            date of the positive screen.
0405/160.................  HIV/AIDS: Pneumocystis Jiroveci Pneumonia (PCP)    NCQA
                            Prophylaxis: Percentage of patients aged 6 weeks
                            and older with a diagnosis of HIV/AIDS who were
                            prescribed Pneumocystis Jiroveci Pneumonia (PCP)
                            prophylaxis.
0409/205.................  HIV/AIDS: Sexually Transmitted Disease Screening   AMA-PCPI/NCQA
                            for Chlamydia, Gonorrhea, and Syphilis:
                            Percentage of patients aged 13 years and older
                            with a diagnosis of HIV/AIDS for whom chlamydia,
                            gonorrhea and syphilis screenings were performed
                            at least once since the diagnosis of HIV
                            infection.
0028/226.................  Preventive Care and Screening: Tobacco Use:        AMA-PCPI
                            Screening and Cessation Intervention: Percentage
                            of patients aged 18 years and older who were
                            screened for tobacco use one or more times
                            within 24 months AND who received cessation
                            counseling intervention if identified as a
                            tobacco user.
2082/338.................  HIV Viral Load Suppression: The percentage of      HRSA
                            patients, regardless of age, with a diagnosis of
                            HIV with a HIV viral load less than 200 copies/
                            mL at last HIV viral load test during the
                            measurement year.
2083/339.................  Prescription of HIV Antiretroviral Therapy:        HRSA
                            Percentage of patients, regardless of age, with
                            a diagnosis of HIV prescribed antiretroviral
                            therapy for the treatment of HIV infection
                            during the measurement year.
2079/340.................  HIV Medical Visit Frequency: Percentage of         HRSA
                            patients, regardless of age with a diagnosis of
                            HIV who had at least one medical visit in each 6
                            month period of the 24 month measurement period,
                            with a minimum of 60 days between medical visits.
----------------------------------------------------------------------------------------------------------------


[[Page 40464]]


             Table 39--Proposed Inflammatory Bowel Disease (IBD) Measures Group for 2015 and Beyond
----------------------------------------------------------------------------------------------------------------
        NQF/ PQRS                    Measure title and description                     Measure developer
----------------------------------------------------------------------------------------------------------------
0028/226.................  Preventive Care and Screening: Tobacco Use:        AMA-PCPI
                            Screening and Cessation Intervention: Percentage
                            of patients 18 years and older who were screened
                            for tobacco use one or more times within 24
                            months AND who received cessation counseling
                            intervention if identified as a tobacco user.
N/A/270..................  Inflammatory Bowel Disease (IBD): Preventive       AGA
                            Care: Corticosteroid Sparing Therapy: Percentage
                            of patients aged 18 years and older with a
                            diagnosis of inflammatory bowel disease who have
                            been managed by corticosteroids greater than or
                            equal to 10 mg/day for 60 or greater consecutive
                            days that have been prescribed corticosteroid
                            sparing therapy in the last reporting year.
N/A/271..................  Inflammatory Bowel Disease (IBD): Preventive       AGA
                            Care: Corticosteroid Related Iatrogenic Injury--
                            Bone Loss Assessment: Percentage of patients
                            aged 18 years and older with a diagnosis of
                            inflammatory bowel disease who have received
                            dose of corticosteroids greater than or equal to
                            10 mg/day for 60 or greater consecutive days and
                            were assessed for risk of bone loss once per the
                            reporting year.
0041/110.................  Preventive Care and Screening: Influenza           AMA-PCPI
                            Immunization: Percentage of patients aged 6
                            months and older seen for a visit between
                            October 1 and March 31 who received an influenza
                            immunization OR who reported previous receipt of
                            an influenza immunization.
0043/111.................  Pneumonia Vaccination Status for Older Adults:     NCQA
                            Percentage of patients 65 years of age and older
                            who have ever received a pneumococcal vaccine.
N/A/274..................  Inflammatory Bowel Disease (IBD): Testing for      AGA
                            Latent Tuberculosis (TB) Before Initiating Anti-
                            TNF (Tumor Necrosis Factor) Therapy: Percentage
                            of patients aged 18 years and older with a
                            diagnosis of inflammatory bowel disease for whom
                            a tuberculosis (TB) screening was performed and
                            results interpreted within 6 months prior to
                            receiving a first course of anti-TNF (tumor
                            necrosis factor) therapy.
N/A/275..................  Inflammatory Bowel Disease (IBD): Assessment of    AGA
                            Hepatitis B Virus (HBV) Status Before Initiating
                            Anti-TNF (Tumor Necrosis Factor) Therapy:
                            Percentage of patients aged 18 years and older
                            with a diagnosis of inflammatory bowel disease
                            (IBD) who had Hepatitis B Virus (HBV) status
                            assessed and results interpreted within 1 year
                            prior to receiving a first course of anti-TNF
                            (tumor necrosis factor) therapy.
----------------------------------------------------------------------------------------------------------------


                         Table 40--Proposed Oncology Measures Group for 2015 and Beyond
----------------------------------------------------------------------------------------------------------------
          NQF/ PQRS                        Measure title and description                  Measure developer
----------------------------------------------------------------------------------------------------------------
0387/071.....................  Breast Cancer: Hormonal Therapy for Stage IC-IIIC     AMA-PCPI/ASCO/NCCN
                                Estrogen Receptor/Progesterone Receptor (ER/PR)
                                Positive Breast Cancer: Percentage of female
                                patients aged 18 years and older with Stage IC
                                through IIIC, ER or PR positive breast cancer who
                                were prescribed tamoxifen or aromatase inhibitor
                                (AI) during the 12-month reporting period.
0385/072.....................  Colon Cancer: Chemotherapy for AJCC Stage III Colon   AMA-PCPI/ASCO/NCCN
                                Cancer Patients: Percentage of patients aged 18
                                through 80 years with AJCC Stage III colon cancer
                                who are referred for adjuvant chemotherapy,
                                prescribed adjuvant chemotherapy, or have
                                previously received adjuvant chemotherapy within
                                the 12-month reporting period.
0041/110.....................  Preventive Care and Screening: Influenza              AMA-PCPI
                                Immunization: Percentage of patients aged 6 months
                                and older seen for a visit between October 1 and
                                March 31 who received an influenza immunization OR
                                who reported previous receipt of an influenza
                                immunization.
0419/130.....................  Documentation of Current Medications in the Medical   CMS/QIP
                                Record: Percentage of visits for patients aged 18
                                years and older for which the eligible professional
                                attests to documenting a list of current
                                medications using all immediate resources available
                                on the date of the encounter. This list must
                                include ALL known prescriptions, over-the-counters,
                                herbals, and vitamin/mineral/dietary (nutritional)
                                supplements AND must contain the medications' name,
                                dosage, frequency and route of administration.
0384/143.....................  Oncology: Medical and Radiation--Pain Intensity       AMA-PCPI
                                Quantified: Percentage of patients, regardless of
                                patient age, with a diagnosis of cancer currently
                                receiving chemotherapy or radiation therapy in
                                which pain intensity is quantified.
0383/144.....................  Oncology: Medical and Radiation--Plan of Care for     AMA-PCPI
                                Pain: Percentage of visits for patients, regardless
                                of age, with a diagnosis of cancer currently
                                receiving chemotherapy or radiation therapy who
                                report having pain with a documented plan of care
                                to address pain.
0028/226.....................  Preventive Care and Screening: Tobacco Use:           AMA-PCPI
                                Screening and Cessation Intervention: Percentage of
                                patients 18 years and older who were screened for
                                tobacco use one or more times within 24 months AND
                                who received cessation counseling intervention if
                                identified as a tobacco user.
----------------------------------------------------------------------------------------------------------------


  Table 41--Proposed Optimizing Patient Exposure to Ionizing Radiation
                   Measures Group for 2015 and Beyond
------------------------------------------------------------------------
                       Measure title and
     NQF/ PQRS            description             Measure developer
------------------------------------------------------------------------
N/A/359...........  Optimizing Patient      AMA-PCPI
                     Exposure to Ionizing
                     Radiation:
                     Utilization of a
                     Standardized
                     Nomenclature for
                     Computed Tomography
                     (CT) Imaging
                     Description:
                     Percentage of
                     computed tomography
                     (CT) imaging reports
                     for all patients,
                     regardless of age,
                     with the imaging
                     study named according
                     to a standardized
                     nomenclature and the
                     standardized
                     nomenclature is used
                     in institution's
                     computer systems.

[[Page 40465]]

 
N/A/360...........  Optimizing Patient      AMA-PCPI
                     Exposure to Ionizing
                     Radiation: Count of
                     Potential High Dose
                     Radiation Imaging
                     Studies: Computed
                     Tomography (CT) and
                     Cardiac Nuclear
                     Medicine Studies:
                     Percentage of
                     computed tomography
                     (CT) and cardiac
                     nuclear medicine
                     (myocardial perfusion
                     studies) imaging
                     reports for all
                     patients, regardless
                     of age, that document
                     a count of known
                     previous CT (any type
                     of CT) and cardiac
                     nuclear medicine
                     (myocardial
                     perfusion) studies
                     that the patient has
                     received in the 12-
                     month period prior to
                     the current study.
N/A/361...........  Optimizing Patient      AMA-PCPI
                     Exposure to Ionizing
                     Radiation: Reporting
                     to a Radiation Dose
                     Index Registry:
                     Percentage of total
                     computed tomography
                     (CT) studies
                     performed for all
                     patients, regardless
                     of age, that are
                     reported to a
                     radiation dose index
                     registry AND that
                     include at a minimum
                     selected data
                     elements.
N/A/362...........  Optimizing Patient      AMA-PCPI
                     Exposure to Ionizing
                     Radiation: Computed
                     Tomography (CT)
                     Images Available for
                     Patient Follow-up and
                     Comparison Purposes:
                     Percentage of final
                     reports for computed
                     tomography (CT)
                     studies performed for
                     all patients,
                     regardless of age,
                     which document that
                     Digital Imaging and
                     Communications in
                     Medicine (DICOM)
                     format image data are
                     available to non-
                     affiliated external
                     entities on a secure,
                     media free,
                     reciprocally
                     searchable basis with
                     patient authorization
                     for at least a 12-
                     month period after
                     the study.
N/A/363...........  Optimizing Patient      AMA-PCPI
                     Exposure to Ionizing
                     Radiation: Search for
                     Prior Computed
                     Tomography (CT)
                     Imaging Studies
                     Through a Secure,
                     Authorized, Media-
                     Free, Shared Archive:
                     Percentage of final
                     reports of computed
                     tomography (CT)
                     studies performed for
                     all patients,
                     regardless of age,
                     which document that a
                     search for Digital
                     Imaging and
                     Communications in
                     Medicine (DICOM)
                     format images was
                     conducted for prior
                     patient CT imaging
                     studies completed at
                     non-affiliated
                     external entities
                     within the past 12
                     months and are
                     available through a
                     secure, authorized,
                     media free, shared
                     archive prior to an
                     imaging study being
                     performed.
N/A/364...........  Optimizing Patient      AMA-PCPI
                     Exposure to Ionizing
                     Radiation:
                     Appropriateness:
                     Follow-up CT Imaging
                     for Incidentally
                     Detected Pulmonary
                     Nodules According to
                     Recommended
                     Guidelines:
                     Percentage of final
                     reports for CT
                     imaging studies of
                     the thorax for
                     patients aged 18
                     years and older with
                     documented follow-up
                     recommendations for
                     incidentally detected
                     pulmonary nodules
                     (eg, follow-up CT
                     imaging studies
                     needed or that no
                     follow-up is needed)
                     based at a minimum on
                     nodule size AND
                     patient risk factors.
------------------------------------------------------------------------


   Table 42--Proposed Parkinson's Disease Measures Group for 2015 and
                                 Beyond
------------------------------------------------------------------------
                       Measure title and
     NQF/ PQRS            description             Measure developer
------------------------------------------------------------------------
0326/047..........  Care Plan: Percentage   AMA-PCPI/NCQA
                     of patients aged 65
                     years and older who
                     have an care plan or
                     surrogate decision
                     maker documented in
                     the medical record or
                     documentation in the
                     medical record that
                     an care plan was
                     discussed but the
                     patient did not wish
                     or was not able to
                     name a surrogate
                     decision maker or
                     provide an care plan.
N/A/289...........  Parkinson's Disease:    AAN
                     Annual Parkinson's
                     Disease Diagnosis
                     Review: All patients
                     with a diagnosis of
                     Parkinson's disease
                     who had an annual
                     assessment including
                     a review of current
                     medications (e.g.,
                     medications that can
                     produce Parkinson-
                     like signs or
                     symptoms) and a
                     review for the
                     presence of atypical
                     features (e.g., falls
                     at presentation and
                     early in the disease
                     course, poor response
                     to levodopa, symmetry
                     at onset, rapid
                     progression [to Hoehn
                     and Yahr stage 3 in 3
                     years], lack of
                     tremor or
                     dysautonomia) at
                     least annually.
N/A/290...........  Parkinson's Disease:    AAN
                     Psychiatric Disorders
                     or Disturbances
                     Assessment: All
                     patients with a
                     diagnosis of
                     Parkinson's disease
                     who were assessed for
                     psychiatric disorders
                     or disturbances
                     (e.g., psychosis,
                     depression, anxiety
                     disorder, apathy, or
                     impulse control
                     disorder) at least
                     annually.
N/A/291...........  Parkinson's Disease:    AAN
                     Cognitive Impairment
                     or Dysfunction
                     Assessment: All
                     patients with a
                     diagnosis of
                     Parkinson's disease
                     who were assessed for
                     cognitive impairment
                     or dysfunction at
                     least annually.
N/A/292...........  Parkinson's Disease:    AAN
                     Querying about Sleep
                     Disturbances: All
                     patients with a
                     diagnosis of
                     Parkinson's disease
                     (or caregivers, as
                     appropriate) who were
                     queried about sleep
                     disturbances at least
                     annually.
N/A/293...........  Parkinson's Disease:    AAN
                     Rehabilitative
                     Therapy Options: All
                     patients with a
                     diagnosis of
                     Parkinson's disease
                     (or caregiver(s), as
                     appropriate) who had
                     rehabilitative
                     therapy options
                     (e.g., physical,
                     occupational, or
                     speech therapy)
                     discussed at least
                     annually.
N/A/294...........  Parkinson's Disease:    AAN
                     Parkinson's Disease
                     Medical and Surgical
                     Treatment Options
                     Reviewed: All
                     patients with a
                     diagnosis of
                     Parkinson's disease
                     (or caregiver(s), as
                     appropriate) who had
                     the Parkinson's
                     disease treatment
                     options (e.g., non-
                     pharmacological
                     treatment,
                     pharmacological
                     treatment, or
                     surgical treatment)
                     reviewed at least
                     once annually.
------------------------------------------------------------------------


  Table 43--Proposed Preventive Care Measures Group for 2015 and Beyond
------------------------------------------------------------------------
                       Measure title and
     NQF/ PQRS            description             Measure developer
------------------------------------------------------------------------
0046/039..........  Screening or Therapy    AMA-PCPI/NCQA
                     for Osteoporosis for
                     Women Aged 65 Years
                     and Older: Percentage
                     of female patients
                     aged 65 years and
                     older who have a
                     central dual-energy X-
                     ray absorptiometry
                     (DXA) measurement
                     ordered or performed
                     at least once since
                     age 60 or
                     pharmacologic therapy
                     prescribed within 12
                     months.

[[Page 40466]]

 
0098/48...........  Urinary Incontinence:   AMA-PCPI/NCQA
                     Assessment of
                     Presence or Absence
                     of Urinary
                     Incontinence in Women
                     Aged 65 Years and
                     Older: Percentage of
                     female patients aged
                     65 years and older
                     who were assessed for
                     the presence or
                     absence of urinary
                     incontinence within
                     12 months.
0041/110..........  Preventive Care and     AMA-PCPI
                     Screening: Influenza
                     Immunization:
                     Percentage of
                     patients aged 6
                     months and older seen
                     for a visit between
                     October 1 and March
                     31 who received an
                     influenza
                     immunization OR who
                     reported previous
                     receipt of an
                     influenza
                     immunization.
0043/111..........  Pneumonia Vaccination   NCQA
                     Status for Older
                     Adults: Percentage of
                     patients 65 years of
                     age and older who
                     have ever received a
                     pneumococcal vaccine.
N/A/112...........  Breast Cancer           NCQA
                     Screening: Percentage
                     of women 50 through
                     74 years of age who
                     had a mammogram to
                     screen for breast
                     cancer within 27
                     months.
0034/113..........  Colorectal Cancer       NCQA
                     Screening: Percentage
                     of patients 50
                     through 75 years of
                     age who had
                     appropriate screening
                     for colorectal cancer.
0421/128..........  Preventive Care and     CMS/QIP
                     Screening: Body Mass
                     Index (BMI) Screening
                     and Follow-Up:
                     Percentage of
                     patients aged 18
                     years and older with
                     a documented BMI
                     during the current
                     encounter or during
                     the previous 6 months
                     AND when the BMI is
                     outside of normal
                     parameters, a follow-
                     up plan is documented
                     during the encounter
                     or during the
                     previous 6 months of
                     the encounter.
                    Normal Parameters: Age
                     65 years and older
                     BMI >= 23 and < 30;
                     Age 18-64 years BMI
                     >= 18.5 and < 25.
0418/134..........  Preventive Care and     CMS/QIP
                     Screening: Screening
                     for Clinical
                     Depression and Follow-
                     Up Plan: Percentage
                     of patients aged 12
                     years and older
                     screened for clinical
                     depression on the
                     date of the encounter
                     using an age
                     appropriate
                     standardized
                     depression screening
                     tool AND if positive,
                     a follow-up plan is
                     documented on the
                     date of the positive
                     screen.
0028/226..........  Preventive Care and     AMA-PCPI
                     Screening: Tobacco
                     Use: Screening and
                     Cessation
                     Intervention:
                     Percentage of
                     patients 18 years and
                     older who were
                     screened for tobacco
                     use one or more times
                     within 24 months AND
                     who received
                     cessation counseling
                     intervention if
                     identified as a
                     tobacco user.
------------------------------------------------------------------------


Table 44--Proposed Rheumatoid Arthritis (RA) Measures Group for 2015 and
                                 Beyond
------------------------------------------------------------------------
                       Measure title and
     NQF/ PQRS            description             Measure developer
------------------------------------------------------------------------
0054/108..........  Rheumatoid Arthritis    NCQA
                     (RA): Disease
                     Modifying Anti-
                     Rheumatic Drug
                     (DMARD) Therapy:
                     Percentage of
                     patients aged 18
                     years and older who
                     were diagnosed with
                     RA and were
                     prescribed,
                     dispensed, or
                     administered at least
                     one ambulatory
                     prescription for a
                     DMARD.
0041/110..........  Preventive Care and     AMA-PCPI
                     Screening: Influenza
                     Immunization:
                     Percentage of
                     patients aged 6
                     months and older seen
                     for a visit between
                     October 1 and March
                     31 who received an
                     influenza
                     immunization OR who
                     reported previous
                     receipt of an
                     influenza
                     immunization.
N/A/176...........  Rheumatoid Arthritis    AMA-PCPI
                     (RA): Tuberculosis
                     Screening: Percentage
                     of patients aged 18
                     years and older with
                     a diagnosis of
                     rheumatoid arthritis
                     (RA) who have
                     documentation of a
                     tuberculosis (TB)
                     screening performed
                     and results
                     interpreted within 6
                     months prior to
                     receiving a first
                     course of therapy
                     using a biologic
                     disease-modifying
                     anti-rheumatic drug
                     (DMARD).
N/A/177...........  Rheumatoid Arthritis    AMA-PCPI
                     (RA): Periodic
                     Assessment of Disease
                     Activity: Percentage
                     of patients aged 18
                     years and older with
                     a diagnosis of
                     rheumatoid arthritis
                     (RA) who have an
                     assessment and
                     classification of
                     disease activity
                     within 12 months.
N/A/178...........  Rheumatoid Arthritis    AMA-PCPI
                     (RA): Functional
                     Status Assessment:
                     Percentage of
                     patients aged 18
                     years and older with
                     a diagnosis of
                     rheumatoid arthritis
                     (RA) for whom a
                     functional status
                     assessment was
                     performed at least
                     once within 12 months.
N/A/179...........  Rheumatoid Arthritis    AMA-PCPI
                     (RA): Assessment and
                     Classification of
                     Disease Prognosis:
                     Percentage of
                     patients aged 18
                     years and older with
                     a diagnosis of
                     rheumatoid arthritis
                     (RA) who have an
                     assessment and
                     classification of
                     disease prognosis at
                     least once within 12
                     months.
N/A/180...........  Rheumatoid Arthritis    AMA-PCPI
                     (RA): Glucocorticoid
                     Management:
                     Percentage of
                     patients aged 18
                     years and older with
                     a diagnosis of
                     rheumatoid arthritis
                     (RA) who have been
                     assessed for
                     glucocorticoid use
                     and, for those on
                     prolonged doses of
                     prednisone >=10 mg
                     daily (or equivalent)
                     with improvement or
                     no change in disease
                     activity,
                     documentation of
                     glucocorticoid
                     management plan
                     within 12 months.
0028/226..........  Preventive Care and     AMA-PCPI
                     Screening: Tobacco
                     Use: Screening and
                     Cessation
                     Intervention:
                     Percentage of
                     patients 18 years and
                     older who were
                     screened for tobacco
                     use one or more times
                     within 24 months AND
                     who received
                     cessation counseling
                     intervention if
                     identified as a
                     tobacco user.
------------------------------------------------------------------------


     TAble 45--Proposed Sinusitis Measures Group for 2015 and Beyond
------------------------------------------------------------------------
                       Measure title and
     NQF/PQRS             description             Measure developer
------------------------------------------------------------------------
0419/130..........  Documentation of        CMS/QIP
                     Current Medications
                     in the Medical
                     Record: Percentage of
                     visits for patients
                     aged 18 years and
                     older for which the
                     eligible professional
                     attests to
                     documenting a list of
                     current medications
                     using all immediate
                     resources available
                     on the date of the
                     encounter. This list
                     must include ALL
                     known prescriptions,
                     over-the-counters,
                     herbals, and vitamin/
                     mineral/dietary
                     (nutritional)
                     supplements AND must
                     contain the
                     medications' name,
                     dosage, frequency and
                     route of
                     administration..
0420/131..........  Pain Assessment and     CMS/QIP
                     Follow-Up: Percentage
                     of visits for
                     patients aged 18
                     years and older with
                     documentation of a
                     pain assessment using
                     a standardized
                     tool(s) on each visit
                     AND documentation of
                     a follow-up plan when
                     pain is present.

[[Page 40467]]

 
0028/226..........  Preventive Care and     AMA-PCPI
                     Screening: Tobacco
                     Use: Screening and
                     Cessation
                     Intervention:
                     Percentage of
                     patients 18 years and
                     older who were
                     screened for tobacco
                     use one or more times
                     within 24 months AND
                     who received
                     cessation counseling
                     intervention if
                     identified as a
                     tobacco user.
N/A/331...........  Adult Sinusitis:        AMA-PCPI
                     Antibiotic Prescribed
                     for Acute Sinusitis
                     (Appropriate Use):
                     Percentage of
                     patients, aged 18
                     years and older, with
                     a diagnosis of acute
                     sinusitis who were
                     prescribed an
                     antibiotic within 7
                     days of diagnosis or
                     within 10 days after
                     onset of symptoms.
N/A/332...........  Adult Sinusitis:        AMA-PCPI
                     Appropriate Choice of
                     Antibiotic:
                     Amoxicillin
                     Prescribed for
                     Patients with Acute
                     Bacterial Sinusitis:
                     Percentage of
                     patients aged 18
                     years and older with
                     a diagnosis of acute
                     bacterial sinusitis
                     that were prescribed
                     amoxicillin, without
                     clavulante, as a
                     first line antibiotic
                     at the time of
                     diagnosis.
N/A/333...........  Adult Sinusitis:        AMA-PCPI
                     Computerized
                     Tomography for Acute
                     Sinusitis (Overuse):
                     Percentage of
                     patients aged 18
                     years and older with
                     a diagnosis of acute
                     sinusitis who had a
                     computerized
                     tomography (CT) scan
                     of the paranasal
                     sinuses ordered at
                     the time of diagnosis
                     or received within 28
                     days after date of
                     diagnosis.
------------------------------------------------------------------------


    Table 46--Proposed Sleep Apnea Measures Group for 2015 and Beyond
     [Please note that we are proposing to remove this measure group
  contingent on the measure steward not being able to maintain certain
measures contained in these measures group. If a measure steward is able
 to maintain ownership of these measures, we plan to keep this measures
  group in the PQRS measure set. This Table Q26 indicates the measures
 that we propose will be available in this measures group should we keep
              this measures group in the PQRS measure set]
------------------------------------------------------------------------
                       Measure title and
     NQF/PQRS             description             Measure developer
------------------------------------------------------------------------
0421/128..........  Preventive Care and     CMS/QIP
                     Screening: Body Mass
                     Index (BMI) Screening
                     and Follow-Up:
                     Percentage of
                     patients aged 18
                     years and older with
                     a documented BMI
                     during the current
                     encounter or during
                     the previous 6 months
                     AND when the BMI is
                     outside of normal
                     parameters, a follow-
                     up plan is documented
                     during the encounter
                     or during the
                     previous 6 months of
                     the encounter.
                    Normal Parameters: Age
                     65 years and older
                     BMI >= 23 and < 30;
                     Age 18-64 years BMI
                     >= 18.5 and < 25.
0419/130..........  Documentation of        CMS/QIP
                     Current Medications
                     in the Medical
                     Record: Percentage of
                     visits for patients
                     aged 18 years and
                     older for which the
                     eligible professional
                     attests to
                     documenting a list of
                     current medications
                     using all immediate
                     resources available
                     on the date of the
                     encounter. This list
                     must include ALL
                     known prescriptions,
                     over-the-counters,
                     herbals, and vitamin/
                     mineral/dietary
                     (nutritional)
                     supplements AND must
                     contain the
                     medications' name,
                     dosage, frequency and
                     route of
                     administration.
0028/226..........  Preventive Care and     AMA-PCPI
                     Screening: Tobacco
                     Use: Screening and
                     Cessation
                     Intervention:
                     Percentage of
                     patients 18 years and
                     older who were
                     screened for tobacco
                     use one or more times
                     within 24 months AND
                     who received
                     cessation counseling
                     intervention if
                     identified as a
                     tobacco user.
N/A/276...........  Sleep Apnea:            AMA-PCPI/NCQA
                     Assessment of Sleep
                     Symptoms: Percentage
                     of visits for
                     patients aged 18
                     years and older with
                     a diagnosis of
                     obstructive sleep
                     apnea that includes
                     documentation of an
                     assessment of sleep
                     symptoms, including
                     presence or absence
                     of snoring and
                     daytime sleepiness.
N/A/277...........  Sleep Apnea: Severity   AMA-PCPI/NCQA
                     Assessment at Initial
                     Diagnosis: Percentage
                     of patients aged 18
                     years and older with
                     a diagnosis of
                     obstructive sleep
                     apnea who had an
                     apnea hypopnea index
                     (AHI) or a
                     respiratory
                     disturbance index
                     (RDI) measured at the
                     time of initial
                     diagnosis.
N/A/278...........  Sleep Apnea: Positive   AMA-PCPI/NCQA
                     Airway Pressure
                     Therapy Prescribed:
                     Percentage of
                     patients aged 18
                     years and older with
                     a diagnosis of
                     moderate or severe
                     obstructive sleep
                     apnea who were
                     prescribed positive
                     airway pressure
                     therapy.
N/A/279...........  Sleep Apnea:            AMA-PCPI/NCQA
                     Assessment of
                     Adherence to Positive
                     Airway Pressure
                     Therapy: Percentage
                     of visits for
                     patients aged 18
                     years and older with
                     a diagnosis of
                     obstructive sleep
                     apnea who were
                     prescribed positive
                     airway pressure
                     therapy who had
                     documentation that
                     adherence to positive
                     airway pressure
                     therapy was
                     objectively measured.
------------------------------------------------------------------------


 Table 47--Proposed Total Knee Replacement (TKR) Measures Group for 2015
                               and Beyond
------------------------------------------------------------------------
                       Measure title and
     NQF/PQRS             description             Measure developer
------------------------------------------------------------------------
0419/130..........  Documentation of        CMS/QIP
                     Current Medications
                     in the Medical
                     Record: Percentage of
                     visits for patients
                     aged 18 years and
                     older for which the
                     eligible professional
                     attests to
                     documenting a list of
                     current medications
                     using all immediate
                     resources available
                     on the date of the
                     encounter. This list
                     must include ALL
                     known prescriptions,
                     over-the-counters,
                     herbals, and vitamin/
                     mineral/dietary
                     (nutritional)
                     supplements AND must
                     contain the
                     medications' name,
                     dosage, frequency and
                     route of
                     administration.
0028/226..........  Preventive Care and     AMA-PCPI
                     Screening: Tobacco
                     Use: Screening and
                     Cessation
                     Intervention:
                     Percentage of
                     patients 18 years and
                     older who were
                     screened for tobacco
                     use one or more times
                     within 24 months AND
                     who received
                     cessation counseling
                     intervention if
                     identified as a
                     tobacco user.
N/A/350...........  Total Knee              AAHKS
                     Replacement: Shared
                     Decision-Making:
                     Trial of Conservative
                     (Non-surgical)
                     Therapy: Percentage
                     of patients
                     regardless of age or
                     gender undergoing a
                     total knee
                     replacement with
                     documented shared
                     decision-making with
                     discussion of
                     conservative (non-
                     surgical) therapy
                     prior to the
                     procedure.
N/A/351...........  Total Knee              AAHKS
                     Replacement: Venous
                     Thromboembolic and
                     Cardiovascular Risk
                     Evaluation:
                     Percentage of
                     patients regardless
                     of age or gender
                     undergoing a total
                     knee replacement who
                     are evaluated for the
                     presence or absence
                     of venous
                     thromboembolic and
                     cardiovascular risk
                     factors within 30
                     days prior to the
                     procedure including
                     history of Deep Vein
                     Thrombosis, Pulmonary
                     Embolism, Myocardial
                     Infarction,
                     Arrhythmia and Stroke.

