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/ 2008
/ November
/ Wednesday, November 19, 2008
[Federal Register: November 19, 2008 (Volume 73, Number 224)]
[Rules and Regulations]
[Page 69725-70237]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19no08-14]
[[Page 69725]]
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Part II
Book 2 of 2 Books
Pages 69725-70238
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 405, 409, et al.
Medicare Program; Payment Policies Under the Physician Fee Schedule and
Other Revisions to Part B for CY 2009; E-Prescribing Exemption for
Computer-Generated Facsimile Transmissions; and Payment for Certain
Durable Medical Equipment, Prosthetics, Orthotics, and Supplies
(DMEPOS); Final Rule
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 405, 409, 410, 411, 413, 414, 415, 423, 424, 485, 486,
and 489
[CMS-1403-FC] [CMS-1270-F2]
RINs 0938-AP18, 0938-AN14
Medicare Program; Payment Policies Under the Physician Fee
Schedule and Other Revisions to Part B for CY 2009; E-Prescribing
Exemption for Computer-Generated Facsimile Transmissions; and Payment
for Certain Durable Medical Equipment, Prosthetics, Orthotics, and
Supplies (DMEPOS)
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule with comment period.
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SUMMARY: This final rule with comment period implements changes to the
physician fee schedule and other Medicare Part B payment policies to
ensure that our payment systems are updated to reflect changes in
medical practice and the relative value of services. It also finalizes
the calendar year (CY) 2008 interim relative value units (RVUs) and
issues interim RVUs for new and revised codes for CY 2009. In addition,
as required by the statute, it announces that the physician fee
schedule update is 1.1 percent for CY 2009, the preliminary estimate
for the sustainable growth rate for CY 2009 is 7.4 percent, and the
conversion factor (CF) for CY 2009 is $36.0666. This final rule with
comment period also implements or discusses certain provisions of the
Medicare Improvements for Patients and Providers Act of 2008 (MIPPA).
(See the Table of Contents for a listing of the specific issues
addressed in this rule.)
DATES: Effective Date: This final rule with comment period is effective
on January 1, 2009 except for amendments to Sec. 410.62 and Sec.
411.351 which are effective July 1, 2009.
Comment Date: Comments will be considered if we receive them at one
of the addresses provided below, no later than 5 p.m. e.s.t. on
December 29, 2008.
ADDRESSES: In commenting, please refer to file code CMS-1403-FC.
Because of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of four ways (no duplicates,
please):
1. Electronically. You may submit electronic comments on this
regulation to http://www.regulations.gov. Follow the instructions for
``Comment or Submission'' and enter the filecode to find the document
accepting comments.
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-1403-FC, P.O. Box 8013,
Baltimore, MD 21244-8013.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-1403-FC, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
4. By hand or courier. If you prefer, you may deliver (by hand or
courier) your written comments (one original and two copies) before the
close of the comment period to either of the following addresses:
7500 Security Boulevard, Baltimore, MD 21244-1850; or
Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW.,
Washington, DC 20201.
(Because access to the interior of the HHH 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.)
Comments mailed to the addresses indicated as appropriate for hand
or courier delivery may be delayed and received after the comment
period.
Submission of comments on paperwork requirements. You may submit
comments on this document's paperwork requirements by mailing your
comments to the addresses provided at the end of the ``Collection of
Information Requirements'' section in this document.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Pam West, (410) 786-2302, for issues related to practice expense.
Rick Ensor, (410) 786-5617, for issues related to practice expense
methodology.
Stephanie Monroe, (410) 786-6864, for issues related to malpractice
RVUs.
Esther Markowitz, (410) 786-4595, for issues related to telehealth
services.
Craig Dobyski, (410) 786-4584, for issues related to geographic
practice cost indices.
Ken Marsalek, (410) 786-4502, for issues related to the multiple
procedure payment reduction for diagnostic imaging.
Catherine Jansto, (410) 786-7762, or Cheryl Gilbreath, (410) 786-
5919, for issues related to payment for covered outpatient drugs and
biologicals.
Edmund Kasaitis, (410) 786-0477, or Bonny Dahm, (410) 786-4006, for
issues related to the Competitive Acquisition Program (CAP) for Part B
drugs.
Corinne Axelrod, (410) 786-5620, for issues related to Health
Professional Shortage Area Bonus Payments.
Henry Richter, (410) 786-4562, for issues related to payments for
end-stage renal disease facilities.
Lisa Grabert, (410) 786-6827, for issues related to hospital-
acquired conditions and the Physician Resource Use Feedback Program.
August Nemec, (410) 786-0612, for issues related to independent
diagnostic testing facilities; enrollment issues; and the revision to
the ``Appeals of CMS or CMS contractor Determinations When a Provider
or Supplier Fails To Meet the Requirements for Medicare Billing
Privileges'' final rule.
Lisa Ohrin, (410) 786-4565, Kristin Bohl, (410) 786-8680, or Don
Romano, (410) 786-1401, for issues related to anti-markup provisions
and physician self-referral (incentive payment and shared savings
programs).
Diane Stern, (410) 786-1133, for issues related to the quality
reporting system for physician payment for CY 2009.
Andrew Morgan, (410) 786-2543, for issues related to the e-
prescribing exemption for computer-generated fax transmissions.
Terri Harris, (410) 786-6830, for issues related to payment for
comprehensive outpatient rehabilitation facilities (CORFs).
Lauren Oviatt, (410) 786-4683, for issues related to CORF
conditions of coverage.
Trisha Brooks, (410) 786-4561, for issues related to personnel
standards for portable x-ray suppliers.
David Walczak, (410) 786-4475, for issues related to beneficiary
signature for nonemergency ambulance transport services.
Jean Stiller, (410) 786-0708, for issues related to the prohibition
concerning providers of sleep tests
Mark Horney, (410) 786-4554, for issues related to the solicitation
for comments and data pertaining to physician organ retrieval services.
Regina Walker-Wren, (410) 786-9160, for information concerning
educational
[[Page 69727]]
requirements for nurse practitioners and clinical nurse specialists.
Randy Throndset, (410) 786-0131, for information concerning
physician certification and recertification for Medicare home health
services.
William Larson, (410) 786-4639, for coverage issues related to the
initial preventive physical examination.
Cathleen Scally, (410) 786-5714, for payment issues related to the
initial preventive physical examination.
Dorothy Shannon, (410) 786-3396, for issues related to speech
language pathology.
Kendra Hedgebeth, (410) 786-4644, or Gina Longus, (410) 786-1287,
for issues related to low vision aids.
Christopher Molling, (410) 786-6399, or Anita Greenberg, (410) 786-
4601, for issues related to the repeal to transfer of title for oxygen
equipment.
Karen Jacobs, (410) 786-2173, or Hafsa Bora, (410) 786-7899, for
issues related to the therapeutic shoes fee schedule.
Diane Milstead, (410) 786-3355, or Gaysha Brooks, (410) 786-9649,
for all other issues.
SUPPLEMENTARY INFORMATION:
Submitting Comments: We welcome comments from the public on the
following issues:
The Exception for Incentive Payment and Shared Savings
Programs (Sec. 411.357(x)) in section II.N.1. of this final rule with
comment period;
Sections 131(c), 144(b), and 149 of the MIPPA as described
in sections III.C., III.J., and III.M. of this final rule with comment
period.
Interim Relative Value Units (RVUs) for selected codes
identified in Addendum C;
Information on pricing for items in Tables 2 through 5;
Issues related to the Physician Resource Use Feedback
Program described in section II.S.6. of this final rule with comment
period; and
The physician self-referral designated health services
(DHS) codes listed in Tables 29, 30, and 31. You can assist us by
referencing the file code [CMS-1403-FC] and the section heading on
which you choose to comment.
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,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an appointment to view public comments,
phone 1-800-743-3951.
Table of Contents
To assist readers in referencing sections contained in this
preamble, we are providing a table of contents. Some of the issues
discussed in this preamble affect the payment policies, but do not
require changes to the regulations in the Code of Federal Regulations
(CFR). Information on the regulation's impact appears throughout the
preamble, and therefore, is not exclusively in section XVI. of this
final rule with comment period.
I. Background
A. Development of the Relative Value System
1. Work RVUs
2. Practice Expense Relative Value Units (PE RVUs)
3. Resource-Based Malpractice RVUs
4. Refinements to the RVUs
5. Adjustments to RVUs are Budget Neutral
B. Components of the Fee Schedule Payment Amounts
C. Most Recent Changes to Fee Schedule
II. Provisions of the Proposed Regulation
A. Resource-Based Practice Expense (PE) Relative Value Units
(RVUs)
1. Current Methodology
2. PE Proposals for CY 2009
B. Geographic Practice Cost Indices (GPCIs): Locality Discussion
C. Malpractice RVUs (TC/PC issue)
D. Medicare Telehealth Services
E. Specific Coding Issues Related to Physician Fee Schedule
1. Payment for Preadministration-Related Services for
Intravenous Infusion of Immune Globulin
2. Multiple Procedure Payment Reduction for Diagnostic Imaging
3. HCPCS Code for Prostate Saturation Biopsies
F. Part B Drug Payment
1. Average Sales Price (ASP) Issues
2. Competitive Acquisition Program (CAP) Issues
G. Application of the HPSA Bonus Payment
H. Provisions Related to Payment for Renal Dialysis Services
Furnished by End-Stage Renal Disease (ESRD) Facilities
I. Independent Diagnostic Testing Facility (IDTF) Issues
J. Physician and Nonphysician Practitioner (NPP) Enrollment
Issues
K. Amendment to the Exemption for Computer-Generated Facsimile
(FAX) Transmissions From the National Council for Prescription Drug
Programs (NCPDP) SCRIPT Standard for Transmitting Prescription and
Certain Prescription-Related Information for Part D Covered Drugs
Prescribed for Part D Eligible Individuals
L. Comprehensive Outpatient Rehabilitation Facilities (CORF) and
Rehabilitation Agency Issues
M. Technical Corrections for Therapy-Related Issues
N. Physician Self-Referral and Anti-Markup Issues
1. Exception for Incentive Payment and Shared Savings Programs
(Sec. 411.357(x))
2. Changes to Reassignment Rules Related to Diagnostic Tests
(Anti-Markup Provisions)
O1. Physician Quality Reporting Initiative
O2. Electronic Prescribing (E-Prescribing) Incentive Program
P. Discussion of Chiropractic Services Demonstration
Q. Educational Requirements for Nurse Practitioners and Clinical
Nurse Specialists
R. Portable X-Ray Issue
S. Other Issues
1. Physician Certification (G0180) and Recertification (G0179)
for Medicare-Covered Home Health Services Under a Home Health Plan
of Care (POC) in the Home Health Prospective Payment System (HH PPS)
2. Prohibition Concerning Payment of Continuous Positive Airway
Pressure (CPAP) Devices
3. Beneficiary Signature for Nonemergency Ambulance Transport
Services
4. Solicitation of Comments and Data Pertaining to Physician
Organ Retrieval Services
5. Revision to the ``Appeals of CMS or CMS contractor
Determinations When a Provider or Supplier Fails To Meet the
Requirements for Medicare Billing Privileges'' Final Rule
6. Physician Resource Use Feedback Program
T. Electronic Prescribing (E-Prescribing) Incentive Program
III. Medicare Improvements for Patients and Providers Act of 2008
(MIPPA) Provisions
A. Section 101: Improvements to Coverage of Preventive Services
B. Section 131: Physician Payment, Efficiency, and Quality
Improvements
C. Section 131(c): Physician Resource Use Feedback Program
D. Section 132: Incentives for Electronic Prescribing
E. Section 133(b): Expanding Access to Primary Care Services
F. Section 134: Extension of Floor on Medicare Work Geographic
Adjustment Under the Medicare Physician Fee Schedule
G. Section 136: Extension of Treatment of Certain Physician
Pathology Services Under Medicare
H. Section 141: Extension of Exceptions Process for Medicare
Therapy Caps
[[Page 69728]]
I. Section 143: Speech-Language Pathology Services
J. Section 144(b): Repeal of Transfer of Title for Oxygen
Equipment
K. Section 145: Clinical Laboratory Tests
L. Section 146: Improved Access to Ambulance Services
M. Section 149: Adding Certain Entities as Originating Sites for
Payment of Telehealth Services
N. Section 153: Renal Dialysis Provisions
IV. Potentially Misvalued Codes Under PFS
A. Valuing Services Under the Physician Fee Schedule
B. Requested Approaches for the AMA RUC To Utilize
C. AMA RUC Review of Potentially Misvalued Codes
V. Refinement of Relative Value Units for Calendar Year 2009 and
Response to Public Comments on Interim Relative Value Units for 2008
A. Summary of Issues Discussed Related to the Adjustment of
Relative Value Units
B. Process for Establishing Work Relative Value Units for the
Physician Fee Schedule
C. Interim 2008 Codes
D. Establishment of Interim Work Relative Value Units for New
and Revised Physician's Current Procedural Terminology (CPT) Codes
and New Healthcare Common Procedure Coding System Codes (HCPCS) for
2009 (Includes Table Titled ``AMA RUC Recommendations and CMS'
Decisions for New and Revised 2009 CPT Codes'')
E. Discussion of Codes and AMA RUC Recommendations
F. Additional Coding Issues
G. Establishment of Interim PE RVUs for New and Revised
Physician's Current Procedural Terminology (CPT) Codes and New
Healthcare Common Procedure Coding System (HCPCS) Codes for 2009
VI. Physician Self-Referral Prohibition: Annual Update to the List
of CPT/HCPCS Codes
A. General
B. Speech-Language Pathology Services
C. Annual Update to the Code List
VII. Physician Fee Schedule Update for CY 2009
A. Physician Fee Schedule Update
B. The Percentage Change in the Medicare Economic Index (MEI)
C. The Update Adjustment Factor (UAF)
VIII. Allowed Expenditures for Physicians' Services and the
Sustainable Growth Rate (SGR)
A. Medicare Sustainable Growth Rate
B. Physicians' Services
C. Preliminary Estimate of the SGR for 2009
D. Revised Sustainable Growth Rate for 2008
E. Calculation of 2009, 2008, and 2007 Sustainable Growth Rates
IX. Anesthesia and Physician Fee Schedule Conversion Factors for CY
2009
A. Physician Fee Schedule Conversion Factor
B. Anesthesia Conversion Factor
X. Telehealth Originating Site Facility Fee Payment Amount Update
XI. Payment for Certain Durable Medical Equipment, Prosthetics,
Orthotics, and Supplies (DMEPOS)--Services Excluded From Coverage
A. Low Vision Aid Exclusion
B. Replacement of Reasonable Charge Methodology by Fee Schedules
for Therapeutic Shoes
XII. Provisions of the Final Rule
XIII. Waiver of Proposed Rulemaking and Delay in Effective Date
XIV. Collection of Information Requirements
XV. Response to Comments
XVI. Regulatory Impact Analysis
Regulation Text
Addendum A--Explanation and Use of Addendum B
Addendum B--Relative Value Units and Related Information Used in
Determining Medicare Payments for CY 2009
Addendum C--Codes With Interim RVUs
Addendum D--2009 Geographic Adjustment Factors (GAFs)
Addendum E--2009 Geographic Practice Cost Indices (GPCIs) by State
and Medicare Locality
Addendum F--Multiple Procedure Payment Reduction Code List
Addendum G--CY 2009 ESRD Wage Index for Urban Areas Based on CBSA
Labor Market Areas
Addendum H--CY 2009 ESRD Wage Index Based on CBSA Labor Market Areas
for Rural Areas
Addendum I--CPT/HCPCS Imaging Codes Defined by Section 5102(b) of
the DRA
Addendum J--List of CPT/HCPCS Codes Used To Define Certain
Designated Health Services Under Section 1877 of the Social Security
Act
Acronyms
In addition, because of the many organizations and terms to which
we refer by acronym in this final rule with comment period, we are
listing these acronyms and their corresponding terms in alphabetical
order below:
ACC American College of Cardiology
ACR American College of Radiology
AFROC Association of Freestanding Radiation Oncology Centers
AHA American Heart Association
AHRQ [HHS] Agency for Healthcare Research and Quality
AIDS Acquired immune deficiency syndrome
AMA American Medical Association
AMP Average manufacturer price
AOA American Osteopathic Association
ASC Ambulatory surgical center
ASP Average sales price
ASRT American Society of Radiologic Technologists
ASTRO American Society for Therapeutic Radiology and Oncology
ATA American Telemedicine Association
AWP Average wholesale price
BBA Balanced Budget Act of 1997 (Pub. L. 105-33)
BBRA [Medicare, Medicaid and State Child Health Insurance Program]
Balanced Budget Refinement Act of 1999 (Pub. L. 106-113)
BIPA Medicare, Medicaid, and SCHIP Benefits Improvement Protection
Act of 2000 (Pub. L. 106-554)
BLS Bureau of Labor Statistics
BN Budget neutrality
CABG Coronary artery bypass graft
CAD Coronary artery disease
CAH Critical access hospital
CAHEA Committee on Allied Health Education and Accreditation
CAP Competitive acquisition program
CBSA Core-Based Statistical Area
CCHIT Certification Commission for Healthcare Information Technology
CEAMA Council on Education of the American Medical Association
CF Conversion factor
CfC Conditions for Coverage
CFR Code of Federal Regulations
CKD Chronic kidney disease
CLFS Clinical laboratory fee schedule
CMA California Medical Association
CMHC Community mental health center
CMP Civil money penalty
CMS Centers for Medicare & Medicaid Services
CNS Clinical nurse specialist
CoP Condition of participation
CORF Comprehensive Outpatient Rehabilitation Facility
CPAP Continuous positive air pressure
CPEP Clinical Practice Expert Panel
CPI Consumer Price Index
CPI-U Consumer price index for urban customers
CPT [Physicians'] Current Procedural Terminology (4th Edition, 2002,
copyrighted by the American Medical Association)
CRT Certified respiratory therapist
CSW Clinical social worker
CY Calendar year
DHS Designated health services
DME Durable medical equipment
DMEPOS Durable medical equipment, prosthetics, orthotics, and
supplies
DNP Doctor of Nursing Practice
DRA Deficit Reduction Act of 2005 (Pub. L. 109-171)
DSMT Diabetes self-management training
E/M Evaluation and management
EDI Electronic data interchange
EEG Electroencephalogram
EHR Electronic health record
EKG Electrocardiogram
EMG Electromyogram
EMTALA Emergency Medical Treatment and Active Labor Act
EOG Electro-oculogram
EPO Erythopoeitin
ESRD End-stage renal disease
FAX Facsimile
FDA Food and Drug Administration (HHS)
FFS Fee-for-service
FMS [Department of the Treasury's] Financial Management Service
FPLP Federal Payment Levy Program
FR Federal Register
GAF Geographic adjustment factor
GAO General Accounting Office
GPO Group purchasing organization
GPCI Geographic practice cost index
HAC Hospital-acquired conditions
HCPAC Health Care Professional Advisory Committee
HCPCS Healthcare Common Procedure Coding System
HCRIS Healthcare Cost Report Information System
[[Page 69729]]
HH PPS Home Health Prospective Payment System
HHA Home health agency
HHRG Home health resource group
HHS [Department of] Health and Human Services
HIPAA Health Insurance Portability and Accountability Act of 1996
(Pub. L. 104-191)
HIT Health information technology
HITSP Healthcare Information Technology Standards Panel
HIV Human immunodeficiency virus
HOPD Hospital outpatient department
HPSA Health Professional Shortage Area
HRSA Health Resources Services Administration (HHS)
ICF Intermediate care facilities
ICR Information collection requirement
IDTF Independent diagnostic testing facility
IFC Interim final rule with comment period
IPPS Inpatient prospective payment system
IRS Internal Revenue Service
IVIG Intravenous immune globulin
IWPUT Intra-service work per unit of time
JRCERT Joint Review Committee on Education in Radiologic Technology
MA Medicare Advantage
MA-PD Medicare Advantage-Prescription Drug Plans
MedCAC Medicare Evidence Development and Coverage Advisory Committee
(formerly the Medicare Coverage Advisory Committee (MCAC))
MedPAC Medicare Payment Advisory Commission
MEI Medicare Economic Index
MIEA-TRHCA Medicare Improvements and Extension Act of 2006 (that is,
Division B of the Tax Relief and Health Care Act of 2006 (TRHCA)
(Pub. L. 109-432)
MIPPA Medicare Improvements for Patients and Providers Act of 2008
(Pub. L. 110-275)
MMA Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (Pub. L. 108-173)
MMSEA Medicare, Medicaid, and SCHIP Extension Act of 2007 (Pub. L.
110-173)
MNT Medical nutrition therapy
MP Malpractice
MPPR Multiple procedure payment reduction
MQSA Mammography Quality Standards Act of 1992 (Pub. L. 102-539)
MRA Magnetic resonance angiography
MRI Magnetic resonance imaging
MS-DRG Medicare Severity-Diagnosis related group
MSA Metropolitan statistical area
NCD National Coverage Determination
NCPDP National Council for Prescription Drug Programs
NDC National drug code
NISTA National Institute of Standards and Technology Act
NP Nurse practitioner
NPDB National Practitioner Data Bank
NPI National Provider Identifier
NPP Nonphysician practitioner
NPPES National Plan and Provider Enumeration System
NQF National Quality Forum
NRC Nuclear Regulatory Commission
NTTAA National Technology Transfer and Advancement Act of 1995 (Pub.
L. 104-113)
NUBC National Uniform Billing Committee
OACT [CMS'] Office of the Actuary
OBRA Omnibus Budget Reconciliation Act
ODF Open door forum
OIG Office of Inspector General
OMB Office of Management and Budget
ONC [HHS'] Office of the National Coordinator for Health Information
Technology
OPPS Outpatient prospective payment system
OSA Obstructive Sleep Apnea
OSCAR Online Survey and Certification and Reporting
P4P Pay for performance
PA Physician assistant
PC Professional component
PCF Patient compensation fund
PDP Prescription drug plan
PE Practice expense
PE/HR Practice expense per hour
PEAC Practice Expense Advisory Committee
PECOS Provider Enrollment, Chain, and Ownership System
PERC Practice Expense Review Committee
PFS Physician Fee Schedule
PHP Partial hospitalization program
PIM [Medicare] Program Integrity Manual
PLI Professional liability insurance
POA Present on admission
POC Plan of care
PPI Producer price index
PPS Prospective payment system
PPTA Plasma Protein Therapeutics Association
PQRI Physician Quality Reporting Initiative
PRA Paperwork Reduction Act
PSA Physician scarcity areas
PSG Polysomnography
PT Physical therapy
ResDAC Research Data Assistance Center
RFA Regulatory Flexibility Act
RIA Regulatory impact analysis
RN Registered nurse
RNAC Reasonable net acquisition cost
RRT Registered respiratory therapist
RUC [AMA's Specialty Society] Relative (Value) Update Committee
RVU Relative value unit
SBA Small Business Administration
SGR Sustainable growth rate
SLP Speech-language pathology
SMS [AMA's] Socioeconomic Monitoring System
SNF Skilled nursing facility
SOR System of record
SRS Stereotactic radiosurgery
TC Technical Component
TIN Tax identification number
TRHCA Tax Relief and Health Care Act of 2006 (Pub. L. 109-432)
UPMC University of Pittsburgh Medical Center
USDE United States Department of Education
VBP Value-based purchasing
WAMP Widely available market price
I. Background
Since January 1, 1992, Medicare has paid for physicians' services
under section 1848 of the Social Security Act (the Act), ``Payment for
Physicians' Services.'' The Act requires that payments under the
physician fee schedule (PFS) be based on national uniform relative
value units (RVUs) based on the relative resources used in furnishing a
service. Section 1848(c) of the Act requires that national RVUs be
established for physician work, practice expense (PE), and malpractice
expense. Before the establishment of the resource-based relative value
system, Medicare payment for physicians' services was based on
reasonable charges.
A. Development of the Relative Value System
1. Work RVUs
The concepts and methodology underlying the PFS were enacted as
part of the Omnibus Budget Reconciliation Act (OBRA) of 1989 (Pub. L.
101-239), and OBRA 1990, (Pub. L. 101-508). The final rule, published
on November 25, 1991 (56 FR 59502), set forth the fee schedule for
payment for physicians' services beginning January 1, 1992. Initially,
only the physician work RVUs were resource-based, and the PE and
malpractice RVUs were based on average allowable charges.
The physician work RVUs established for the implementation of the
fee schedule in January 1992 were developed with extensive input from
the physician community. A research team at the Harvard School of
Public Health developed the original physician work RVUs for most codes
in a cooperative agreement with the Department of Health and Human
Services (DHHS). In constructing the code-specific vignettes for the
original physician work RVUs, Harvard worked with panels of experts,
both inside and outside the Federal government, and obtained input from
numerous physician specialty groups.
Section 1848(b)(2)(B) of the Act specifies that the RVUs for
anesthesia services are based on RVUs from a uniform relative value
guide. We established a separate conversion factor (CF) for anesthesia
services, and we continue to utilize time units as a factor in
determining payment for these services. As a result, there is a
separate payment methodology for anesthesia services.
We establish physician work RVUs for new and revised codes based on
recommendations received from the American Medical Association's (AMA)
Specialty Society Relative Value Update Committee (RUC).
2. Practice Expense Relative Value Units (PE RVUs)
Section 121 of the Social Security Act Amendments of 1994 (Pub. L.
103-432),
[[Page 69730]]
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
physician's service beginning in 1998. We were to consider general
categories of expenses (such as office rent and wages of personnel, but
excluding malpractice expenses) comprising PEs.
Section 4505(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L.
105-33), amended section 1848(c)(2)(C)(ii) of the Act to delay
implementation of the resource-based PE RVU system until January 1,
1999. In addition, section 4505(b) of the BBA provided for a 4-year
transition period from charge-based PE RVUs to resource-based RVUs.
We established the resource-based PE RVUs for each physician's
service in a final rule, published November 2, 1998 (63 FR 58814),
effective for services furnished in 1999. Based on the requirement to
transition to a resource-based system for PE over a 4-year period,
resource-based PE RVUs did not become fully effective until 2002.
This resource-based system was based on two significant sources of
actual PE data: the Clinical Practice Expert Panel (CPEP) data; and the
AMA's Socioeconomic Monitoring System (SMS) data. The CPEP data were
collected from panels of physicians, practice administrators, and
nonphysicians (for example, registered nurses (RNs)) nominated by
physician specialty societies and other groups. The CPEP panels
identified the direct inputs required for each physician's service in
both the office setting and out-of-office setting. We have since
refined and revised these inputs based on recommendations from the RUC.
The AMA's SMS data provided aggregate specialty-specific information on
hours worked and PEs.
Separate PE RVUs are established for procedures that can be
performed in both a nonfacility setting, such as a physician's office,
and a facility setting, such as a hospital outpatient department. The
difference between the facility and nonfacility RVUs reflects the fact
that a facility typically receives separate payment from Medicare for
its costs of providing the service, apart from payment under the PFS.
The nonfacility RVUs reflect all of the direct and indirect PEs of
providing a particular service.
Section 212 of the Balanced Budget Refinement Act of 1999 (BBRA)
(Pub. L. 106-113) directed the Secretary of Health and Human Services
(the Secretary) to establish a process under which we accept and use,
to the maximum extent practicable and consistent with sound data
practices, data collected or developed by entities and organizations to
supplement the data we normally collect in determining the PE
component. On May 3, 2000, we published the interim final rule (65 FR
25664) that set forth the criteria for the submission of these
supplemental PE survey data. The criteria were modified in response to
comments received, and published in the Federal Register (65 FR 65376)
as part of a November 1, 2000 final rule. The PFS final rules 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 CY 2007 PFS final rule with comment period (71 FR 69624), we
revised the methodology for calculating PE RVUs beginning in CY 2007
and provided for a 4-year transition for the new PE RVUs under this new
methodology. We will continue to evaluate this policy and proposed
necessary revisions through future rulemaking.
3. Resource-Based Malpractice (MP) RVUs
Section 4505(f) of the BBA amended section 1848(c) of the Act
requiring us to implement resource-based malpractice (MP) RVUs for
services furnished on or after 2000. The resource-based MP RVUs were
implemented in the PFS final rule published November 2, 1999 (64 FR
59380). The MP RVUs were based on malpractice insurance premium data
collected from commercial and physician-owned insurers from all the
States, the District of Columbia, and Puerto Rico.
4. Refinements to the RVUs
Section 1848(c)(2)(B)(i) of the Act requires that we review all
RVUs no less often than every 5 years. The first 5-Year Review of the
physician work RVUs was published on November 22, 1996 (61 FR 59489)
and was effective in 1997. The second 5-Year Review was published in
the CY 2002 PFS final rule with comment period (66 FR 55246) and was
effective in 2002. The third 5-Year Review of physician work RVUs was
published in the CY 2007 PFS final rule with comment period (71 FR
69624) and was effective on January 1, 2007. (Note: Additional codes
relating to the third 5-Year Review of physician work RVUs were
addressed in the CY 2008 PFS final rule with comment period (72 FR
66360).)
In 1999, the AMA's RUC established the Practice Expense Advisory
Committee (PEAC) for the purpose of refining the direct PE inputs.
Through March 2004, the PEAC provided recommendations to CMS for over
7,600 codes (all but a few hundred of the codes currently listed in the
AMA's Current Procedural Terminology (CPT) codes). As part of the CY
2007 PFS final rule with comment period (71 FR 69624), we implemented a
new methodology for determining resource-based PE RVUs and are
transitioning this over a 4-year period.
In the CY 2005 PFS final rule with comment period (69 FR 66236), we
implemented the first 5-Year Review of the MP RVUs (69 FR 66263).
5. Adjustments to RVUs are Budget Neutral
Section 1848(c)(2)(B)(ii)(II) of the Act provides that adjustments
in RVUs for a year may not cause total PFS payments to differ by more
than $20 million from what they would have been if the adjustments were
not made. In accordance with section 1848(c)(2)(B)(ii)(II) of the Act,
if adjustments to RVUs cause expenditures to change by more than $20
million, we make adjustments to ensure that expenditures do not
increase or decrease by more than $20 million.