[[Page 40468]]

 
N/A/352...........  Total Knee              AAHKS
                     Replacement:
                     Preoperative
                     Antibiotic Infusion
                     with Proximal
                     Tourniquet:
                     Percentage of
                     patients regardless
                     of age undergoing a
                     total knee
                     replacement who had
                     the prophylactic
                     antibiotic completely
                     infused prior to the
                     inflation of the
                     proximal tourniquet.
N/A/353...........  Total Knee              AAHKS
                     Replacement:
                     Identification of
                     Implanted Prosthesis
                     in Operative Report:
                     Percentage of
                     patients regardless
                     of age or gender
                     undergoing total knee
                     replacement whose
                     operative report
                     identifies the
                     prosthetic implant
                     specifications
                     including the
                     prosthetic implant
                     manufacturer, the
                     brand name of the
                     prosthetic implant
                     and the size of
                     prosthetic implant.
------------------------------------------------------------------------

e. Proposals for Measures Available for Reporting in the GPRO Web 
Interface
    We finalized the measures that are available for reporting in the 
GPRO Web interface for 2014 and beyond in the CY 2013 PFS final rule 
(77 FR 69269). However, we are proposing to remove and add measures in 
the GPRO Web interface measure set as reflected in Tables 47 and 48 for 
2015 and beyond. Specifically, Table 47 specifies the measures we are 
proposing to remove for reporting from the GPRO Web interface, and 
Table 48 specifies the measures we are proposing to add for reporting 
in the GPRO Web interface. CMS is proposing to adopt Depression 
Remission at Twelve Months (NQF 0710) in the 2015 GPRO Web 
Interface reporting option for ACOs and group practices. This measure 
is currently reportable in the PQRS program through the EHR reporting 
option only and has not been tested using claims level data or sampling 
methodology. Depression Remission at Twelve Months (NQF 0710) 
requires a look-back period and a look-forward period possibly spanning 
multiple calendar years. Additionally, this measure requires 
utilization of a PHQ-9 depression screening tool with a score greater 
than 9 and a diagnosis of depression/dysthymia to identify the 
beginning of the episode (initial patient population). Successful 
completion of the quality action for this measure looks for a PHQ-9 
score of less than 5 at the twelve month mark (plus or minus 30 days) 
from the initial onset of the episode. CMS is soliciting comments 
regarding this proposal, including operational concerns and the 
technical feasibility for implementation in the 2015 GPRO Web 
Interface. We note that, in addition to addressing changes in evidence-
based practices, we are modifying the GPRO Web interface in an effort 
to align with the proposed measure changes in the Medicare Shared 
Savings Program specified in section III.M.
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    Please note that, if these proposals are finalized, the GPRO 
measure set will contain 21 measures available for reporting.
f. The Clinician Group (CG) Consumer Assessment of Healthcare Providers 
and Systems (CAHPS) Survey
    In the CY 2014 PFS final rule with comment period, we finalized the 
CG-CAHPS survey available for reporting under the PQRS for 2014 and 
beyond (78 FR 74750 through 74751), to which we are now referring as 
the CAHPS for PQRS. Please note that, in the CY 2014 PFS final rule 
with comment period, we classified the CAHPS for PQRS survey under the 
care coordination and communication NQS domain. We note that this was 
an error on our part, as the CAHPS for PQRS survey has typically been 
classified under the Person and Caregiver-Centered Experience and 
Outcomes domain as the CAHPS for PQRS survey assesses beneficiary 
experience of care and outcomes. Therefore, as we indicate in Table 21, 
we are proposing to reclassify the CAHPS for PQRS survey under the 
Person and Caregiver-Centered Experience and Outcomes domain. We invite 
public comment on this proposal.
6. Statutory Requirements and Other Considerations for the Selection of 
PQRS Quality Measures for Meeting the Criteria for Satisfactory 
Participation in a QCDR for 2014 and Beyond for Individual Eligible 
Professionals
    For the measures which eligible professionals participating in a 
QCDR must report, section 1848(m)(3)(D) of the Act, as amended and 
added by section 601(b) of the ATRA, provides that the Secretary shall 
treat eligible professionals as satisfactorily submitting data on 
quality measures if they satisfactorily participate in a QCDR. Section 
1848(m)(3)(E) of the Act, as added by section 601(b) of the ATRA, 
provides some flexibility with regard to the types of measures 
applicable to satisfactory participation in a QCDR, by specifying that 
for measures used by a QCDR, sections 1890(b)(7) and 1890A(a) of the 
Act shall not apply, and measures endorsed by the entity with a 
contract with the Secretary under section 1890(a) of the Act may be 
used.
    In the CY 2014 PFS final rule with comment period, we finalized 
requirements related to the parameters for the measures that would have 
to be reported to CMS by a QCDR for the purpose of its individual 
eligible

[[Page 40473]]

professionals meeting the criteria for satisfactory participation under 
the PQRS (78 FR 74751 through 74753). Although we are not proposing to 
remove any of the requirements we finalized related to these 
parameters, we are proposing to modify the following parameters we 
finalized in the CY 2014 PFS final rule with comment period related to 
measures that may be reported by a QCDR:
     The QCDR must have at least 1 outcome measure available 
for reporting, which is a measure that assesses the results of health 
care that are experienced by patients (that is, patients' clinical 
events; patients' recovery and health status; patients' experiences in 
the health system; and efficiency/cost).
    As we are proposing that for an eligible professional to meet the 
criterion for satisfactory participation in a QCDR for the 2017 PQRS 
payment adjustment, the eligible professional must report on at least 3 
outcome measures or, in lieu of 3 outcome measures, at least 2 outcome 
measures and 1 resource use, patient experience of care, or efficiency/
appropriate use measure, we are modifying this requirement to conform 
to this proposed satisfactory participation criterion. Therefore, we 
are proposing that a QCDR must have at least 3 outcome measures 
available for reporting, which is a measure that assesses the results 
of health care that are experienced by patients (that is, patients' 
clinical events; patients' recovery and health status; patients' 
experiences in the health system; and efficiency/cost). In lieu of 
having 3 outcome measures available for reporting, the QCDR must have 
at least 2 outcome measures available for reporting and at least 1 
resource use, patient experience of care, or efficiency/appropriate use 
measure.
    We are proposing to define resource use, patient experience of 
care, or efficiency/appropriate use measures in the following manner:
     A resource use measure is a measure that is a comparable 
measure of actual dollars or standardized units of resources applied to 
the care given to a specific population or event, such as a specific 
diagnosis, procedure, or type of medical encounter.
     A patient experience of care measure is a measure of 
person- or family-reported experiences (outcomes) of being engaged as 
active members of the health care team and in collaborative 
partnerships with providers and provider organizations.
     An efficiency/appropriate use measure is a measure of the 
appropriate use of health care services (such as diagnostics or 
therapeutics) based upon evidence-based guidelines of care, or for 
which the potential for harm exceeds the possible benefits of care.
    Please note that, for purposes of meeting the criteria for 
satisfactory participation in a QCDR, we allow QCDRs to report on any 
measure provided that it meets the measure parameters we finalize. We 
note that we would allow and encourage the reporting of the Consumer 
Assessment of Healthcare Providers Surgical Care Survey (S-CAHPS) 
through a QCDR.
    Finally, in the CY 2014 PFS final rule with comment period, we 
stated that a QCDR must provide to CMS descriptions and narrative 
specifications for the measures for which it will report to CMS by no 
later than March 31, 2014. In keeping with this timeframe, we propose 
that a QCDR must provide to CMS descriptions for the measures for which 
it will report to CMS for a particular year by no later than March 31 
of the applicable reporting period for which the QCDR wishes to submit 
quality measures data. For example, if a QCDR wishes to submit quality 
measures data for the 2017 PQRS payment adjustment (the 12-month 
reporting period of which occurs in 2015), the QCDR must provide to CMS 
descriptions for the measures for which it will report to CMS by no 
later than March 31, 2015. The descriptions must include: name/title of 
measures, NQF  (if NQF endorsed), descriptions of the 
denominator, numerator, and when applicable, denominator exceptions and 
denominator exclusions of the measure. The narrative specifications 
provided must be similar to the narrative specifications we provide in 
our measures list, available at http://www.cms.gov/apps/ama/license.asp?file=/PQRS/downloads/2014_PQRS_IndClaimsRegistry_MeasureSpecs_SupportingDocs_12132013.zip.
    Related to this proposal, we propose that, 15 days following CMS 
approval of these measure specifications, the QCDR must publicly post 
the measures specifications for the measures it intends to report for 
the PQRS using any public format it prefers. Immediately following 
posting of the measures specification information, the QCDR must 
provide CMS with the link to where this information is posted. CMS will 
then post this information when it provides its list of QCDRs for the 
year. We believe providing this information will further aide in 
creating transparency of reporting.
    We invite public comment on these proposals.
7. Informal Review
    In the CY 2013 PFS final rule with comment period (77 FR 69289), we 
established that ``an eligible professional electing to utilize the 
informal review process must request an informal review by February 28 
of the year in which the payment adjustment is being applied. For 
example, if an eligible professional requests an informal review 
related to the 2015 payment adjustment, the eligible professional would 
be required to submit his/her request for an informal review by 
February 28, 2015.'' As stated in the CY 2013 PFS final rule with 
comment period, we believed this deadline provided ample time for 
eligible professionals and group practices after their respective 
claims begin to be adjusted due to the payment adjustment. However, 
because PQRS data is used to establish the quality composite of the VM, 
we believe it is necessary to expand the informal review process to 
allow for some limited corrections of the PQRS data to be made. 
Therefore, we propose to modify the payment adjustment informal review 
deadline to within 30 days of the release of the feedback reports. For 
example, if the feedback reports for the 2016 payment adjustment (based 
on data collected for 2014 reporting periods) are released on August 
31, 2015, an eligible professional or group practice would be required 
to submit a request for an informal review by September 30, 2015. We 
believe that by being able to notify eligible professionals and group 
practices of CMS' decision on the informal review request much earlier 
than we would have been able to do with the previous informal review 
request deadline we can provide a brief period for an eligible or group 
practice to make some limited corrections to its PQRS data. This 
resubmitted data could then be used to make corrections to the VM 
calculations, when appropriate.
    The PQRS regulations at Sec.  414.90(m)(1) currently require an 
eligible professional or group practice to submit an informal review 
request to CMS within 90 days of the release of the feedback reports. 
Therefore, we propose to revise Sec.  414.90(m)(1).
    Regarding the eligible professional's or group practice's ability 
to provide additional information to assist in the informal review 
process, we propose to provide the following limitations as to what 
information may be taken into consideration:
     CMS would only allow resubmission of data that was 
submitted using a third-party vendor using either

[[Page 40474]]

the qualified registry, EHR data submission vendor, or QCDR reporting 
mechanisms. Therefore, CMS would not allow resubmission of data 
submitted via claims, direct EHR, or the GPRO web interface reporting 
mechanisms. We are limiting resubmission to third-party vendors, 
because we believe that third-party vendors are more easily able to 
detect errors than direct users.
    CMS would only allow resubmission of data that was already 
previously submitted to CMS. Submission of new data--such as new 
measures data not previously submitted or new data for eligible 
professionals for which data was not submitted during the original 
submission period--would not be accepted.
     For any given resubmission period, CMS would only accept 
data that was previously submitted for the reporting periods for which 
the corresponding informal review period applies. For example, the 
resubmission period immediately following the informal review period 
for the 2017 PQRS payment adjustment would only allow resubmission for 
data previously submitted for the 2017 PQRS payment adjustment 
reporting periods occurring in 2015.
    As such, we are proposing to add Sec.  414.90(m)(3) to reflect this 
proposal as follows: (3) If, during the informal review process, CMS 
finds errors in data that was submitted using a third-party vendor 
using either the qualified registry, EHR data submission vendor, or 
QCDR reporting mechanisms, CMS may allow for the resubmission of data 
to correct these errors. (i) CMS will not allow resubmission of data 
submitted via claims, direct EHR, and the GPRO web interface reporting 
mechanisms. (ii) CMS will only allow resubmission of data that was 
already previously submitted to CMS. (iii) CMS will only accept data 
that was previously submitted for the reporting periods for which the 
corresponding informal review period applies.
    We invite public comment on these proposals.

L. Electronic Health Record (EHR) Incentive Program

    The HITECH Act (Title IV of Division B of the ARRA, together with 
Title XIII of Division A of the ARRA) authorizes incentive payments 
under Medicare and Medicaid for the adoption and meaningful use of 
certified EHR technology (CEHRT). Section 1848(o)(2)(B)(iii) of the Act 
requires that in selecting CQMs for eligible professionals (EPs) to 
report under the EHR Incentive Program, and in establishing the form 
and manner of reporting, the Secretary shall seek to avoid redundant or 
duplicative reporting otherwise required. As such, we have taken steps 
to establish alignments among various quality reporting and payment 
programs that include the submission of CQMs.
    For CY 2012 and subsequent years, Sec.  495.8(a)(2)(ii) requires an 
EP to successfully report the clinical quality measures selected by CMS 
to CMS or the states, as applicable, in the form and manner specified 
by CMS or the states, as applicable.
    In the CY 2014 PFS final rule with comment period (78 FR 74756), we 
finalized our proposal to require EPs who seek to report CQMs 
electronically under the Medicare EHR Incentive Program to use the most 
recent version of the electronic specifications for the CQMs and have 
CEHRT that is tested and certified to the most recent version of the 
electronic specifications for the CQMs. We noted it is important for 
EPs to electronically report the most recent versions of the electronic 
specifications for the CQMs as updated measure versions correct minor 
inaccuracies found in prior measure versions. We stated that to ensure 
that CEHRT products can successfully transmit CQM data using the most 
recent version of the electronic specifications for the CQMs, it is 
important that the product be tested and certified to the most recent 
version of the electronic specifications for the CQMs.
    Since finalizing this proposal, we have received feedback from 
stakeholders regarding the difficulty and expense of having to test and 
recertify CEHRT products to the most recent version of the electronic 
specifications for the CQMs. While we still believe EPs should test and 
certify their products to the most recent version of the electronic 
specifications for the CQMs when feasible, we understand the burdens 
associated with this requirement. Therefore, to eliminate this added 
burden, we are proposing that, beginning in CY 2015, EPs would not be 
required to ensure that their CEHRT products are recertified to the 
most recent version of the electronic specifications for the CQMs. 
Please note that, although we are not requiring recertification, EPs 
must still report the most recent version of the electronic 
specifications for the CQMs.
    In the CY 2014 PFS final rule with comment period, we established 
the requirement that EPs who seek to report CQMs electronically under 
the Medicare EHR Incentive Program must use the most recent version of 
the electronic specifications for the CQMs (78 FR 74756). When 
establishing this requirement, we did not account for instances where 
errors are discovered in the updated electronic measure specifications. 
To account for these instances and consistent with the proposal set 
forth in the PQRS in section III.K, we propose that, beginning in CY 
2015, if we discover errors in the most recently updated electronic 
measure specifications for a certain measure, we would use the version 
of electronic measure specifications that immediately precedes the most 
recently updated electronic measure specifications.
    Additionally, we noted that, with respect to the following measure 
CMS140v2, Breast Cancer Hormonal Therapy for Stage IC-IIIC Estrogen 
Receptor/Progesterone Receptor (ER/PR) Positive Breast Cancer (NQF 
0387), a substantive error was discovered in the June 2013 version of 
this electronically specified clinical quality measure (78 FR 74757). 
If an EP chooses to report this measure electronically under the EHR 
Incentive Program in CY 2014, the prior, December 2012 version of the 
measure, which is CMS140v1, must be used (78 FR 74757). Since a more 
recent and corrected version of this measure has been developed, we 
will require the reporting of the most recent, updated version of the 
measure Breast Cancer Hormonal Therapy for Stage IC-IIIC Estrogen 
Receptor/Progesterone Receptor (ER/PR) Positive Breast Cancer (NQF 
0387), if an EP chooses to report the measure electronically in CY 
2015.
    In the EHR Incentive Program Stage 2 final rule, we established CQM 
reporting options for the Medicare EHR Incentive Program for CY 2014 
and subsequent years that include one individual reporting option that 
aligns with the PQRS's EHR reporting option (77 FR 54058) and two group 
reporting options that align with the PQRS GPRO and Medicare Shared 
Savings Program (MSSP) and Pioneer ACOs (77 FR 54076 to 54078). In the 
CY 2014 PFS final rule with comment period, we finalized two additional 
aligned options for EPs to report CQMs for the Medicare EHR Incentive 
Program for CY 2014 and subsequent years with the intention of 
minimizing the reporting burden on EPs (78 FR 74753 through 74757). One 
of the aligned options finalized in the CY 2014 PFS final rule with 
comment period (78 FR 74754 through 74755) is a reporting option for 
CQMs for the Medicare EHR Incentive Program under which EPs can submit 
CQM information using qualified clinical data registries, according the 
definition and requirements for qualified clinical data registries 
established under the PQRS.

[[Page 40475]]

    The second aligned option finalized in the CY 2014 PFS final rule 
with comment period (78 FR 74755 through 74756) is a group reporting 
option for CQMs for the Medicare EHR Incentive Program beginning in CY 
2014 under which EPs who are part of a Comprehensive Primary Care (CPC) 
initiative practice site that successfully reports at least nine 
electronically specified CQMs across three domains for the relevant 
reporting period in accordance with the requirements established for 
the CPC initiative and using CEHRT would satisfy the CQM reporting 
component of meaningful use for the Medicare EHR Incentive Program. If 
a CPC practice site is not successful in reporting, EPs who are part of 
the site would still have the opportunity to report CQMs in accordance 
with the requirements established for the Medicare EHR Incentive 
Program in the Stage 2 final rule. Additionally, only those EPs who are 
beyond their first year of demonstrating meaningful use may use this 
CPC group reporting option. The CPC practice sites must submit the CQM 
data in the form and manner required by the CPC initiative. Therefore, 
whether CPC required electronic submission or attestation of CQMs, the 
CPC practice site must submit the CQM data in the form and manner 
required by the CPC initiative.
    The CPC initiative, under the authority of section 3021 of the 
Affordable Care Act, is a multi-payer initiative fostering 
collaboration between public and private health care payers to 
strengthen primary care. Under this initiative, we will pay 
participating primary care practices a care management fee to support 
enhanced, coordinated services. Simultaneously, participating 
commercial, state, and other federal insurance plans are also offering 
enhanced support to primary care practices that provide high-quality 
primary care. There are approximately 483 CPC practice sites across 7 
health care markets in the U.S. More details on the CPC initiative can 
be found at http://innovation.cms.gov/initiatives/Comprehensive-Primary-Care-Initiative/index.html.
    Under the CPC initiative, CPC practice sites are required to report 
to CMS a subset of the CQMs that were selected in the EHR Incentive 
Program Stage 2 final rule for EPs to report under the EHR Incentive 
Program beginning in CY 2014 (for a list of CQMs that were selected in 
the EHR Incentive Program Stage 2 final rule for EPs to report under 
the EHR Incentive Program beginning in CY 2014, see 77 FR 54069 through 
54075). We propose to retain the group reporting option for CPC 
practice sites as finalized in the CY 2014 PFS final rule, but to relax 
the requirement for the CQMs to cover three domains. Instead, we 
propose that, for CY 2015 only, under this group reporting option, the 
CPC practice site must report a minimum of nine CQMs from the CPC 
subset, and the nine CQMs reported must cover at least 2 domains, 
although we strongly encourage practice sites to report across more 
domains if feasible. Although the requirement to report across three 
domains is important because the domains are linked to the National 
Quality Strategy and used throughout CMS quality programs, the CPC 
practice sites are required to report from a limited number of CQMs 
that were selected for the EHR Incentive Program and are focused on a 
primary care population. Therefore, these CPC practice sites may not 
have measures to select from that cover three domains. Additionally, 
CPC practice sites are assessed for quality performance on measures 
other than electronically specified CQMs which do cover other National 
Quality Strategy domains. We invite public comment on this proposal.

M. Medicare Shared Savings Program

    Under section 1899 of the Act, CMS has established the Medicare 
Shared Savings program (Shared Savings Program) to facilitate 
coordination and cooperation among providers to improve the quality of 
care for Medicare Fee-For-Service (FFS) beneficiaries and reduce the 
rate of growth in health care costs. Eligible groups of providers and 
suppliers, including physicians, hospitals, and other health care 
providers, may participate in the Shared Savings Program by forming or 
participating in an Accountable Care Organization (ACO). The final rule 
implementing the Shared Savings Program appeared in the November 2, 
2011 Federal Register (Medicare Shared Savings Program: Accountable 
Care Organizations Final Rule (76 FR 67802)).
    Section 1899(b)(3)(A) of the Act requires the Secretary to 
determine appropriate measures to assess the quality of care furnished 
by ACOs, such as measures of clinical processes and outcomes; patient, 
and, wherever practicable, caregiver experience of care; and 
utilization such as rates of hospital admission for ambulatory 
sensitive conditions. Section 1899(b)(3)(B) of the Act requires ACOs to 
submit data in a form and manner specified by the Secretary on measures 
that the Secretary determines necessary for ACOs to report to evaluate 
the quality of care furnished by ACOs. Section 1899(b)(3)(C) of the Act 
requires the Secretary to establish quality performance standards to 
assess the quality of care furnished by ACOs, and to seek to improve 
the quality of care furnished by ACOs over time by specifying higher 
standards, new measures, or both for the purposes of assessing the 
quality of care. Additionally, section 1899(b)(3)(D) of the Act gives 
the Secretary authority to incorporate reporting requirements and 
incentive payments related to the PQRS, EHR Incentive Program and other 
similar initiatives under section 1848 of the Act. Finally, section 
1899(d)(1)(A) of the Act states that an ACO is eligible to receive 
payment for shared savings, if they are generated, only after meeting 
the quality performance standards established by the Secretary.
    In the November 2011 final rule establishing the Shared Savings 
Program, we established the quality performance standards that ACOs 
must meet to be eligible to share in savings that are generated (76 FR 
67870 through 67904). Quality performance measures are submitted by 
ACOs through a CMS web interface, currently the group practice 
reporting (GPRO) web interface, calculated by CMS from internal and 
claims data, and collected through a patient and caregiver experience 
of care survey.
    Consistent with the directive under section 1899(b)(3)(C) of the 
Act, we believe the existing Shared Savings Program regulations 
incorporate a built in mechanism for encouraging ACOs to improve care 
over the course of their 3-year agreement period, and to reward quality 
improvement over time. During the first year of the agreement period, 
ACOs can qualify for the maximum sharing rate by completely and 
accurately reporting all quality measures. After that, ACOs must meet 
certain thresholds of performance, which are currently phased in, and 
are rewarded for improved performance on a sliding scale in which 
higher levels of quality performance translate to higher rates of 
shared savings (or, for ACOs subject to performance-based risk that 
demonstrate losses, lower rates of shared losses). In this way, the 
quality performance standard increases over the course of the ACO's 
agreement period.
    Additionally, we have made an effort to align quality performance 
measures, submission methods, and incentives under the Shared Savings 
Program with the PQRS. Eligible professionals participating in an ACO 
may qualify for the PQRS incentive payment under the Shared Savings 
Program or avoid the downward PQRS payment adjustment when the ACO 
satisfactorily reports the

[[Page 40476]]

ACO GPRO measures on their behalf using the GPRO web interface.
    Since the November 2011 final rule establishing the Shared Savings 
Program was issued, we have revisited certain aspects of the quality 
performance standard in the annual PFS rulemaking out of a desire to 
ensure thoughtful alignment with the agency's other quality incentive 
programs that are addressed in that rule. Specifically, we have updated 
our rules to align with PQRS and the EHR Incentive Program, and 
addressed issues related to benchmarking and scoring ACO quality 
performance (77 FR 69301 through 69304; 78 FR 74757 through 74764). We 
have identified several policies related to the quality performance 
standard that we would like to address in this rule at this time. 
Specifically, we are revisiting the current quality performance 
standard, proposing changes to the quality measures, and seeking 
comment on future quality performance measures. We are also proposing 
to modify the timeframe between updates to the quality performance 
benchmarks, to establish an additional incentive to reward ACO quality 
improvement, and to make several technical corrections to the 
regulations in subpart F of Part 425.
1. Existing Quality Measures and Performance Standard
    As discussed previously, section1899(b)(3) of the Act states that 
the Secretary may establish quality performance standards to assess the 
quality of care furnished by ACOs and ``seek to improve the quality of 
care furnished by ACOs over time by specifying higher standards, new 
measures, or both. . . .'' In the November 2011 Shared Savings Program 
final rule, we established a quality performance standard that consists 
of 33 measures. These measures are submitted by the ACO through the 
GPRO web interface, calculated by CMS from administrative and claims 
data, and collected via a patient experience of care survey based on 
the Clinician and Group Consumer Assessment of Healthcare Providers and 
Systems (CG-CAHPS) survey. Although the patient experience of care 
survey used for the Shared Savings Program includes the core CG-CAHPS 
modules, this patient experience of care survey also includes some 
additional modules. Therefore, we will refer to the patient experience 
of care survey that is used under the Shared Savings Program as CAHPS 
for ACOs. The measures span four domains, including patient experience 
of care, care coordination/patient safety, preventive health, and at-
risk population. The measures collected through the GPRO web interface 
are also used to determine whether eligible professionals participating 
in an ACO qualify for the 2013 and 2014 PQRS incentive payment or avoid 
the PQRS payment adjustment for 2015 and subsequent years. Eligible 
professionals in an ACO may qualify for the PQRS incentive payment or 
avoid the downward PQRS payment adjustment when the ACO satisfactorily 
reports all of the ACO GPRO measures on their behalf using the GPRO web 
interface.
    In selecting the 33 measure set, we balanced a wide variety of 
important considerations. Given that many ACOs were expected to be 
newly formed organizations, in the November 2011 Shared Savings Program 
final rule (76 FR 67886), we concluded that ACO quality measures should 
focus on discrete processes and short-term measurable outcomes derived 
from administrative claims and limited medical record review 
facilitated by a CMS-provided web interface to lessen the burden of 
reporting. Because of the focus on Medicare FFS beneficiaries, our 
measure selection emphasized prevention and management of chronic 
diseases that have high impact on these beneficiaries such as heart 
disease, diabetes mellitus, and chronic obstructive pulmonary disease. 
We believed that the quality measures used in the Shared Savings 
Program should be tested, evidence-based, target conditions of high 
cost and high prevalence in the Medicare FFS population, reflect 
priorities of the National Quality Strategy, address the continuum of 
care to reflect the requirement that ACOs accept accountability for 
their patient populations, and align with existing quality programs and 
value-based purchasing initiatives.
    At this time, we continue to believe it is most appropriate to 
focus on quality measures that directly assess the overall quality of 
care furnished to FFS beneficiaries. The set of 33 measures that we 
adopted in the November 2011 Shared Savings Program final rule includes 
measures addressing patient experience, outcomes, and evidence-based 
care processes. Thus far, we have not included any specific measures 
addressing high cost services or utilization since we believe that the 
potential to earn shared savings offers an important and direct 
incentive for ACOs to address utilization issues in a way that is most 
appropriate for their organization, patient population, and local 
healthcare environment. We note that while the quality performance 
standard is limited to these 33 measures, the performance of ACOs is 
measured on many more metrics and ACOs are informed of their 
performance in these areas. For example, an assessment of an ACO's 
utilization of certain resources is provided to the ACO via quarterly 
reports that contain information such as the utilization of emergency 
services or the utilization of CTs and MRIs.
    As we have stated previously (76 FR 67872), our principal goal in 
selecting quality measures for ACOs was to identify measures of success 
in the delivery of high-quality health care at the individual and 
population levels. We believe endorsed measures have been tested, 
validated, and clinically accepted, and therefore, selected the 33 
measures with a preference for NQF-endorsed measures. However, the 
statute does not limit us to using endorsed measures in the Shared 
Savings Program. As a result we also exercised our discretion to 
include certain measures that we believe to be high impact but that are 
not currently endorsed, for example, ACO11, Percent of PCPs 
Who Successfully Qualify for an EHR Incentive Program Payment.
    In selecting the final set of 33 measures, we sought to include 
both process and outcome measures, including patient experience of care 
(76 FR 67873). Because ACOs are charged with improving and coordinating 
care and delivering high quality care, but also need time to form, 
acquire infrastructure and develop clinical care processes, we continue 
to believe it is important to have a combination of both process and 
outcomes measures. We note, however, that as other CMS quality 
reporting programs, such as PQRS, move to more outcomes-based measures 
and fewer process measures over time, we may also revise the quality 
performance standard for the Shared Savings Program to incorporate more 
outcomes-based measures over time.
    Therefore, we viewed the 33 measures adopted in the November 2011 
Shared Savings Program final rule as a starting point for ACO quality 
measurement. As we stated in that rule (67 FR 67891), we plan to modify 
the measures in future reporting cycles to reflect changes in practice 
and improvements in quality of care and to continue aligning with other 
quality reporting programs and will add and/or retire measures as 
appropriate through the rulemaking process. In addition, we are working 
with the measures community to ensure that the specifications for the 
measures used under the Shared Savings Program are up-to-date. We note 
that we must balance the timing of the release of specifications so 
they are as up-to-date