As explained in the CY 2007 PFS final rule with comment period (71
FR 69624), due to the increase in work RVUs resulting from the third 5-
Year Review of physician work RVUs, we applied a separate budget
neutrality (BN) adjustor to the work RVUs for services furnished during
2007 and 2008. This approach is consistent with the method we used to
make BN adjustments to reflect the changes in the PE RVUs.
Section 133(b) of the MIPPA amends section 1848(c)(2)(B) of the Act
to specify that, instead of continuing to apply the BN adjustor for the
5-Year Review to work RVUs, the BN adjustment must be applied to the CF
for years beginning with CY 2009. Further discussion of this MIPPA
provision as it relates to the CY 2009 PFS can be found in sections
III. and IX. of this final rule with comment period.
B. Components of the Fee Schedule Payment Amounts
To calculate the payment for every physician's service, the
components of the fee schedule (physician work, PE, and MP RVUs) are
adjusted by a geographic practice cost index (GPCI). The GPCIs reflect
the relative costs of physician work, PE, and malpractice insurance in
an area compared to the national average costs for each component.
RVUs are converted to dollar amounts through the application of a
CF, which
[[Page 69731]]
is calculated by CMS' Office of the Actuary (OACT).
The formula for calculating the Medicare fee schedule payment
amount for a given service and fee schedule area can be expressed as:
Payment = [(RVU work x GPCI work) + (RVU PE x GPCI PE) + (RVU
malpractice x GPCI malpractice)] x CF.
C. Most Recent Changes to the Fee Schedule
The CY 2008 PFS final rule with comment period (72 FR 66222)
addressed certain provisions of Division B of the Tax Relief and Health
Care Act of 2006--Medicare Improvements and Extension Act of 2006 (Pub.
L. 109-432) (MIEA-TRHCA), and made other changes to Medicare Part B
payment policy to ensure that our payment systems are updated to
reflect changes in medical practice and the relative value of services.
The CY 2008 PFS final rule with comment period also discussed
refinements to resource-based PE RVUs; GPCI changes; malpractice RVUs;
requests for additions to the list of telehealth services; several
coding issues including additional codes from the 5-Year Review;
payment for covered outpatient drugs and biologicals; the competitive
acquisition program (CAP); clinical lab fee schedule issues; payment
for end-stage renal dialysis (ESRD) services; performance standards for
facilities; expiration of the physician scarcity area (PSA) bonus
payment; conforming and clarifying changes for comprehensive outpatient
rehabilitation facilities (CORFs); a process for updating the drug
compendia; physician self-referral issues; beneficiary signature for
ambulance transport services; durable medical equipment (DME) update;
the chiropractic services demonstration; a Medicare economic index
(MEI) data change; technical corrections; standards and requirements
related to therapy services under Medicare Parts A and B; revisions to
the ambulance fee schedule; the ambulance inflation factor for CY 2008;
and an amendment to the e-prescribing exemption for computer-generated
facsimile transmissions.
We also finalized the calendar year (CY) 2007 interim RVUs and
issued interim RVUs for new and revised procedure codes for CY 2008.
In accordance with section 1848(d)(1)(E)(i) of the Act, we also
announced that the PFS update for CY 2008 is -10.1 percent, the
preliminary estimate for the sustainable growth rate (SGR) for CY 2008
is -0.1 percent and the CF for CY 2008 is $34.0682. However, subsequent
to publication of the CY 2008 PFS final rule with comment period,
section 101(a) of the Medicare, Medicaid, and SCHIP Extension Act of
2007 (Pub. L. 110-173) (MMSEA) was enacted on December 29, 2007 and
provided for a 0.5 percent update to the conversion factor for the
period beginning January 1, 2008 and ending June 30, 2008. For the
first half of 2008 (that is, January through June), the Medicare PFS
conversion factor was $38.0870. In the absence of legislation, the PFS
conversion factor for the second half of 2008 would have been $34.0682,
as announced in the PFS final rule with comment period for CY 2008.
However, as a result of the enactment of the Medicare Improvements for
Patients and Providers Act of 2008 (Pub. L. 110-275) (MIPPA), the
Medicare PFS conversion factor remained at $38.0870 for the remaining
portion of 2008 (July through December).
II. Provisions of the Final Rule With Comment Period
In response to the CY 2009 PFS proposed rule (73 FR 38502) we
received approximately 4,100 timely public comments. These included
comments from individual physicians, health care workers, professional
associations and societies, manufacturers and Congressmen. The majority
of the comments addressed proposals related to independent diagnostic
testing facilities, anti-markup, prohibition concerning providers of
sleep tests, and the general impact of the proposed rule on specific
specialties. To the extent that comments were outside the scope of the
proposed rule, they are not addressed in this final rule with comment
period.
A. Resource-Based Practice Expense (PE) Relative Value Units (RVUs)
Practice expense (PE) is the portion of the resources used in
furnishing the service that reflects the general categories of
physician and practitioner expenses, such as office rent and personnel
wages but excluding malpractice expenses, as specified in section
1848(c)(1)(B) of the Act.
Section 121 of the Social Security Amendments of 1994 (Pub. L. 103-
432), enacted on October 31, 1994, required CMS to develop a
methodology for a resource-based system for determining PE RVUs for
each physician's service. Until that time, PE RVUs were based on
historical allowed charges. This legislation stated that the revised PE
methodology must consider the staff, equipment, and supplies used in
the provision of various medical and surgical services in various
settings beginning in 1998. The Secretary has interpreted this to mean
that Medicare payments for each service would be based on the relative
PE resources typically involved with furnishing the service.
The initial implementation of resource-based PE RVUs was delayed
from January 1, 1998, until January 1, 1999, by section 4505(a) of the
BBA. In addition, section 4505(b) of the BBA required that the new
payment methodology be phased in over 4 years, effective for services
furnished in CY 1999, and fully effective in CY 2002. The first step
toward implementation of the statute was to adjust the PE values for
certain services for CY 1998. Section 4505(d) of the BBA required that,
in developing the resource-based PE RVUs, the Secretary must--
Use, to the maximum extent possible, generally-accepted
cost accounting principles that recognize all staff, equipment,
supplies, and expenses, not solely those that can be linked to specific
procedures and actual data on equipment utilization.
Develop a refinement method to be used during the
transition.
Consider, in the course of notice and comment rulemaking,
impact projections that compare new proposed payment amounts to data on
actual physician PE.
In CY 1999, we began the 4-year transition to resource-based PE
RVUs utilizing a ``top-down'' methodology whereby we allocated
aggregate specialty-specific practice costs to individual procedures.
The specialty-specific PEs were derived from the American Medical
Association's (AMA's) Socioeconomic Monitoring Survey (SMS). In
addition, under section 212 of the BBRA, we established a process
extending through March 2005 to supplement the SMS data with data
submitted by a specialty. The aggregate PEs for a given specialty were
then allocated to the services furnished by that specialty on the basis
of the direct input data (that is, the staff time, equipment, and
supplies) and work RVUs assigned to each CPT code.
For CY 2007, we implemented a new methodology for calculating PE
RVUs. Under this new methodology, we use the same data sources for
calculating PE, but instead of using the ``top-down'' approach to
calculate the direct PE RVUs, under which the aggregate direct and
indirect costs for each specialty are allocated to each individual
service, we now utilize a ``bottom-up'' approach to calculate the
direct costs. Under the ``bottom up'' approach, we determine the direct
PE by adding the costs of the resources (that is, the clinical staff,
equipment, and supplies) typically required to provide each service.
The
[[Page 69732]]
costs of the resources are calculated using the refined direct PE
inputs assigned to each CPT code in our PE database, which are based on
our review of recommendations received from the AMA's Relative Value
Update Committee (RUC). For a more detailed explanation of the PE
methodology see the June 29, 2006 proposed notice (71 FR 37242) and the
CY 2007 PFS final rule with comment period (71 FR 69629).
1. Current Methodology
a. Data Sources for Calculating Practice Expense
The AMA's SMS survey data and supplemental survey data from the
specialties of cardiothoracic surgery, vascular surgery, physical and
occupational therapy, independent laboratories, allergy/immunology,
cardiology, dermatology, gastroenterology, radiology, independent
diagnostic testing facilities (IDTFs), radiation oncology, and urology
are used to develop the PE per hour (PE/HR) for each specialty. For
those specialties for which we do not have PE/HR, the appropriate PE/HR
is obtained from a crosswalk to a similar specialty.
The AMA developed the SMS survey in 1981 and discontinued it in
1999. Beginning in 2002, we incorporated the 1999 SMS survey data into
our calculation of the PE RVUs, using a 5-year average of SMS survey
data. (See the CY 2002 PFS final rule with comment period (66 FR
55246)). The SMS PE survey data are adjusted to a common year, 2005.
The SMS data provide the following six categories of PE costs:
Clinical payroll expenses, which are payroll expenses
(including fringe benefits) for nonphysician clinical personnel.
Administrative payroll expenses, which are payroll
expenses (including fringe benefits) for nonphysician personnel
involved in administrative, secretarial, or clerical activities.
Office expenses, which include expenses for rent, mortgage
interest, depreciation on medical buildings, utilities, and telephones.
Medical material and supply expenses, which include
expenses for drugs, x-ray films, and disposable medical products.
Medical equipment expenses, which include depreciation,
leases, and rent of medical equipment used in the diagnosis or
treatment of patients.
All other expenses, which include expenses for legal
services, accounting, office management, professional association
memberships, and any professional expenses not previously mentioned in
this section.
In accordance with section 212 of the BBRA, we established a
process to supplement the SMS data for a specialty with data collected
by entities and organizations other than the AMA (that is, those
entities and organizations representing the specialty itself). (See the
Criteria for Submitting Supplemental Practice Expense Survey Data
interim final rule with comment period (65 FR 25664)). Originally, the
deadline to submit supplementary survey data was through August 1,
2001. In the CY 2002 PFS final rule (66 FR 55246), the deadline was
extended through August 1, 2003. To ensure maximum opportunity for
specialties to submit supplementary survey data, we extended the
deadline to submit surveys until March 1, 2005 in the Revisions to
Payment Policies Under the Physician Fee Schedule for CY 2004 final
rule with comment period (68 FR 63196) (hereinafter referred to as CY
2004 PFS final rule with comment period).
The direct cost data for individual services were originally
developed by the Clinical Practice Expert Panels (CPEP). The CPEP data
include the supplies, equipment, and staff times specific to each
procedure. The CPEPs consisted of panels of physicians, practice
administrators, and nonphysicians (for example, RNs) who were nominated
by physician specialty societies and other groups. There were 15 CPEPs
consisting of 180 members from more than 61 specialties and
subspecialties. Approximately 50 percent of the panelists were
physicians.
The CPEPs identified specific inputs involved in each physician's
service provided in an office or facility setting. The inputs
identified were the quantity and type of nonphysician labor, medical
supplies, and medical equipment.
In 1999, the AMA's RUC established the PEAC. From 1999 to March
2004, the PEAC, a multi-specialty committee, reviewed the original CPEP
inputs and provided us with recommendations for refining these direct
PE inputs for existing CPT codes. Through its last meeting in March
2004, the PEAC provided recommendations for over 7,600 codes which we
have reviewed and in most instances have accepted. As a result, the
current PE inputs differ markedly from those originally recommended by
the CPEPs. The PEAC was replaced by the Practice Expense Review
Committee (PERC) and now these PE-related activities are addressed by
the AMA RUC PE subcommittee.
b. Allocation of PE to Services
The aggregate level specialty-specific PEs are derived from the
AMA's SMS survey and supplementary survey data. To establish PE RVUs
for specific services, it is necessary to establish the direct and
indirect PE associated with each service.
(i) Direct costs. The direct costs are determined by adding the
costs of the resources (that is, the clinical staff, equipment, and
supplies) typically required to provide the service. The costs of these
resources are calculated from the refined direct PE inputs in our PE
database. These direct inputs are then scaled to the current aggregate
pool of direct PE RVUs. The aggregate pool of direct PE RVUs can be
derived using the following formula: (PE RVUs x physician CF) x
(average direct percentage from SMS/(Supplemental PE/HR data)).
(ii) Indirect costs. The SMS and supplementary survey data are the
source for the specialty-specific aggregate indirect costs used in our
PE calculations. We then allocate the indirect costs to the code level
on the basis of the direct costs specifically associated with a code
and the maximum of either the clinical labor costs or the physician
work RVUs. For calculation of the 2009 PE RVUs, we use the 2007
procedure-specific utilization data crosswalked to 2009 services. To
arrive at the indirect PE costs--
We apply a specialty-specific indirect percentage factor
to the direct expenses to recognize the varying proportion that
indirect costs represent of total costs by specialty. For a given
service, the specific indirect percentage factor to apply to the direct
costs for the purpose of the indirect allocation is calculated as the
weighted average of the ratio of the indirect to direct costs (based on
the survey data) for the specialties that furnish the service. For
example, if a service is furnished by a single specialty with indirect
PEs that were 75 percent of total PEs, the indirect percentage factor
to apply to the direct costs for the purposes of the indirect
allocation would be (0.75/0.25) = 3.0. The indirect percentage factor
is then applied to the service level adjusted indirect PE allocators.
We use the specialty-specific PE/HR from the SMS survey
data, as well as the supplemental surveys for cardiothoracic surgery,
vascular surgery, physical and occupational therapy, independent
laboratories, allergy/immunology, cardiology, dermatology, radiology,
gastroenterology, IDTFs, radiation oncology, and urology. (Note: For
radiation oncology, the data represent
[[Page 69733]]
the combined survey data from the American Society for Therapeutic
Radiology and Oncology (ASTRO) and the Association of Freestanding
Radiation Oncology Centers (AFROC)). As discussed in the CY 2008 PFS
final rule with comment period (72 FR 66233), the PE/HR survey data for
radiology is weighted by practice size. We incorporate this PE/HR into
the calculation of indirect costs using an index which reflects the
relationship between each specialty's indirect scaling factor and the
overall indirect scaling factor for the entire PFS. For example, if a
specialty had an indirect practice cost index of 2.00, this specialty
would have an indirect scaling factor that was twice the overall
average indirect scaling factor. If a specialty had an indirect
practice cost index of 0.50, this specialty would have an indirect
scaling factor that was half the overall average indirect scaling
factor.