[[Page 40477]]

as possible, while also giving ACOs sufficient time to review 
specifications. Our intention is to issue the specifications annually, 
prior to the start of the reporting period for which they will apply. 
For example, we issued the specifications for the 2014 reporting period 
in late 2013, prior to the start of the 2014 reporting period.
    In the November 2011 Shared Savings Program final rule (76 FR 
67873), we combined care coordination and patient safety into a single 
domain to better align with the National Quality Strategy and to 
emphasize the importance of ambulatory patient safety and care 
coordination. We also intended to continue exploring ways to best 
capture ACO care coordination metrics and noted that we would consider 
adding new care coordination measures for future years (67 FR 67877).
2. Proposed Changes to the Quality Measures Used in Establishing 
Quality Performance Standards That ACOs Must Meet To Be Eligible for 
Shared Savings
    Since the November 2011 Shared Savings Program final rule, we have 
continued to review the quality measures used for the Shared Savings 
Program to ensure that they are up to date with current clinical 
practice and are aligned with the GPRO web interface reporting for 
PQRS. Based on the reviews, we have identified a number of proposed 
measure additions, deletions and other revisions that we believe would 
be appropriate for the Shared Savings Program. Under the following 
proposed measure revisions, ACOs would be assessed on 37 measures 
annually, an increase of 4 measures. However, as explained in more 
detail below, we believe the measures chosen are more outcome-oriented 
and would ultimately reduce the reporting burden on ACOs.
    The following is a description of the proposed changes that would 
be effective for the 2015 reporting period and would be reported by 
ACOs to us in early 2016. Table 50 offers an overview of the proposed 
changes and is provided as a reference. (We note that the deletion and 
insertion of certain measures affects the composite measures, and we 
are proposing corresponding revisions to both the diabetes and coronary 
artery disease composite measures.)
     CAHPS Stewardship of Patient Resources. This measure is 
one of the unscored survey measures currently collected in addition to 
the seven that are already part of the current set of 33 scored 
measures under the Shared Savings Program. Information on the unscored 
survey measure modules is currently shared with the ACOs for 
informational purposes only. The Stewardship of Patient Resources 
measure asks the patient whether the care team talked with the patient 
about prescription medicine costs. The measure exhibited high 
reliability during the first two administrations of the CAHPS survey, 
and during testing, the beneficiaries that participated in cognitive 
testing said that prescription drug costs was important to them. We are 
proposing to add Stewardship of Patient Resources as a scored measure 
in the patient experience domain because we believe, based on testing, 
that this is an important factor for measuring a beneficiary's 
experience with healthcare providers. We are also proposing that the 
measure would be phased into pay for performance as we plan to do for 
other new measures, using a similar process to the phase in that was 
used for the measure modules in the survey that are currently used to 
assess ACO quality performance. We seek comment on this proposal and on 
any other patient experience of care measures that might be considered 
in future rulemaking.
     Skilled Nursing Facility 30-Day All-Cause Readmission 
Measure (SNFRM). We propose to add a 30-day all cause SNF readmission 
measure. CMS is the measure steward for this claims based measure which 
is under review at NQF under NQF 2510. This measure estimates 
the risk-standardized rate of all-cause, unplanned, hospital 
readmissions for patients who have been admitted to a Skilled Nursing 
Facility within 30 days of discharge from a prior inpatient admission 
to a hospital, CAH, or a psychiatric hospital. The measure is based on 
data for 12 months of SNF admissions. We believe this measure would 
help fill a gap in the current Shared Savings Program measure set and 
would provide a focus on an area where ACOs are targeting care 
redesign. ACOs and their ACO providers/suppliers often include post-
acute care (PAC) settings and the addition of this measure would 
enhance the participation and alignment with these facilities. Even 
when the ACO does not include post-acute facilities formally as part of 
its organization, ACO providers/suppliers furnish other services that 
have the potential to affect PAC outcomes. Thus, this measure would 
emphasize the importance of coordinating the care of beneficiaries 
across these sites of care. Additionally, because this measure is 
calculated from claims, there would not be a burden on ACOs to collect 
this information.
     All-Cause Unplanned Admissions for Patients with Diabetes 
Mellitus (DM), Heart Failure (HF) and Multiple Chronic Conditions. We 
propose to add three new measures to the Care Coordination/Patient 
Safety domain. The three proposed new measures are for: all-cause 
unplanned Admissions for Patients with Diabetes Mellitus (DM), all-
cause unplanned Admissions for Patients with Heart Failure (HF) and 
all-cause unplanned Admissions for Patients with Multiple Chronic 
Conditions. These three measures are under development though a CMS 
contract with Yale New Haven Health Services Corporation/Center for 
Outcomes Research and Evaluation (CORE) to develop quality measures 
specifically for ACO patients with heart failure, diabetes, and 
multiple chronic conditions. We believe that these measures are 
important to promote and assess ACO quality as it relates to chronic 
condition inpatient admission because they are major causes for 
unplanned admissions and will support the ACOs' efforts to improve care 
coordination for these chronic conditions. These measures are claims 
based, and therefore, we do not expect that they would impose any 
additional burden on ACOs.
     Depression Remission at Twelve Months. We propose to add 
Depression Remission at Twelve Months (NQF 0710) to the 
Preventive Health domain. Depression is a serious health condition for 
the Medicare population and can decrease patient adherence to treatment 
for chronic conditions. This measure would enhance our measurement of 
health outcomes and depression is an important health condition that we 
believe is appropriate to be addressed by ACOs. The measure would be 
submitted through the GPRO web interface, and would be aligned with 
PQRS. We also seek comments on the inclusion of additional behavioral 
health measures, such as substance abuse or mental health measures, in 
future rulemaking cycles.
     Diabetes Measures for Foot Exam and Eye Exam. Diabetes is 
one of the most serious, chronic health conditions for Medicare 
beneficiaries. It is critical that Medicare beneficiaries that have 
diabetes receive foot and eye exams to help prevent diabetes-related 
foot amputations and blindness. Both of the two new measures would be 
added to the Clinical Care for at Risk Population-Diabetes domain. They 
are endorsed by NQF (NQF 0055 and 0056). We also 
propose to include these two new measures as part of a new Diabetes 
Mellitus composite measure. These measures would also align with PQRS 
and the EHR Incentive Program. We believe these measures would be

[[Page 40478]]

appropriate additional measures for assessing quality of care furnished 
in ACOs to help prevent diabetes-related foot amputations and 
blindness.
     Coronary Artery Disease (CAD): Symptom Management. This 
new measure would be added to the Clinical Care for At Risk Population-
Coronary Artery Disease domain and included in the CAD Composite 
Measure. The measure helps assess symptom management for CAD patients 
based on the percentage of adults with a diagnosis of coronary artery 
disease seen within a 12-month period with results of an evaluation of 
level of activity and an assessment of whether anginal symptoms are 
present or absent with appropriate management of anginal symptoms 
within a 12-month period. This new measure would be added to further 
enhance the CAD composite measure by adding an assessment of patient 
activity level and management of angina, which are important clinical 
factors for beneficiaries with CAD. The measure would align with PQRS 
(PQRS 0242) and the EHR Incentive Program.
     Coronary Artery Disease (CAD): Beta Blocker Therapy--Prior 
Myocardial Infarction (MI) or Left Ventricular Systolic Dysfunction 
(LVEF<40%). This new measure would be added to the Clinical Care for At 
Risk Population-Coronary Artery Disease domain and included in the CAD 
Composite Measure. This new measure is endorsed by NQF as NQF 
0070 and would be added to further enhance the CAD composite 
measure. This measure reflects the number of patients with CAD who have 
prior myocardial infarction or LVEF <40 percent who are prescribed 
beta-blocker therapy and thus is designed to support improvement in 
outcomes for these CAD patients.
     Coronary Artery Disease (CAD): Antiplatelet Therapy. This 
new measure would be added to the Clinical Care for At Risk Population-
Coronary Artery Disease domain and included in the CAD Composite 
Measure. The measure is defined as the percentage of patients aged 18 
years and older with a diagnosis of coronary artery disease seen within 
a 12-month period that were prescribed aspirin or clopidogrel. This new 
measure is endorsed by NQF as NQF 0067 and would be added to 
update the CAD composite measure to reflect updated clinical guidelines 
for lipid control. This new measure would replace the existing measure 
at ACO 30, Ischemic Vascular Disease (IVD): Use of Aspirin or 
Another Antithrombotic, which we are proposing to remove because it no 
longer reflects current clinical guidelines.
     Documentation of Current Medications in the Medical Record 
(NQF #0419). This new measure would replace ACO 12 (NQF 
0097) Medication Reconciliation measure. The current measure 
is designed to determine whether medication reconciliation was done 
immediately following a hospital discharge whereas the medical 
community has indicated to us that it is better clinical practice to 
perform medication reconciliation at every office visit, which NQF 
0419 is designed to measure. In addition, this new replacement 
measure aligns with both PQRS and the EHR Incentive Program.
     Percent of PCPs who Successfully Meet Meaningful Use 
Requirements. Because the EHR Incentive Program begins its transition 
to a payment adjustment effective in 2015, we propose to modify the 
name and specifications for ACO 11 Percent of PCPs who 
Successfully Qualify for an EHR Incentive Program Payment so that it 
more accurately depicts successful use and adoption of EHR technology 
in the coming years. We note this measure would continue to be doubly 
weighted.
    We seek comment on these proposed new measures.
    Additionally, we have identified a number of the existing measures 
that have not kept up with clinical best practice, are redundant with 
other measures that make up the quality reporting standard, or that 
could be replaced by similar measures that are more appropriate for ACO 
quality reporting. We propose to no longer collect data on the 
following measures, and these measures would no longer be used for 
establishing the quality performance standards that ACOs must meet to 
qualify to share in savings:
     ACO #12, Medication Reconciliation after Discharge from an 
Inpatient Facility: As explained above, we would replace this measure 
with a new measure for documentation of current medications in the 
medical record since the medical community has indicated the importance 
of medication reconciliation at each office visit rather than only 
after an inpatient discharge.
     ACO 22, Diabetes Composite measure: Hemoglobin 
A1c control (<8 percent). The Hemoglobin A1c Control (<8%) component is 
being proposed for removal as we have concerns that the HbA1c level 
monitored in this measure is considered too low to comprehensively 
evaluate HbA1c control for the frail elderly population.
     ACO 24, Diabetes Composite: Blood Pressure (<140/
90) (NQF #0729). In an effort to reduce redundant and burdensome ACO 
reporting of quality measures, we are proposing to no longer collect 
data for this measure. Although we recognize that the sample patient 
populations for the measures are different, we believe that there is 
clinical overlap between ACO 24 and ACO 28, 
Hypertension (HTN): Blood Pressure Control (NQF 0018). We 
propose to retain ACO 28, rather than ACO 24, because 
ACO 28 represents a more comprehensive assessment of an ACO's 
performance in controlling its population's high blood pressure, 
whereas the diabetes measure assesses a subpopulation of the broader 
blood pressure measure.
     ACO 25, Diabetes Composite: Tobacco Non-use (NQF 
#0729). We believe this measure is somewhat duplicative of the separate 
measure ACO 17, Tobacco Use Assessment and Tobacco Cessation 
Intervention (NQF 0028) and that the diabetes measure may 
capture a subpopulation of the broader measure. We prefer to use NQF 
0028 as a measure of tobacco use for the Shared Savings 
Program because this measure has been identified as a cross-cutting 
measure as it represents a screening assessment that most eligible 
professionals may perform and is applicable to most adult patients. 
This measure is applicable in various outpatient settings.
     ACO 23, Diabetes Composite: Low Density 
Lipoprotein (<100) (NQF #0729). We propose to retire this and the two 
other lipid control measures listed below as a result of new clinical 
guidelines released in 2013 by the American College of Cardiology and 
American Heart Association (see https://circ.ahajournals.org/content/early/2013/11/11/01.cir.0000437738.63853.7a.full.pdf). The new 
guidelines recommend treating individuals with moderate-to-high dose 
statin therapy based on cardiac risk rather than only treating high 
cholesterol to specific targets.
     ACO 29, Ischemic Vascular Disease: Complete Lipid 
Profile and LDL Control (<100 mg/dl) (NQF #0075). We propose to retire 
this lipid control related measure because of the new clinical 
guidelines for statin treatment as noted in the previous bullet.
     ACO 30, Ischemic Vascular Disease: Use of Aspirin 
or another Antithrombotic (NQF #0068). This measure would be replaced 
by the proposed new CAD measure for antiplatelet therapy (NQF 
67), which reflects current clinical guidelines.
     ACO 32, Coronary Artery Disease (CAD) Composite: 
Drug Therapy for Lowering LDL Cholesterol (NQF #74).

[[Page 40479]]

We propose to retire this lipid control related measure because of the 
new clinical guidelines for statin treatment as noted above.
    We seek comment on our proposal to remove these measures from the 
quality performance standards.
    Finally, given these proposed changes, we propose updates and 
revisions to the Diabetes and CAD Composites. We propose that the 
Diabetes Composite would include the following measures:
     ACO 26: Diabetes Mellitus: Daily Aspirin or 
Antiplatelet Medication Use for Patients with Diabetes Mellitus and 
Ischemic Vascular Disease.
     ACO 27: Diabetes: Hemoglobin A1c Poor Control.
     ACO 41: Diabetes: Foot Exam.
     ACO 42: Diabetes: Eye Exam.
    We further propose that the CAD Composite would include the 
following measures:
     ACO 33: Angiotensin-Converting Enzyme (ACE) 
Inhibitor or Angiotensin Receptor Blocker (ARB) Therapy--Diabetes or 
Left Ventricular Systolic Dysfunction (LVEF<40%).
     ACO 43: Antiplatelet Therapy.
     ACO 44: Symptom Management.
     ACO 45: Beta-Blocker Therapy--Prior Myocardial 
Infarction (MI) or Left Ventricular Systolic Dysfunction (LVEF<40%).
    We seek comment on these proposed composites and whether there are 
any concerns regarding calculation of a composite score. There has been 
increased interest in the use of composite performance measures over 
the past few years and stakeholders have raised general concerns 
regarding composite measures and their purpose for quality improvement. 
CMS worked with the National Quality Forum (NQF) and their technical 
expert panel in 2013 to update NQF's composite measure evaluation 
guidance, which in turn may also be used by developers for composite 
measure development. Given the general concerns around composite 
measures and their use, we seek comment on how we combine and 
incorporate component measure scoring for the composite. In particular, 
we are interested in whether stakeholders have any concerns about 
including ACO 27, reverse-scored measure, in the Diabetes 
Composite, and whether there are any methodological considerations we 
should consider when including a reverse-scored measures in composites.
    To summarize, under these proposed changes, we would add 12 new 
measures and retire eight measures. We are also proposing to rename the 
EHR measure in order to reflect the transition from an incentive 
payment to a payment adjustment under the EHR Incentive Program and to 
revise the component measures within the Diabetes and CAD composites. 
In total, we propose to use 37 measures for establishing the quality 
performance standards that ACOs must meet to achieve shared savings. 
Although the total number of measures would increase from the current 
33 measures to 37 measures, we do not anticipate that this would 
increase the reporting burden on ACOs. The increased number of measures 
is accounted for by measures that would be calculated by CMS using 
administrative claims data or from a patient survey. The total number 
of measures that the ACO would need to directly report through the CMS 
Web site interface would actually decrease by one, in addition to 
removing redundancy in measures reported.
    As part of these proposed changes, we would replace the current 
five component diabetes composite measure with a new four component 
diabetes composite measure. In addition, we would replace the current 
two component coronary artery disease composite measure with a new four 
component coronary artery disease composite measure. Twenty-one of the 
measures would be reported by ACOs through the GPRO web interface and 
scored as 15 measures.
    An overview of the proposed changes is provided in Table 50 which 
demonstrates what measures would be used to assess ACO quality under 
the Shared Savings Program if our proposals are finalized.

                     Table 50--Measures for Use in Establishing Quality Performance Standards That ACOs Must Meet for Shared Savings
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                            Pay for performance phase in
                                                                             Proposed   NQF No./ Measure   Method of data   R--Reporting  P--Performance
            Domain                ACO Measure No.        Measure title          new          steward         submission    -----------------------------
                                                                              measure                                          PY1       PY2       PY3
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            AIM: Better Care for Individuals
--------------------------------------------------------------------------------------------------------------------------------------------------------
Patient/Caregiver Experience..  ACO-1.............  CAHPS: Getting Timely   ..........  NQF 0005, AHRQ.
                                                     and Information.
                                ACO-2.............  CAHPS: How Well Your    ..........  NQF 0005 AHRQ.
                                ACO-3.............  CAHPS: Patients'        ..........  NQF 0005 AHRQ.
                                ACO-4.............  CAHPS: Access to        ..........  NQF N/A  Survey..........        R         P         P
                                                     Specialists.                        CMS/AHRQ.
                                ACO-5.............  CAHPS: Health           ..........  NQF N/A  Survey..........        R         P         P
                                                     Promotion and                       CMS/AHRQ.
                                                     Education.
                                ACO-6.............  CAHPS: Shared Decision  ..........  NQF N/A  Survey..........        R         P         P
                                                     Making.                             CMS/AHRQ.
                                ACO-7.............  CAHPS: Health Status/   ..........  NQF N/A  Survey..........        R         R         R
                                                     Functional Status.                  CMS/AHRQ.
                                ACO-34............  CAHPS: Stewardship of           X   NQF N/A  Survey..........        R         P         P
                                                     Patient Resources.                  CMS/AHRQ.
Care Coordination/Safety......  ACO-8.............  Risk-Standardized, All  ..........  Adapted NQF       Claims..........        R         R         P
                                                     Condition Readmission.              1789
                                                                                         CMS.
                                ACO-35............  Skilled Nursing                 X   NQF TBD  Claims..........        R         R         P
                                                     Facility 30-Day All-                CMS.
                                                     Cause Readmission
                                                     Measure (SNFRM).

[[Page 40480]]

 
                                ACO-36............  All-Cause Unplanned             X   NQF TBD  Claims..........        R         R         P
                                                     Admissions for                      CMS.
                                                     Patients with
                                                     Diabetes.
                                ACO-37............  All-Cause Unplanned             X   NQF TBD  Claims..........        R         R         P
                                                     Admissions for                      CMS.
                                                     Patients with Heart
                                                     Failure.
                                ACO-38............  All-Cause Unplanned             X   NQF TBD  Claims..........        R         R         P
                                                     Admissions for                      CMS.
                                                     Patients with
                                                     Multiple Chronic
                                                     Conditions.
                                ACO-9.............  Ambulatory Sensitive    ..........  Adapted NQF       Claims..........        R         P         P
                                                     Conditions                          0275
                                                     Admissions: Chronic                 AHRQ.
                                                     Obstructive Pulmonary
                                                     Disease or Asthma in
                                                     Older Adults (AHRQ
                                                     Prevention Quality
                                                     Indicator (PQI)
                                                     5).
                                ACO-10............  Ambulatory Sensitive    ..........  Adapted NQF       Claims..........        R         P         P
                                                     Conditions                          0277
                                                     Admissions: Heart                   AHRQ.
                                                     Failure (AHRQ
                                                     Prevention Quality
                                                     Indicator (PQI)
                                                     8 ).
                                ACO-11............  Percent of PCPs who     ..........  NQF N/A  EHR Incentive           R         P         P
                                                     Successfully Meet                   CMS.              Program
                                                     Meaningful Use                                        Reporting.
                                                     Requirements.
                                ACO-39............  Documentation of                X   NQF 0419 CMS.       Interface.
                                                     in the Medical Record.
                                ACO-13............  Falls: Screening for    ..........  NQF 0101 NCQA.      Interface.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           AIM: Better Health for Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Preventive Health.............  ACO-14............  Preventive Care and     ..........  NQF 0041 AMA-PCPI.  Interface.
                                                     Immunization.
                                ACO-15............  Pneumonia Vaccination   ..........  NQF 0043 NCQA.      Interface.
                                                     Adults.
                                ACO-16............  Preventive Care and     ..........  NQF 0421 CMS.       Interface.
                                                     Index (BMI) Screening
                                                     and Follow Up.
                                ACO-17............  Preventive Care and     ..........  NQF 0028 AMA-PCPI.  Interface.
                                                     Use: Screening and
                                                     Cessation
                                                     Intervention.
                                ACO-18............  Preventive Care and     ..........  NQF 0418 CMS.       Interface.
                                                     for Clinical
                                                     Depression and Follow-
                                                     up Plan.
                                ACO-19............  Colorectal Cancer       ..........  NQF 0034 NCQA.      Interface.
                                ACO-20............  Breast Cancer           ..........  NQF NA   CMS Web                 R         R         P
                                                     Screening.                          NCQA.             Interface.
                                ACO-21............  Preventive Care and     ..........  CMS.............  CMS Web                 R         R         P
                                                     Screening: Screening                                  Interface.
                                                     for High Blood
                                                     Pressure and Follow-
                                                     up Documented.
Clinical Care for At Risk       ACO-40............  Depression Remission            X   NQF 0710 MNCM.      Interface.
Clinical Care for At Risk       ..................  Diabetes Composite      ..........  CMS composite...  CMS Web                 R         P         P
 Population--Diabetes.                               (All or Nothing                                       Interface.
                                                     Scoring).

[[Page 40481]]

 
                                ACO-26............     ACO-26: Diabetes     ..........  NQF 0729 MNCN
                                                        Aspirin or                       (individual
                                                        Antiplatelet                     measure).
                                                        Medication Use for
                                                        Patients with
                                                        Diabetes Mellitus
                                                        and Ischemic
                                                        Vascular Disease.
                                ACO-27............     ACO-27: Diabetes     ..........  NQF 0059 NCQA       Interface.
                                                        Hemoglobin A1c                   (individual
                                                        Poor Control.                    component).
                                   ACO-41:........  ACO-41: Diabetes: Foot          X   NQF 0056 NCQA       Interface.
                                                                                         (individual
                                                                                         component).
                                   ACO-42.........  ACO-42: Diabetes: Eye           X   NQF 0055 NCQA       Interface.
                                                                                         (individual
                                                                                         component).
Clinical Care for At Risk       ACO-28............  Hypertension (HTN):     ..........  NQF 0018 NCQA.      Interface.
                                                     Blood Pressure.
Clinical Care for At Risk       ACO-31............  Heart Failure (HF):     ..........  NQF 0083 AMA-PCPI.  Interface.
                                                     for Left Ventricular
                                                     Systolic Dysfunction
                                                     (LVSD).
Clinical Care for At Risk       ..................  Coronary Artery         ..........  CMS composite...  CMS Web                 R         R         P
 Population--Coronary Artery                         Disease (CAD)                                         Interface.
 Disease.                                            Composite (All or
                                                     Nothing Scoring).
                                ACO-33............     ACO-33; Angiotensin- ..........  NQF 0066 ACC        Interface.
                                                        (ACE) Inhibitor or               (individual
                                                        Angiotensin                      component).
                                                        Receptor Blocker
                                                        (ARB) Therapy--for
                                                        patients with CAD
                                                        and Diabetes or
                                                        Left Ventricular
                                                        Systolic
                                                        Dysfunction (LVEF
                                                        <40%).
                                ACO-43............     ACO-43:                      X   NQF 0067 ACC        Interface.
                                                        Therapy.                         (individual
                                                                                         component).
                                ACO-44............     ACO-44 :Symptom              X   NQF N/A  CMS Web                 R         R         P
                                                        Management.                      AMA-PCPI          Interface.
                                                                                         (individual
                                                                                         component).
                                ACO-45............     ACO-45: Beta-                X   NQF 0070 ACC        Interface.
                                                        Prior Myocardial                 (individual
                                                        Infarction (MI) or               component).
                                                        Left Ventricular
                                                        Systolic
                                                        Dysfunction (LVEF
                                                        <40%).
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Table 51 provides the current number of measures by domain and 
displays the total points and domain weights used for scoring purposes. 
The current scoring methodology is explained in the regulations at 
Sec.  425.502 and in the preamble to the November 2011 final rule (76 
FR 67895 through 67900). Table 52 provides a summary of the proposed 
number of measures by domain and the resulting total points and domain 
weights that would be used for scoring purposes under these proposed 
changes. Otherwise, the current quality scoring points methodology for 
calculating an ACO's overall quality performance score would continue 
to apply. Table 53 provides the measures that are retired/replaced.

[[Page 40482]]



  Table 51--Current Number of Measures and Total Points for Each Domain Within the Quality Performance Standard
----------------------------------------------------------------------------------------------------------------
                                           Number of
                Domain                    individual       Total measures for     Total possible   Domain weight
                                           measures         scoring purposes          points         (percent)
----------------------------------------------------------------------------------------------------------------
Patient/Caregiver Experience..........               7  7 individual survey                   14              25
                                                         module measures.
Care Coordination/Patient Safety......               6  6 measures, including                 14              25
                                                         the EHR measure double-
                                                         weighted (4 points).
Preventive Health.....................               8  8 measures..............              16              25
At-Risk Population....................              12  7 measures, including 5-              14              25
                                                         component diabetes
                                                         composite measure and 2-
                                                         component coronary
                                                         artery disease
                                                         composite measure.
                                       -------------------------------------------------------------------------
    Total in all Domains..............              33  28......................              58             100
----------------------------------------------------------------------------------------------------------------


 Table 52--Proposed Number of Measures and Total Points for Each Domain within the Quality Performance Standard
----------------------------------------------------------------------------------------------------------------
                                           Number of
                Domain                    individual       Total measures for     Total possible   Domain weight
                                           measures         scoring purposes          points         (percent)
----------------------------------------------------------------------------------------------------------------
Patient/Caregiver Experience..........               8  8 individual survey                   16              25
                                                         module measures.
Care Coordination/Patient Safety......              10  9 measures, plus the EHR              22              25
                                                         measure double-weighted
                                                         (4 points).
Preventive Health.....................               8  8 measures..............              16              25
At-Risk Population....................              11  5 measures, including 3               10              25
                                                         individual measures
                                                         plus a 4-component
                                                         diabetes composite
                                                         measure and a 4-
                                                         component coronary
                                                         artery disease
                                                         composite measure.
                                       -------------------------------------------------------------------------
    Total in all Domains..............              37  31......................              64             100
----------------------------------------------------------------------------------------------------------------


                                               Table 53--Shared Savings Program Measures Retired/Replaced
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                            Pay for Performance Phase In R = Reporting
                                                                         NQF measure                                       P=Performance
             Notes                    Domain         Measure title       /      Method of data  -----------------------------------------------
                                                                       measure steward     submission       Performance     Performance     Performance
                                                                                                              Year 1          Year 2          Year 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
ACO 12 Replaced......  Care Coordination/ Medication         NQF 97   GPRO Web                      R               P               P
                                 Patient Safety.    Reconciliation:    AMA-PCPI/NCQA.    Interface.
                                                    Reconciliation
                                                    After Discharge
                                                    from an
                                                    Inpatient
                                                    Facility.
ACO 22 Retired.......  At Risk            Diabetes           NQF 0729 MN         Interface.
                                 etes.              or Nothing         Community
                                                    Scoring):          Measurement.
                                                    Hemoglobin A1c
                                                    Control (<8
                                                    percent).
ACO 23 Retired.......  At Risk            Diabetes           NQF 0729 MN         Interface.
                                 etes.              or Nothing         Community
                                                    Scoring): Low      Measurement.
                                                    Density
                                                    Lipoprotein
                                                    (<100).
ACO 24 Retired -       At Risk            Diabetes           NQF 0729 MN         Interface.
                                 etes.              or Nothing         Community
                                                    Scoring): Blood    Measurement.
                                                    Pressure <140/90.
ACO 25 Retired--       At Risk            Diabetes           NQF 0729 MN         Interface.
                                 etes.              or Nothing         Community
                                                    Scoring):          Measurement.
                                                    Tobacco Non Use.

[[Page 40483]]

 
ACO 29 Retired.......  At Risk            Ischemic Vascular  NQF 75   GPRO Web                      R               P               P
                                 Population--Isch   Disease (IVD):     NCQA.             Interface.
                                 emic Vascular      Complete Lipid
                                 Disease.           Profile and LDL
                                                    Control <100 mg/
                                                    dl.
ACO 30 Replaced......  At Risk            Ischemic Vascular  NQF 68   GPRO Web                      R               P               P
                                 Population--Isch   Disease (IVD):     NCQA.             Interface.
                                 emic Vascular      Use of Aspirin
                                 Disease.           or Another
                                                    Antithrombotic.
ACO 32 Retired.......  At Risk            Coronary Artery    NQF 74   GPRO Web                      R               R               P
                                 Population--Coro   Disease (CAD)      CMS (composite)/  Interface.
                                 nary Artery        Composite: All     AMA-PCPI
                                 Disease.           or Nothing         (individual
                                                    Scoring: Drug      component).
                                                    Therapy for
                                                    Lowering LDL-
                                                    Cholesterol.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We believe that these modifications will enhance ACO quality 
reporting, better reflect clinical practice guidelines, streamline 
measures reporting, and enhance alignment with PQRS and the EHR 
Incentive Program. Finally, we are proposing that these measures would 
become effective beginning with the 2015 reporting period, and 2015 
performance year (PY). All 37 measures would be phased in for ACOs with 
2015 start dates according to the phase-in schedule in Table 50. ACOs 
with start dates before 2015 would be responsible only for complete and 
accurate reporting of the new measures for the 2015 performance year, 
and then responsible for either reporting or performance on the 
measures according to the phase in schedule. For example, assume a new 
measure is scheduled to phase in with reporting in PY1, reporting in 
PY2, and performance in PY3. Further assume that an ACO with a 2014 
start date will be in its second performance year (PY2) when the 
measure becomes effective. In this example, the ACO would be 
responsible for complete and accurate reporting of the new measure in 
PY2 and for performance on the measure in PY3. If we change the 
assumptions in the example to say that the new measure is scheduled to 
phase in with reporting in PY1, performance in PY2, and performance in 
PY3, then the ACO would be responsible for complete and accurate 
reporting of the new measure in PY2 and for performance on the measure 
in PY3. Finally, we note that consistent with our proposed revisions to 
Sec.  425.502(a) regarding quality reporting in a second and subsequent 
agreement period, an ACO that transitions to a new agreement period 
would continue to be assessed on the quality performance standard that 
would otherwise apply to an ACO in the third performance year of its 
first agreement period. Take the example of an ACO with a 2013 start 
date that will be responsible for reporting the new measure in the 2015 
reporting period, its third performance year. Assume the measure is 
scheduled to phase in from reporting in PY1, reporting in PY2, and 
performance in PY3. In this case, the ACO would be responsible for 
complete and accurate reporting of the new measure in 2015 (PY3 of its 
first agreement period). If the ACO renews its participation agreement 
for another 3 years, the ACO would be responsible for performance on 
that measure for each year of its new agreement period because the 
measure is designated as a pay for performance measure in PY3 of the 
preceding agreement period.
    Additionally, as noted in the November 2011 Shared Savings Program 
final rule (76 FR 67900), the Shared Savings Program uses the same 
sampling method used by PQRS GPRO. Specifically, the sample for the ACO 
GPRO must consist of at least 411 assigned beneficiaries per measure 
set/domain. If the pool of eligible, assigned beneficiaries is less 
than 411, the ACO must report on 100 percent, or all, of the assigned 
beneficiaries sampled. To the extent that PQRS modifies and finalizes 
changes in the reporting requirements for group practices reporting via 
the GPRO web interface, we propose to make similar modifications to ACO 
reporting through the GPRO web interface. Specifically, as discussed in 
section III.K.4.a. of this proposed rule, we are proposing to reduce 
the GPRO web interface minimum reporting requirements for PQRS 
reporting from 411 to 248 consecutively ranked and assigned patients 
for each measure or 100 percent of the sample for each measure if there 
are less than 248 patients in a given sample. We propose that the 
reduced sample for each measure for reporting through the GPRO web 
interface would also apply to ACOs. We believe that a reduction in the 
number of sampled beneficiaries would reduce reporting burden for ACOs 
while maintaining high statistical validity and reliability in results.
3. Request for Comments for Future Quality Measures
    In addition to the proposed changes to the current set of 33 
quality measures for the Shared Savings Program discussed above, we are 
interested in public comment on additional measures that we may 
consider in future rulemaking. We particularly welcome comments 
regarding the following issues:
     Gaps in measures and additional specific measures: We 
recognize that there may be gaps in the ACO quality performance 
standard. For example,

[[Page 40484]]

ACOs are charged with improving care coordination for FFS 
beneficiaries. While above we propose to add a measure for SNF 30-day 
all-cause readmission to address current gaps in SNF settings, we seek 
comment on whether there are additional measures that might be used to 
assess the ACO's performance with respect to care coordination in post-
acute care and other settings. We also recognize the need to balance 
filling gaps in the quality performance standard with the reporting 
burden on ACOs. To the extent possible, we wish to identify measures 
for filling any gaps in the quality performance standard that would not 
increase the reporting burden on ACOs unduly. We welcome comments on 
specific measures or measure groups that may be considered in future 
rulemaking to fill in gaps that may exist for assessing ACO quality 
performance. For example, we seek input on measures that address the 
quality of care in the various different settings that may be part of 
an ACO, such as post-acute care settings including SNF or home health. 
We note that any suggestions for new measures would be more thoroughly 
discussed in a future rulemaking cycle prior to being adopted as part 
of the quality performance standard under the Shared Savings Program 
and if we deem it appropriate we would also submit them to the NQF 
Measures Application Partnership (MAP) via the list of Measures Under 
Consideration that the Secretary annually makes available to the public 
as part of the pre-rulemaking process under section 1890A(a)(2) of the 
Act for the purpose of seeking multi-stakeholder group input, 
consistent with the requirements of section 3014 of the Affordable Care 
Act, if the measures have not already been reviewed by the MAP.
     Caregiver experience of care: While we recognize there is 
a concern about patient subjectivity to surveys, we include measures 
based on data collected via the patient experience of care survey in 
the quality performance standard because we believe patients' 
perception of their care experience reflects important aspects of the 
quality of the care they receive, such as communication and patient 
engagement in decision-making, that are not adequately captured by 
other measures. As such, patient surveys are important complements to 
the other process of care and outcomes measures. For this reason, we 
stated in November 2011 Shared Savings Program final rule (76 FR 67874) 
that we intended to expand the quality measures over time to include 
more caregiver experience measures. Therefore, we seek comment on 
additional specific caregiver experience of care measures that might be 
considered in future rulemaking.
     Alignment with Value-Based Payment Modifier (VM) measures: 
We desire to continue to align with other Medicare quality initiatives 
in order to reduce ACO burden and streamline quality reporting and 
indicators. In the CY 2013 PFS final rule with comment period (77 FR 
69313) we established a policy not to apply the VM in CY 2015 and CY 
2016 to groups of physicians that participate in ACOs under the Shared 
Savings Program. Although section 1848(p)(4)(B)(iii)(I) of the Act 
gives the Secretary discretion to apply the VM to specific physicians 
and groups of physicians as the Secretary determines appropriate for 
2015 and 2016, consistent with section 1848(p)(4)(B)(iii)(II), which 
requires application of the VM to all physicians and groups of 
physicians beginning not later than January 1, 2017, we are proposing 
to start applying the VM to physicians participating in ACOs beginning 
in 2017. In addition, in section III.K.4.b of this proposed rule, we 
discuss our proposal to also apply the VM to all nonphysician eligible 
professionals in groups with 2 or more eligible professionals and to 
solo practitioners who are nonphysician eligible professionals, 
including eligible professionals participating in ACOs, starting in CY 
2017. To that end, we are seeking comment on whether there are 
synergies that can be created by aligning the ACO quality measures set 
with the measures used under the VM. For example, in the Value-based 
Modifier program, there are two claims-based composite outcomes 
measures, namely, the Composite of Acute Prevention Quality Indicators 
(PQIs) comprised by 3 measures (NQF 279 Bacterial Pneumonia 
Admission Rate, NQF 280 Dehydration Admission Rate, and NQF 
281 Urinary Tract Infection Admission Rate) and the Composite 
of Chronic Prevention Quality Indicators (PQIs) comprised by 6 measures 
(NQF 638 Uncontrolled Diabetes, NQF 272 Short Term 
Diabetes complications, NQF 274 Long Term Diabetes 
Complications, NQF 285 Lower Extremity Amputation for 
Diabetes, NQF 275 COPD, and NQF 277 Congestive Heart 
Failure). (See https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeedbackProgram/Downloads/2012-ACSC-Outcomes-Msrs.pdf). Because these VM measures are claims based measures, no 
additional reporting burden would be added to ACOs. In addition, we 
note that two of these measures are currently a part of the ACO quality 
measures set, specifically, NQF 275, ``Ambulatory Sensitive 
Conditions Admissions: Chronic Obstructive Pulmonary Disease,'' and NQF 
277: ``Ambulatory Sensitive Conditions Admissions: Congestive 
Heart Failure.'' Although we are not proposing changes at this time to 
align with the measures used under the VM, we are seeking comment on 
whether the VM composites should be considered in the future as a 
replacement for the two ACO claims based ambulatory sensitive 
conditions admissions (ASCA) measures.
     Specific measures to assess care in the frail elderly 
population: We recognize providers face challenges in caring for the 
health needs of the frail elderly. There are, however, many challenges 
in defining and measuring the quality of care for this population. In 
the November 2011 Shared Savings Program final rule, we incorporated a 
measure focused on the frail elderly population--ACO13 
Screening for Fall Risk, which rewards ACOs for incorporating fall risk 
assessments in the redesign of their care processes. Our expectation 
was that practitioners would use the results of the fall risk 
assessments to promote meaningful conversations with their frail 
elderly patients about fall risks and ways to prevent or reduce these 
events. We also stated that as ACOs gain more experience integrating 
the fall risk screening into their day-to-day practices, we planned to 
revisit the frail elderly measures in future rulemaking to build upon 
these achievements and to address additional issues for the frail 
elderly (76 FR 67886). We welcome comments with suggestions of new 
measures of the quality of care furnished to the frail elderly 
population that we may consider adopting in future rulemaking.
     Utilization: We did not include utilization measures in 
the quality performance standards adopted in the November 2011 final 
rule establishing the Shared Savings Program because we believed that 
ACOs have an intrinsic motivation to reduce inappropriate utilization 
of services in order to achieve shared savings. However, in recognition 
of the value of feedback on utilization, we include utilization data as 
part of the quarterly aggregate reports provided to ACOs. We welcome 
comments on whether it is sufficient for such utilization information 
to be included in the aggregate quarterly reports to ACOs or whether 
utilization measures should also be used to assess the ACO's quality 
performance as an

[[Page 40485]]

added incentive to provide more efficient care. If commenters are 
interested in having such utilization measures included in the quality 
performance standard, we welcome specific comments on what measures 
would be most appropriate and suggestions for how to risk adjust these 
measures.
     Health outcomes: Currently, the quality performance 
standard includes a self-reported health and functional status measure 
as part of the patient experience of care survey. We finalized this 
measure as pay for reporting for all 3-years of the agreement period to 
allow ACOs to gain experience with the measure (which had not 
previously been used for accountability purposes in any pay-for-
performance initiative) and to provide important information to them on 
improving the health outcomes of the population they serve (76 FR 
67876). Patient-reported outcomes, although subjective, provide 
valuable information not captured by other means. We continue to 
believe that it is appropriate to require ACOs to report this measure 
and to maintain the performance standard at full and accurate reporting 
in order to allow ACOs to gain experience with the measure. We welcome 
suggestions as to whether and when it would be appropriate to include a 
self-reported health and functional status measure in the quality 
performance standard. We specifically welcome comments on the 
appropriateness of using a tool such the Health Outcomes Survey for 
health plans which assesses changes in the physical and mental health 
of individual beneficiaries over time. This survey would require at 
least 2 years of reporting by the same beneficiary and assesses 
function over time rather than function at a particular point in time. 
We also welcome suggestions for alternatives to self-reported measures 
that may be considered in the future.
     Measures for retirement: Some measures may not provide 
sufficiently useful information for assessing ACO quality performance 
since they are ``topped out'', meaning that all but a very few of 
organizations achieve near perfect performance on the measure. As a 
result, such measures may no longer provide meaningful information 
regarding an ACO's quality performance. Other examples of candidates 
for retirement could be measures that do not drive quality improvement. 
We seek input from commenters on any measures that should be considered 
for retirement in future rulemaking. We welcome comments on whether to 
continue to require ``topped out'' measures be included as pay for 
reporting measures. For example, it could be important to require ACOs 
to continue to report such measures so that we can assess performance 
to ensure quality of care does not decline or for other reasons. In 
addition, we note that as discussed below we are proposing changes to 
the benchmarking methodology for topped out measures.
     Additional public health measures: We may propose to 
include an additional preventive health measure in the quality measure 
set under the Shared Savings Program in future rulemaking. 
Specifically, we are considering adding ``Preventive Care and 
Screening: Unhealthy Alcohol Use: Screening and Brief Counseling'' (NQF 
2152). This measure would reflect screening of Medicare 
beneficiaries covered under the existing Medicare benefit referred to 
as the ``Screening and Behavioral Counseling Interventions in Primary 
Care to Reduce Alcohol Misuse'' benefit. We welcome comments on the 
potential addition of this measure and would consider any comments 
received in developing any future proposal with respect to this 
measure.
4. Accelerating Health Information Technology
a. Overview
    HHS believes all patients, their families, and their healthcare 
providers should have consistent and timely access to their health 
information in a standardized format that can be securely exchanged 
between the patient, providers, and others involved in the patient's 
care. (HHS August 2013 Statement, ``Principles and Strategies for 
Accelerating Health Information Exchange.'' http://www.healthit.gov/policy-researchers-implementers/accelerating-health-information-exchange-hie). The Department is committed to accelerating health 
information exchange (HIE) through the use of electronic health records 
(EHRs) and other types of health information technology (HIT) across 
the broader care continuum through a number of initiatives including: 
(1) alignment of incentives and payment adjustments to encourage 
provider adoption and optimization of HIT and HIE services through 
Medicare and Medicaid payment policies; (2) adoption of common 
standards and certification requirements for interoperable HIT; (3) 
support for privacy and security of patient information across all HIE-
focused initiatives; and (4) governance of health information networks. 
These initiatives are designed to encourage HIE among health care 
providers, including professionals and hospitals eligible for the 
Medicare and Medicaid EHR Incentive Programs and those who are not 
eligible for the EHR Incentive Programs, as well as those providers 
that are participating in the Medicare Shared Savings Program in an ACO 
and those that are not, and are designed to improve care delivery and 
coordination across the entire care continuum. For example, the 
Transition of Care Measure 2 in Stage 2 of the Medicare and 
Medicaid EHR Incentive Programs requires HIE to share summary records 
for more than 10 percent of care transitions. In addition, to increase 
flexibility in the Office of the National Coordinator for Health IT's 
(ONC's) HIT Certification Program and expand HIT certification, ONC has 
issued a proposed rule concerning a voluntary 2015 Edition of EHR 
certification criteria, which would more easily accommodate 
certification of HIT for technology used in health care settings where 
health care providers are not typically eligible for incentive payments 
under the EHR Incentive Programs, to facilitate greater HIE across the 
entire care continuum.
    We believe that HIE and the use of certified EHRs can effectively 
and efficiently help ACOs and participating providers improve internal 
care delivery practices, support management of patient care across the 
continuum, and support the reporting of eCQMs. More information on the 
Voluntary 2015 Edition EHR Certification Criteria Proposed Rule is 
available at http://healthit.gov/policy-researchers-implementers/standards-and-certification-regulations.
    b. Electronic Reporting of Quality Measure Data
    We believe that certified EHR technology used in a meaningful way 
is one piece of a broader health information technology infrastructure 
needed to reform the health care system and improve health care 
quality, efficiency, and patient safety. Through our programs such as 
the Medicare and Medicaid EHR Incentive Programs and the Stage 2 
meaningful use (MU) requirements we seek to expand the meaningful use 
of certified EHR technology. Adoption of certified EHR technology 
(CEHRT) by ACO participants and ACO providers/suppliers may help 
support efforts to achieve improvements in patient care and quality, 
including reductions in medical errors, increased access to and 
availability of records and data, improved clinical decision support, 
and the convenience of electronic prescribing. Additionally, we believe

[[Page 40486]]

that the potential for the Shared Savings Program to achieve its goals 
could be further advanced by direct EHR-based quality data reporting by 
ACOs and their ACO participants and ACO providers/suppliers. This could 
help reinforce the use of CEHRT, reduce errors in quality measure 
submission, and achieve data submission efficiencies. We believe ACOs 
and their providers should be leaders in encouraging EHR adoption and 
should be using CEHRT to improve quality of care and patient safety and 
to reduce errors.
    Furthermore, beginning in 2015, eligible professionals that do not 
successfully demonstrate meaningful use of certified EHR technology 
will be subject to a downward payment adjustment under Medicare that 
starts at -1 percent and increases each year that an eligible 
professional does not demonstrate meaningful use, to a maximum of -5 
percent. A final rule establishing the requirements of Stage 2 of the 
Medicare EHR Incentive Program appeared in the September 4, 2012 
Federal Register (Medicare and Medicaid Programs; Electronic Health 
Record Incentive Program--Stage 2 Final Rule) (77 FR 53968). Included 
in this final rule are the meaningful use and other requirements that 
apply for the payment adjustments under Medicare for covered 
professional services provided by eligible professionals failing to 
demonstrate meaningful use of CEHRT, including the CQM reporting 
component of meaningful use. As previously discussed in section 
III.M.2, we are proposing to revise the name and the specifications for 
the quality measure regarding EHR adoption to take the changing 
incentives into account. Specifically, we are proposing to change the 
name of ACO 11 from ``Percent of PCPs Who Successfully Qualify 
for an EHR Incentive Program Payment'' to ``Percent of PCPs Who 
Successfully Meet Meaningful Use Requirements'' to more accurately 
reflect what is being measured.
    Additionally, under a group reporting option established for the 
Medicare EHR Incentive Program (77 FR 54076 through 54078), EPs 
participating in an ACO under the Shared Savings Program who extract 
the data necessary for the ACO to satisfy the quality reporting 
requirements of the Shared Savings Program from CEHRT would satisfy the 
CQM reporting component of meaningful use as a group for the Medicare 
EHR Incentive Program. In addition to submitting CQMs as part of an 
ACO, EPs have to individually satisfy the other objectives and 
associated measures for their respective stage of meaningful use.
    However, we clarify that if an EP intends to use this group 
reporting option to meet the CQM reporting component of meaningful use, 
then the EP would have to extract all its CQM data from a CEHRT and 
report it to the ACO (in a form and manner specified by the ACO) in 
order for the EP to potentially qualify for the Medicare EHR Incentive 
Program. The ACO must also report the GPRO web interface measures and 
satisfy the reporting requirements under the Shared Savings Program in 
order for its EPs to satisfy the CQM reporting component of meaningful 
use for the Medicare EHR Incentive Program.
    Although these group reporting requirements were established under 
the Medicare EHR Incentive Program, the Shared Savings Program 
regulations were not amended to reflect these reporting requirements. 
Therefore, we propose to amend the regulations governing the Shared 
Savings Program to align with the requirements previously adopted under 
the Medicare EHR Incentive Program in order to provide that EPs 
participating in an ACO under the Shared Savings Program can satisfy 
the CQM reporting component of meaningful use for the Medicare EHR 
Incentive Program when the ACO reports GPRO web interface measures by 
adding new paragraph (d) to Sec.  425.506. This new paragraph will 
provide that EPs participating in an ACO under the Shared Savings 
Program satisfy the CQM reporting component of meaningful use for the 
Medicare EHR Incentive Program when: (1) The eligible professional 
extracts data necessary for the ACO to satisfy its GPRO quality 
reporting requirements from CEHRT; and (2) the ACO satisfactorily 
reports the ACO GPRO measures through a CMS Web interface. Although 
this proposal will align the Medicare Shared Savings Program 
regulations with the existing requirements under the Medicare EHR 
Incentive Program, we intend to take steps in the future to better 
align and integrate EHR use into quality reporting under the Shared 
Savings Program.
    We recognize there are operational constraints that must be 
considered when developing policies related to electronic reporting of 
quality measures under the Shared Savings Program. First, many ACO 
legal entities are conveners of Medicare enrolled entities, but are not 
Medicare-enrolled themselves, that is, many ACO legal entities do not 
provide direct health care services, and therefore, may not thus far 
have had a need for an EHR. Further, ACO participants and ACO 
providers/suppliers may be at different levels of EHR adoption. For 
example, an ACO may have ACO participants that do not own an EHR. Other 
ACOs may have ACO participants that have and use EHR platforms, but 
have chosen different platforms, each requiring different modifications 
to make them uniformly extract required quality data. In addition, ACOs 
have told us that different EHR platforms may not yet be seamlessly 
interoperable. Finally, within each ACO participant, there may be 
differing levels of EHR use among the ACO providers/suppliers that are 
EPs. Operationally, a few options could be considered for implementing 
the eCQM portion of the meaningful use requirements in the future. For 
example, we could consider whether it would be preferable for the EPs 
within each ACO participant to individually submit EHR data to CMS, 
whether each ACO participant should report as a group; whether the ACO 
itself should aggregate EHR data from its ACO participants and then 
submit the quality measures to CMS; or whether the ACO could submit 
quality measure data via a data submission vendor that would be 
responsible for aggregating and submitting the data on the ACO's 
behalf.
    Although we are not proposing any new requirements regarding EHR 
based reporting under the Shared Savings Program at this time, we 
welcome suggestions and comments about these issues which we would 
consider in developing any future proposals. We especially seek comment 
on the feasibility of an ACO to be a convener and submitter of quality 
measures through an EHR or alternative method of electronically 
reporting quality measures to us. We are interested in the 
opportunities and barriers to ACO EHR quality measure reporting, as 
well as ways to overcome any barriers. We also welcome suggestions on 
alternative ways that we might implement EHR-based reporting of quality 
measures in the Shared Savings Program, such as directly from EHRs or 
via data submission vendors. We seek comment on whether EHR reporting 
should be a requirement for all Shared Savings Program ACOs or if the 
requirement for EHR reporting should be phased in gradually, for 
instance through a separate risk track or by the establishment of a 
``core and menu'' quality measure set approach in which we would 
establish a core set of required quality measures and then supplement 
these required measures with a menu of additional measures (such as 
EHR-based reporting) from

[[Page 40487]]

which an ACO could choose. This approach could provide ACOs with 
additional flexibility and allow them to report on quality measures 
that better reflect any special services they provide. As an 
alternative, we also seek comment on whether ACO providers/suppliers 
could use a local registry-like version of the GPRO Web interface to 
capture relevant clinical information and to monitor performance on all 
Medicare patients throughout the year and to more easily report quality 
data to CMS annually.
3. Quality Performance Benchmarks
a. Overview of Current Requirements
    Section 1899(b)(3)(C) of the Act directs the Secretary to 
``establish quality performance standards to assess the quality of care 
furnished by ACOs'' and to ``seek to improve the quality of care 
furnished by ACOs over time by specifying higher standards, new 
measures, or both for purposes of assessing such quality of care.'' 
Under the current Shared Savings Program regulations at Sec.  425.502, 
the following requirements with regard to establishing a quality 
performance benchmark for measures apply: (1) During the first 
performance year of an ACO's agreement period, the quality performance 
standard is set at the level of complete and accurate reporting; (2) 
during subsequent performance years, the quality performance standard 
will be phased in such that ACOs will be assessed on their performance 
on certain measures (see Table 1 of the November 2011 Shared Savings 
Program final rule (76 FR 67889 through 67890), for details of the 
transition for each of the 33 measures); (3) we designate a quality 
performance benchmark and minimum attainment level for each measure, 
and establish a point scale for the level of achievement on each 
measure; and (4) we define quality performance benchmarks using FFS 
Medicare data or using flat percentages when the 60th percentile is 
equal to or greater than 80.00 percent.
    Section 425.502(b)(2) governs the data that CMS uses to establish 
the quality performance benchmarks for quality performance measures 
under the Shared Savings Program. Consistent with section 1899(b)(3)(C) 
of the Act, which requires CMS to seek to improve the quality of care 
furnished by ACOs participating in the Shared Savings Program over 
time, Sec.  425.500(b)(3) states that in establishing the measures to 
assess the quality of care furnished by an ACO, CMS seeks to improve 
the quality of care furnished by ACOs over time by specifying higher 
standards, new measures, or both.
    Subsequently, we discussed several issues related to the 
establishment of quality performance benchmarks in the CY 2014 PFS 
final rule with comment period (78 FR 74759 through 74764). In that 
rule (78 FR 74760), we finalized a proposal to combine all available 
Medicare FFS quality data, including data gathered under PQRS (through 
both the GPRO web interface tool and other quality reporting 
mechanisms) and other relevant FFS quality data reported to CMS 
(including data submitted by Shared Savings Program and Pioneer ACOs) 
to set the quality performance benchmarks for 2014 and subsequent 
reporting periods. In establishing this policy, we determined that it 
was appropriate to use all FFS data rather than only ACO data, at least 
in the early years of the program, to avoid the possibility of 
punishing high performers where performance is generally high among all 
ACOs. We did not finalize a proposal to use Medicare Advantage (MA) 
data alone or in combination with FFS data in the short-term. Instead, 
we stated in the CY 2014 PFS final rule with comment period (78 FR 
74760) that we intended to revisit the policy of using MA data in 
future rulemaking when we have more experience setting benchmarks for 
ACOs.
    Additionally, in the CY 2014 PFS final rule with comment period, we 
retained the ability to use flat percentages to set benchmarks when 
many reporters demonstrate high achievement on a measure, so that ACOs 
with high performance on a measure are not penalized (78 FR 74760). 
More specifically, we will now use all available FFS data to calculate 
benchmarks, including ACO data, except where performance at the 60th 
percentile is equal to or greater than 80 percent for individual 
measures. In these cases, a flat percentage will be used to set the 
benchmark for the measure. This policy allows ACOs with high scores to 
earn maximum or near maximum quality points while still allowing room 
for improvement and rewarding that improvement in subsequent years.
    As previously discussed, the first year of an ACO's agreement 
period is pay for reporting only, so ACOs earn their maximum sharing 
rate for completely and accurately reporting all 33 quality measures. 
Quality performance benchmarks are released in subregulatory guidance 
prior to the start of the quality reporting period for which they apply 
so that as we phase in measures to pay for performance ACOs are aware 
of the actual performance rates they will need to achieve to earn the 
maximum quality points under each domain. In the November 2011 Shared 
Savings Program final rule, we indicated our intent to gradually raise 
the minimum attainment level to continue to incentivize quality 
improvement over time and noted that we would do so through future 
rulemaking after providing sufficient advance notice with a comment 
period to allow for industry input (76 FR 67898). In the CY 2014 PFS 
final rule with comment period, we reiterated our policy of setting 
quality performance benchmarks prior to the reporting year for which 
they would apply (78 FR 74759). Specifically, we use data submitted in 
2013 for the 2012 reporting period to set the quality performance 
benchmarks for the 2014 reporting period. However, we recognize that in 
the first few years of the Shared Savings Program, we will only have a 
limited amount of data for some measures, which may cause the 
benchmarks for these measures to fluctuate, possibly making it 
difficult for ACOs to improve upon their previous year's performance. 
Stakeholders have also told us that they prefer to have a stable 
benchmark target so that they can be rewarded for quality improvement 
from one year to the next. Therefore, instead of modifying quality 
performance benchmarks annually, in the CY 2014 PFS final rule with 
comment period (78 FR 74761) we stated that we would set the benchmarks 
for the 2014 reporting year in advance using data submitted during 2013 
for the 2012 reporting year, and continue to use that benchmark for 2 
reporting years (specifically, the 2014 and 2015 reporting years). We 
further indicated our intention to revisit this issue in future 
rulemaking to allow for public comment on the appropriate number of 
years that a benchmark should apply before it is updated.
b. Proposed Revisions for Benchmarking Measures That Are ``Topped Out''
    In the discussion of measures above, we indicated that some 
measures may be topped out, meaning that all but a very few of 
organizations achieve near perfect performance on the measure. Since 
publication of the quality performance benchmarks for the 2014 and 2015 
quality reporting years, a number of ACOs have noted that using 
available national FFS data has resulted in some benchmarks where the 
80th or 90th percentiles approach 100 percent performance on the 
measure. Stakeholders have suggested it is unreasonable to hold 
organizations, especially very large organizations such as ACOs to this 
high standard and that