When the clinical labor portion of the direct PE RVU is
greater than the physician work RVU for a particular service, the
indirect costs are allocated based upon the direct costs and the
clinical labor costs. For example, if a service has no physician work
and 1.10 direct PE RVUs, and the clinical labor portion of the direct
PE RVUs is 0.65 RVUs, we would use the 1.10 direct PE RVUs and the 0.65
clinical labor portions of the direct PE RVUs to allocate the indirect
PE for that service.
c. Facility/Nonfacility Costs
Procedures that can be furnished in a physician's office as well as
in a hospital or facility setting have two PE RVUs: facility and
nonfacility. The nonfacility setting includes physicians' offices,
patients' homes, freestanding imaging centers, and independent
pathology labs. Facility settings include hospitals, ambulatory
surgical centers (ASCs), and skilled nursing facilities (SNFs). The
methodology for calculating PE RVUs is the same for both facility and
nonfacility RVUs, but is applied independently to yield two separate PE
RVUs. Because the PEs for services provided in a facility setting are
generally included in the payment to the facility (rather than the
payment to the physician under the PFS), the PE RVUs are generally
lower for services provided in the facility setting.
d. 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), both of
which may be performed independently or by different providers. When
services have TCs, PCs, and global components that can be billed
separately, the payment for the global component equals the sum of the
payment for the TC and PC. This is a result of using a weighted average
of the ratio of indirect to direct costs across all the specialties
that furnish the global components, TCs, and PCs; that is, we apply the
same weighted average indirect percentage factor to allocate indirect
expenses to the global components, PCs, and TCs for a service. (The
direct PE RVUs for the TC and PC sum to the global under the bottom-up
methodology.)
e. Transition Period
As discussed in the CY 2007 PFS final rule with comment period (71
FR 69674), we are implementing the change in the methodology for
calculating PE RVUs over a 4-year period. During this transition
period, the PE RVUs will be calculated on the basis of a blend of RVUs
calculated using our methodology described previously in this section
(weighted by 25 percent during CY 2007, 50 percent during CY 2008, 75
percent during CY 2009, and 100 percent thereafter), and the CY 2006 PE
RVUs for each existing code. PE RVUs for codes that are new during this
period will be calculated using only the current PE methodology and
will be paid at the fully transitioned rate.
f. PE RVU Methodology
The following is a description of the PE RVU methodology.
(i) 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 survey PE per physician hour
data.
(ii) 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. The
direct costs consist of the costs of the direct inputs for clinical
labor, medical supplies, and medical equipment. The clinical labor cost
is the sum of the cost of all the staff types associated with the
service; it is the product of the time for each staff type and the wage
rate for that staff type. The medical supplies cost is the sum of the
supplies associated with the service; it is the product of the quantity
of each supply and the cost of the supply. The medical equipment cost
is the sum of the cost of the equipment associated with the service; it
is the product of the number of minutes each piece of equipment is used
in the service and the equipment cost per minute. The equipment cost
per minute is calculated as described at the end of this section.
Apply a BN adjustment to the direct inputs.
Step 2: Calculate the current aggregate pool of direct PE costs. To
do this, multiply the current aggregate pool of total direct and
indirect PE costs (that is, the current aggregate PE RVUs multiplied by
the CF) by the average direct PE percentage from the SMS and
supplementary specialty survey data.
Step 3: Calculate the aggregate pool of direct costs. To do this,
for all PFS services, sum the product of the direct costs for each
service from Step 1 and the utilization data for that service.
Step 4: Using the results of Step 2 and Step 3 calculate a direct
PE BN adjustment so that the aggregate direct cost pool does not exceed
the current aggregate direct cost pool and apply it to the direct costs
from Step 1 for each service.
Step 5: Convert the results of Step 4 to an RVU scale for each
service. To do this, divide the results of Step 4 by the Medicare PFS
CF.
(iii) Create the Indirect PE RVUs
Create indirect allocators.
Step 6: Based on the SMS and supplementary specialty 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 we are calculating the direct and indirect percentages across
the global components, PCs, and TCs. That is, the direct and indirect
percentages for a given service (for example, echocardiogram) do not
vary by the PC, TC and global component.
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 RVU, the
clinical PE RVU, and the work RVU.
For most services the indirect allocator is: indirect percentage *
(direct PE RVU/direct percentage) + work RVU.
There are two situations where this formula is modified:
If the service is a global service (that is, a service
with global, professional, and technical components), then the indirect
allocator is: indirect percentage * (direct PE RVU/direct percentage) +
clinical PE RVU + work RVU.
[[Page 69734]]
If the clinical labor PE RVU exceeds the work RVU (and the
service is not a global service), then the indirect allocator is:
indirect percentage * (direct PE RVU/direct percentage) + clinical PE
RVU.
(Note: For global services, the indirect allocator is based on both
the work RVU and the clinical labor PE RVU. We do this to recognize
that, for the professional service, indirect PEs will be allocated
using the work RVUs, and for the TC service, indirect PEs will be
allocated using the direct PE RVU and the clinical labor PE RVU. 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 RVU/direct
percentage). The second part is either the work RVU, clinical PE RVU,
or both depending on whether the service is a global service and
whether the clinical PE RVU exceeds the work RVU (as described earlier
in this step.)
Apply a BN 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 physician specialty survey data. This
is similar to the Step 2 calculation for the direct PE RVUs.
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. This is
similar to the Step 3 calculation for the direct PE RVUs.
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. This is similar to the Step 4
calculation for the direct PE RVUs.
Calculate the Indirect Practice Cost Index.
Step 12: Using the results of Step 11, calculate aggregate pools of
specialty-specific adjusted indirect PE allocators for all PFS services
for a specialty by adding the product of the adjusted indirect PE
allocator for each service and the utilization data for that service.
Step 13: Using the specialty-specific indirect PE/HR data,
calculate specialty-specific aggregate pools of indirect PE for all PFS
services for that specialty by adding the product of the indirect PE/HR
for the specialty, the physician time for the service, and the
specialty's utilization for the service.
Step 14: Using the results of Step 12 and Step 13, calculate the
specialty-specific indirect PE scaling factors as under the current
methodology.
Step 15: Using the results of Step 14, calculate an indirect
practice cost index at the specialty level by dividing each specialty-
specific indirect scaling factor by the average indirect scaling factor
for the entire PFS.
Step 16: Calculate the indirect practice cost index at the service
level to ensure the capture of all indirect costs. Calculate a weighted
average of the practice cost index values for the specialties that
furnish the service. (Note: For services with TCs and PCs, we calculate
the indirect practice cost index across the global components, PCs, and
TCs. Under this method, the indirect practice cost index for a given
service (for example, echocardiogram) does not vary by the PC, TC and
global component.)
Step 17: Apply the service level indirect practice cost index
calculated in Step 16 to the service level adjusted indirect allocators
calculated in Step 11 to get the indirect PE RVU.
(iv) Calculate the Final PE RVUs
Step 18: Add the direct PE RVUs from Step 6 to the indirect PE RVUs
from Step 17.
Step 19: Calculate and apply the final PE BN adjustment by
comparing the results of Step 18 to the current pool of PE RVUs. This
final BN adjustment is required primarily because certain specialties
are excluded from the PE RVU calculation for rate-setting purposes, but
all specialties are included for purposes of calculating the final BN
adjustment. (See ``Specialties excluded from rate-setting calculation''
below in this section.)
(v) Setup File Information
Specialties excluded from rate-setting calculation: For
the purposes of calculating the PE RVUs, we exclude certain specialties
such as midlevel practitioners paid at a percentage of the PFS,
audiology, and low volume specialties from the calculation. These
specialties are included for the purposes of calculating the BN
adjustment.
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 RVU. For
example, the professional service code 93010 is associated with the
global code 93000.
Payment modifiers: Payment modifiers are accounted for in
the creation of the file. For example, services billed with the
assistant at surgery modifier are paid 16 percent of the PFS amount for
that service; therefore, the utilization file is modified to only
account for 16 percent of any service that contains the assistant at
surgery modifier.
Work RVUs: The setup file contains the work RVUs from this
final rule.
(vi) 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); 150,000 minutes.
usage = equipment utilization assumption; 0.5.
price = price of the particular piece of equipment.
interest rate = 0.11.
life of equipment = useful life of the particular piece of
equipment.
maintenance = factor for maintenance; 0.05.
Note: To illustrate the PE calculation, in Table 1 we have used
the conversion factor (CF) of $36.0666 which is the CF effective
January 1, 2009 as published in this final rule.
[[Page 69735]]
Table 1--Calculation of PE RVUs Under Methodology for Selected Codes
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
99213 Office 33533 CABG, 93000 ECG, 93005 ECG, 93010 ECG,
Step Source Formula visit, est arterial single 71020 Chest x- 71020TC Chest x- 7102026 Chest x- complete tracing report
nonfacility facility ray nonfacility ray nonfacility ray nonfacility nonfacility nonfacility nonfacility
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(1) Labor cost (Lab)........... Step 1.......... AMA............... ................. $13.32 $77.52 $5.74 $5.74 $-- $6.12 $6.12 $--
(2) Suppy cost (Sup)........... Step 1.......... AMA............... ................. $2.98 $7.34 $3.39 $3.39 $-- $1.19 $1.19 $--
(3) Equipment cost (Eqp)....... Step 1.......... AMA............... ................. $0.19 $0.65 $8.17 $8.17 $-- $0.12 $0.12 $--
(4) Direct cost (Dir).......... Step 1.......... .................. =(1)+(2)+(3)..... $16.50 $85.51 $17.31 $17.31 $-- $7.43 $7.43 $--
(5) Direct adjustment (Dir Adj) Steps 2-4....... See footnote*..... ................. 0.625 0.625 0.625 0.625 0.625 0.625 0.625 0.625
(6) Adjusted labor............. Steps 2-4....... =Lab*Dir Adj...... =(1)*(5)......... $8.33 $48.48 $3.59 $3.59 $-- $3.83 $3.83 $--
(7) Adjusted supplies.......... Steps 2-4....... =Sup*Dir Adj...... =(2)*(5)......... $1.87 $4.59 $2.12 $2.12 $-- $0.75 $0.75 $--
(8) Adjusted equipment......... Steps 2-4....... =Eqp*Dir Adj...... =(3)*(5)......... $0.12 $0.41 $5.11 $5.11 $-- $0.07 $0.07 $--
(9) Adjusted direct............ Steps 2-4....... .................. =(6)+(7)+(8)..... $10.32 $53.48 $10.82 $10.82 $-- $4.65 $4.65 $--
(10) Conversion Factor (CF).... Step 5.......... MFS............... ................. 36.0666 36.0666 36.0666 36.0666 36.0666 36.0666 36.0666 36.0666
(11) Adj. labor cost converted. Step 5.......... =(Lab*Dir Adj)/CF. =(6)/(10)........ 0.23 1.34 0.10 0.10 -- 0.11 0.11 --
(12) Adj. supply cost converted Step 5.......... =(Sup*Dir Adj)/CF. =(7)/(10)........ 0.05 0.13 0.06 0.06 -- 0.02 0.02 --
(13) Adj. equip cost converted. Step 5.......... =(Eqp*Dir Adj)/CF. =(8)/(10)........ 0.00 0.01 0.14 0.14 -- 0.00 0.00 --
(14) Adj. direct cost converted Step 5.......... .................. =(11)+(12)+(13).. 0.29 1.48 0.30 0.30 -- 0.13 0.13 --
(15) Wrk RVU................... Setup File...... MFS............... ................. 0.92 33.64 0.22 -- 0.22 0.17 -- 0.17
(16) Dir--pct.................. Steps 6, 7...... Surveys........... ................. 33.8% 32.6% 40.7% 40.7% 40.7% 37.7% 37.7% 37.7%
(17) Ind--pct.................. Steps 6, 7...... Surveys........... ................. 66.2% 67.4% 59.3% 59.3% 59.3% 62.3% 62.3% 62.3%
(18) Ind. Alloc. formula (1st Step 8.......... See Step 8........ ................. ((14)/(16))*(17) ((14)/(16))*(17) ((14)/(16))*(17) ((14)/(16))*(17) ((14)/(16))*(17) ((14)/(16))*(17) ((14)/(16))*(17) ((14)/(16))*(17)
part).
(19) Ind. Alloc. (1st part).... Step 8.......... .................. See (18)......... 0.56 3.06 0.44 0.44 -- 0.21 0.21 --
(20) Ind. Alloc. formulas (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)......... 0.92 33.64 0.32 0.10 0.22 0.28 0.11 0.17
(22) Indirect Allocator Step 8.......... .................. =(19)+(21)....... 1.48 36.70 0.76 0.54 0.22 0.49 0.32 0.17
(1st+2nd).
(23) Indirect Adjustment (Ind Steps 9-11...... See footnote**.... ................. 0.337 0.337 0.337 0.337 0.337 0.337 0.337 0.337
Adj).
(24) Adjusted Indirect Steps 9-11...... =Ind Alloc * Ind ................. 0.50 12.37 0.26 0.18 0.07 0.16 0.11 0.06
Allocator. Adj.
(25) Ind.Practice Cost Index Steps 12-16..... See Steps 12-16 = ................. 0.973 0.976 1.087 1.087 1.087 1.237 1.237 1.237
(PCI). Adj. Ind.
(26) Adjusted Indirect......... Step 17......... Alloc*PCI......... =(24)*(25)....... 0.49 12.07 0.28 0.20 0.08 0.20 0.13 0.07
(27) PE RVU.................... Steps 18-19..... =(Adj Dir+Adj Ind) =((14)+(26)) 0.77 13.44 0.57 0.49 0.08 0.33 0.26 0.07
*budn. *budn.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 69736]]
2. PE Proposals for CY 2009
a. RUC Recommendations for Direct PE Inputs
In the CY 2009 PFS proposed rule, we agreed with the AMA RUC PE
recommendations for 23 codes except for the inclusion of the clinical
staff for quality-related activities for 8 immunization injection
services (73 FR 38512). The AMA RUC recommendations and other PE issues
are addressed below.
Immunization Services
We did not accept the AMA RUC-recommended inclusion of 4 minutes of
clinical staff time related to quality activities (QA) for the 4
immunization codes for the initial injection: CPT codes 90465, 90467,
90471, and 90473; nor did we accept the recommended 1 minute of QA time
for the 4 ``each additional'' subsequent injection for CPT codes 90466,
90468, 90472 and 90474. As we explained, unlike the clinical staff time
related to quality activities that is included for mammography services
as required by the Mammography Quality Standards Act of 1992 (Pub. L.
102-539) (MQSA), there is no statutory requirement for quality-related
clinical staff time inputs for these services.
Comment: We received comments from individuals and group practice
physicians, specialty societies, the AMA RUC, the AMA, two State
medical societies, a vaccine manufacturer, a pharmaceutical research
association, and the National Vaccine Advisory Committee regarding our
omission of the QA clinical labor time for the immunization injection
codes. These commenters requested that we add back the QA clinical time
as recommended by the AMA RUC.
Response: Based on the commenters' requests, we reexamined the
issue. We have identified clinical QA time included in other services
that is not based on a statutory requirement. For many cardiac and
vascular ultrasound services, for example, QA time is included because
it is directly related to compliance with accreditation requirements.
After our review, we believe there was evidence to support the
inclusion of this QA time in this case in order to comply with State
and Federal regulatory guidelines. We have revised the PE database to
reflect QA time for these immunization services.
Comment: Other commenters representing specialty societies
supported our acceptance of the AMA RUC recommendations for the 15
other services identified in Table 2 of the proposed rule.