[[Page 40488]]

it may be easier for smaller and medium size physician practices to 
achieve higher levels of performance given their smaller patient 
populations. We believe these concerns have merit because we have 
looked at the FFS data submitted to CMS and agree it is possible that 
smaller practices or practices with smaller populations may be able to 
achieve these higher levels of performance more easily than larger 
practices or organizations with larger patient populations. Therefore, 
we are proposing certain modifications to our benchmarking methodology 
to address the way that such ``topped out'' measures are treated for 
purposes of evaluating an ACO's performance. Specifically, when the 
national FFS data results in the 90th percentile for a measure are 
greater than or equal to 95 percent, we would use flat percentages for 
the measure, similar to our policy under Sec.  425.502(b)(2)(ii) of 
using flat percentages when the 60th percentile is greater than 80 
percent to address clustered measures. We believe this approach would 
address concerns about how topped out measures affect the quality 
performance standard while continuing to reward high performance, and 
being readily understandable to all. We propose to revise Sec.  
425.502(b)(2)(ii) to reflect this proposed policy. We invite comments 
on this proposal. We also invite comments on other potential approaches 
for addressing topped out measures. We would use any comments received 
to help develop any future proposals regarding topped out measures. For 
example, we welcome comments on whether we should drop topped out 
measures from the measures set, fold them into composites, or retain 
them but make them pay for reporting only.
c. Proposed Quality Performance Standard for Measures That Apply to 
ACOs That Enter a Second or Subsequent Participation Agreement
    As discussed previously, during an ACO's first participation 
agreement period, the quality performance standard during the first 
performance year is initially set at the level of complete and accurate 
reporting, and then, during performance years 2 and 3 within the ACO's 
first agreement period, the quality performance standard is phased in 
such that the ACO is assessed on its performance on selected measures. 
We did not directly indicate the quality performance standard that 
would apply if an ACO were to subsequently enter into a second or 
subsequent participation agreement. However, Sec.  425.502(a)(1) 
provides that during the first performance year of an ACO's agreement 
period, CMS will define the quality performance standard at the level 
of complete and accurate reporting of all quality measures. As drafted, 
this regulation could be read to imply that the quality performance 
standard for ACOs in the first performance year of a subsequent 
agreement period would also be set at the standard of full and accurate 
reporting. We do not believe it is appropriate for an ACO in a second 
or subsequent agreement period to report quality measures on a pay-for-
reporting basis if they have previously reported these measures in a 
prior agreement period. The ACO would have gained experience reporting 
the quality measures during the earlier agreement period, and as a 
result, we do not believe it would be necessary to provide any further 
transition period. Rather, we believe it would be appropriate to assess 
the ACO's actual performance on measures that have been designated as 
pay for performance during all 3 years of the second or subsequent 
participation agreement period.
    Accordingly, we propose to revise our regulations to expressly 
provide that during a second or subsequent participation agreement 
period, the ACO would continue to be assessed on its performance on 
each measure that has been designated as pay for performance. That is, 
the ACO would continue to be assessed on the quality performance 
standard that would otherwise apply to an ACO if it were in the third 
performance year of the first agreement period. We will do this by 
modifying Sec.  425.502(a)(1) and (a)(2) to indicate that the 
performance standard will be set at the level of complete and accurate 
reporting of all quality measures only for the first performance year 
of an ACO's first agreement period, and that during subsequent 
agreement periods, pay for performance will apply for all three 
performance years. As proposed earlier in this section, new measures 
that are added to the quality performance standard would be phased in 
along the timeline indicated when the measure is added and in 
operational documents.
d. Proposed Timing for Updating Benchmarks
    As discussed in the CY 2014 PFS final rule with comment (78 FR 
74761), we have further considered suggestions from ACOs regarding the 
appropriate number of years that a benchmark should apply before it is 
updated. ACOs suggested that there be a longer period of time to gain 
experience with the performance measure, before benchmarks are further 
updated. ACOs also indicated that it would be desirable to set and 
leave benchmarks static for additional performance years so that they 
have a quality improvement target to strive for that does not change 
frequently. ACOs believe that a stable benchmark would enhance their 
ability to be rewarded for quality improvement, as well as quality 
achievement, from one year to the next. We recognize, however, that 
there could be some concerns about lengthening the period between 
updates to the quality performance benchmarks. The current benchmarks 
as discussed previously, for example, are based on a combination of all 
available Medicare FFS quality data, including data gathered under 
PQRS, the Shared Savings Program and Pioneer ACO Model, but not MA 
quality data. To the extent that the benchmarks are based on quality 
data reported by a large number of ACOs and other FFS entities, we 
believe it is reasonable to use them to assess the quality performance 
of ACOs. Furthermore, as discussed in the 2014 PFS final rule with 
comment period (78 FR 74761), we are also persuaded that we should 
establish a longer period between updates to the benchmarks in order to 
provide ACOs with a more stable target for measuring quality 
improvement. In the absence of this stability, it could be very 
difficult to assess quality improvement from year to year.
    In the 2014 PFS final rule with comment period, we noted that we 
intended to address the number of years between updates to the 
benchmarks again in future rulemaking in order to allow for public 
comment. Therefore, we considered how long benchmarks should be in 
place before they are updated. We considered a range of options, from 
setting benchmarks every 2 years to setting benchmarks every 5 years. 
For example, we considered the option of setting benchmarks every 3 
years. However, we note that ACO agreement periods are 3 years long and 
a new cohort of ACOs enters the program each year. As a result, setting 
benchmarks every 3 years might advantage some ACOs over others, 
particularly ACOs that have an agreement period during which benchmarks 
are not updated. Therefore, we propose to update benchmarks every 2 
years. We believe 2 years is an appropriate amount of time because the 
Shared Savings Program is relatively new and we do not have extensive 
experience in setting benchmarks under the Shared Savings Program. 
Updating the benchmarks every 2 years would enable us to be more 
flexible and give us the ability to make adjustments more

[[Page 40489]]

frequently if appropriate. We note, however, that we may revisit this 
policy as more ACOs enter the program, more FFS data is collected which 
could help us better understand to what extent benchmarks should vary 
from year to year, or if we make any future proposals regarding the use 
of MA quality data for setting benchmarks.
    Accordingly, we propose to revise Sec.  425.502(b) to add a new 
paragraph (b)(4)(i), which will provide that CMS will update benchmarks 
every 2 years. To illustrate this proposed policy, the existing quality 
performance benchmarks, which are based on data submitted in 2013 for 
the 2012 reporting period would apply for a total of 2 performance 
years (the 2014 and 2015 performance years) after which we would reset 
the benchmarks for all ACOs based on data for the 2014 reporting period 
that is reported during 2015. These updated benchmarks would apply for 
the 2016 and 2017 performance years. This timeline is summarized in 
Table 54. Under this proposal, ACOs would have a stable target for 
quality achievement for 2 years, which should improve the opportunity 
for ACOs to be rewarded for improvement from year to year compared to 
that benchmark. We also propose to revise Sec.  425.502(b) to add a new 
paragraph (b)(4)(ii), which will provide that for measures introduced 
in the first year of the 2-year benchmarking cycle, the benchmark will 
be established in the second year and updated along with the other 
measures at the start of the next 2-year benchmarking cycle.
    We seek comment on this proposal. We specifically seek comment on 
the appropriate number of years that a benchmark should remain stable 
before it is updated. We also welcome comments about when annual 
updates might be appropriate such as when there is a substantive 
specification change to a measure between years. For instance, the age 
range used for the breast cancer screening measure is different in 2014 
than in 2013, or when the measure owner modifies or retires a measure. 
Additionally, although we are proposing to retain our current policy of 
using the most recent available data to set the quality performance 
benchmarks, we also seek comment on whether data from other reporting 
periods should also be considered in establishing benchmarks that will 
apply for 2 performance years. Specifically, we seek input on whether 
data from multiple years should be used to help provide more stable 
benchmarks. For example, should data submitted for the 2013 and 2014 
reporting periods be combined to set benchmarks for the 2016 and 2017 
performance years?

Table 54--Proposed Timeline for Setting and Updating Quality Performance
                               Benchmarks
------------------------------------------------------------------------
                                        Year data is    Performance year
                                         collected,       and reporting
  Reporting period for data used to     analyzed, and    period to which
            set benchmark               benchmark is        benchmark
                                          published          applies
------------------------------------------------------------------------
2012................................              2013       2014 & 2015
2014................................              2015       2016 & 2017
2016................................              2017       2018 & 2019
------------------------------------------------------------------------

4. Rewarding Quality Improvement
a. Current Approach To Rewarding ACOs for Both Quality Attainment and 
Quality Improvement
    ACOs must meet a CMS-specified quality performance standard in 
order to be eligible to share in savings. The Shared Savings Program 
quality performance standard currently consists of a set of quality 
measures spanning four domains that are collected via the patient and 
caregiver experience of care survey, calculated by CMS from internal 
administrative and claims data, and submitted by the ACO through the 
CMS web interface. The four domains include patient/caregiver 
experience of care, care coordination/patient safety, preventive 
health, and at-risk populations. The measures collected through the CMS 
web interface are also used to determine whether eligible professionals 
that bill through the TIN of an ACO participant qualify for the PQRS 
incentive payment or avoid the downward PQRS payment adjustment. 
Eligible professionals that bill through the TIN of an ACO participant 
may qualify for the PQRS incentive payment or avoid the downward PQRS 
payment adjustment when the ACO satisfactorily reports the ACO GPRO 
quality measures on their behalf.
    Under current policy, the quality performance standard is defined 
at the level of full and complete reporting for the first performance 
year of an ACO's agreement period. After that, an ACO must meet certain 
thresholds of performance and is rewarded on a sliding scale in which 
higher levels of quality performance translate to higher rates of 
shared savings. This scale, therefore, rewards improvement over time, 
since higher performance translates to higher shared savings. For 
example, an ACO that performs at the 80th percentile one year and then 
at the 90th percentile the next year would receive a higher level of 
shared savings in its second year than its first year, based on its 
improved quality performance. In this way, ACOs are rewarded for both 
attainment and improvement. This is particularly true when benchmarks 
are stable for more than one year, as proposed previously.
    We recognize that rewards for both quality attainment, as well as 
quality improvement are not always built in to pay-for-performance 
initiatives. For example, in HVBP (Hospital Value-Based Purchasing) 
hospitals are scored based on the higher of their achievement or 
improvement on specified quality measures, with some hospitals 
receiving incentive payments if their overall performance is high 
enough relative to their peers. In the November 2011 final rule 
establishing the Shared Savings Program (76 FR 67897), we indicated in 
response to comments that we believe the approach of offering more 
points for better quality performance also offers an implicit incentive 
for continuous quality improvements, since it incorporates a sliding 
scale in which higher levels of quality performance translate to higher 
sharing rates. We believed that high performing ACOs should do well 
under this approach since it recognizes and provides incentives for 
ACOs to maintain high quality performance in order to maximize their 
share of savings and minimize their share of losses.
b. Additional Rewards for Quality Improvement
    ACOs and other stakeholders have suggested that the current quality 
points scale described above does not adequately reward ACOs for both 
quality attainment and improvement. They request that we further 
strengthen

[[Page 40490]]

the incentives for quality improvement by including an additional 
explicit reward for those ACOs that improve from one year to the next.
    As discussed previously, the existing quality performance standard 
includes a sliding point scale that rewards ACOs for certain levels of 
attainment. In addition, we note that under the proposal discussed 
above in which we propose to establish a stable quality performance 
benchmark for a period of 2 years, there should be an even greater 
opportunity for every ACO to demonstrate improvement and be rewarded 
for that improvement from year to year. However, we are persuaded by 
suggestions from stakeholders that an additional, more explicit reward 
should be included for ACOs that improve their quality scores from year 
to year. The success of the Shared Savings Program is partially 
dependent on ACOs further improving the quality of the care they 
provide, not merely maintaining current levels of quality. Therefore, 
we are proposing to revise our existing quality scoring strategy to 
explicitly recognize and reward ACOs that make year-to-year 
improvements in their quality performance scores on individual 
measures. We believe that offering an additional and explicit reward 
for improving quality performance would complement and reinforce our 
current quality performance scoring system that implicitly takes into 
account improvements over prior performance and rewards ACOs with a 
greater share in savings for greater quality performance. We believe 
that adding an explicit incentive places even greater emphasis on 
quality improvement, encouraging all ACOs to continue to improve 
quality for their patient populations over time, in addition to 
maintaining existing high quality levels.
    To develop such an approach, we looked to the MA program, which has 
already successfully developed and implemented a formula for measuring 
quality improvement. The MA five star rating program computes an 
improvement change score which is defined as the score for a measure in 
performance year minus the score in previous performance year. The MA 
five star rating program then measures each plan's net quality 
improvement by calculating the total number of significantly improved 
quality measures and subtracting the total number of significantly 
declined quality measures. This is an approach that we believe is also 
appropriate for measuring quality improvement for ACOs. (For more 
details on the formula for calculating the MA quality improvement 
measure, see the discussion in ``Medicare 2014 Part C & D Star Rating 
Technical Notes'', Attachment I, page 80, which can be downloaded from 
the CMS Web site at http://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovGenIn/PerformanceData.html.)
    We continue to believe it is important to recognize that the Shared 
Savings Program is not a managed care program. Unlike MA, this 
program's design retains FFS flexibility and the freedom of choice 
available to beneficiaries under Medicare Parts A and B which generally 
necessitates different program requirements. However, in this case we 
believe there would be significant advantages for the Shared Savings 
Program to adopt the formula for a quality improvement measure that MA 
has already developed and implemented rather than attempt to develop a 
new formula for a quality improvement measure. In particular, the MA 
measure formula has already been fully developed and vetted with 
stakeholders, in the context of the MA program, with detailed 
operational specifications and previously shared with the public.
    In addition, we believe it is important to add a quality 
improvement measure to the Shared Savings Program in a manner that 
would minimize disruption for ACOs. We believe it would be undesirable 
for both ACOs and the program if the quality improvement measure were 
added in a way that required extensive revisions to the current quality 
measurement methodology, for example, reweighting of the four quality 
measure domains. Therefore, we propose to add a quality improvement 
measure to award bonus points for quality improvement to each of the 
existing four quality measure domains. For each quality measure domain, 
we would award an ACO up to two additional bonus points for quality 
performance improvement on the quality measures within the domain. 
These bonus points would be added to the total points that the ACO 
achieved within each of the four domains. Under this proposal, the 
total possible points that can be achieved in a domain, including up to 
2 bonus points, could not exceed the current maximum total points 
achievable within the domain. For example, as shown in Table 51, 
currently the total possible points for the patient/caregiver 
experience domain, which has seven individual measures, is 14 total 
possible points. Under this proposal to provide for quality improvement 
bonus points, the maximum possible points within this domain would 
continue to be 14. If an ACO scored 12 points and was awarded two 
additional bonus points for quality improvement then the ACO's total 
points for this domain would be 14. However, if instead this same ACO 
had scored 13 points, then this ACO's total points after adding the 
bonus points could still not exceed 14.
    ACOs would achieve bonus points for this quality improvement 
measure in a domain if they achieve statistically significant levels of 
quality improvement for measures within the domain, as discussed below. 
Otherwise, the current methodology for calculating the ACO's overall 
quality performance score would continue to apply (see Sec.  425.502(e) 
and 76 FR 67895 through 67900). Additional details about the proposal 
to incorporate bonus points into the quality performance scoring 
methodology follow:
    Table 51 shows the maximum possible points that currently may be 
earned by an ACO in each domain and for all domains. Table 52 shows the 
maximum possible points that may be earned under the proposed quality 
measures changes. The data in Tables 51 and 52 are not affected by this 
proposal to provide for bonus points for quality improvement and do not 
include the proposed maximum of two bonus points in each domain. The 
quality improvement measure scoring for a domain would be based on the 
ACO's net improvement in quality for the other measures in the domain. 
The calculation of the quality improvement measure for each domain 
would generally be based on the formula used for the MA five star 
rating program, as follows:

Improvement Change Score = score for a measure in performance year 
minus score in previous performance year.

    In general, for a measure to be eligible to be included for 
purposes of determining quality improvement and awarding bonus points 
in a domain for a performance year, the measure must be a measure for 
which an ACO was scored in both the performance year and the 
immediately preceding performance year. Measures that were not scored 
in both the performance year and the immediately preceding performance 
year, for example, new measures, would not be included in the 
assessment of improvement. Otherwise, for purposes of determining 
quality improvement and awarding bonus points, we would include all of 
the individual measures within the domain, including both pay-for-
reporting measures and pay-for-performance measures. We believe it 
would be appropriate to include pay-for-reporting measures for purposes 
of determining quality improvement and

[[Page 40491]]

awarding bonus points since under Sec.  425.500(f) ACOs that fail to 
report all quality measures, including pay-for-reporting measures 
completely, accurately, and timely may be subject to termination or 
other corrective action. As an example, pay for reporting applies to 
the CAHPS health status/functional status measure for all three 
performance years. However, the ACO's performance on the health status/
functional status measure would still be considered in performance 
years two and three when we evaluate whether an ACO should be awarded 
bonus points.
    In determining improvement, the actual performance score achieved 
by the ACO on the measure would be used, not the score used to 
determine shared savings. In other words, we calculate a performance 
score for each measure, regardless of whether it is pay for reporting 
or pay for performance, and include the score in the report we provide 
to the ACO. For example, all measures are pay for reporting in the 
first year of an ACO's first agreement period, but even though the ACO 
will receive full credit for all reported measures, its actual 
performance on those measures will also be scored and provided to the 
ACO for informational purposes. We believe it is appropriate to use 
these actual performance scores to assess improvement on a measure from 
year to year, regardless of whether the measure is designated as a pay 
for reporting or a pay for performance measure in that performance year 
because the performance scores achieved by the ACO provide the best 
indication of the actual change in quality performance by the ACO.
    If the ACO is in its first performance year of its first agreement 
period, then it would not be possible, of course, to measure quality 
improvement. Therefore, for these ACOs the existing scoring methodology 
would continue to apply and no bonus points would be awarded. If an ACO 
in its second or subsequent performance year does not experience an 
improvement nor a decline in quality performance for any of the 
selected measures compared to its previous reporting period, or it 
experiences an improvement for some measures but has an equal or 
greater number of measures where quality performance has declined, then 
the ACO would likewise not be awarded any bonus points. If an ACO 
renews a participation agreement, then the measurement of quality 
improvement would be based on a comparison between performance in the 
first year of the new agreement period and performance in the 3rd year 
of the previous agreement period.
    For each qualifying measure, we would determine whether there was a 
significant improvement or decline between the two performance years by 
applying a common standard statistical test. (See the discussion of the 
t-test for calculating the MA quality improvement measure in ``Medicare 
2014 Part C & D Star Rating Technical Notes'', Attachment I, page 80, 
which can be downloaded from the CMS Web site at http://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovGenIn/PerformanceData.html). Statistical significance testing in this case 
assesses how unlikely it is that differences as big as those observed 
would be due to chance when the performance is actually the same. Under 
this methodology, we can be reasonably certain, at a 95 percent level 
of confidence, that statistically significant differences in an ACO's 
quality measure performance for a year compared to the previous year 
are real and not simply due to random variation in measure sampling.
    The awarding of bonus points would be based on an ACO's net 
improvement within a domain, and would be calculated by determining the 
total number of significantly improved measures and subtracting the 
total number of significantly declined measures. Up to two bonus points 
would be awarded on a sliding scale based on the ACO's net improvement 
for the domain to the total number of individual measures in the 
domain. Specifically, the bonus points, up to a maximum of 2 points, 
would be awarded in direct proportion to the ACO's net improvement for 
the domain to the total number of individual measures in the domain. 
For example, there are seven individual measures for the patient/
caregiver experience of care domain. If the ACO achieved a significant 
quality increase in all seven measures then the ACO would be awarded 
the maximum of two bonus points for this domain. However, if the ACO 
achieved a significant quality increase in only one of the seven 
measures in this domain and no significant quality decline on any of 
the measures then the ACO would be awarded 0.29 bonus points for 
quality improvement in the domain that is \1/7\ times 2 = 0.29. The 
total points that the ACO could achieve in this domain could still not 
exceed the current maximum of 14 points shown in Table 51.
    Tables 51 and 52 reflect the current quality measure scoring 
methodology which would continue under this proposal. These tables show 
the number of points available per domain under both the current 
quality performance standard and the proposed revisions to the quality 
performance standard.
    Consistent with our current quality scoring methodology, the total 
points earned for measures in each domain, including any quality 
improvement bonus points up to the total possible points, would be 
summed and divided by the total points available for that domain to 
produce an overall domain score of the percentage of points earned 
versus points available. The percentage score for each domain will be 
averaged together to generate a final overall quality performance score 
and sharing rate for each ACO that will be used to determine the amount 
of savings it shares or, if applicable, the amount of losses it owes, 
consistent with the requirements under Sec.  425.502(e).
    In developing this proposal to award bonus points for quality 
improvement, we considered several alternative options. Specifically, 
we considered whether it would be more appropriate not to award bonus 
points but instead to include a computed quality improvement measure 
that would be incorporated into the current scoring methodology just as 
any other measure would be added. Under this alternative approach, we 
would increase the total possible points that could be awarded in a 
domain. However, we did not propose that approach because we believe 
that awarding bonus points would provide the desired incentive, would 
be more understandable and less disruptive, and would not require 
extensive changes to the quality performance standard. By awarding 
bonus points we also avoid the need to develop ways to avoid unfairly 
penalizing new ACOs. Similarly, ACOs that have already achieved a very 
high level of quality for an individual measure may not be able to 
achieve further statistically significant improvement for the measure. 
Such ACOs could otherwise be disadvantaged if they were not able to 
earn performance points for a new quality improvement measure added to 
the total measures in the domain. We believe our quality improvement 
proposal mitigates these concerns because the measure recognizes 
incremental improvement at higher levels of performance and does not 
impose any penalty on ACOs that have already achieved a high level of 
performance.
    We also considered whether we should provide an even greater 
additional incentive by increasing the total possible bonus points, 
perhaps up to 4 points to provide a higher incentive for greater levels 
of quality

[[Page 40492]]

improvement. However, we are not proposing that option because we are 
concerned that awarding 4 points for the quality improvement measure 
could overweight the additional incentive for quality improvement given 
that the program already rewards higher performance with a greater 
share of any savings.
    In addition, we have some concerns about whether it would be 
appropriate to use the ``pay for reporting'' data reported to us, given 
that the accuracy does not affect an ACO's quality performance score in 
the first performance year. Therefore, we considered whether the 
proposed quality improvement score should apply only to those ACOs that 
have completed at least two performance years. Under this alternative 
approach, ACOs would have an opportunity to be assessed based on their 
actual quality measure performance before being assessed on their 
quality improvement scores. We did not select this approach because we 
wanted to provide an incentive that would apply as soon as possible in 
the agreement period. Furthermore, as noted earlier, we believe it 
would be appropriate to include pay-for-reporting measures for purposes 
of awarding bonus points since under Sec.  425.500(f) ACOs are required 
to report pay-for-reporting measures completely, accurately, and 
timely.
    We are proposing to add a new paragraph (e)(4) to Sec.  425.502 to 
incorporate this proposed process for calculating bonus points for 
quality improvement into the quality performance scoring methodology. 
We seek comments on this proposal and welcome comments on the 
alternative approaches discussed above. We also seek comments on 
whether there are other alternative approaches to explicitly rewarding 
quality improvement for ACOs, and whether the implicit reward for 
quality improvement provided under the current regulations is 
sufficient.
    We also welcome any suggestions on how the Shared Savings Program 
might integrate elements of other quality improvement methodologies 
such as those employed by HVBP or MA. Such comments would be considered 
in developing possible future proposals to further align with other 
Medicare quality improvement programs.
5. Technical Corrections
    Currently Sec.  425.502(d)(2)(ii) states that ACOs must score above 
the minimum attainment level determined by CMS on 70 percent of the 
measures in each domain. If an ACO fails to achieve the minimum 
attainment level on at least 70 percent of the measures in a domain, 
CMS will take the actions described in Sec.  425.216(c). We note that 
Sec.  425.216, which addresses the actions we may take prior to 
termination of an ACO from the Shared Savings Program does not include 
a paragraph (c). To encompass all of the actions we may take prior to 
termination, we believe the correct reference should be to Sec.  
425.216 generally, and therefore, propose to make a technical 
correction to Sec.  425.502(d)(2)(ii) to eliminate the specific 
reference to paragraph (c) of Sec.  425.216. We also propose to correct 
a typographical error in this provision by revising ``actions 
describe'' to read ``actions described.''
    In addition, we are also proposing to make a technical correction 
to Sec.  425.502(a)(2). This provision currently states that ACOs will 
be assessed on performance based on the minimum attainment level for 
certain measures. However, as explained above and in the November 2011 
Shared Savings Program final rule (76 FR 67895 through 67896), ACO 
performance on a measure is assessed not only based on the minimum 
attainment level for the measure but also based upon the quality 
performance benchmark that has been established for that measure. This 
methodology for calculating the performance score for a measure is 
codified in the regulations at Sec.  425.502(c). Accordingly, we 
propose to amend Sec.  425.502(a)(2) to state that ACO performance will 
be assessed based on the quality performance benchmark and minimum 
attainment level for certain measures.
    We request comments on these proposed technical corrections.

N. Value-Based Payment Modifier and Physician Feedback Program

1. Overview
    Section 1848(p) of the Act requires that we establish a value-based 
payment modifier (VM) and apply it to specific physicians and groups of 
physicians the Secretary determines appropriate starting January 1, 
2015, and to all physicians and groups of physicians by January 1, 
2017. On or after January 1, 2017, section 1848(p)(7) of the Act 
provides the Secretary discretion to apply the VM to eligible 
professionals as defined in section 1848(k)(3)(B) of the Act. Section 
1848(p)(4)(C) of the Act requires the VM to be budget neutral.
    In this rule, we are proposing policies to apply the VM to all 
physicians and groups of physicians and also nonphysician eligible 
professionals and to increase the amount of payment at risk. We also 
are proposing to refine the methodologies used to determine our quality 
and cost composites and also to establish a corrections process for 
2015.
2. Governing Principles for VM Implementation
    In the CY 2013 PFS final rule with comment period, we discussed the 
goals of the VM and also established that specific principles should 
govern the implementation of the VM (77 FR 69307). We refer readers to 
that rule for a detailed discussion and list those principles here for 
reference.
     A focus on measurement and alignment. Measures for the VM 
should consistently reflect differences in performance among groups or 
solo practitioners, reflect the diversity of services furnished, and be 
consistent with the National Quality Strategy and other CMS quality 
initiatives, including the PQRS, the Shared Savings Program, and the 
Medicare EHR Incentive Program.
     A focus on physician and eligible professional choice. 
Physicians and other nonphysician eligible professionals should be able 
to choose the level (individual or group) at which their quality 
performance will be assessed, reflecting eligible professionals' choice 
over their practice configurations. The choice of level should align 
with the requirements of other physician quality reporting programs.
     A focus on shared accountability. The VM can facilitate 
shared accountability by assessing performance at the group level and 
by focusing on the total costs of care, not just the costs of care 
furnished by an individual professional.
     A focus on actionable information. The Quality and 
Resource Use Reports (QRURs) should provide meaningful and actionable 
information to help groups and solo practitioners identify clinical 
areas where they are doing well, as well as areas in which performance 
could be improved by providing groups and solo practitioners with QRURs 
on the quality and cost of care they furnish to their patients.
     A focus on a gradual implementation. The VM should focus 
initially on identifying high and low performing groups and solo 
practitioners. As we gain more experience with physician measurement 
tools and methodologies, we can broaden the scope of measures assessed, 
refine physician peer groups, create finer payment distinctions, and 
provide greater payment incentives for high performance.

[[Page 40493]]

3. Overview of Existing Policies for the Physician VM
    In the CY 2013 PFS final rule with comment period (77 FR 69310), we 
finalized policies to phase-in the VM by applying it starting January 
1, 2015, to payments under the Medicare PFS for physicians in groups of 
100 or more eligible professionals. A summary of the existing policies 
that we finalized for the CY 2015 VM can be found in the CY 2013 PFS 
proposed rule (77 FR 44991 through 45021). Similarly, in the CY 2014 
PFS final rule with comment period, we finalized policies to phase-in 
the VM by applying it starting January 1, 2016 to payments under the 
Medicare PFS for physicians in groups of 10 or more eligible 
professionals. The policies that we finalized for the CY 2016 VM can be 
found in the CY 2014 final rule with comment period (78 FR 74765 
through 74787).
4. Provisions of This Proposed Rule
    We are making the following proposals regarding the VM policies:
     To apply the VM to all physicians and nonphysician 
eligible professionals in groups with 2 or more eligible professionals 
and to solo practitioners starting in CY 2017.
     To make quality-tiering mandatory for groups and solo 
practitioners within Category 1 for the CY 2017 VM. Category 1 
includes: (1) Groups that meet the criteria for satisfactory reporting 
of data on PQRS quality measures via the group practice reporting 
option (GPRO) for the CY 2017 PQRS payment adjustment; (2) groups that 
do not register to participate in the PQRS as a group practice 
participating in the PQRS GPRO in CY 2015 and that have at least 50 
percent of the group's eligible professionals meet the criteria for 
satisfactory reporting of data on PQRS quality measures as individuals 
for the CY 2017 PQRS payment adjustment, or in lieu of satisfactory 
reporting, satisfactorily participate in a PQRS-qualified clinical data 
registry for the CY 2017 PQRS payment adjustment; and (3) solo 
practitioners that meet the criteria for satisfactory reporting of data 
on PQRS quality measures as individuals for the CY 2017 PQRS payment 
adjustment, or in lieu of satisfactory reporting, satisfactorily 
participate in a PQRS-qualified clinical data registry for the CY 2017 
PQRS payment adjustment. However, groups with between 2 and 9 eligible 
professionals and solo practitioners would be subject only to any 
upward or neutral adjustment determined under the quality-tiering 
methodology, and groups with 10 or more eligible professionals would be 
subject to upward, neutral, or downward adjustments determined under 
the quality-tiering methodology.
     To apply the VM to physicians and nonphysician eligible 
professionals participating in the Shared Savings Program, the Pioneer 
ACO Model, the CPC Initiative, or other similar Innovation Center 
models or CMS initiatives starting in CY 2017.
     To clarify the exclusion of non-assigned claims for non-
participating providers from the VM.
     To increase the amount of payment at risk under the VM 
from 2.0 percent in CY 2016 to 4.0 percent in CY 2017.
     To align the quality measures and quality reporting 
mechanisms for the VM with those available to groups and individuals 
under the PQRS during the CY 2015 performance period.
     To expand the current informal inquiry process to allow 
additional corrections for the CY 2015 payment adjustment period.
     To address the concerns raised by NQF regarding the per 
capita cost measures in the cost composite.
    We also seek comment on, but make no proposals regarding the 
treatment of hospital-based physicians with regard to the VM.
a. Group Size
    Section 1848(p)(4)(B)(iii) of the Act requires the Secretary to 
apply the VM to items and services furnished under the PFS beginning on 
January 1, 2015, for specific physicians and groups of physicians the 
Secretary determines appropriate, and beginning not later than January 
1, 2017, for all physicians and groups of physicians.
    In the CY 2013 PFS final rule with comment period, we stated that 
we would gradually phase in the VM in CY 2015 by first applying it to 
large groups (77 FR 69308), which we defined as groups of physicians 
with 100 or more eligible professionals. In the CY 2014 PFS final rule 
with comment period, we continued our phase-in of the VM and adopted a 
policy to apply the VM in CY 2016 to groups of physicians with 10 or 
more eligible professionals (78 FR 74765-74767).
    As mentioned above, section 1848(p)(4)(B)(iii)(II) of the Act 
requires the Secretary to apply the VM to items and services furnished 
under the PFS beginning not later than January 1, 2017, for all 
physicians and groups of physicians. Therefore, we propose to apply the 
VM in CY 2017 and each subsequent calendar year payment adjustment 
period to physicians in groups of physicians with 2 or more eligible 
professionals and to physicians who are solo practitioners. For 
purposes of the VM, we defined a physician, a group of physicians, and 
an eligible professional in the CY 2013 PFS final rule with comment 
period (77 FR 69307-69310). We propose to define a ``solo 
practitioner'' at Sec.  414.1205 as a single Tax Identification Number 
(TIN) with 1 eligible professional who is identified by an individual 
National Provider Identifier (NPI) billing under the TIN. This proposal 
completes our phase in of the VM as required by the Act. Please note 
that in section III.N.4.b of this proposed rule, we discuss our 
proposal to also apply the VM to nonphysician eligible professionals in 
groups subject to the VM and to nonphysician eligible professionals who 
are solo practitioners in CY 2017 and subsequent CY payment adjustment 
periods. Additionally, we note that in section III.N.4.g of this 
proposed rule, we state that performance on quality and cost measures 
in CY 2015 will be used to calculate the VM that is applied to items 
and services for which payment is made under the PFS during CY 2017.
    Table 55 shows the number of groups, eligible professionals, 
physicians, and nonphysician eligible professionals in groups of 
various sizes based on an analysis of CY 2012 claims with a 90-day run-
out period. We note that the number of eligible professionals includes 
other practitioners, such as physician assistants and nurse 
practitioners, in addition to physicians. We estimate that our 
proposals to apply the VM to all groups with 2 or more eligible 
professionals and to all solo practitioners in CY 2017 would affect 
approximately 83,500 groups and 210,000 solo practitioners (as 
identified by their TINs) that consist of approximately 815,000 
physicians and 315,000 nonphysician eligible professionals.