Response: We have finalized the AMA RUC PE recommendations for
these services.
b. Equipment Time-in-Use
The formula for estimating the cost per minute for equipment is
based upon a variety of factors, including the cost of the equipment,
useful life, interest rate, maintenance cost, and utilization. The
purpose of this formula is to identify an estimated cost per minute for
the equipment that can be multiplied by the time the equipment is in
use to obtain an estimated per use equipment cost to develop the
resource-based PE RVU.
In calculating the estimated cost per minute for services that are
in use 24 hours per day for 7 days per week, we have assumed that the
maximum amount of time that the equipment can be in use is
approximately 525,000 minutes (that is, 525,000 minutes = (24 hours per
day) x (7 days per week) x (52 weeks per year) x (60 minutes per
hour)).
For CY 2008, we used 525,000 minutes to calculate the per minute
equipment cost for the equipment used in CPT code 93012, Telephonic
transmission of post-symptom electrocardiogram rhythm strip(s), 24-hour
attended monitoring, per 30 day period of time; tracing only and CPT
code 93271, Patient demand single or multiple event recording with
presymptom memory loop, 24-hour attended monitoring, per 30 day period
of time; monitoring, receipt of transmissions, and analysis. Based on
information presented to us by a provider group suggesting that the
equipment was in use continuously, we determined that this equipment is
used 24 hours a day, 7 days a week. Thus, we assigned the equipment a
100 percent usage rate. However, in subsequent discussions with a
provider group, we determined that, although there may be a 100 percent
usage rate for a particular month, this does not correspond to a 100
percent usage rate for a year. Therefore, for CY 2009 we proposed to
apply our standard utilization rate of 50 percent to the 525,000
maximum minutes of use, consistent with our utilization rate assumption
for other equipment. This results in 262,500 minutes (that is, 262,500
= 525,000 x 0.50) of average use over the course of the year.
In the CY 2008 PFS rule, we used 43,200 minutes (60 minutes per
hour x 24 hours per day x 30 days per month) to estimate the per use
cost of the equipment in these monthly services. We are continuing to
use 43,200 minutes in determining the equipment cost per use for these
codes.
Comment: The majority of comments received supported our proposal
to assign the standard 50 percent utilization rate to CPT codes 93012
and 93271. Other comments disagreed with our proposal and described it
as an arbitrary method for changing equipment utilization rates. Many
commenters suggested that we should develop a survey process that would
obtain service specific utilization rates for all PFS services.
Response: We agree with the commenters that support assigning the
standard 50 percent equipment utilization rate to CPT codes 93012 and
93271 and we will finalize our proposal to use the standard 50 percent
utilization rate for CPT codes 93012 and 93271. Although we did not
make any proposals related to a comprehensive survey of services
specific equipment costs, we plan to continue to work with interested
parties to analyze the possibilities for potential inclusion in a
future rulemaking cycle.
c. Change to PE Database Inputs for Certain Cardiac Stress Tests
In the CY 2009 PFS proposed rule, we proposed to change the PE
database for CPT code 93025, Microvolt T-wave alternans for assessment
of ventricular arrhythmias, to make the clinical labor staff type
consistent with the other cardiac stress tests, CPT codes 93015 and
93017. In addition, we proposed to add the specific Microvolt T-wave
testing equipment in place of the cardiac stress testing treadmill
devices, as well as to revise the time-in-use for the equipment in CPT
93025 to reflect the service period. We also proposed to apply similar
revisions to the equipment time-in-use to the other 2 CPT codes, CPT
codes 93015 and 93017.
Comment: The manufacturer of the equipment technology and the
specialty society were supportive of these proposed changes. In
addition, the AMA RUC noted that it would address this issue at the
2008 October AMA RUC meeting.
Response: We have received and accepted the AMA RUC recommendations
for CPT 93025, 93015 and 93017 which support all of the changes in our
proposal. The PE database is revised to reflect these changes.
d. Revisions to Sec. 414.22(b)(5)(i) Concerning Practice Expense
Current regulations at Sec. 414.22(b)(5)(i) provide an explanation
of the two levels of PE RVUs for the facility and nonfacility settings
that are used in determining payment under the PFS. Section
414.22(b)(5)(i)(A) discusses
[[Page 69737]]
facility PE RVUs and Sec. 414.22(b)(5)(i)(B) discusses nonfacility PE
RVUs. Language in each of these sections incorrectly implies that the
facility PE RVU is lower than or equal to the nonfacility PE RVUs.
However, there are some instances where the facility PE RVUs may
actually be greater than the nonfacility PE RVUs. In order to address
this inaccuracy, we proposed to revise Sec. 414.22(b)(5)(i)(A) and (B)
to remove this language.
We received no comments on our proposed technical change and have
revised the regulations at Sec. 414.22(b)(5)(i)(A) and (B) as
proposed.
e. Other PE Direct Input Issues
(i) Removal of Conscious Sedation (CS) PE Inputs for Services in
Which CS is not Inherent--Technical Correction
In reviewing the PE database, we noted that the conscious sedation
(CS) PE inputs for 12 CPT codes in which CS is not inherent had not
been removed after CPT 2005 began identifying these codes in a separate
Addendum. The CS inputs for CPT codes 19300, 22520, 22521, 31717,
62263, 62264, 62268, 62269, 63610, 64585, 64590, and 64595 had been
added by the AMA RUC's PEAC prior to CY 2005. At that time, the AMA RUC
recommended deletion of the CS PE inputs for all procedures that were
not identified in the CPT 2005 manual Addendum which lists the services
in which CS is inherent; and thus include the associated direct PE
inputs. Due to a technical error, these inputs were not removed for CY
2005. We have removed the CS PE inputs for the 12 CPT codes noted
above. We ask that the AMA RUC permit specialty societies to bring any
CPT codes forward to either the February or April 2009 AMA RUC meetings
should any other discrepancies between the CPT Addendum and the PE
database be identified.
(ii) Jejunostomy Tube Price
A comment received on the CY 2009 PFS proposed rule stated that we
had mistakenly entered the price for a set of 2, rather than just 1,
jejunostomy tube in each of the following CPT codes 49441, 49446,
49451, and 49452. So that the price of this PE supply can be properly
valued as part of the PE RVUs for each of the four services in which it
is found, we have changed the price of this supply from $198 to $97.50
in CPT codes 49441, 49446, 49451, and 49452. In addition, because it's
correct price is less than $150, this item was erroneously placed on
the list for re-pricing of higher-cost supplies on Table 29 in the
proposed rule; and, as a result of this price correction, it has been
removed from the list of supply items in need of repricing.
(iii) Supply Code SH079, Collagen, Dermal Implant (2.5ml uou)
(Contigen)
We received comments from a specialty society representing
urologists noting that the dermal collagen implant, priced at $317, was
an inappropriate supply input for CPT 52330. The specialty society
asked that we remove this supply from this service. We agree that
inclusion of the dermal collagen implant as a supply input for CPT code
52330 is not appropriate. The PE RVUs for CPT 52330 reflect the removal
of this supply item.
(iv) Contractor Pricing of CPT 77371 for Stereotactic Radiosurgery
(SRS) Treatment Delivery
CPT code 77371, Radiation treatment delivery, stereotactic
radiosurgery (SRS) (complete course of treatment of cerebral lesion(s)
consisting of one session); multi-source Cobalt 60 based, (more
commonly known as Gamma Knife) was a new CPT code for CY 2007. At that
time, we accepted nearly all of the AMA RUC PE recommendations for this
procedure (we did not accept the Cobalt 60 radiation source as a direct
PE input) during CY 2007 rulemaking, and these recommendations are
reflected in the PE RVUs for CPT 77371. The PE inputs for CPT 77371 had
been proposed by the sitting AMA RUC specialty society representing
therapeutic radiation oncology physicians. The AMA RUC discussed and
amended the specialty's proposal for direct PE inputs (particularly the
amount of clinical labor time) prior to agreeing on the final AMA RUC
recommendation that was forwarded to CMS for CY 2007. Due to the
equipment expense (nearly $4 million) along with the many Nuclear
Regulatory Commission (NRC) requirements for construction of the
facility required to furnish these procedures, all but one of these
facilities is connected with a hospital setting, leaving a single free-
standing nonfacility provider.
Comment: We received 3 comments stating that the PE RVUs listed in
Addendum B for CPT 77371 are exceptionally inadequate. All commenters,
including the single freestanding nonfacility based provider, noted the
difference in payments between those made under OPPS and the PFS for
CPT 77371. For CY 2009, the commenters noted that the proposed OPPS
payment is $7,608 and the PFS payment under the proposed rule would be
$1,260. A freestanding nonfacility provider noted that it had worked
with the Medicare contractor but was unsuccessful in securing a higher
payment because the contractor could not deviate from the established
PE RVUs. Two commenters also stated that they believe the direct PE
inputs are incorrect since the cost data they had gathered from other
facility providers of this stereotactic radiosurgery (SRS) service
included extra clinical labor time due to Nuclear Regulatory Commission
(NRC) requirements for both the physicist and the registered nurse. In
addition, they disagreed with our decision to treat the Cobalt 60
radiation source (recommended by the AMA RUC as a 1-month renewable
equipment item) as an indirect PE cost in the CY 2007 PFS final rule
with comment period. The commenters have asked us to contractor-price
CPT 77371 for CY 2009 if a payment correction cannot be made in the
final rule.
Response: We will ask the AMA RUC to review the direct PE inputs
for this code in light of these comments. In the interim, we believe
the commenters have raised sufficient questions regarding the propriety
of the direct PE inputs and PE RVUs established for this new code in
2007 to warrant contractor-pricing for CPT 77371 for CY 2009.
f. Supply and Equipment Items Needing Specialty Input
We have identified some supply and equipment items from the CY 2008
final rule with comment period for which we were unable to verify the
pricing information (see Table 2: Items Needing Specialty Input for
Pricing and Table 3: Equipment Items Needing Specialty Input for
Pricing). For the items listed in Tables 2 and 3, we are requesting
that commenters provide pricing information. In addition, we are
requesting acceptable documentation, as described in the footnote to
each table, to support the recommended prices. For supplies or
equipment that previously appeared on these lists, we may propose to
delete these items unless we receive adequate information to support
current pricing by the conclusion of the comment period for this final
rule.
In Tables 4 and 5, we have listed specific supplies and equipment
items related to new CY 2009 CPT codes that are discussed in section V.
of this final rule with comment period. We have added these items to
the PE database along with the associated prices (on an interim basis).
We plan to propose finalized pricing information in the CY 2010 PFS
proposed rule. Item prices identified in these tables are also
reflected in the PE RVUs in Addendum B. In addition, we have asked
commenters to submit specific information in response to the
[[Page 69738]]
discussion of the supply and equipment items for some each of the new
CPT codes in section V. of this final rule with comment period. We have
also specifically asked for public comment about the direct cost inputs
for the 3 new 2009 CPT codes which we contractor-priced for CY 2009
(CPT codes 93229, 93299, and 95803).
Table 2--Supply Items Needing Specialty Input for Pricing
--------------------------------------------------------------------------------------------------------------------------------------------------------
Primary Commenter
Code 2008/9 Unit Unit Associated Associated * Prior item status response and CMS 2009 Item status
Description price Specialties CPT code(s) on table action refer to note(s)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gas, argon, ................. ........ Urology, 50395 YES................ New item 2008... A, D.
cryoablation. Radiology,
Interventional
Radiology.
Gas, helium, ................. ........ Urology, 50395 YES................ New item 2008... A, D.
cryoablation. Radiology,
Interventional
Radiology.
SL119....... Sealant spray.... oz............... ........ Radiation 77333 YES................ No comments B.
Oncology. received.
Catheter, Kumpe.. Item............. ........ Radiology, 50385, 50386 YES................ New item 2008... A, D.
Interventional
Radiology.
Disposable ................. ........ Oral and 21073 YES................ New item 2008... A, D.
aspirating Maxillofacial
syringe. Surgery.
Guidewire, angle ................. ........ Radiology, 50385, 50386 YES................ New item 2008... A, D.
tip (Terumo), Interventional
180 cm.1 Radiology.
Snare, Nitinol Item............. ........ Radiology, 50385, 50386 YES................ New item 2008... A, D.
(Amplatz). Interventional
Radiology.
NA.......... Agent, neurolytic ml............... ........ Orthopedic 64632 NO................. New item 2009... A.
Surgery,
Podiatry.
NA.......... Strut, Item............. 1151 ................ 20697 NO................. New item 2009... A.
replacement,
dynamic external.
NA.......... Tube, anaerobic Item............. ........ 62267........... Lab NO................. New item 2009... A, B.
culture.
NA.......... Tube, Item............. 97.50 49441, 49446, Accessory NO................. Price changed/ C.
jejunsostomy. 49451 and 49452. CMS error. $195
price for 2 J-
tubes. $97.50
accepted.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* CPT codes and descriptions only are copyright 2009 American Medical Association. All Rights Reserved. Applicable FARS/DFARS apply.
Note: Acceptable documentation includes detailed description (including system, kit or product components), source (multiple sources requested), and
current pricing information. For most items, there will be multiple sources of documentation available--multiple products/models that can be used as
acceptable substitutes in performing a procedure. We ask that documentation from multiple sources be submitted with verified prices of the various
products which represent the price range. In these instances, only one specific item/model/product is available on the market for use in a given
procedure, one source of documentation is required. However, CMS expects that all documentation reflect the market price for each product reflecting
the manufacturer or vendor discounts, rebates, etc. Invoices from physician purchases are the preferred documentation. In cases where this is not
possible, CMS may accept other documentation such as copies of catalog pages, hard copy from specific Web pages, physician invoices, and typical or
average sales price ``quotes'' (letter format okay) from manufacturers, vendors, or distributors. Unacceptable documentation includes phone numbers
and addresses of manufacturer, vendors or distributors, Web site links without pricing information, etc.
A. Additional documentation required. Need detailed description (including ``kit'', system, or product contents and component parts), source, and
current pricing information (including pricing per specified unit of measure in database).
B. No/Insufficient information received. Where applicable, retained price in database on an interim basis. Forward acceptable documentation promptly.
C. Submitted price accepted.
D. 2008/9 price retained on an interim basis. Forward acceptable documentation promptly.
Table 3--Equipment Items Needing Specialty Input for Pricing
--------------------------------------------------------------------------------------------------------------------------------------------------------
* CPT
2008/9 Primary specialties code(s) Prior status on Commenter response 2009 Item status
Code 2008/9 Description Price associated with item associated table and CMS action refer to note(s)
with item
--------------------------------------------------------------------------------------------------------------------------------------------------------
Camera mount-floor... 2300 Dermatology......... 96904 Yes................. Specialty to submit, A and D.
asap.
Cross slide 500 Dermatology......... 96904 Yes................. Specialty to submit, A and D.
attachment. asap.
Plasma pheresis 37,900 Radiology, 36481, G0341 Yes................. Revised description B.
machine. Dermatology. based on comments
received that light
source was not part
of item.
Documentation
requested.
ED039........... Psychology Testing ......... Psychology.......... 96101, 96102 Yes................. Specialty to submit, B.
Equipment. asap.