[[Page 40494]]



                                     Table 55--Eligible Professional/Physician Group Size Distribution (2012 claims)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Eligible                            Number of                          Percent of
                 Group size                   Number of groups    professionals       Number of       nonphysician       Percent of       nonphysician
                                                  (TINs)\*\           (EPs)          physicians            EPs           physicians            EPs
--------------------------------------------------------------------------------------------------------------------------------------------------------
100+ EPs....................................             1,044           303,009           223,917            79,092                27                25
50-99 EPs...................................             1,526           103,998            71,089            32,909                 9                10
25-49 EPs...................................             3,675           125,314            85,127            40,187                10                13
20-24 EPs...................................             1,831            39,887            27,115            12,772                 3                 4
10-19 EPs...................................             8,356           112,553            76,905            35,648                 9                11
2-9 EPs.....................................            67,065           235,756            166807            68,949                20                22
1 EP........................................           209,950           209,950           164,334            45,616                20                14
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total...................................           293,447         1,130,467           815,294           315,173               100               100
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The number of groups (TINs) does not include TINs that have one or more EPs participating in the Shared Savings Program, the Pioneer ACO Model, or the
  Comprehensive Primary Care Initiative.

    As discussed in the CY 2014 PFS proposed rule with comment period 
(78 FR 43500 through 43502), we conducted statistical reliability 
analysis on the PQRS quality measures contained in the 2010 and 2011 
group and individual Quality and Resource Use Reports (QRURs). These 
reports contained the PQRS quality measures used in these years, and 
these PQRS measures are similar to the PQRS measures that will be used 
in the VM starting in CY 2015. The quality measures in the group 
reports were statistically reliable at a high level. Moreover, at that 
time, the average reliability score was high for 98 percent of the 
individually reported PQRS measures included in the individual feedback 
reports; therefore, with the exceptions discussed in section III.N.4.h 
of this proposed rule regarding the all cause hospital readmission 
measure, we believe that the PQRS quality measures for groups with 2 or 
more eligible professionals and solo practitioners will also be 
reliable since they are chosen by the physicians and reflect their 
patients' conditions and practices' clinical priorities.
    We believe that we can validly and reliably apply a VM to groups 
with 2 or more eligible professionals and to solo practitioners because 
we would be basing the quality of care composite on the PQRS measures 
selected, and reported on, by the groups (or the eligible professionals 
in the groups) and the solo practitioners. We believe that the VM 
should recognize the diversity of medical practices and the various 
measures used to assess quality of care furnished by these practices 
and provide flexibility on the data they report for quality measures 
under the PQRS. Therefore, beginning in the CY 2014 performance period 
for the groups of physicians subject to the CY 2016 VM, we have 
permitted these groups for purposes of the VM to participate in the 
PQRS as a group under the GPRO or to have at least 50 percent of the 
eligible professionals in the group participate in the PQRS as 
individuals (78 FR 74767 through 74768). As a result, physicians and 
other eligible professionals in the group are able to report data on 
quality measures that reflect their own clinical practice. In the 
latter case, as proposed in section III.N.4.c of this proposed rule, a 
group would be included in Category 1 (as described in section 
III.N.4.c of this proposed rule) if at least 50 percent of the eligible 
professionals in the group meet the criteria to avoid the CY 2017 PQRS 
payment adjustment by using any of the reporting options available to 
them under the PQRS in CY 2015.
    We also conducted statistical reliability analyses on the cost 
measures contained in the 2010 and 2011 group and individual QRURs. 
These reports contained the same 5 per capita cost measures that will 
be used for the VM. The cost measures in the group reports were 
statistically reliable at a high level, and the average reliability 
score was high for all of the cost measures included in the individual 
feedback reports. In addition, as discussed in the CY 2014 PFS final 
rule with comment period (78 FR 74774-74784), we are including the 
Medicare Spending per Beneficiary (MSPB) measure in the cost composite 
of the VM and are adjusting the cost comparison approach to consider 
the medical specialty composition of the group of physicians. Based on 
an analysis of CY 2012 claims, we estimate that approximately 48 
percent of all eligible professionals are in a group (as identified by 
a TIN) that would have the total per capita cost measure, as identified 
in Sec.  414.1235(a)(1), in its cost composite score; approximately 41 
percent of all eligible professionals are in a TIN that would have the 
MSPB measure in its cost composite score; and approximately 34 percent 
of all eligible professionals are in a TIN that would have both 
measures in its cost composite score. Therefore, we believe that we 
will be able to calculate a cost composite score for a significant 
number of groups and solo practitioners. In the CY 2014 PFS final rule 
with comment period, we finalized the proposal that if we are unable to 
attribute a sufficient number of beneficiaries to a group of physicians 
subject to the VM, and thus, are unable to calculate any of the cost 
measures with at least 20 cases, then the group's cost composite score 
would be classified as ``average'' under the quality-tiering 
methodology (78 FR 74780 through 74781). However, we note this policy 
was codified in Sec.  414.1270(b)(5) as a group of physicians subject 
to the value-based payment modifier will receive a cost composite score 
that is classified as ``average'' under Sec.  414.1275(b)(2) if such 
group does not have at least one cost measure with at least 20 cases. 
We believe the regulation text at Sec.  414.1270(b)(5) better reflects 
the intent of this policy, and accordingly, we propose to clarify that 
the description of this policy in the preamble of the CY 2014 PFS final 
rule with comment period (78 FR 74780 through 74781) should be the same 
as the regulation text at Sec.  414.1270(b)(5). We propose to apply the 
same policy to groups and solo practitioners beginning in CY 2017. That 
is, a group or solo practitioner would receive a cost composite score 
that is classified as ``average'' under the quality-tiering methodology 
if the group or solo practitioner does not have at least one cost 
measure with at least 20 cases. We propose to revise Sec.  414.1270 
accordingly.
    We believe we have provided smaller groups and solo practitioners 
sufficient lead time to understand how the VM works and how to 
participate in the PQRS. In the late summer of 2014, we plan to 
disseminate QRURs based on CY 2013 data to all groups of physicians and 
physicians who are solo practitioners. These QRURs will contain 
performance information on the quality

[[Page 40495]]

and cost measures used to calculate the quality and cost composites of 
the VM and will show how all TINs would fare under the policies 
established for the VM. The QRURs will also include additional 
information about the TINs' performance on the MSPB measure, 
individually-reported PQRS measures, and the specialty-adjusted cost 
measures. Then, during the summer of 2015, we intend to disseminate 
QRURs based on CY 2014 data to all groups of physicians and physicians 
who are solo practitioners and the reports would show how all TINs 
would fare under the policies established for the VM for the CY 2016 
payment adjustment period. Thus, we believe all groups and solo 
practitioners will have adequate data to improve performance on the 
quality and cost measures that will be used to calculate the VM in CY 
2017. Although we are sensitive to providing groups and solo 
practitioners with adequate lead time to understand the impact of the 
beneficiary attribution method used for the VM, we believe our proposal 
to hold harmless groups with between 2 and 9 eligible professionals and 
solo practitioners from any downward payment adjustments under quality-
tiering in CY 2017 would likely mitigate unintended consequences that 
could occur (see section III.N.4.c of this proposed rule).
    Accordingly, we propose to revise the regulations at Sec.  414.1210 
to reflect that beginning in the CY 2017 payment adjustment period, the 
VM would be applied to physician and nonphysician eligible 
professionals in groups with 2 or more eligible professionals and to 
solo practitioners based on the performance period described at Sec.  
414.1215. As established in the CY 2014 PFS final rule with comment 
period (78 FR 74772) and stated in section III.N.4.g of this proposed 
rule, CY 2015 is the performance period for the CY 2017 VM. Since the 
VM policies established for the CY 2017 payment adjustment period and 
each subsequent calendar year payment adjustment period would apply to 
groups and solo practitioners, we propose to amend the regulations 
under subpart N to add references to solo practitioners accordingly. We 
seek comments on all of these proposals.
b. Application of the VM to Nonphysician EPs
    Section 1848(p) of the Act requires that we establish a VM and 
apply it to items and services furnished under the PFS beginning on 
January 1, 2015, for specific physicians and groups of physicians the 
Secretary determines appropriate, and beginning not later than January 
1, 2017, for all physicians and groups of physicians. Section 
1848(p)(7) of the Act provides the Secretary discretion to apply the VM 
on or after January 1, 2017 to eligible professionals as defined in 
section 1848(k)(3)(B) of the Act. In CY 2015 and CY 2016, we apply the 
VM to the items and services billed under the PFS by physicians in 
groups (as identified by their Medicare-enrolled TIN) subject to the 
VM, but not to the other eligible professionals that also may bill 
under the TIN. We finalized in the CY 2013 PFS final rule with comment 
period (77 FR 69307 through 69310) that physicians, as defined in 
section 1861(r) of the Act, include doctors of medicine or osteopathy, 
doctors of dental surgery or dental medicine, doctors of podiatric 
medicine, doctors of optometry, and chiropractors.
    In section III.N.4.a. of this proposed rule, we discussed our 
proposal to apply the VM in the CY 2017 payment adjustment period and 
each subsequent calendar year payment adjustment period to physicians 
in groups of physicians with 2 or more eligible professionals and to 
physicians who are solo practitioners as required by section 
1848(p)(4)(B)(iii)(II) of the Act.
    Under the discretion afforded the Secretary in section 1848(p)(7) 
of the Act, we propose to apply the VM beginning in the CY 2017 payment 
adjustment period to all of the eligible professionals in groups with 2 
or more eligible professionals and to eligible professionals who are 
solo practitioners. That is, we propose to apply the VM beginning in CY 
2017 to the items and services billed under the PFS by all of the 
physicians and nonphysician eligible professionals who bill under a 
group's TIN. We propose to apply the VM beginning in CY 2017 to groups 
that consist only of nonphysician eligible professionals (for example, 
groups with only nurse practitioners or physician assistants). We 
propose to modify the definition of ``group of physicians'' under Sec.  
414.1205 to also include the term ``group'' to reflect these proposals. 
We also propose to apply the VM beginning in CY 2017 to nonphysician 
eligible professionals who are solo practitioners. Additionally, we 
propose that physicians and nonphysician eligible professionals would 
be subject to the same VM policies established in earlier rulemakings 
and under 42 CFR part 414, subpart N. For example, nonphysician 
eligible professionals would be subject to the same amount of payment 
at risk and quality-tiering policies as physicians. We propose to 
modify the regulations under 42 CFR part 414, subpart N accordingly.
    We finalized in the CY 2013 PFS final rule with comment period (77 
FR 69307 through 69310) that, for purposes of establishing group size, 
we will use the definition of an eligible professional as specified in 
section 1848(k)(3)(B) of the Act. This section defines an eligible 
professional as any of the following: (1) A physician; (2) a 
practitioner described in section 1842(b)(18)(C) of the Act: physician 
assistant, nurse practitioner, clinical nurse specialist, certified 
registered nurse anesthetist, certified nurse-midwife, clinical social 
worker, clinical psychologist, registered dietician, or nutrition 
professional; (3) a physical or occupational therapist or a qualified 
speech-language pathologist; or (4) a qualified audiologist. Beginning 
CY 2017, under our proposal, the VM would apply to all of the eligible 
professionals, as specified in section 1848(k)(3)(B) of the Act, that 
bill under a group's TIN based on the TIN's performance during the 
applicable performance period. During the payment adjustment period, 
all of the nonphysician eligible professionals who bill under a group's 
TIN would be subject to the same VM that would apply to the physicians 
who bill under that TIN.
    We stated in the CY 2013 PFS final rule with comment period (77 FR 
69307) that one of the principles that govern the implementation of the 
VM is our focus on shared accountability and that we have a role in 
fostering high value care for individual patients, but also focusing on 
how that patient interacts with the health care system generally. We 
stated our belief that the VM can facilitate shared accountability by 
assessing performance at the group practice level and by focusing on 
the total costs of care, not just the costs of care furnished by an 
individual physician. We believe that our proposal to apply the VM to 
the physicians and nonphysician eligible professionals in a group will 
foster shared accountability among all of the eligible professionals in 
the group and encourage them to seek innovative ways to furnish high-
quality, patient-centered, and efficient care to the Medicare FFS 
patients they treat.
    Moreover, section 1848(p)(5) of the Act requires us to, as 
appropriate, apply the VM ``in a manner that promotes systems-based 
care.'' We stated in the CY 2013 PFS proposed rule that, in this 
context, systems-based care is the processes and workflows that (1) 
make effective use of information technologies, (2) develop effective 
teams, (3) coordinate care across patient conditions, services, and 
settings over time, and (4) incorporate performance and outcome 
measurements for

[[Page 40496]]

improvement and accountability.\10\ (77 FR 44996) We believe that 
applying the VM to all of the eligible professionals in a group, rather 
than only the physicians in the group, would enhance their ability and 
the resources to redesign such processes and workflows to achieve these 
objectives and furnish high-quality and cost-effective clinical care 
with greater care coordination.
---------------------------------------------------------------------------

    \10\ Johnson JK, Miller SH, Horowitz SD. Systems-based practice: 
Improving the safety and quality of patient care by recognizing and 
improving the systems in which we work. In: Henriksen K, Battles JB, 
Keyes MA, Grady ML, editors. Advances in Patient Safety: New 
Directions and Alternative Approaches, Vol 2: Culture and Redesign. 
AHRQ Publication No. 08-0034-2. Rockville, MD: Agency for Healthcare 
Research and Quality; August 2008. p. 321-330.
---------------------------------------------------------------------------

    As mentioned above, we are also proposing to apply the VM to groups 
that consist only of nonphysician eligible professionals, as well as 
solo practitioners who are nonphysician eligible professionals 
beginning in CY 2017. The quality of care composite for these groups 
and solo practitioners would be based on the quality data submitted 
under the PQRS at the group or individual level in accordance with our 
policy. To the extent we are able to attribute beneficiaries to these 
groups and solo practitioners under the attribution methodology 
proposed in section III.N.4.j of this proposed rule to calculate cost 
measures, we propose to calculate the cost composite using those cost 
measures. If a cost composite cannot be calculated for a group or solo 
practitioner, then we propose to classify the group or solo 
practitioner's cost composite as ``average'' as specified in Sec.  
414.1270. We seek comments on all of our proposed policies for applying 
the VM to nonphysician eligible professionals beginning in CY 2017.
c. Approach To Setting the VM Adjustment Based on PQRS Participation
    In the CY 2014 PFS final rule with comment period (78 FR 74767-
74768), we adopted a policy to categorize groups of physicians subject 
to the VM in CY 2016 based on a group's participation in the PQRS. 
Specifically, we categorize groups of physicians eligible for the CY 
2016 VM into two categories. Category 1 includes groups of physicians 
that (a) meet the criteria for satisfactory reporting of data on PQRS 
quality measures through the GPRO for the CY 2016 PQRS payment 
adjustment or (b) do not register to participate in the PQRS as a group 
practice in CY 2014 and that have at least 50 percent of the group's 
eligible professionals meet the criteria for satisfactory reporting of 
data on PQRS quality measures as individuals for the CY 2016 PQRS 
payment adjustment, or in lieu of satisfactory reporting, 
satisfactorily participate in a PQRS-qualified clinical data registry 
for the CY 2016 PQRS payment adjustment. For a group of physicians that 
is subject to the CY 2016 VM to be included in Category 1, the criteria 
for satisfactory reporting (or the criteria for satisfactory 
participation, if the PQRS-qualified clinical data registry reporting 
mechanism is selected) must be met during the CY 2014 reporting period 
for the PQRS CY 2016 payment adjustment. For the CY 2016 VM, Category 2 
includes those groups of physicians that are subject to the CY 2016 VM 
and do not fall within Category 1. For those groups of physicians in 
Category 2, the VM for CY 2016 is -2.0 percent.
    We propose to use a similar two-category approach for the CY 2017 
VM based on participation in the PQRS by groups and solo practitioners. 
To continue to align the VM with the PQRS and accommodate the various 
ways in which EPs can participate in the PQRS, for purposes of the CY 
2017 VM, we propose that Category 1 would include those groups that 
meet the criteria for satisfactory reporting of data on PQRS quality 
measures via the GPRO (through use of the web-interface, EHR, or 
registry reporting mechanism, as proposed in section III.K of this 
proposed rule) for the CY 2017 PQRS payment adjustment. Our proposed 
criteria for satisfactory reporting of data on PQRS quality measures 
via the GPRO for the PQRS payment adjustment for CY 2017 are described 
in section III.K of this proposed rule. We also propose to include in 
Category 1 groups that do not register to participate in the PQRS as a 
group practice participating in the PQRS group practice reporting 
option (GPRO) in CY 2015 and that have at least 50 percent of the 
group's eligible professionals meet the criteria for satisfactory 
reporting of data on PQRS quality measures as individuals (through the 
use of claims, EHR, or registry reporting mechanism) for the CY 2017 
PQRS payment adjustment, or in lieu of satisfactory reporting, 
satisfactorily participate in a PQRS-qualified clinical data registry 
for the CY 2017 PQRS payment adjustment, all as proposed in section 
III.K of this proposed rule. We note that these proposals are 
consistent with the policies for inclusion in Category 1 as established 
for the CY 2016 VM (78 FR 74767 through 74768). We would maintain the 
50 percent threshold for the CY 2017 VM as we expand the application of 
the VM to all groups and solo practitioners in CY 2017. Our proposed 
criteria for satisfactory reporting by individual eligible 
professionals for the claims, EHR, and registry reporting mechanisms 
and for satisfactory participation in a qualified clinical data 
registry for the CY 2017 PQRS payment adjustment are described in 
section III.K of this proposed rule. Lastly, we propose to include in 
Category 1 those solo practitioners that meet the criteria for 
satisfactory reporting of data on PQRS quality measures as individuals 
(through the use of claims, registry, or EHR reporting mechanism) for 
the CY 2017 PQRS payment adjustment, or in lieu of satisfactory 
reporting, satisfactorily participate in a PQRS-qualified clinical data 
registry for the CY 2017 PQRS payment adjustment, all as proposed in 
section III.K of this proposed rule. Category 2 would include those 
groups and solo practitioners that are subject to the CY 2017 VM and do 
not fall within Category 1. As discussed in section III.N.4.f of this 
proposed rule, for CY 2017, we are proposing to apply a -4.0 percent VM 
to groups with two or more eligible professionals and solo 
practitioners that fall in Category 2. We seek comment on these 
proposals.
    For a group and a solo practitioner that would be subject to the CY 
2017 VM to be included in Category 1, the criteria for satisfactory 
reporting (or the criteria for satisfactory participation, in the case 
of solo practitioners and the 50 percent option described above for 
groups) would need to be met during the reporting periods occurring in 
CY 2015 for the CY 2017 PQRS payment adjustment. As noted earlier, CY 
2015 is the performance period for the CY 2017 payment adjustment 
period for the VM. In the event that the criteria that are finalized 
for the CY 2017 PQRS payment adjustment differ from what is proposed 
for the PQRS in this proposed rule, our intention is to align the 
criteria for inclusion in Category 1 to the extent possible with the 
criteria that are ultimately established for the CY 2017 PQRS payment 
adjustment.
    In the CY 2014 PFS final rule with comment period (78 FR 74768-
74770), we finalized that the quality-tiering methodology will apply to 
all groups in Category 1 for the VM for CY 2016, except that groups of 
physicians with between 10 and 99 eligible professionals would be 
subject only to upward or neutral adjustments derived under the 
quality-tiering methodology, while groups of physicians with 100 or 
more eligible professionals would be subject to upward, neutral, or 
downward adjustments derived under the quality-

[[Page 40497]]

tiering methodology. In other words, we finalized that groups of 
physicians in Category 1 with between 10 and 99 eligible professionals 
would be held harmless from any downward adjustments derived from the 
quality-tiering methodology for the CY 2016 VM.
    For the CY 2017 VM, we propose to continue a similar phase-in of 
the quality-tiering based on the number of eligible professionals in 
the group. We propose to apply the quality-tiering methodology to all 
groups and solo practitioners in Category 1 for the VM for CY 2017, 
except that groups with between 2 and 9 eligible professionals and solo 
practitioners would be subject only to upward or neutral adjustments 
derived under the quality-tiering methodology, while groups with 10 or 
more eligible professionals would be subject to upward, neutral, or 
downward adjustments derived under the quality-tiering methodology. In 
other words, we propose that solo practitioners and groups with between 
2 and 9 eligible professionals in Category 1 would be held harmless 
from any downward adjustments derived from the quality-tiering 
methodology for the CY 2017 VM. Accordingly, we propose to revise Sec.  
414.1270 to reflect these proposals. We believe this proposed approach 
would reward groups and solo practitioners that provide high-quality/
low-cost care, reduce program complexity, and would also fully engage 
groups and solo practitioners into the VM as we complete the phase-in 
of the VM in CY 2017. We seek comments on these proposals.
    We believe it is appropriate to hold groups with between 2 and 9 
eligible professionals and solo practitioners in Category 1 harmless 
from any downward adjustments under the quality-tiering methodology, 
which is similar to the policy we apply to groups with between 10 and 
99 eligible professionals during the first year the VM applies to them 
(CY 2016). We note that we anticipate applying the CY 2018 VM with both 
upward and downward adjustments based on a performance period of CY 
2016 to all groups and solo practitioners, and therefore, we would make 
proposals in future rulemaking accordingly.
    For groups with between 10 and 99 eligible professionals, we 
believe it is appropriate to begin both the upward and the downward 
payment adjustments under the quality-tiering methodology for the CY 
2017 VM. As stated in the CY 2014 PFS final rule with comment period 
(78 FR 74769), on September 16, 2013, we made available to all groups 
of 25 or more eligible professionals an annual QRUR based on 2012 data 
to help groups estimate their quality and cost composites. As discussed 
in section III.N.4.a. of this proposed rule, in the late summer of 
2014, we plan to disseminate QRURs based on CY 2013 data to all groups 
of physicians and physicians who are solo practitioners. These QRURs 
will contain performance information on the quality and cost measures 
used to calculate the quality and cost composites of the VM and will 
show how all TINs would fare under the policies established for the VM 
for the CY 2015 payment adjustment period. Then, during the summer of 
2015, we intend to disseminate QRURs based on CY 2014 data to all 
groups and solo practitioners, and the reports would show how all TINs 
would fare under the policies established for the VM for the CY 2016 
payment adjustment period. The QRURs will also include additional 
information about the TINs' performance on the MSPB measure, 
individually-reported PQRS measures, and the specialty-adjusted cost 
measures. Thus, we believe groups with between 10 and 99 eligible 
professionals will have adequate data to improve performance on the 
quality and cost measures that will be used to calculate the VM in CY 
2017. As a result, we believe it is appropriate to apply both upward 
and downward adjustments under the quality-tiering methodology to 
groups with 10 or more eligible professionals in 2017.
    Based on an analysis of CY 2012 claims, we estimate that 
approximately 6 percent of all eligible professionals are in a Category 
1 TIN that would be classified in tiers that would earn an upward 
adjustment, approximately 11 percent of all eligible professionals are 
in a Category 1 TIN that would be classified in tiers that would 
receive a downward adjustment, and approximately 83 percent of all 
eligible professionals are in a Category 1 TIN that would receive no 
payment adjustment in CY 2017. These results suggest that our quality-
tiering methodology identifies a small number of groups and solo 
practitioners that are outliers--both high and low performers--in terms 
of whose payments would be affected by the VM, thus limiting any 
widespread unintended consequences.
    We will continue to monitor the VM program and continue to examine 
the characteristics of those groups that could be subject to an upward 
or downward payment adjustment under our quality-tiering methodology to 
determine whether our policies create anomalous effects in ways that do 
not reflect consistent differences in performance among physicians and 
physician groups.
d. Application of the VM to Physicians and Nonphysician Eligible 
Professionals that Participate in the Shared Savings Program, the 
Pioneer ACO Model, the CPC Initiative, or Other Similar Innovation 
Center Models or CMS Initiatives
    We established a policy in the CY 2013 PFS final rule with comment 
period (77 FR 69313) to not apply the VM in CY 2015 and CY 2016 to 
groups of physicians that participate in the Shared Savings Program 
Accountable Care Organizations (ACOs), the Pioneer ACO Model, the 
Comprehensive Primary Care (CPC) Initiative, or other similar 
Innovation Center or CMS initiatives. We stated in the CY 2014 PFS 
final rule with comment period (78 FR 74766) that from an operational 
perspective, we will apply this policy to any group of physicians that 
otherwise would be subject to the VM, if one or more physician(s) in 
the group participate(s) in one of these programs or initiatives during 
the relevant performance period (CY 2013 for the CY 2015 VM, and CY 
2014 for the CY 2016 VM).
    Although section 1848(p)(4)(B)(iii)(I) of the Act gives the 
Secretary discretion to apply the VM beginning on January 1, 2015 to 
specific physicians and groups of physicians the Secretary determines 
appropriate, section 1848(p)(4)(B)(iii)(II) of the Act requires 
application of the VM beginning not later than January 1, 2017 to all 
physicians and groups of physicians. Therefore, as discussed in section 
III.N.4.a. of this proposed rule, we are proposing to apply the VM to 
all physicians in groups with 2 or more eligible professionals and to 
solo practitioners who are physicians starting in CY 2017. In section 
III.N.4.b of this proposed rule, we discussed our proposal to also 
apply the VM starting in CY 2017 to all nonphysician eligible 
professionals in groups with 2 or more eligible professionals and to 
solo practitioners who are nonphysician eligible professionals. We 
describe in this section how we propose to apply the VM beginning in 
the CY 2017 payment adjustment period to the physicians and 
nonphysician eligible professionals in groups, as well as those who are 
solo practitioners, participating in the Shared Savings Program, 
Pioneer ACO Model, the CPC Initiative, or other similar Innovation 
Center models or CMS initiatives.