Strobe, 400 watts 1500 Dermatology......... 96904 Yes................. Documentation B.
(Studio)(2). requested.
Cryosurgery system ......... Urology, Radiology, 50593 Yes................. New item 2008....... A and D.
(for tumor Interventional
ablation).1 Radiology.
[[Page 69739]]
Workstation, dual, 85000 Cardiology.......... 93351 No.................. New item 2009, E.
echocardiography. Specialty submitted
$173,509--CMS
accept $85,000.
EQ136........... Infrared Coagulator 3659.50 .................... 46606, No.................. New price for 2009 E.
(with hand 46608, with addition of
applicator, includes 46610, light guide, Supply
light guide). 46612, 46930 code, Eq136,
descriptor changed
to include the
light guide.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* CPT codes and descriptions only are copyright 2009 American Medical Association. All Rights Reserved. Applicable FARS/DFARS apply.
Note: Acceptable documentation includes detailed description (including system, kit or product components), source (multiple sources requested), and
current pricing information. For most items, there will be multiple sources of documentation available--multiple products/models that can be used as
acceptable substitutes in performing a procedure. We ask that documentation from multiple sources be submitted with verified prices of the various
products which represent the price range. In these instances, only one specific item/model/product is available on the market for use in a given
procedure, one source of documentation is required. However, CMS expects that all documentation reflect the market price for each product reflecting
the manufacturer or vendor discounts, rebates, etc. Invoices from physician purchases are the preferred documentation. In cases where this is not
possible, CMS may accept other documentation such as copies of catalog pages, hard copy from specific Web pages, physician invoices, and typical or
average sales price ``quotes'' (letter format okay) from manufacturers, vendors, or distributors. Unacceptable documentation includes phone numbers
and addresses of manufacturer, vendors or distributors, Web site links without pricing information, etc.
A. Additional documentation required. Need detailed description (including kit contents), source, and current pricing information (including pricing per
specified unit of measure in database). Accept copies of catalog pages or hard copy from specific Web pages. Phone numbers or addresses of
manufacturer, vendors, or distributors are not acceptable documentation.
B. No/Insufficient received. Retained price in database on an interim basis. Forward acceptable documentation promptly.
C. Submitted price accepted.
D. 2008/9 price, where specified, retained on an interim basis. Forward acceptable documentation promptly.
E. See discussion in section V. of this final rule with comment period. Forward requested documentation promptly, for example, whether item is typical.
Table 4--Practice Expense Supply Item Additions for CY 2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
* CPT code(s)
Equip code Supply description Unit Unit associated with Supply category Comments
price item
--------------------------------------------------------------------------------------------------------------------------------------------------------
NA.............................. Agent, neurolytic.. ml................. ........ 64632.............. Pharmacy, Rx....... A, B and D.
NA.............................. IV infusion set, Item............... 11.5 96369 and 96371.... Hypodermic, IV..... B.
Sof-set (Minimed).
NA.............................. Strut, replacement, Item............... 1151 20697.............. Accessory.......... A.
dynamic external.
NA.............................. Swab, patient prep, Item............... 1.04 93352.............. Pharmacy, NonRx.... B.
1.5 ml
(chloraprep).
NA.............................. Tube, anaerobic Item............... ........ 62267.............. Lab................ A.
culture.
NA.............................. Tube, jejunsostomy. Item............... 97.50 49441, 49446, 49451 Accessory.......... A and C.
and 49452.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* CPT codes and descriptions only are copyright 2009 American Medical Association. All Rights Reserved. Applicable FARS/DFARS apply.
A. Price verification needed. Item(s) added to table of supplies requiring specialty input.
B. Request explanation/rationale as to why specific supply is necessary, how it differs from current PE database item, and why current PE item(s) cannot
be used for procedure(s).
C. CMS price correction.
D. Also, see discussion in section V. of this final rule with comment period. Proxy in use on an interim basis: SH062 Sclerosing solution, inj.
Table 5--Practice Expense Equipment Item Additions for CY 2009
----------------------------------------------------------------------------------------------------------------
* CPT code(s) Supply or
Item code Equipment Equip Unit price associated with equipment Comments
description life item category
----------------------------------------------------------------------------------------------------------------
NA................ Workstation, 5 85000 93351........... DOCUMENTATION... A and D.
dual,
echocardiograph
y.
NA................ Pacemaker, 5 123250 93693 and 93696. OTHER EQUIPMENT. B and D.
Interrogation,
System (CMS
used Pacemaker,
Monitoring,
System as proxy
for price).
[[Page 69740]]
EQ198............. Pacemaker follow- 7 23507 93279, 93280, OTHER EQUIPMENT. C and D.
up system (incl 93281, 93282,
software and 93284, 93285,
hardware) 93286, 93287,
(Paceart). 93288, 93289,
93290, 93291,
93292, 93724.
EQ136............. Infrared 10 3659.50 46606, 46608, OTHER EQUIPMENT. A and D.
Coagulator 46610, 46612,
(with hand 46930.
applicator,
includes light
guide).
----------------------------------------------------------------------------------------------------------------
* CPT codes and descriptions only are copyright 2009 American Medical Association. All Rights Reserved.
Applicable FARS/DFARS apply.
A. Price verification needed. Item(s) added to table of equipment requiring specialty input.
B. Interim value, CY 2009 only. CMS assigned the pacemaker monitoring system to these two CPT codes that the
specialty association requested a pacemaker ``interrogation'' system. Since the CMS PE database does not
contain such an item, we assigned, on an interim basis, the pacemaker monitoring system that was assigned to
these 2 codes previously. Although we remain uncertain as to the appropriate equipment that should be
assigned, we will work with the specialty as they provide us with more information and documentation for the
typical equipment needed for these 2 services when provided in the physician's office.
C. Interim value, CY 2009 only. CMS assigned EQ198 to all new cardiac monitoring codes for CY 2009 because the
crosswalked codes (for CY 2008) each contained the equipment item EQ198. While the specialty requested the
``pacemaker monitoring system'' for these services, CMS was not provided any information to support the change
in technology for these services provided in the physician's office setting.
D. Also, see discussion in Section V. of this final rule with comment period.
B. Geographic Practice Cost Indices (GPCI): Locality Discussion
1. Update
Section 1848(e)(1)(A) of the Act requires us to develop separate
Geographic Practice Cost Indices (GPCIs) to measure resource cost
differences among localities compared to the national average for each
of the three fee schedule components (work, PE and malpractice). While
requiring that the PE and malpractice GPCIs reflect the full relative
cost differences, section 1848(e)(1)(A)(iii) of the Act requires that
the physician work GPCIs reflect only one-quarter of the relative cost
differences compared to the national average.
Section 1848(e)(1)(C) of the Act requires us to review and, if
necessary, adjust the GPCIs at least every 3 years. This section also
specifies that if more than 1 year has elapsed since the last GPCI
revision, we must phase in the adjustment over 2 years, applying only
one-half of any adjustment in each year. As discussed in the CY 2008
PFS final rule with comment period (72 FR 66243), we established new
GPCIs for each Medicare locality in CY 2008 and implemented them. The
CY 2008 adjustment to the GPCIs reflected the first year of the 2-year
phase-in.
We noted in the CY 2009 PFS proposed rule (73 FR 38513), that the
physician work GPCIs we calculated did not reflect the 1.000 floor that
was in place during CY 2006 through June 30, 2008. However, as
discussed in section III. of this preamble, section 134 of the MIPPA of
2008 extended the 1.000 work GPCI floor from July 1, 2008, through
December 31, 2009. Additionally, section 134(b) of the MIPPA sets a
permanent 1.500 work GPCI floor in Alaska for services furnished
beginning January 1, 2009. As such, the CY 2009 GPCIs and summarized
GAFs reflect these statutorily mandated work GPCI floors.
See Addenda D and E for the CY 2009 GPCIs and summarized geographic
adjustment factors (GAFs).
For a detailed explanation of how the GPCI update was developed,
see the CY 2008 PFS final rule with comment period (72 FR 66244).
2. Payment Localities
a. Background
As stated above in this section, section 1848(e)(1)(A) of the Act
requires us to develop separate GPCIs to measure resource cost
differences among localities compared to the national average for each
of the three fee schedule components (work, PE, and malpractice).
Payments under the PFS are based on the relative resources required to
provide services, and are adjusted for differences in resource costs
among payment localities using the GPCIs. As a result, PFS payments
vary between localities. Although the PFS payment for a particular
service is actually adjusted by applying a GPCI to each fee schedule
component, for purposes of discussion and comparison, we calculate a
geographic adjustment factor (GAF) for each locality. These GAFs
reflect a weighted average of the GPCIs within the locality and can be
used as a general proxy for area practice costs. A GAF is calculated to
reflect a summarization of the GPCIs, (which is used only to make
comparisons across localities). The GAFs are not an absolute measure of
actual costs, nor are they used to calculate PFS payments. Rather, they
are a tool that can be used as a proxy for differences in the cost of
operating a medical practice among various geographic areas (for
example counties) for the purpose of assessing the potential impact of
alternative locality configurations.
Prior to 1992, Medicare payments for physicians' services were made
on the basis of reasonable charges. Payment localities were established
under the reasonable charge system by local Medicare carriers based on
their knowledge of local physician charging patterns and economic
conditions. A total of 210 localities were developed; including 22
``Statewide'' localities where all areas within a State (whether urban
or rural) received the same payment amount for a given service. These
localities changed little between the inception of Medicare in 1966 and
the beginning of the PFS in 1992. Following the inception of the PFS,
we acknowledged that there was no consistent geographic basis for these
localities and that they did not reflect the significant economic and
demographic changes that had taken place since 1966. As a result, a
study was begun in 1994 which culminated in a comprehensive locality
revision which was implemented in 1997.
The 1997 payment locality revision was based and built upon the
prior locality structure. The 22 previously existing Statewide
localities remained Statewide localities. New localities were
established in the remaining 28 States by comparing the area cost
differences (using the GAFs as a proxy for costs) of the localities
within these States. We ranked the existing localities within these
States by GAFs in descending order. The GAF of the highest locality
[[Page 69741]]
within a State was compared to the weighted average GAF of other
localities. If the differences between these GAFs exceeded 5 percent,
the highest locality remained a distinct locality. If the GAFs
associated with all the localities in a State did not vary by at least
5 percent, the State became a Statewide locality. If the highest
locality remained a distinct locality, the process was repeated for the
second highest locality and so on until the variation among remaining
localities fell below the 5 percent threshold. The rest of the
localities within the State were combined into a single rest-of-State
locality as their costs were relatively homogeneous. The revised
locality structure (which is the one currently in use) reduced the
number of localities from 210 to 89. The number of Statewide localities
increased from 22 to 34. The development of the current locality
structure is described in detail in the CY 1997 PFS proposed rule (61
FR 34615) and the subsequent final rule (61 FR 59494).
Although there have been no changes to the locality structure since
1997, we have proposed changes in recent years, although we did not
finalize them. As we have frequently noted, any changes to the locality
configuration must be made in a budget neutral manner. Therefore,
changes in localities can lead to significant redistributions in
payments. For many years, we have not considered making changes to
localities without the support of a State Medical Association, which we
believed would demonstrate consensus for the change among the
professionals who would be affected. However, we recognize that over
time changes in demographics or local economic conditions may lead us
to conduct a more comprehensive examination of existing payment
localities, and consideration of potential alternatives.
Payment Locality Approaches Discussed in the CY 2008 PFS Proposed Rule
For the past several years, we have been involved in discussions
with California physicians and their representatives about recent
shifts in relative demographics and economic conditions among a number
of counties within the current California payment locality structure.
In the CY 2008 PFS proposed rule, we described three options for
changing the payment localities in California. For a detailed
discussion of the options for changing the payment localities in
California, see the CY 2008 PFS proposed rule and final rule with
comment period (72 FR 38139 and 72 FR 66245, respectively).
After evaluating the comments on these options, which included
MedPAC's two suggestions for developing changes in payment localities
for the entire country (not just California), other States expressing
interest in having their payment localities reconfigured, and the
California Medical Association's decision not to endorse any option, we
decided not to proceed with any of the alternatives we presented. We
explained in the CY 2008 final rule with comment period (72 FR 66248)
that we intended to conduct a thorough analysis of potential approaches
to reconfiguring localities and would address this issue again in
future rulemaking. We also noted that some commenters wanted us to
consider a national reconfiguration of localities rather than just
making changes one State at a time.
b. Alternative Payment Locality Approaches
In the CY 2009 PFS proposed rule, we explained that as a follow-up
to the CY 2008 PFS final rule with comment period, we contracted with
Acumen, LLC to conduct a preliminary study of several options for
revising the payment localities. To that end, we are currently
reviewing several alternative approaches for reconfiguring payment
localities on a nationwide basis. However, our study of possible
alternative payment locality configurations is in the early stages of
development. We also stated that we are not making any changes to our
payment localities at this time. For a discussion of the alternative
payment locality configurations currently under consideration, see the
CY 2009 PFS proposed rule (73 FR 38514).
Our preliminary study of several options for revising the payment
localities was posted on the CMS Web site on August 21, 2008. The
report entitled, ``Review of Alternative GPCI Payment Locality
Structures'', which was produced by Acumen, LLC under contract to CMS,
is accessible from the PFS Federal regulation notices Web page under
the download section of the CY 2009 PFS proposed rule (CMS-1403-P). The
report may also be accessed directly from the following link: http://
www.cms.hhs.gov/PhysicianFeeSched/downloads/ReviewOfAltGPCIs.pdf.
Comments on the interim report were accepted through November 3, 2008.
In the CY 2009 PFS proposed rule and on the CMS Web site, we
encouraged interested parties to submit comments on the options
presented in the proposed rule and in our interim report. We also
requested comments on the administrative and operational issues
associated with each option, as well as suggestions for other options.
Comment: We received comments on the options discussed in the
proposed rule from various specialty groups and medical societies, as
well as a few group practices and individual practitioners. Generally,
commenters commended us for acknowledging the need for intermittent
reconfiguration of PFS payment localities and expressed support for our
study of alternative locality configurations. Some commenters urged us
to expedite changes in our payment localities and suggested that we do
so as part of the CY 2009 final rule. Other commenters requested that,
in any locality reconfiguration, we minimize the payment discrepancy
between urban and rural areas to ensure continued access to care.
Response: We would like to thank the public for the comments
submitted on the options presented in the proposed rule and in the
interim report posted on the CMS Web site. We will summarize all
comments received in future rulemaking. As we have stated previously,
we will provide extensive opportunities for public comment (for
example, town hall meetings or open door forums, as well as a proposed
rule) on any specific proposals for changes to the locality
configuration before implementing any changes.
C. Malpractice RVUs (PC/TC Issue)
In the CY 1992 PFS final rule (56 FR 59527), we described in detail
how malpractice (MP) RVUs are calculated for each physicians' service
and, when professional liability insurance (PLI) premium data are not
available, how we crosswalk or assign RVUs to services. Following the
initial calculation of resource-based MP RVUs, the MP RVUs are then
subject to review by CMS at 5-year intervals. Reviewing the MP RVUs
every 5 years ensures that the MP relative values reflect any
marketplace changes in the physician community's ability to acquire
PLI. However, there are codes that define certain radiologic services
that have never been part of the MP RVU review process. The MP RVUs
initially assigned to these codes have not been revised because there
is a lack of suitable data on the cost of PLI for technical staff or
imaging centers (where most of these services are performed).
In the CY 2008 PFS proposed rule (72 FR 38143), we noted that the
PLI workgroup, a subset of the Relative Value Update Committee (RUC) of
the AMA, brought to our attention the fact that there are approximately
600 services that have TC MP RVUs that are
[[Page 69742]]
greater than the PC MP RVUs. The PLI workgroup requested that we make
changes to these MP RVUs and suggested that it is illogical for the MP
RVUs for the TC of a service to be higher than the MP RVUs for the PC.
We responded that we would like to develop a resource-based
methodology for the technical portion of these MP RVUs; but that we did
not have data to support such a change. We asked for information about
how, and if, technicians employed by facilities purchase PLI or how
their professional liability is covered. We also asked for comments on
what types of PLI are carried by facilities that perform these
technical services.
In the CY 2008 PFS final rule with comment period (72 FR 66248),
one commenter suggested that we ``flip'' the MP RVUs between the PCs
and TCs, or make them equal. Reversing the RVUs would reduce the MP
RVUs for the TC and increase the MP RVUs for the PC. The AMA's PLI
workgroup recommended that we reduce the MP RVUs for the TC for these
codes to zero. The workgroup suggested that there are no identifiable
separate costs for professional liability for the TC. The workgroup
also recommended that the MP RVUs removed from the TC for these codes
be redistributed across all physicians' services.
We responded that we did not believe it would be appropriate to
``flip'' the PC and TC MP RVU values because the professional part of
the MP RVUs has undergone a resource-based review, is derived from
actual data, and is consistent with the resource-based methodology for
PFS payments. We stated that we would not simply equalize the PC and TC
RVU values because we had no data to demonstrate that the MP costs for
the technical portion of these services are the same as the
professional portion.
We also noted that we have received several comments supporting the
decision to examine the possibility of developing a resource-based
methodology for the technical portion of the MP RVUs. The commenters
supported the collection and analysis of appropriate MP premium data
before making any changes to the MP RVU distribution.
We stated that we would continue to solicit, collect, and analyze
appropriate data on this subject. We noted that when we had sufficient
information we would be better able to make a determination as to what,
if any, changes should be made and that we would propose any changes in
future rulemaking.
In the CY 2009 PFS proposed rule (73 FR 38515), we stated that the
issue of assigning MP RVUs for the TC of certain services continues to
be a source of concern for several physician associations and for CMS.
We noted that we did not receive a response to our CY 2008 request for
additional data on this issue and that this issue is one of importance
to CMS. We also stated that the lack of available PLI data affects our
ability to make a resource-based evaluation of the TC MP RVUs for these
codes. We indicated that as part of our work to update the MP RVUs in
CY 2010, we would instruct our contractor to research available data
sources for the MP costs associated with the TC portion of these codes
and that we would also ask the contractor to look at what is included
in general liability insurance versus PLI for physicians and other
professional staff. We also stated that if data sources are available,
we would instruct the contractor to gather the data so we will be ready
to implement revised MP RVUs for the TC of these codes in conjunction
with the update of MP RVUs for the PCs in 2010.
The following is a summary of the comments we received on the CY
2009 PFS proposed rule and our responses.
Comment: Most commenters opposed any change to the MP RVUs that
would make the TC MP RVUs zero. The commenters stated that there are
identifiable MP expenses associated with allied health professionals
and that for many radiation oncology centers there are separate MP
insurance policies for the radiation oncologists and the nonphysician
clinical personnel. The commenters requested that we ensure that the
liability insurance associated with the nonphysician personnel is
reflected in the MP RVUs for technical services. The commenters also
stated that these expenses do not represent general insurance liability
premiums which are part of the PE RVUs. The commenters were supportive
of our plan for researching data sources for MP premium data for the TC
of these codes. One commenter provided the name of a company that
provides liability insurance to imaging facilities.
Other commenters, including the AMA, proposed that CMS reduce to
zero the TC MP RVUs associated with the codes identified as having
higher TC MP RVUs than PC MP RVUs. The commenters stated that any
premium data received would represent general liability insurance, not
liability insurance premium data related to nonphysician clinical
personnel. The commenters suggested that premium data does not exist to
support a resource-based computation of the MP RVUs for the TC and
stated that general liability insurance premiums are included in the PE
component and should not be part of the MP RVU calculation.
Response: We appreciate the comments in support of our proposal to
instruct our contractor to research available data sources for the MP
costs associated with the TC portions of these codes. As we stated in
the CY 2008 PFS final rule with comment period (72 FR 66248), we are
not able to evaluate whether sufficient data exists or to make a
judgment on the RUC's assertion that such data are not available. It is
possible that the contractor responsible for collecting the data for
the 5-year MP RVU update will identify providers of professional
liability insurance for nonphysician clinical personnel. We plan to
share the information received on a potential source of such data with
our contractor. If such premium data can be identified, it will be
incorporated into the MP RVU update. In the event that we adopt such
data, we will ensure there is no duplication of costs between the PE
and the MP RVUs. As noted in the CY 2009 PFS proposed rule, and
discussed above in this section, we will be addressing this issue as
part of the update to the malpractice RVUs for CY 2010.
D. Medicare Telehealth Services
1. Requests for Adding Services to the List of Medicare Telehealth
Services
Section 1834(m)(4)(F) of the Act defines telehealth services as
professional consultations, office visits, and office psychiatry
services, and any additional service specified by the Secretary. In
addition, the statute required us to establish a process for adding
services to or deleting services from the list of telehealth services
on an annual basis.
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 an ongoing opportunity to submit requests for adding services.
We assign any request to make additions to the list of Medicare
telehealth services to one of the following categories:
Category 1: Services that are similar to
professional consultations, office visits, and office psychiatry
services. In reviewing these requests, we look for similarities between
the proposed and existing telehealth services for the roles of, and
interactions among, the beneficiary, the physician (or other
practitioner) at the distant site
[[Page 69743]]
and, if necessary, the telepresenter. We also look for similarities in
the telecommunications system used to deliver the proposed service, for
example, the use of interactive audio and video equipment.
Category 2: Services that are not similar to the
current list of telehealth services. Our review of these requests
includes an assessment of whether the use of a telecommunications
system to deliver the service produces similar diagnostic findings or
therapeutic interventions as compared with the face to face ``hands
on'' delivery of the same service. Requestors should submit evidence
showing that the use of a telecommunications system does not affect the
diagnosis or treatment plan as compared to a face to face delivery of
the requested service.
Since establishing the process, we have added the following to the
list of Medicare telehealth services: psychiatric diagnostic interview
examination; ESRD services with two to three visits per month and four
or more visits per month (although we require at least one visit a
month to be furnished in-person ``hands on'', by a physician, clinical
nurse specialist (CNS), nurse practitioner (NP), or physician assistant
(PA) to examine the vascular access site); individual medical nutrition
therapy; and the neurobehavioral status exam.
Requests to add services to the list of Medicare telehealth
services must be submitted and received no later than December 31 of
each calendar year to be considered for the next rulemaking cycle. For
example, requests submitted before the end of CY 2007 are considered
for the CY 2009 proposed rule. Each request for adding a service to the
list of Medicare telehealth services must include any supporting
documentation you wish us to consider as we review the request. Because
we use the annual PFS as a vehicle for making changes to the list of
Medicare telehealth services, requestors should be advised that any
information submitted is subject to disclosure for this purpose. For
more information on submitting a request for an addition to the list of
Medicare telehealth services, including where to directly mail these
requests, visit our Web site at http://www.cms.hhs.gov/telehealth/.
2. Submitted Requests for Addition to the List of Telehealth Services
We received the following requests in CY 2007 for additional
approved services to become effective for CY 2009: (1) Diabetes self-
management training (DSMT); and (2) critical care services. In
addition, in the CY 2008 PFS final rule with comment period (72 FR
66250), we committed to continuing to evaluate last year's request to
add subsequent hospital care to the list of approved telehealth
services. In the CY 2009 PFS proposed rule (73 FR 38515), we responded
to these requests. We did not propose to add DSMT or critical care
services to the list of Medicare telehealth services. We proposed to
create HCPCS codes specific to follow-up inpatient consultations
delivered via telehealth, and we proposed to revise Sec. 410.78 and
Sec. 414.65 to revise our regulations accordingly. The following is a
summary of the discussion from the proposed rule and a summary of the
comments we received and our responses.
a. Diabetes Self-Management Training (DSMT)
The American Telemedicine Association (ATA) and the Marshfield
Clinic submitted a request to add individual and group diabetes self
management training (DSMT) (as represented by Healthcare Common
Procedure Coding System (HCPCS) codes G0108 and G0109) to the list of
approved telehealth services. The requesters believe that DSMT services
can be considered and approved for telehealth as Category 1 services
because they are comparable to medical nutrition therapy (MNT) services
approved for telehealth.
As discussed in the CY 2009 PFS proposed rule (73 FR 38516), Sec.
414.65 provides for the payment of individual MNT furnished via
telehealth. Group MNT is not an approved telehealth service, so it
cannot be used as a point of comparison for group DSMT (as represented
by HCPCS code G0109). In addition, group counseling services have a
different interactive dynamic between the physician or practitioner at
the distant site and beneficiary at the originating site as compared to
services on the current list of Medicare telehealth services. (See 70
FR 45787 and 70 FR 70157 for a previous discussion of group services.)
Since the interactive dynamic of group DSMT is not similar to
individual MNT or any other service currently approved for telehealth,
we believe that group DSMT must be evaluated as a category 2 service.
Section 1861(qq) of the Act provides that DSMT (which can be either
a group or individual service) involves educational and training
services to ensure therapy compliance or to provide necessary skills
and knowledge to participate in managing the condition, including the
skills necessary for the self administration of injectable drugs. We
believe individual DSMT is not analogous to individual MNT because of
the element of skill based training that is encompassed within
individual DSMT, but is not an aspect of individual MNT (or any other
services currently approved for telehealth). Due to the statutory
requirement that DSMT services include teaching beneficiaries the
skills necessary for the self administration of injectable drugs, we
believe that DSMT, whether provided to an individual or a group, must
be evaluated as a category 2 service.
Because we consider individual and group DSMT to be category 2
services, we needed to evaluate whether these are services for which
telehealth can be an adequate substitute for a face to face encounter.
After reviewing studies submitted with the request, we determined that
we do not have sufficient comparative analysis that either individual
or group DSMT delivered via telecommunications is equivalent to DSMT
delivered face to face. We did not find evidence that providing DSMT
via telehealth is an adequate substitute for providing DSMT in person.
Therefore, we proposed not to add individual and group DSMT (as
described by HCPCS codes G0108 and G0109) to the list of approved
telehealth services.
Comment: Some commenters disagreed with our proposal and noted that
adding DSMT to the list of approved telehealth services would provide a
physician or practitioner with an additional tool for supporting
patient compliance with management of diabetes. One commenter
acknowledged that training patients in the self-administration of
injectable drugs, a required component of DSMT programs, would be
difficult to perform via telehealth. However, the commenter disagreed
that this concern should prevent diabetes patients from accessing the
DSMT benefit through telehealth. The commenter believes that educating
a patient on diet, exercise, medications, managing stress and illness,
and managing blood sugar can be taught via telehealth.
Another commenter agreed that telehealth should not serve as a
substitute for initial DSMT training that may involve hands-on teaching
of injectable medications or appropriate usage of glucose monitors.
However, the commenter believes that follow-up telehealth encounters
can help to quickly identify any potential problems or health concerns.
Response: The request we received was to add individual and group
DSMT as described by HCPCS codes G0108 and G0109 to the list of
Medicare
[[Page 69744]]
telehealth services. As discussed above, teaching beneficiaries the
skills necessary for the self administration of injectable drugs is a
statutorily required element of DSMT (and is typically provided as part
of an individual DSMT session). This skill based training is typically
not a component of any of the current Medicare telehealth services.
Group DSMT (which comprises the vast majority of DSMT; initial and
follow up) is by definition furnished in a group setting and,
therefore, the interactive dynamic is not similar to any existing
telehealth service. No group services are approved for telehealth. For
more information on our review of the use of telehealth to furnish
group services, see the CY 2006 PFS proposed rule (70 FR 45787).
In order to consider addition of services for Medicare telehealth
that are not similar to the existing list of telehealth services, we
require comparative studies showing that the use of an interactive
audio and video telecommunications system is an adequate substitute for
the in person (face-to-face) delivery of the requested service. To
date, requestors have not submitted sufficient comparative analyses
supporting the approval of skill based training (such as teaching a
patient how to administer self-injectable drugs) for telehealth.
Likewise, requestors have not submitted comparative analyses showing
that the use of a telecommunications system is an adequate substitute
for group counseling services (DSMT or otherwise) furnished in person.
We agree with the commenters that skill-based training, such as
teaching patients how to inject insulin, would be difficult to
accomplish without the physical in person presence of the teaching
practitioner. However, we disagree that this training element should be
carved out of individual (or group) DSMT for purposes of providing
Medicare telehealth services. The skill-based training involved in
teaching beneficiaries the skills necessary for the self-administration
of injectable drugs is a key component of this statutorily defined
benefit (and therefore inherent in the codes that describe DSMT). We do
not believe that it would be appropriate to carve out this statutorily
required component of DSMT for purposes of telehealth.
b. Critical Care Services
The (UPMC) submitted a request to add critical care services (as
defined by HCPCS codes 99291 and 99292) as a ``Category 1'' service.
The requester draws similarities to the evaluation and management (E/M)
consultation services currently approved for telehealth. The requester
noted that the primary difference between critical care and other E/M
services already approved for telehealth is that critical care is
specific to patients with vital organ failure. Anecdotally, UPMC has
found that the use of telecommunications systems and software gives
stroke patients timely access to highly specialized physicians.
According to the request, UPMC physicians are able to give ``an equally
effective examination, spend the same amount of time with the patient
and develop the same course of treatment just as if they were
bedside.''
The acuity of a critical care patient is significantly greater than
the acuity generally associated with patients receiving the E/M
services approved for telehealth. Because of the acuity of critically
ill patients, we do not consider critical care services similar to any
services on the current list of Medicare telehealth services.
Therefore, we believe critical care must be evaluated as a Category 2
service.
Because we consider critical care services to be Category 2, we
needed to evaluate whether these are services for which telehealth can
be an adequate substitute for a face-to-face encounter. We had no
evidence suggesting that the use of telehealth could be a reasonable
surrogate for the face-to-face delivery of this type of care. As such,
we did not propose to add critical care services (as defined by HCPCS
codes 99291 and 99292) to the list of approved telehealth services.