[[Page 40498]]

(1) Physicians and Nonphysician Eligible Professionals That Participate 
in ACOs Under the Shared Savings Program
    Beginning with the CY 2017 payment adjustment period, we propose to 
apply the VM to physicians and nonphysician eligible professionals in 
groups with 2 or more eligible professionals and to physicians and 
nonphysician eligible professionals who are solo practitioners that 
participate in the Shared Savings Program. Groups and solo 
practitioners participate in the Shared Savings Program as part of an 
ACO as provided in section 1899 of the Act. Under the Shared Savings 
Program, an ACO may consist of multiple participating groups and solo 
practitioners (as identified by the ACO participants' TINs). As of 
April 1, 2014, there are 338 ACOs participating in the Shared Savings 
Program. This number includes 31 ACOs that consist of only one ACO 
participant TIN. The ACO submits quality data on behalf of all the ACO 
participant TINs in that ACO under the Shared Savings Program.
    Beginning with the CY 2017 payment adjustment period, we propose to 
classify the cost composite for the VM as ``average cost'' for groups 
and solo practitioners (as identified by the ACO's participant TINs) 
that participate in the Shared Savings Program during the payment 
adjustment period (for example, CY 2017). We propose to apply ``average 
cost'' to these groups and solo practitioners regardless of whether 
they participated in the Shared Savings Program during the performance 
period (for example, in CY 2015 for the CY 2017 VM). We believe that it 
would not be appropriate to apply the quality-tiering methodology to 
calculate the cost composite for these groups and solo practitioners 
because of the differences in the methodology used to calculate the 
cost benchmarks under the Shared Savings Program and the VM. Under the 
Shared Savings Program, cost benchmarks are based on the actual 
historical Medicare fee-for-service expenditures for beneficiaries that 
would have been assigned to the ACO during the historical benchmark 
period, and are updated to reflect changes in national FFS spending; 
however, the cost benchmarks under the VM are based on national 
averages. We believe that these are significant differences in the 
methodology for calculating the cost benchmarks under the two programs. 
Consequently, we believe that any attempt to calculate the cost 
composite for groups and solo practitioners participating in the Shared 
Savings Program using the quality-tiering methodology would create two 
sets of standards for ACOs for their cost performance. We believe that 
having two sets of standards for ACOs for cost performance would be 
inappropriate and confusing. We seek comments on our proposals to 
classify the cost composite as ``average cost'' for groups and solo 
practitioners that participate in the Shared Savings Program during the 
payment adjustment period.
    For groups and solo practitioners that participate in the Shared 
Savings Program during the performance period (for example, CY 2015), 
but no longer participate in the Shared Savings Program during the 
payment adjustment period (for example, CY 2017), we propose to apply 
the quality-tiering methodology to calculate the cost composite for the 
VM for the payment adjustment period based on the groups' and solo 
practitioners' performance on the cost measures, as identified under 
Sec.  414.1235, during the performance period. We believe that it would 
be appropriate to apply the quality-tiering methodology to calculate 
the cost composite because these groups and solo practitioners are no 
longer part of the Shared Savings Program during the payment adjustment 
period and their cost benchmarks would be calculated only under the VM 
during the payment adjustment period.
    Beginning with the CY 2017 payment adjustment period, we propose to 
calculate the quality of care composite score for the VM for groups and 
solo practitioners that participate in an ACO under the Shared Savings 
Program in accordance with the following policies:
    (a) We propose to calculate the quality of care composite score 
based on the quality-tiering methodology using quality data submitted 
by the ACO, as discussed in section III.N.4.h of this proposed rule, 
from the performance period and apply the same score to all of the 
groups and solo practitioners under the ACO during the payment 
adjustment period. In other words, using CY 2017 as an example, we 
propose to calculate the quality of care composite score for the CY 
2017 VM for all of the groups and solo practitioners participating in 
the ACO in CY 2017 based on the ACO's CY 2015 quality data. We note 
that in section III.N.4.h of this proposed rule, we are proposing to 
exclude the claims-based outcome measures identified under Sec.  
414.1230 from the calculation of the quality of care composite score 
for groups and solo practitioners that participate in the Shared 
Savings Program during the payment adjustment period.
    (b) For groups and solo practitioners that participate in the ACO 
during the payment adjustment period (for example, CY 2017) and either 
did not participate in the Shared Savings Program or were part of a 
different ACO during the performance period (for example, CY 2015), we 
propose to calculate the quality of care composite score based on the 
quality-tiering methodology using the quality data submitted by the ACO 
from the performance period. For example, if a group or solo 
practitioner is in ACO 1 during CY 2017, and either was not in the 
Shared Savings Program or was part of ACO 2 during CY 2015, we would 
use ACO 1's quality data from CY 2015 to calculate the quality of care 
composite. We believe this approach is consistent with our policy not 
to ``track'' or ``carry'' an individual professional's performance from 
one TIN to another TIN (see 77 FR 69308 through 69310). In other words, 
if a professional changes groups from TIN A in the performance period 
to TIN B in the payment adjustment period, we would apply TIN B's VM to 
the professional's payments for items and services billed under TIN B 
during the payment adjustment period.
    (c) If the ACO did not exist during the performance period (for 
example, CY 2015), then we would not have the ACO's quality data to use 
in the calculation of the quality of care composite score for the 
payment adjustment period (for example, CY 2017). Therefore, if the ACO 
exists during the payment adjustment period but did not exist during 
the performance period, we propose to classify the quality of care 
composite for all groups and solo practitioners that participate in the 
ACO during the payment adjustment period as ``average quality'' for the 
payment adjustment period. We propose to apply this policy to groups 
and solo practitioners regardless of their status during the 
performance period--in other words, regardless of whether they 
participated in the Shared Savings Program as part of a different ACO, 
or did not exist during the performance period (for example, a TIN 
forms or newly enrolls in Medicare after the end of the performance 
period). We believe this proposal is appropriate since we would not 
have the ACO's quality data from the performance period to calculate a 
quality of care composite for all of the groups and solo practitioners 
participating in the ACO during the payment adjustment period. We note 
that some of these groups and solo practitioners may have participated 
in the PQRS during the performance period; therefore, we would have 
quality data for those groups and solo

[[Page 40499]]

practitioners. If they were part of a different ACO during the 
performance period, then we would also have that ACO's quality data. 
However, we do not believe that it would be appropriate to use the 
groups' and solo practitioners' PQRS or other ACO quality data from the 
performance period to calculate a quality of care composite because the 
groups and solo practitioners are part of a new ACO during the payment 
adjustment period. We believe this approach is consistent with our 
policy not to ``track'' or ``carry'' an individual professional's 
performance from one TIN to another TIN (see 77 FR 69308 through 
69310). In this case, if a TIN's status changes from the performance 
period to the payment adjustment period (that is, participating in ACO 
2 or not participating in the Shared Savings Program in the performance 
period, to participating in ACO 1 in the payment adjustment period), 
then we would not ``track'' or ``carry'' ACO 2's quality data or the 
TIN's PQRS quality data to determine the quality of care composite for 
groups and solo practitioners that participate in ACO 1.
    (d) For groups and solo practitioners that participate in the 
Shared Savings Program during the performance period (for example, CY 
2015) but no longer participate in the Shared Savings Program during 
the payment adjustment period (for example, CY 2017), we propose to 
classify the quality of care composite as ``average quality'' for the 
VM for the payment adjustment period. Since these groups and solo 
practitioners were part of an ACO during the performance period, we 
would have the ACO's quality data from that period. However, we do not 
believe that it would be appropriate to use the ACO's quality data from 
the performance period to calculate a quality of care composite because 
the groups and solo practitioners are no longer part of the ACO during 
the payment adjustment period. We believe this approach is also 
consistent with our policy not to ``track'' or ``carry'' an individual 
professional's performance from one TIN to another TIN (see 77 FR 69308 
through 69310). Even though we are proposing to classify the quality of 
care composite for these groups and solo practitioners as ``average 
quality,'' we seek comments on whether we should use the ACO's quality 
data from the performance period to calculate the quality composite for 
these groups and solo practitioners for the payment adjustment period.
    We seek comments on all of our proposals to calculate the quality 
composite for groups and solo practitioners participating in the Shared 
Savings Program as described above. A summary of these proposals is 
shown in Table 56 using TIN A and ACO 1 and ACO 2 as examples.

      Table 56--Summary of Proposed Policies for Groups and Solo Practitioners With Shared Savings Program
                                              Participation Changes
----------------------------------------------------------------------------------------------------------------
                                     TIN's Status        TIN's Status        TIN's Quality        TIN's Cost
                                      during the      during the payment   composite for the   composite for the
            Scenario              performance period   adjustment period  payment adjustment  payment adjustment
                                   (for example, CY    (for example, CY       period (for         period (for
                                         2015)               2017)         example, CY 2017)   example, CY 2017)
----------------------------------------------------------------------------------------------------------------
a. Continued ACO participation--  TIN A is part of    TIN A is part of    Based on ACO 1's    Average cost.
 TIN A participates in ACO 1       ACO 1.              ACO 1.              quality data from
 during both the performance and                                           the performance
 payment adjustment periods.                                               period (for
                                                                           example, CY 2015.
b. Joining an existing ACO and    TIN A is not part   TIN A is part of    Based on ACO 1's    Average cost.
 not from another ACO--TIN A was   of any ACO and      ACO 1.              quality data from
 not part of any ACO during the    ACO 1 exists                            the performance
 performance period, but          OR................                       period (for
 participates in ACO 1 during     TIN A is not part                        example, CY 2015.
 the payment adjustment period     of ACO 2 and ACO
 (ACO 1 existed in the             1 exists.
 performance period)
OR..............................
Joining an existing ACO from
 another ACO--TIN A participated
 in ACO 2 during the performance
 period, but is part of ACO 1
 during the payment adjustment
 period (ACO 1 existed in the
 performance period).
c. Joining a new ACO as a new     TIN A and ACO 1     TIN A is part of    Average quality...  Average cost.
 TIN--TIN A participates in ACO    did not exist       ACO 1.
 1 during the payment adjustment  OR................
 period (ACO 1 and TIN A did not  TIN A is not part
 exist in the performance          of any ACO and
 period)                           ACO 1 did not
OR..............................   exist.
Joining a new ACO and not from    OR................
 another ACO--TIN A was not part  TIN A is part of
 of any ACO during the             ACO 2 and ACO 1
 performance period, but           did not exist..
 participates in ACO 1 during
 the payment adjustment period
 (ACO 1 did not exist in the
 performance period) OR Joining
 a new ACO from another ACO--TIN
 A participated in ACO 2 during
 the performance period, but is
 part of ACO 1 during the
 payment adjustment period (ACO
 1 did not exist in the
 performance period).
d. Dropping out of an ACO--TIN A  TIN A is part of    TIN A is not part   Average quality...  Based on TIN A's
 participated in ACO 1 during      ACO 1.              of any ACO.                             cost data for the
 the performance period, but is                                                                performance
 not part of any ACO during the                                                                period using the
 payment adjustment period.                                                                    quality-tiering
                                                                                               methodology.
----------------------------------------------------------------------------------------------------------------


[[Page 40500]]

    We believe that our proposal to apply the VM to groups and solo 
practitioners that participate in ACOs under the Shared Savings Program 
is appropriate in light of the statutory requirement under section 
1848(p)(4)(B)(iii)(II) of the Act to apply the VM to all physicians and 
groups of physicians beginning not later than January 1, 2017. We 
believe our proposals, as described above, would further encourage 
groups and solo practitioners that participate in ACOs under the Shared 
Savings Program to furnish high quality care to Medicare beneficiaries 
by providing them with an opportunity to earn upward payment 
adjustments. We propose to apply the same VM, which would be calculated 
based on the policies proposed above, to all groups and solo 
practitioners, as identified by their TINs, that participate in an ACO 
under the Shared Savings Program during the payment adjustment period. 
Consequently, the same VM would also apply to the physicians and 
nonphysician eligible professionals in those groups and to the 
physicians and nonphysician eligible professionals who are solo 
practitioners that participate in the ACO during the payment adjustment 
period.
    In section III.N.4.c of this proposed rule, we discussed our 
proposal to hold groups with between 2 and 9 eligible professionals and 
solo practitioners who are in Category 1 harmless from any downward 
adjustments under the quality-tiering methodology for the CY 2017 
payment adjustment period. We propose to also hold harmless from any 
downward adjustments groups with between 2 and 9 eligible professionals 
and solo practitioners that participate in ACOs under the Shared 
Savings Program during the CY 2017 payment adjustment period based on 
their size during the performance period. We would follow our 
established process for determining group size, which is described at 
Sec.  414.1210(c). Therefore, to the extent that a quality of care 
composite can be calculated for an ACO, and the cost composite would be 
classified as ``average cost,'' groups with 10 or more eligible 
professionals participating in the Shared Savings Program would be 
subject to an upward, downward, or no payment adjustment in CY 2017, 
and groups with between 2 and 9 eligible professionals and solo 
practitioners would be subject to an upward or no payment adjustment in 
CY 2017. We also propose that groups and solo practitioners 
participating in ACOs under the Shared Savings Program would be 
eligible for the additional upward payment adjustment of +1.0x for 
caring for high-risk beneficiaries, as proposed in section III.N.4.f. 
We propose to modify Sec.  414.1210 to reflect these proposals.
(2) Physicians and Nonphysician Eligible Professionals that Participate 
in the Pioneer ACO Model, the Comprehensive Primary Care (CPC) 
Initiative, or Other Similar Innovation Center Models or CMS 
Initiatives
    Section 1115A of the Act authorizes the Innovation Center to test 
innovative payment and service delivery models to reduce Medicare, 
Medicaid, or Children's Health Insurance Program (CHIP) expenditures, 
while preserving or enhancing the quality of care furnished to 
beneficiaries under those programs. Therefore, all models tested by the 
Innovation Center would be expected to assess participating entities 
(for example, providers, ACOs, states) based on quality and cost 
performance. As noted above, we established a policy in the CY 2013 PFS 
final rule with comment period (77 FR 69313) to not apply the VM in CY 
2015 and CY 2016 to groups of physicians that are participating in the 
Pioneer ACO Model, the CPC Initiative, or in other Innovation Center 
initiatives or other CMS programs which also involve shared savings and 
where participants make substantial investments to report quality 
measures and to furnish higher quality, more efficient and effective 
healthcare.
    In section III.N.4.a. of this proposed rule, we discussed our 
proposal to apply the VM to all physicians in groups with 2 or more 
eligible professionals and to solo practitioners who are physicians 
starting in CY 2017, as required under section 1848(p)(4)(B)(iii)(II) 
of the Act. In section III.N.4.b, we discussed our proposal to also 
apply the VM starting in CY 2017 to all nonphysician eligible 
professionals in groups with 2 or more eligible professionals and to 
solo practitioners who are nonphysician eligible professionals.
    The Pioneer ACO Model and the CPC Initiative are scheduled to end 
on December 31, 2016. Therefore, the relevant performance periods for 
consideration for participants in these initiatives are CY 2015 for the 
CY 2017 VM payment adjustment period and potentially CY 2016 for the CY 
2018 VM payment adjustment period. Under the Pioneer ACO Model, an ACO 
may consist of practitioners from multiple participating groups and 
solo practitioners (as identified by their individual TIN/NPI 
combination). Thus, a group practice may consist of one or more 
eligible professionals who participate in the Pioneer ACO Model and 
other eligible professionals who do not participate in the Pioneer ACO 
Model. In the case of the CPC Initiative, a practice site may 
participate in the model even if one or more other practice sites that 
use the same TIN does not participate. Beginning with the CY 2017 
payment adjustment period, we propose to apply the VM to physicians and 
nonphysician eligible professionals in groups with 2 or more eligible 
professionals and to physicians and nonphysician eligible professionals 
who are solo practitioners that participate in the Pioneer ACO Model or 
the CPC Initiative during the relevant performance period in accordance 
with the policies described below.
    (a) For groups and solo practitioners that participate in the 
Pioneer ACO Model or the CPC Initiative during the performance period 
(for example, CY 2015) and do not participate in the Shared Savings 
Program or other similar Innovation Center models or CMS initiatives 
during the payment adjustment period (for example, CY 2017), we propose 
to calculate the quality of care composite score for the VM for the 
payment adjustment period based on the following three scenarios:
    Scenario 1: If a group participates in the PQRS as a group practice 
under the PQRS GPRO during the performance period and meets the 
criteria for satisfactory reporting of data on PQRS quality measures 
via one of the GPRO reporting mechanisms, as proposed in section III.K 
of this proposed rule, for the respective PQRS payment adjustment, then 
we propose to use the PQRS GPRO data to calculate the group's quality 
of care composite for the VM for the payment adjustment period. We 
propose to apply the same quality of care composite to all eligible 
professionals that bill under the group's TIN during the payment 
adjustment period. We also propose that if the group registers for GPRO 
for the performance period and does not meet the criteria for 
satisfactory reporting of data on PQRS quality measures via one of the 
GPRO reporting mechanisms for the respective PQRS payment adjustment, 
then the group would fall in Category 2. As discussed in section 
III.N.4.f of this proposed rule, for CY 2017, we are proposing to apply 
a -4.0 percent VM to groups with two or more eligible professionals and 
solo practitioners that fall in Category 2. In this case, all eligible 
professionals that bill under the group's TIN during the payment 
adjustment period would be subject to the -4.0% VM payment adjustment. 
We seek comment on this proposal.

[[Page 40501]]

    Scenario 2: In the case of a group that does not report under the 
PQRS GPRO during the performance period and includes one or more 
eligible professionals that participate in a Pioneer ACO under the 
Pioneer ACO Model or in the CPC Initiative during the performance 
period, as well as other eligible professionals that do not participate 
in these models, we propose that if at least 50 percent of all eligible 
professionals in the group satisfactorily report quality data to CMS 
for the performance period, then we would calculate a quality of care 
composite using the quality-tiering methodology and the satisfactorily 
reported data on the PQRS quality measures submitted by the eligible 
professionals in the group as individuals under PQRS. For purposes of 
this scenario, by ``satisfactorily report quality data to CMS,'' we 
mean that at least 50 percent of the group's eligible professionals 
meet the criteria for satisfactory reporting of data on PQRS quality 
measures as individuals for the PQRS payment adjustment during the 
performance period, or in lieu of satisfactory reporting, 
satisfactorily participate in a PQRS-qualified clinical data registry 
for the PQRS payment adjustment during the performance period, or 
successfully report quality data to the Pioneer ACO Model or the CPC 
Initiative during the performance period. The quality of care composite 
would be calculated using satisfactorily reported data on the PQRS 
quality measures submitted by the eligible professionals in the group 
as individuals under PQRS regardless of whether or not the eligible 
professionals who report the data participate in the Pioneer ACO Model 
or the CPC Initiative. We propose to assign the group a quality of care 
composite that is the higher of ``average quality'' or the group's 
actual classification as determined under the quality-tiering 
methodology. We propose to apply the same quality of care composite to 
all eligible professionals that bill under the group's TIN during the 
payment adjustment period, regardless of whether they participated in 
the model during the performance period.
    We propose that if less than 50 percent of all eligible 
professionals in the group satisfactorily report quality data to CMS 
for the performance period, then this group would fall in Category 2. 
In other words, less than 50 percent of the group's eligible 
professionals meet the criteria for satisfactory reporting of data on 
PQRS quality measures as individuals for the PQRS payment adjustment 
during the performance period, or in lieu of satisfactory reporting, 
satisfactorily participate in a PQRS-qualified clinical data registry 
for the PQRS payment adjustment during the performance period, or 
successfully report quality data to the Pioneer ACO Model or the CPC 
Initiative during the performance period. As discussed in section 
III.N.4.f of this proposed rule, for CY 2017, we are proposing to apply 
a -4.0 percent VM to groups with two or more eligible professionals and 
solo practitioners that fall in Category 2. In this case, all eligible 
professionals that bill under the group's TIN during the payment 
adjustment period would be subject to the -4.0 percent VM payment 
adjustment, regardless of whether they participated in the model during 
the performance period.
    We note the eligible professionals in these groups that participate 
in the Pioneer ACO Model or the CPC Initiative submit quality data 
under their respective model. However, we do not believe that we can 
reasonably use the quality data submitted under these models in the 
calculation of the quality of care composite for these groups. At this 
time, we are unable to operationally integrate the data from these 
models with the value modifier program due to systems constraints and 
the unique nature of reporting for participants in these models. We 
also do not believe that we are able to predict how the quality data 
submitted under these models would affect the group's quality 
composite. We note that because these models are at the forefront of 
innovation, we believe that the eligible professionals participating in 
these models would have higher quality performance. For example, 
results from the first performance year of the Pioneer ACO Model 
demonstrated that Pioneer ACOs performed better than published rates in 
fee-for-service for 15 clinical quality measures for which comparable 
data are available. On readmissions, 25 of 32 Pioneer ACOs generated 
lower risk-adjusted readmission rates for their aligned beneficiaries 
than the benchmark rate for all Medicare fee-for-service beneficiaries. 
On clinical quality measures that assess hypertension control for 
Medicare beneficiaries, the median rate among Pioneer ACOs with 
diabetes was 68 percent compared to 55 percent as measured in adult 
diabetic population in 10 managed care plans across 7 states from 2000 
to 2001. Also, on clinical quality measures that assess low density 
lipoprotein (LDL) control for patients with diabetes, the median rate 
among Pioneer ACOs for low density lipoprotein control among 
beneficiaries with diabetes was 57 percent compared to 48 percent in an 
adult diabetic population in 10 managed care plans across 7 states from 
2000 to 2001. For these reasons, we seek to ensure that these groups 
are at least considered to have ``average'' quality, as reflected in 
our proposal above.
    We also considered two alternatives to our proposal above for 
Scenario 2. First, we considered assigning these groups a quality 
composite of ``average quality'' without consideration of any PQRS 
quality data that may be available to calculate quality measure scores 
and a quality composite. We did not believe it would be appropriate to 
make such a proposal because we believe it is important to use data on 
quality, to the extent practicable, to determine a group's quality 
composite. Consequently, we believe it is appropriate to use the data 
that is reported under PQRS to calculate a quality composite for these 
groups. We recognize that some eligible professionals in these groups 
may not submit quality data under PQRS and that these professionals are 
likely to participate in a model and submit quality data through that 
model. Since we believe that participants in these models tend to 
perform better than average with regard to quality as described above, 
we believe that it is possible that we would underestimate a group's 
quality performance if we consider PQRS data only. Accordingly, to the 
extent that the data reported under PQRS by individual eligible 
professionals in the group results in a quality composite that is one 
standard deviation above average (that is, ``high quality''), we 
believe it is likely that this composite would increase by including 
data (were it available) from the eligible professionals who report 
quality data through the model. Therefore, we believe that it would be 
inappropriate to reduce a quality composite from ``high quality'' to 
``average quality.'' Second, we considered assigning a quality 
composite of ``average quality'' to groups where less than 50 percent 
of all eligible professionals in the group meet the criteria for 
satisfactory reporting of data on PQRS quality measures as individuals 
for the PQRS payment adjustment during the performance period, or in 
lieu of satisfactory reporting, satisfactorily participate in a PQRS-
qualified clinical data registry for the PQRS payment adjustment during 
the performance period, because we would not have quality data for more 
than half of the group that we could use to calculate a quality 
composite. Similarly, if at least 50 percent of all

[[Page 40502]]

eligible professionals in a group satisfactorily report or participate 
under PQRS as individuals, we considered using their PQRS quality data 
to calculate a quality composite for the group and applying the 
quality-tiering methodology to classify the group as high, average, or 
low quality. We did not believe it would be appropriate to make such a 
proposal. We do not believe that it is appropriate to classify a group 
as ``low quality'' when more than half of the eligible professionals in 
the group successfully report quality data (whether it be under PQRS or 
a model), even though we do not believe at this time we can reasonably 
use quality data reported through a model for the VM, because we 
believe that participants in these models would likely increase the 
group's quality performance were their data included. In other words, 
to the extent that the data reported under PQRS by individual eligible 
professionals in the group results in a quality composite that is ``low 
quality'' (that is, one standard deviation below average), we believe 
that this could be in part because the quality data of higher 
performing eligible professionals reported through the model would not 
be included in the calculation of the quality composite. Therefore, we 
believe it would be inappropriate to classify such a group as lower 
than ``average quality.''
    We note that it may be possible for a group to have a 
disproportionately large number of eligible professionals participating 
in the Pioneer ACO Model or the CPC Initiative. In this instance, our 
proposal would result in the use of the PQRS data reported by a 
relatively small number of eligible professionals who are not 
participating in the model to determine the quality of care composite 
that would apply to all eligible professionals in the group. We seek 
comment on the degree to which this situation occurs and the 
appropriateness of our proposal in this instance, as well as 
alternatives to our proposal.
    Scenario 3: If a group does not report under the PQRS GPRO during 
the performance period, consists entirely of eligible professionals 
that participate in the Pioneer ACO Model or the CPC Initiative, and 
successfully reports quality data to CMS under the model for the 
performance period, then we propose to classify the group's quality of 
care composite as ``average quality.'' We also propose to classify as 
``average quality'' the quality of care composite of solo practitioners 
that participate in the Pioneer ACO Model or the CPC Initiative and 
successfully report quality data to CMS under the model for the 
performance period. We propose to apply the same quality of care 
composite to all eligible professionals that bill under the group's TIN 
during the payment adjustment period. These eligible professionals 
submit quality data to the Pioneer ACO Model or the CPC Initiative; 
however, as discussed above, we do not believe that we can reasonably 
use the model quality data in the calculation of the quality of care 
composite for these groups and solo practitioners. Additionally, we 
propose that if the group or the solo practitioner does not 
successfully report quality data to CMS under the model for the 
performance period, then the group or solo practitioner would fall in 
Category 2. As discussed in section III.N.4.f of this proposed rule, 
for CY 2017, we are proposing to apply a -4.0 percent VM to groups with 
two or more eligible professionals and solo practitioners that fall in 
Category 2. In this case, all eligible professionals that bill under 
the group's TIN during the payment adjustment period would be subject 
to the -4.0% VM payment adjustment.
    As an alternative to this proposal, we considered assigning 
``average quality'' to groups and solo practitioners that do not 
successfully report quality data to CMS under the model for the 
performance period. We believe that this policy would not have been 
consistent with our proposal to consider groups and solo practitioners 
that do not satisfactorily report or participate for PQRS as Category 2 
as described in section III.N.4.c of this proposed rule. We also 
believe that assigning ``average quality'' may inadvertently create 
incentives for groups and solo practitioners to not report quality data 
to CMS under these models.
    For groups and solo practitioners that participate in the Pioneer 
ACO Model or the CPC Initiative during the performance period (for 
example, CY 2015) and do not participate in the Shared Savings Program 
or other similar Innovation Center models or CMS initiatives during the 
payment adjustment period (for example, CY 2017) (Scenarios 1 through 3 
above), we propose to apply the quality-tiering methodology to 
calculate the cost composite for the VM for the payment adjustment 
period based on a group's and solo practitioner's performance on the 
cost measures, as identified under Sec.  414.1235, during the 
performance period. We believe that it would be appropriate to apply 
the quality-tiering methodology to calculate the cost composite because 
these groups and solo practitioners are no longer part of the Pioneer 
ACO Model or the CPC during the payment adjustment period, and their 
cost benchmarks would be calculated only under the VM during the 
payment adjustment period.
    (b) For groups and solo practitioners that participate in the 
Pioneer ACO Model or the CPC Initiative during the performance period 
(for example, CY 2015) and participate in other similar Innovation 
Center models or CMS initiatives during the payment adjustment period 
(for example, CY 2017) (but not the Shared Savings Program), we propose 
to calculate the quality of care composite based on the three scenarios 
described above to the extent we are able. We recognize that these 
three scenarios might not be applicable to all of the various models 
and initiatives that may be developed in future years. We also propose 
to classify the cost composite for these groups and solo practitioners 
for the payment adjustment period as ``average cost.'' We believe that, 
for groups and solo practitioners participating in other similar models 
or initiatives during the payment adjustment period, calculating a cost 
composite based on the quality-tiering methodology may create two sets 
of standards for evaluating their cost performance; therefore, we 
believe it would be appropriate to assign ``average cost'' to these 
groups and solo practitioners. If we believe a different approach to 
applying the VM would be appropriate for a new model or initiative, we 
intend to address it in future rulemaking.
    (c) For groups and solo practitioners that participate in the 
Pioneer ACO Model or the CPC Initiative during the performance period 
(for example, CY 2015) and participate in an ACO under the Shared 
Savings Program during the payment adjustment period (for example, CY 
2017), we propose to calculate the quality of care composite score 
based on the quality-tiering methodology using quality data submitted 
by the Shared Savings Program ACO from the performance period. For 
groups and solo practitioners that participate in a Shared Savings 
Program ACO during the payment adjustment period that did not exist 
during the performance period, we propose to classify the quality of 
care composite as ``average quality'' for the payment adjustment period 
because we would not have quality data from the performance period for 
that ACO. We also propose to classify the cost composite for the VM as 
``average cost'' for groups and solo practitioners that participate in 
a Shared Savings Program ACO during the payment adjustment period. As 
we stated in section III.N.4.d.1 of this proposed rule, we believe that 
there are significant

[[Page 40503]]

differences in the methodology for calculating the cost benchmarks 
under the VM and the Shared Savings Program. Consequently, we believe 
that any attempt to calculate the cost composite for groups and solo 
practitioners participating in the Shared Savings Program using the 
quality-tiering methodology would create two sets of standards for ACOs 
for their cost performance, which would be inappropriate and confusing. 
These proposals are consistent with the proposals for participants in 
the Shared Savings Program described above.
    (d) In section III.N.4.c of this proposed rule, we discussed our 
proposal to hold groups with between 2 and 9 eligible professionals and 
solo practitioners who are in Category 1 harmless from any downward 
adjustments under the quality-tiering methodology for the CY 2017 
payment adjustment period. We propose to also hold harmless from any 
downward adjustments for CY 2017 groups with between 2 and 9 eligible 
professionals, where one or more eligible professionals participate in 
the Pioneer ACO Model or the CPC, and solo practitioners that 
participate in the Pioneer ACO Model or the CPC during the CY 2015 
performance period based on their size during the performance period. 
We would follow our established process for determining group size, 
which is described at Sec.  414.1210(c). We also propose that groups 
where one or more eligible professionals participate in the Pioneer 
Model or the CPC during the performance period, and solo practitioners 
participating in the Pioneer ACO Model or the CPC during the 
performance period would be eligible for the additional upward payment 
adjustment of +1.0x for caring for high-risk beneficiaries, as proposed 
in section III.N.4.f below.
    (e) In addition, beginning with the CY 2017 payment adjustment 
period, we propose to apply the VM to physicians and nonphysician 
eligible professionals in groups with 2 or more eligible professionals 
and to physicians and nonphysician eligible professionals who are solo 
practitioners that participate in other similar Innovation Center 
models or CMS initiatives during the relevant performance period for 
the VM in accordance with the proposed policies described above for the 
Pioneer ACO Model and the CPC Initiative. We are unable to propose an 
exhaustive list of the models and initiatives that would fall under 
this category because many of them have not yet been developed. In 
addition, it is possible that the timeline for implementing some of 
these new models and initiatives may not coincide with the timeline for 
rulemaking for the VM. To address these issues, we propose to rely on 
the following general criteria to determine whether a model or 
initiative would fall in this ``other similar'' category and thus would 
be subject to the policies described above for the Pioneer ACO Model 
and the CPC Initiative: (1) The model or initiative evaluates the 
quality of care and/or requires reporting on quality measures; (2) the 
model or initiative evaluates the cost of care and/or requires 
reporting on cost measures; (3) participants in the model or initiative 
receive payment based at least in part on their performance on quality 
measures and/or cost measures; (4) potential for conflict between the 
methodologies used for the VM and the methodologies used for the model 
or initiative; or (5) other relevant factors specific to a model or 
initiative. We note that a model or initiative would not have to 
satisfy or address all of these criteria to be included in this ``other 
similar'' category. Rather, the criteria are intended to serve as a 
general framework for evaluating models and initiatives with regard to 
the application of the VM to groups and solo practitioners that 
participate. We are seeking public comment on these or other 
appropriate criteria for determining which models or initiatives we 
should classify as ``other similar'' models, for the purposes of 
applying the policies for the Pioneer ACO Model and the CPC Initiative 
described above.
    As noted above, we recognize that the policies we finalize for the 
Pioneer ACO Model and the CPC Initiative after consideration of public 
comments might not be applicable to all of the various models and 
initiatives that could be developed in future years. If we believe a 
different approach to applying the VM would be appropriate for a model 
or initiative, we intend to address it in future rulemaking. In 
addition, if we were to determine that a model or initiative falls 
under this ``other similar'' category based on the general criteria 
that we finalize after consideration of public comments, we propose to 
provide notice to participants in the model or initiative through the 
methods of communication that are typically used for the model or 
initiative.
    We propose to modify Sec.  414.1210 to reflect all of these 
proposals.
    A summary of these proposals is shown in Table 57 using TIN A as an 
example.

Table 57--Summary of Proposed Policies for Groups and Solo Practitioners With Pioneer ACO Model, CPC Initiative,
                or Other Similar Innovation Center Model or CMS Initiative Participation Changes
----------------------------------------------------------------------------------------------------------------
                                                                                                   TIN's cost
                                      TIN's status        TIN's status        TIN's quality    composite for the
                                       during the      during the payment   composite for the       payment
             Scenario              performance period   adjustment period  payment adjustment  adjustment period
                                    (for example, CY    (for example, CY       period (for      (for example, CY
                                          2015)               2017)         example, CY 2017)        2017)
----------------------------------------------------------------------------------------------------------------
a. Scenario 1: TIN A participates  TIN A is part of    TIN A is not part   If TIN A            If TIN A
 in the Pioneer ACO Model or the    the Pioneer ACO     of the Shared       satisfactorily      satisfactorily
 CPC Initiative during the          Model or CPC        Savings Program     reports under       reports under
 performance period, but does not   Initiative.         or other similar    PQRS GPRO for the   PQRS GPRO for
 participate in the Shared                              Innovation Center   performance         the performance
 Savings Program or other similar                       models or CMS       period: Based on    period:
 Innovation Center models or CMS                        initiatives.        TIN A's PQRS GPRO  Based on TIN A's
 initiatives during the payment                                             data.               cost data for
 adjustment period (some or all                                            If TIN A does not    the performance
 of the eligible professionals in                                           satisfactorily      period using the
 TIN A participate in the Pioneer                                           report under PQRS   quality-tiering
 ACO Model or CPC Initiative)                                               GPRO for the        methodology.
AND..............................                                           performance
TIN A registers for PQRS GPRO for                                           period: TIN A
 the performance period.                                                    falls in Category
                                                                            2 and a -4.0
                                                                            percent VM is
                                                                            applied to the
                                                                            TIN in the
                                                                            payment
                                                                            adjustment period.

[[Page 40504]]

 
a. Scenario 2: TIN A participates  TIN A is part of    TIN A is not part   If at least 50      If at least 50
 in the Pioneer ACO Model or the    the Pioneer ACO     of the Shared       percent of all      percent of all
 CPC Initiative during the          Model or CPC        Savings Program     eligible            eligible
 performance period, but does not   Initiative.         or other similar    professionals in    professionals in
 participate in the Shared                              Innovation Center   TIN A               TIN A
 Savings Program or other similar                       models or CMS       satisfactorily      satisfactorily
 Innovation Center models or CMS                        initiatives.        report quality      report quality
 initiatives during the payment                                             data to CMS for     data to CMS for
 adjustment period (TIN A has one                                           the performance     the performance
 or more eligible professionals                                             period: Higher of   period: Based on
 that participate in the Pioneer                                            ``average           TIN A's cost
 ACO Model or CPC Initiative and                                            quality'' or the    data for the
 other non-participating eligible                                           actual              performance
 professionals)                                                             classification      period using the
AND..............................                                           under the quality-  quality-tiering
For the performance period: TIN A                                           tiering             methodology
 does not report under PQRS GPRO;                                           methodology based
 some eligible professionals                                                on PQRS quality
 report quality data to the                                                 data submitted by
 Pioneer ACO Model or the CPC                                               the eligible
 Initiative and others report                                               professionals as
 under PQRS as individuals.                                                 individuals.
                                                                           If less than 50
                                                                            percent of all
                                                                            eligible
                                                                            professionals in
                                                                            TIN A
                                                                            satisfactorily
                                                                            report quality
                                                                            data to CMS for
                                                                            the performance
                                                                            period: TIN A
                                                                            falls in Category
                                                                            2 and a -4.0
                                                                            percent VM is
                                                                            applied to the
                                                                            TIN in the
                                                                            payment
                                                                            adjustment period.
a. Scenario 3: TIN A participates  TIN A is part of    TIN A is not part   If TIN A            If TIN A
 in the Pioneer ACO Model or the    the Pioneer ACO     of the Shared       successfully        successfully
 CPC Initiative during the          Model or CPC        Savings Program     reports quality     reports quality
 performance period, but does not   Initiative.         or other similar    data to the         data to the
 participate in the Shared                              Innovation Center   Pioneer ACO Model   Pioneer ACO
 Savings Program or other similar                       models or CMS       or CPC Initiative   Model or CPC
 Innovation Center models or CMS                        initiatives.        for the             Initiative for
 initiatives during the payment                                             performance         the performance
 adjustment period (all eligible                                            period: Average     period: Based on
 professionals in TIN A                                                     quality.            TIN A's cost
 participate in the Pioneer ACO                                            If TIN A does not    data for the
 Model or CPC Initiative)                                                   successfully        performance
AND..............................                                           report quality      period using the
For the performance period: TIN A                                           data to the         quality-tiering
 does not report under PQRS GPRO;                                           Pioneer ACO Model   methodology.
 TIN A reports quality data to                                              or CPC Initiative
 the Pioneer ACO Model or the CPC                                           for the
 Initiative.                                                                performance
                                                                            period: TIN A
                                                                            falls in Category
                                                                            2 and a -4.0
                                                                            percent VM is
                                                                            applied to the
                                                                            TIN in the
                                                                            payment
                                                                            adjustment period.
b. TIN A participates in the       TIN A is part of    TIN A is part of    Based on Scenarios  Average cost.
 Pioneer ACO Model or the CPC       the Pioneer ACO     other similar       1-3.
 Initiative during the              Model or CPC        Innovation Center
 performance period and             Initiative.         models or CMS
 participates in other similar                          initiatives (but
 Innovation Center models or CMS                        not the Shared
 initiatives during the payment                         Savings Program).
 adjustment period (but not the
 Shared Savings Program).
c. TIN A participates in the       TIN A is part of    TIN A is part of    Based on the        Average cost.
 Pioneer ACO Model or the CPC       the Pioneer ACO     an ACO under the    Shared Savings
 Initiative during the              Model or CPC        Shared Savings      Program ACO's
 performance period and             Initiative.         Program.            quality data for
 participates in an ACO under the                                           the performance
 Shared Savings Program during                                              period.
 the payment adjustment period.                                            If the ACO did not
                                                                            exist in the
                                                                            performance
                                                                            period: Average
                                                                            quality.
----------------------------------------------------------------------------------------------------------------

e. Clarification Regarding Treatment of Non-Assigned Claims for Non-
Participating Physicians
    As indicated earlier, section 1848(p) of the Act requires the 
Secretary to establish a payment modifier that provides for 
differential payment to a physician or a group of physicians under the 
PFS based upon the quality of care furnished compared to cost during a 
performance period. In the CY 2013 PFS final rule with comment period 
in which we established a number of key policies for the VM, we stated 
that we had received few comments on our proposal to apply the VM to 
the Medicare paid amounts for the items and services billed under the 
PFS so that beneficiary cost-sharing or coinsurance would not be 
affected (77 FR 69309). These commenters generally agreed with the 
proposal to apply the VM to the Medicare paid amounts for the items and 
services billed under the PFS at the TIN level so that beneficiary 
cost-sharing would not be affected. Therefore, we finalized this policy 
and accordingly established a definition of the VM at Sec.  414.1205 
that was consistent with the proposal and the statutory requirement to 
provide for differential payment to a physician or a group of 
physicians under the fee schedule based upon the quality of care 
furnished compared to cost during a performance period.
    We continue to believe it is important that beneficiary cost-
sharing not be affected by the VM and that the VM should be applied to 
the amount that Medicare pays to physicians. However, in previous 
rulemaking, we did not directly address whether the VM would be applied 
to both assigned services for which Medicare makes payment to the 
physician, and to non-assigned services for which Medicare makes 
payment to the beneficiary. Participating physicians are those who have 
signed an agreement in accordance with section 1842(h)(1) of the Act to 
accept payment on an assignment-related basis for all items and 
services furnished to Medicare beneficiaries. In other words, 
participating physicians agree to accept the Medicare approved amount 
as payment in full and to charge the beneficiary only the Medicare 
deductible and coinsurance amount. In contrast, non-participating 
physicians

[[Page 40505]]

have not signed an agreement to accept assignment for all services 
furnished to beneficiaries, but they can still choose to accept 
assignment for individual services. If they choose not to accept 
assignment for particular services non-participating physicians can 
charge the beneficiary more than the Medicare-approved amount, up to a 
limit called the ``limiting charge.'' The limiting charge is defined at 
section 1848(g)(2)(C) of the Act as 115 percent of the recognized 
payment amount for nonparticipating physicians. In contrast, if a non-
participating physician chooses to accept assignment for a service, 
they receive payment from Medicare at the approved amount for non-
participating physicians, which is 95 percent of the fee schedule 
amount. Over 99 percent of Medicare physician services are billed on an 
assignment related basis by both participating and non-participating 
physicians and other suppliers, with the remainder billed as non-
assigned services by non-participating physicians and other suppliers.
    For assigned claims, Medicare makes payment directly to the 
physician. In accordance with section 1848(p)(1) of the Act and the 
regulations at Sec.  414.1205 and Sec.  414.1210(a), the VM should be 
applied to assigned claims. However, for non-assigned claims, the 
limiting charge (the amount that the physician can bill a beneficiary 
for a non-assigned service) would not be affected if the VM were 
applied to the claim. This is so, because for non-assigned claims, 
application of the VM would not affect the limiting charge. Rather, 
Medicare makes payment for the non-assigned services directly to the 
beneficiary and the physician receives all payment for a non-assigned 
service directly from the beneficiary. If the VM were to be applied to 
non-assigned services, then the Medicare payment to a beneficiary would 
be increased when the VM is positive and decreased when the VM is 
negative. The application of the VM to non-assigned claims would 
therefore directly affect beneficiaries and not physicians, contrary to 
our intent as discussed in previous rulemaking (77 FR 69309). On that 
basis, we are proposing to clarify that we would apply the VM only to 
assigned services and not to non-assigned services starting in CY 2015. 
We do not expect this proposed clarification, to not apply the VM to 
non-assigned claims, would be likely to affect a physician's decision 
to participate in Medicare or to otherwise accept assignment for a 
particular claim. This is because the amount that a provider is 
entitled to receive from the beneficiary for non-assigned claims is not 
affected by whether or not the VM is applicable to non-assigned claims. 
Additionally, to the extent our proposal to expand application of the 
VM to nonphysician eligible professionals is finalized, we would 
likewise apply the VM only to services billed on an assignment-related 
basis and not to non-assigned services. We invite comments on this 
proposed clarification.
f. Payment Adjustment Amount
    Section 1848(p) of the Act does not specify the amount of payment 
that should be subject to the adjustment for the VM; however, section 
1848(p)(4)(C) of the Act requires the VM be implemented in a budget 
neutral manner. Budget neutrality means that payments will increase for 
some groups and solo practitioners based on high performance and 
decrease for others based on low performance, but the aggregate 
expected amount of Medicare spending in any given year for physician 
and nonphysician eligible professional services paid under the Medicare 
PFS will not change as a result of application of the VM.
    In the CY 2014 PFS final rule with comment period (78 FR 74770-
74771), we adopted a policy to apply a maximum downward adjustment of 
2.0 percent for the CY 2016 VM for those groups of physicians with 10 
or more eligible professionals that are in Category 2 and for groups of 
physicians with 100 or more eligible professionals that are in Category 
1 and are classified as low quality/high cost groups.
    Although we received comments suggesting that larger payment 
adjustments (both upward and downward) would be necessary to more 
strongly encourage quality improvements, we finalized our proposed 
adjustments as we believed they better aligned with our goal to 
gradually phase in the VM. However, we noted that as we gained 
experience with our VM methodologies, we would likely consider ways to 
increase the amount of payment at risk (77 FR 69324).
    We received comments on the CY 2014 proposed rule suggesting that 
the payment adjustment under the VM must be of significant weight to 
drive physician behavior toward achieving high quality and low cost 
care and that the VM should represent a larger percentage of physician 
payments under the PFS that should be increased incrementally from 2.0 
percent and subject to annual review. In our response to these 
comments, we agreed that the amount of payment at risk should be higher 
to incentivize physicians to provide high quality and low cost care. We 
also stated that our experience under PQRS has shown us that a 1.0 or 
2.0 percent incentive payment has not produced widespread participation 
in the PQRS. Thus, we believed that we needed to increase the amount of 
payment at risk for the CY 2016 VM to incentivize physicians and groups 
of physicians to report PQRS data, which will be used to calculate the 
VM. We continue to believe this is the appropriate strategy.
    We believe that we can increase the amount of payment at risk 
because we can reliably apply a VM to groups with 2 or more eligible 
professionals and to solo practitioners in CY 2017 as discussed in 
section III.N.4.a. of this proposed rule. Therefore, we propose to 
increase the downward adjustment under the VM by doubling the amount of 
payment at risk from 2.0 percent in CY 2016 to 4.0 percent in CY 2017. 
That is, for CY 2017, we propose to apply a -4.0 percent VM to groups 
with two or more eligible professionals and solo practitioners that 
fall in Category 2. In addition, we propose to increase the maximum 
downward adjustment under the quality-tiering methodology in CY 2017 to 
-4.0 percent for groups and solo practitioners classified as low 
quality/high cost and to set the adjustment to -2.0 percent for groups 
and solo practitioners classified as either low quality/average cost or 
average quality/high cost. However, as discussed in section III.N.4.c 
of this proposed rule, we are proposing to hold solo practitioners and 
groups with between 2 and 9 eligible professionals that are in Category 
1 harmless from any downward adjustments under the quality-tiering 
methodology in CY 2017. Consistent with our previous policy, we note 
that the estimated funds derived from the application of the downward 
adjustments to groups and solo practitioners in Category 1 and Category 
2 would be available to all groups and solo practitioners eligible for 
VM upward payment adjustments. Based on an estimate of these funds, we 
also propose to increase the maximum upward adjustment under the 
quality-tiering methodology in CY 2017 to +4.0x for groups and solo 
practitioners classified as high quality/low cost and to set the 
adjustment to +2.0x for groups and solo practitioners classified as 
either average quality/low cost or high quality/average cost. We also 
propose to continue to provide an additional upward payment adjustment 
of +1.0x to groups and solo practitioners that care for high-risk 
beneficiaries (as evidenced by the average HCC risk score of the

[[Page 40506]]

attributed beneficiary population). Lastly, we propose to revise Sec.  
414.1270 and Sec.  414.1275(c) and (d) to reflect the proposed changes 
to the payment adjustments under the VM for the CY 2017 payment 
adjustment period. Table 58 shows the proposed quality-tiering payment 
adjustment amounts for CY 2017 (based on CY 2015 performance). We 
believe that the proposed VM amount differentiates between cost and 
quality tiers in a more meaningful way. We seek comments on all of 
these proposals.

                             Table 58--CY 2017 Value-Based Payment Modifier Amounts
----------------------------------------------------------------------------------------------------------------
                                                                                      Average
                          Cost/quality                              Low quality       quality      High quality
----------------------------------------------------------------------------------------------------------------
Low Cost........................................................           +0.0%          +2.0x*          +4.0x*
Average Cost....................................................           -2.0%           +0.0%          +2.0x*
High Cost.......................................................           -4.0%           -2.0%           +0.0%
----------------------------------------------------------------------------------------------------------------
* Groups and solo practitioners eligible for an additional +1.0x if reporting Physician Quality Reporting System
  quality measures and average beneficiary risk score is in the top 25 percent of all beneficiary risk scores.

    Consistent with the policy adopted in the CY 2013 PFS final rule 
with comment period (77 FR 69324 through 69325), the upward payment 
adjustment factor (``x'' in Table 58) would be determined after the 
performance period has ended based on the aggregate amount of downward 
payment adjustments.
    In section III.N.4.d of this proposed rule, we discussed our 
proposal to apply the VM to physicians and nonphysician eligible 
professionals in groups with 2 or more eligible professionals and to 
physicians and nonphysician eligible professionals who are solo 
practitioners that participate in the Shared Savings Program during the 
payment adjustment period beginning with the CY 2017 payment adjustment 
period. We will have the final list of ACOs that will participate in 
the Shared Savings Program during the payment adjustment period and 
their participant TINs during the late fall prior to the beginning of 
the payment adjustment period (for example, the late fall of CY 2016 
prior to the CY 2017 payment adjustment period). We note that this 
final list may not be available until after the beginning of the 
payment adjustment period. Therefore, we propose to calculate 
preliminary payment adjustment factors (``x'' in Table 58) prior to the 
beginning of the payment adjustment period, and subsequently finalize 
the payment adjustment factors after the final ACO participation list 
is completed. We note that the final payment adjustment factors may be 
updated depending on the outcome of the informal inquiry process 
described later at section III.N.4.i of this proposed rule.
g. Performance Period
    In the CY 2014 PFS final rule with comment period (78 FR 74771 
through 74772), we adopted a policy that performance on quality and 
cost measures in CY 2015 will be used to calculate the VM that is 
applied to items and services for which payment is made under the PFS 
during CY 2017. Accordingly, we added a new paragraph (c) to Sec.  
414.1215 to indicate that the performance period is CY 2015 for VM 
adjustments made in the CY 2017 payment adjustment period.
h. Quality Measures
    In the CY 2014 PFS final rule with comment period (78 FR 74773), we 
aligned our policies for the VM for CY 2016 with the PQRS group 
reporting mechanisms available to groups in CY 2014 and the PQRS 
reporting mechanisms available to individual eligible professionals in 
CY 2014, such that data that groups submit for quality reporting 
purposes through any of the PQRS group reporting mechanisms in CY 2014 
and the data that individual eligible professionals submit through any 
of the individual PQRS reporting mechanisms in CY 2014 will be used for 
calculating the quality composite under the quality-tiering approach 
for the VM for CY 2016. Moreover, all of the quality measures for which 
groups and individual eligible professionals are eligible to report 
under the PQRS in CY 2014 would be used to calculate the VM for a group 
for CY 2016 to the extent the group or individual eligible 
professionals in the group submits data on such measure in accordance 
with our 50 percent threshold policy (78 FR 74768). We also noted that, 
in accordance with 42 CFR 414.1230, three additional quality measures 
(outcome measures) for groups subject to the VM will continue to be 
included in the quality measures used for the VM in CY 2016. These 
measures are: (1) A composite of rates of potentially preventable 
hospital admissions for heart failure, chronic obstructive pulmonary 
disease, and diabetes; (2) a composite rate of potentially preventable 
hospital admissions for dehydration, urinary tract infections, and 
bacterial pneumonia; and (3) rates of an all-cause hospital 
readmissions measure (77 FR 69315).
    PQRS Reporting Mechanisms: We believe it is important to continue 
to align the VM for CY 2017 with the requirements of the PQRS, because 
quality reporting is a necessary component of quality improvement. We 
also seek not to place an undue burden on eligible professionals to 
report such data. Accordingly, for purposes of the VM for CY 2017, we 
propose to include all of the PQRS GPRO reporting mechanisms available 
to groups for the PQRS reporting periods in CY 2015 and all of the PQRS 
reporting mechanisms available to individual eligible professionals for 
the PQRS reporting periods in CY 2015. These reporting mechanisms are 
described in Tables 21 through 49 of this proposed rule.
    PQRS Quality Measures: We propose to use all of the quality 
measures that are available to be reported under these various PQRS 
reporting mechanisms to calculate a group or solo practitioner's VM in 
CY 2017 to the extent that a group (or individual eligible 
professionals in the group, in the case of the ``50 percent option'') 
or solo practitioner submits data on these measures. These PQRS quality 
measures are described in Tables 21 through 49 of this proposed rule. 
We propose that groups with 2 or more eligible professionals would be 
able to elect to include the patient experience of care measures 
collected through the PQRS CAHPS survey for CY 2015 in their VM for CY 
2017. We propose to continue to include the three outcome measures in 
Sec.  414.1230 in the quality measures used for the VM in CY 2017. For 
groups that are assessed under the ``50 percent option'' for the CY 
2017 VM, we propose to calculate the group's performance rate for each 
measure reported by at least one eligible professional in the group by 
combining the weighted average of the performance rates of those 
eligible professionals

[[Page 40507]]

reporting the measure. We also propose for groups that are assessed 
under the ``50 percent option'' for the CY 2017 VM to classify a 
group's quality composite score as ``average'' under the quality-
tiering methodology, if all of the eligible professionals in the group 
satisfactorily participate in a PQRS qualified clinical data registry 
in CY 2015 and we are unable to receive quality performance data for 
those eligible professionals. If some EPs in the group report data 
using a qualified clinical data registry and we are unable to obtain 
the data, but other EPs in the group report data using the other PQRS 
reporting mechanisms for individuals, we would calculate the group's 
score based on the reported performance data that we obtain through 
those other mechanisms.
    While we finalized policies in the CY 2014 final rule with comment 
period that would allow groups assessed under the ``50 percent option'' 
to have data reported through a PQRS qualified clinical data registry 
in CY 2014 used for the purposes of their CY 2016 VM to the extent 
performance data are available, we note that we did not directly 
address the issue of how we would compute the national benchmarks for 
these measures. Under Sec.  414.1250, benchmarks for the quality of 
care measures for the VM are the national mean of a measure's 
performance rate during the year prior to the performance period. In 
the CY 2013 PFS final rule with comment period (77 FR 69322), we 
finalized a policy that if a measure is new to the PQRS, we will be 
unable to calculate a benchmark, and hence, performance on that measure 
will not be included in the quality composite. Therefore, we propose to 
apply that policy to measures reported through a PQRS qualified 
clinical data registry that are new to PQRS (in other words, measures 
that were not previously reported in PQRS). Performance on these 
measures would not be included in the quality composite for the VM 
because we would not be able to calculate benchmarks for them. This 
proposal would apply beginning with the measures reported through a 
PQRS qualified clinical data registry in the CY 2014 performance period 
for the CY 2016 payment adjustment period. We welcome public comment on 
this proposal.
    In addition, we note that the PQRS administrative claims option, 
which included the outcome measures described in Sec.  414.1230, is no 
longer available through PQRS. We propose to clarify that we calculate 
benchmarks for those outcome measures described in Sec.  414.1230 using 
the national mean for a measure's performance rate during the year 
prior to the performance period in accordance with our regulation at 
Sec.  414.1250(b). We welcome public comment on this proposal.
    Quality Measures for the Shared Savings Program: Starting with the 
CY 2017 payment adjustment period, as described in section III.M. of 
this proposed rule, we are proposing to apply the value modifier to 
groups and solo practitioners participating in ACOs under the Shared 
Savings Program. To do so, we are proposing quality measures and 
benchmarks for use with these groups and solo practitioners and seek 
public comment on these proposals. We describe these proposals more 
fully below.
    With regard to quality measures, we note that there is substantial 
overlap between those used to evaluate the ACOs under the Shared 
Savings Program and those used in the PQRS program and for the value 
modifier payment adjustment. For the CY 2017 payment adjustment period 
and subsequent payment adjustment periods, to determine a quality 
composite for the VM for groups and solo practitioners that participate 
in an ACO under the Shared Savings Program, we propose to use the 
quality measures that are identical for the two programs. Specifically, 
for the CY 2017 payment adjustment period, we propose to use the PQRS 
GPRO Web Interface measures and the outcome measure described at Sec.  
414.1230(c) to determine a quality composite for groups and solo 
practitioners that participate in an ACO under the Shared Savings 
Program. Because the ACO GPRO measures and PQRS GPRO Web Interface 
measures will be the same in CY 2015, we propose to use the GPRO Web 
Interface measures reported by ACOs in determining the quality 
composite for groups and solo practitioners participating in ACOs under 
the Shared Savings Program in CY 2017. Utilizing these GPRO Web 
Interface measures in this regard further encourages successful quality 
reporting for Shared Savings Program ACOs. Additionally, we believe 
that the all-cause hospital readmissions measure as calculated for ACOs 
under the Shared Savings Program is equivalent to the all-cause 
hospital readmissions measure we have adopted for the VM at Sec.  
414.1230(c) and therefore propose use of that measure as calculated for 
ACOs in the Shared Savings Program for inclusion in the VM for the CY 
2017 payment adjustment period. We note that the outcome measures 
described at Sec.  414.1230(a) and Sec.  414.1230(b) are not currently 
calculated for ACOs in the Shared Savings Program. These measures are: 
(1) A composite of rates of potentially preventable hospital admissions 
for heart failure, chronic obstructive pulmonary disease, and diabetes; 
and (2) a composite rate of potentially preventable hospital admissions 
for dehydration, urinary tract infections, and bacterial pneumonia. 
Because we have no experience with these measures in the Shared Savings 
Program, at this time, we do not propose to include these measures for 
groups and solo practitioners that participate in ACOs under that 
program. We propose to modify the regulations at Sec.  412.1230 
accordingly.
    To determine the standardized scores for these quality measures 
proposed for use with those participating in ACOs under the Shared 
Savings Program, we propose to apply the benchmark policy for quality 
measures for the VM as described under Sec.  414.1250. Under this 
policy, the VM benchmarks are the national mean for a measure's 
performance rate based on data from one year prior to the performance 
period. We believe these are the appropriate benchmarks to use when 
determining the value modifier payment adjustment because they are the 
same benchmarks used to determine the value modifier payment adjustment 
for other groups and solo practitioners. In other words, we believe 
that use of the VM benchmarks creates a fair comparison among groups 
and solo practitioners because we believe it is appropriate to evaluate 
those that participate in Shared Savings Program ACOs on the same basis 
as those that do not participate in the Shared Savings Program for the 
purpose of the value modifier. We believe the VM benchmarks are 
appropriate because they include all PQRS data available (77 FR 69322), 
including quality data used for the Shared Savings Program. On the 
other hand, while the Shared Savings Program develops benchmarks using 
all available Medicare fee-for-service data, we do not believe it is 
appropriate to use the benchmarks from the Shared Savings Program to 
determine standardized scores for the quality composite of the value 
modifier payment adjustment. We do not think this enables a fair 
comparison among groups and solo practitioners subject to the value 
modifier because the Shared Savings Program benchmarks are calculated 
using a different methodology, providing gradients by decile (including 
the median) of national performance based on data two years prior to 
the performance period (78 FR 74759 through 74760).

[[Page 40508]]

    All-Cause Hospital Readmissions Measure: In addition, since 
finalizing the all-cause hospital readmissions measure described at 
Sec.  414.1230(c) in the CY 2013 PFS final rule with comment (77 FR 
69285), we have investigated the reliability of this measure. According 
to Sec.  414.1265, to calculate a composite score for a quality or cost 
measure based on claims, a group subject to the VM must have 20 or more 
cases for that measure. Furthermore, according to Sec.  414.1265(a), if 
a group has fewer than 20 cases for a measure in a performance period, 
that measure is excluded from its domain and the remaining measures in 
the domain are given equal weight.
    Based on 2012 data, we found that the average reliability for the 
all-cause hospital readmissions measure was below 0.4 when we examined 
groups with fewer than 200 cases but exceeded 0.4 for groups with 200 
or more cases. Although we do not believe there is a universal 
consensus concerning a minimum reliability t