Comment: UPMC submitted a detailed description of their experiences
using telehealth to support the treatment of acute stroke patients and
provided supporting studies describing the use of telemedicine in
remote stroke assessment. Per their comment, remote stroke assessment
has specific and unique clinical importance because an urgent decision,
based in part on a neurological examination, must be made regarding the
administration of thrombolytic therapy within 3 hours of the onset of
stroke symptoms. The elements of remote stroke assessment involve
discrete interactions between physicians and patients, and the
consultative input of specialists experienced in acute stroke treatment
is considered in directing the bedside care of the patient.
Some commenters were concerned that our proposal will not permit
the use of telehealth to treat critically ill patients. We received
comments and supporting documentation regarding the feasibility and
value of providing consultations via telehealth to patients who are
critically ill.
Response: Consultations are already included on the list of
approved telehealth services. Our proposal not to add critical care
services (as defined by 99291 and 99292) to the list of Medicare
telehealth services does not preclude physicians or NPPs from providing
medically necessary and clinically appropriate telehealth consultations
to patients who are critically ill. We believe that permitting initial
and follow up inpatient consultation via telehealth will help provide
greater access to specialty care for critically ill patients (including
stroke patients). If guidance or advice is needed regarding a
critically ill patient, a consultation may be requested from an
appropriate source and may be furnished as a telehealth service. (See
the CMS Internet-Only Medicare Claims Processing Manual, Chapter 12,
Section 30.6.10 for more information on Medicare policy regarding
payment for consultation services.)
In support of the request to approve critical care services (as
described by HCPCS codes 99291 through 99292), UPMC provided
comparative analyses involving the use of an interactive audio and
video telecommunications system as a substitute for an in-person (face-
to-face) clinical assessment. However, the focus of these studies was
limited to stroke patients (critical care services include a broad
range of disease categories). Additionally, one study recruited
clinically stable patients. This study noted that ``because of the
subacute nature of our test bed, the current data must be considered
preliminary in determining their potential impact on actual clinical
decision making.'' The same study also noted that although the use of
telehealth ``may expedite stroke-related decision making, it cannot and
should not be thought of as a substitute for the comprehensive clinical
evaluation of the acute stroke patient, including thorough medical and
cardiac evaluations.'' In another study submitted, the patients
selected were not randomized.
Comment: A few commenters supported our proposal not to add
critical care services to the list of Medicare approved telehealth
services. The commenters believe that, within the current standards of
practice, critical care services require the physical presence of the
physician rendering the critical care services.
We received approximately 20 comments expressing opposition to our
proposal not to add critical care services to the list of Medicare
approved telehealth services which distinguished between their use of
telehealth for
[[Page 69745]]
critical care services and the use of telehealth for remote stroke
assessments, as described in the original request. Many of the
commenters characterized our proposal as a ``non-coverage
determination'' of remote critical care services and described an
intensive care unit (ICU) model that integrates continuous surveillance
of the ICU with an electronic medical records interface. This model is
also programmed to automatically prompt the physician to rapidly
respond and intervene in the event of certain changes in a patient's
physiological status. Many of these commenters included documentation
and references to studies that the adoption of this model reduced
medical errors; enhanced patient safety; reduced complications;
decreased overall length of stay in the ICU; and resulted in a
statistically significant decrease in ICU mortality in comparison to
the traditional ICU model. The commenters also noted that patient
outcomes have been equivalent if not superior to patient outcomes prior
to adopting this model of care.
The American Medical Association (AMA) recently developed Category
III tracking codes for remote critical care services (0188T-0189T). Two
specialty societies commented that they are working with other critical
care organizations to collect and analyze data on remote critical care
services, as requested by the CPT editorial panel.
Response: In the CY 2009 PFS proposed rule, we explained that we
have no evidence suggesting that the use of telehealth could be a
reasonable surrogate for the face-to-face delivery of critical care
services, as defined by HCPCS codes 99291 and 99292. We agree with the
comments that, within the current standards of practice, critical care
services require the physical presence of the physician rendering the
critical care services.
Our proposal not to add critical care services to the list of
approved telehealth services for Medicare was in no way a ``non-
coverage determination'' for remote critical care services described by
the AMA's Category III tracking codes, 0188T-0189T. Consistent with the
AMA's creation of those tracking codes, we believe that remote critical
care services are different from the telehealth delivery of critical
care services (as defined by CPT codes 99291 through 99292). Category
III CPT codes track utilization of a service, facilitating data
collection on, and assessment of new services and procedures. We
believe that the data collected for these tracking codes will help
provide useful information on how to best categorize and value remote
critical care services in the future. However, at the present time, we
do not have sufficient evidence that the provision of critical care
services (as represented by HCPCS codes 99291 and 99292) via telehealth
is an adequate substitute for an in person (face-to-face) encounter.
c. Subsequent Hospital Care
Prior to 2006, follow-up inpatient consultations (as described by
CPT codes 99261 through 99263) were approved for telehealth. CPT 2006
deleted the follow-up inpatient consultation codes and advised
practitioners instead to bill for these services using the codes for
subsequent hospital care (as described by CPT codes 99231 through
99233). For CY 2006, we removed the deleted codes for follow-up
inpatient consultations from the list of approved telehealth services.
In the CY 2008 PFS proposed rule (72 FR 38144) and subsequent final
rule with comment period (72 FR 66250), we discussed a request we
received from the ATA to add subsequent hospital care to the list of
approved telehealth services. Because there is currently no method for
practitioners to bill for follow-up inpatient consultations delivered
via telehealth, the ATA requested that we approve use of the subsequent
hospital care codes to bill follow-up inpatient consultations furnished
via telehealth, as well as to bill for subsequent hospital care
services furnished via telehealth that are related to the ongoing E/M
of the hospital inpatient (72 FR 66250). Since the subsequent hospital
care codes describe a broader range of services than follow-up
inpatient consultation, including some services that may not be
appropriate for addition to the list of telehealth services, we did not
add subsequent hospital care to the list of approved telehealth
services. Instead, we committed to continue to evaluate whether, and if
so, by what mechanism subsequent hospital care could be approved for
telehealth when used for follow-up inpatient consultations (72 FR
66249).
In the CY 2009 PFS proposed rule, we proposed to create a new
series of HCPCS codes for follow-up inpatient telehealth consultations.
Practitioners would use these codes to submit claims to their Medicare
contractors for payment of follow-up inpatient consultations provided
via telehealth. We proposed that the new HCPCS codes would be limited
to the range of services included in the scope of the previous CPT
codes for follow-up inpatient consultations, and the descriptions would
be modified to limit the use of such services for telehealth. The HCPCS
codes would clearly designate these services as follow-up inpatient
consultations provided via telehealth, and not subsequent hospital care
used for inpatient visits. Utilization of these codes would allow for
payment for these services, as well as enable us to monitor whether the
codes are used appropriately. We also proposed to establish the RVUs
for these services at the same level as the RVUs established for
subsequent hospital care (as described by CPT codes 99231 through
99233). We believe this is appropriate because a physician or
practitioner furnishing a telehealth service is paid an amount equal to
the amount that would have been paid if the service had been furnished
without the use of a telecommunication system. Since physicians and
practitioners furnishing follow-up inpatient consultations in a face-
to-face encounter must continue to utilize subsequent hospital care
codes (as described by CPT codes 99231 through 99233), we believe it is
appropriate to set the RVUs for the new telehealth G codes at the same
level as for the subsequent hospital care codes.
Comment: Several commenters enthusiastically supported our proposal
to create a new series of HCPCS codes for follow-up inpatient
telehealth consultations. Some commenters were concerned that our
proposed definition of the new HCPCS codes did not clearly distinguish
these consultations from subsequent hospital care, and they believed it
would not preclude the use of telehealth for the ongoing E/M of an
inpatient. Other commenters supported our effort to reinstitute follow-
up inpatient consultations delivered via telehealth, but discouraged us
from creating new HCPCS codes for the long-term. A few commenters
recommended that instead we approve subsequent hospital care for
telehealth. The AMA and others urged us to implement the proposed G
codes as an interim measure, while working expeditiously with the CPT
Editorial Panel and the RUC to develop appropriate codes and RVUs for
the long-term.
Response: We are pleased that the majority of commenters supported
our proposal to create a new series of HCPCS codes for follow-up
inpatient telehealth consultations. As discussed in the CY 2009 PFS
proposed rule, we considered other approaches to provide and bill for
follow-up inpatient consultations delivered via telehealth. In response
to the comments requesting that we approve subsequent hospital care for
telehealth only when the codes are used for follow-up inpatient
consultations, we were concerned that
[[Page 69746]]
the other approaches under consideration would lead to a misuse of the
service, and practitioners would provide a broader range of services
via telehealth than was formerly approved, including the ongoing, day-
to-day E/M of a hospital inpatient. We were also concerned that it
could be difficult to implement sufficient controls and monitoring to
ensure that whatever mechanism we created would be limited to the
delivery of services that were formerly described as follow-up
inpatient consultations. We continue to believe that creating HCPCS
codes specific to the telehealth delivery of follow-up inpatient
consultations allows us to provide payment for these services, as well
as enables us to best monitor whether the codes are used appropriately.
As noted previously, CPT deleted the follow-up inpatient
consultation codes. We determined that there was a need to establish a
method by which practitioners could provide and bill Medicare for
follow-up inpatient consultations delivered via telehealth, without
allowing the ongoing E/M of a hospital inpatient via telehealth.
Physicians and NPPs furnishing follow-up inpatient consultations in a
face-to-face encounter must continue to utilize subsequent hospital
care codes (as described by CPT codes 99231 through 99233).
In response to commenters concerns that the new HCPCS codes will
not prevent the use of telehealth for the ongoing E/M of an inpatient,
we have modified the definition of follow-up inpatient telehealth
consultations. We clarified that the criteria for these services will
be subject to and consistent with Medicare policy for consultation
services, including criteria that would distinguish a follow-up
consultation from a subsequent E/M visit.
Result of Evaluation of 2009 Requests
We will finalize our proposal not to add DSMT (as defined by HCPCS
codes G0108 and G0109) and not to add critical care services (as
defined by HCPCS codes 99291 and 99292) to the list of Medicare
telehealth services.
We will finalize our proposal to add follow-up inpatient telehealth
consultation, as represented by HCPCS codes G0406 through G0408, to the
list of Medicare telehealth services. We will also finalize our
proposal to add follow-up inpatient telehealth consultations to the
list of Medicare services at Sec. 410.78 and Sec. 414.65.
Practitioners would use the new HCPCS codes to submit claims to
their Medicare contractors for payment of follow-up inpatient
consultations provided via telehealth. These new HCPCS codes are
limited to the range of services included in the scope of the previous
CPT codes for follow-up inpatient consultations, and the descriptions
limit the use of such services for telehealth. The HCPCS codes clearly
designate these services as follow-up inpatient consultations provided
via telehealth, and not subsequent hospital care used for inpatient
visits. Utilization of these codes will allow for payment for these
services, as well as enable us to monitor whether the codes are used
appropriately.
We also will finalize our proposal to establish the RVUs for these
services at the same level as the RVUs established for subsequent
hospital care (as described by CPT codes 99231 through 99233).
Physicians and NPPs furnishing follow-up inpatient consultations in a
face-to-face encounter must continue to utilize subsequent hospital
care codes (as described by CPT codes 99231 through 99233).
We are finalizing our proposal to create HCPCS codes specific to
the telehealth delivery of follow-up inpatient consultations solely to
re-establish the ability for practitioners to provide and bill for
follow-up inpatient consultations delivered via telehealth. These codes
are intended for use by practitioners serving beneficiaries located at
qualifying originating sites (as defined in Sec. 410.78) requiring the
consultative input of physicians who are not available for an in person
(face-to-face) encounter. These codes are not intended to include the
ongoing E/M of a hospital inpatient.
Claims for follow-up inpatient telehealth consultations will be
submitted to the Medicare contractors that process claims for the area
where the physician or practitioner who furnishes the service is
located. Physicians/practitioners must submit the appropriate HCPCS
procedure code for follow-up inpatient telehealth consultations along
with the ``GT'' modifier (``via interactive audio and video
telecommunications system''). By coding and billing the ``GT'' modifier
with the inpatient follow-up inpatient telehealth consultation codes,
the distant site physician/practitioner certifies that the beneficiary
was present at an eligible originating site when the telehealth service
was furnished. (See the CMS Internet-Only Medicare Claims Processing
Manual, Pub. 100-04, Chapter 12, Sec. 190.6.1 for instructions for
submission of interactive telehealth claims.)
In the case of Federal telemedicine demonstration programs
conducted in Alaska or Hawaii, store-and-forward technologies may be
used as a substitute for an interactive telecommunications system.
Covered store-and-forward telehealth services are billed with the
``GQ'' modifier, ``via asynchronous telecommunications system.'' By
using the ``GQ'' modifier, the distant site physician/practitioner
certifies that the asynchronous medical file was collected and
transmitted to him or her at the distant site from a Federal
telemedicine demonstration project conducted in Alaska or Hawaii. (See
the CMS Internet-Only Medicare Claims Processing Manual, Pub. 100-04,
Chapter 12, Sec. 190.6.2 for instructions for submission of telehealth
store and forward claims.)
Follow-Up Inpatient Telehealth Consultations Defined
Follow-up inpatient telehealth consultations are consultative
visits furnished via telehealth to follow up on an initial
consultation, or subsequent consultative visits requested by the
attending physician. The initial inpatient consultation may have been
provided in person or via telehealth. The conditions of payment for
follow-up inpatient telehealth consultations, including qualifying
originating sites and the types of telecommunications systems
recognized by Medicare, are subject to the provisions of Sec. 410.78.
Payment for these services is subject to the provisions of Sec.
414.65.
Follow-up inpatient telehealth consultations include monitoring
progress, recommending management modifications, or advising on a new
plan of care in response to changes in the patient's status or no
changes on the consulted health issue. Counseling and coordination of
care with other providers or agencies is included as well, consistent
with the nature of the problem(s) and the patient's needs. The
physician or practitioner who furnishes the inpatient follow-up
consultation via telehealth cannot be the physician of record or the
attending physician, and the follow-up inpatient consultation would be
distinct from the follow-up care provided by a physician of record or
the attending physician. If a physician consultant has initiated
treatment at an initial consultation and participates thereafter in the
patient's ongoing care management, such care would not be included in
the definition of a follow-up inpatient consultation and is not
appropriate for delivery via telehealth. Follow-up inpatient telehealth
consultations are subject to the criteria for consultation services, as
[[Page 69747]]
described in the CMS Internet-Only Medicare Claims Processing Manual,
Pub 100-04, Chapter 12, Sec. 30.6.10.
Payment for follow-up inpatient telehealth consultations includes
all consultation related services furnished before, during, and after
communicating with the patient via telehealth. Pre-service activities
would include, but would not be limited to, reviewing patient data (for
example, diagnostic and imaging studies, interim lab work) and
communicating with other professionals or family members. Intra-service
activities must include at least two of the three key elements
described below for each procedure code. Post-service activities would
include, but would not be limited to, completing medical records or
other documentation and communicating results of the consultation and
further care plans to other health care professionals. No additional E/
M service could be billed for work related to a follow-up inpatient
telehealth consultation.
Follow-up inpatient telehealth consultations could be provided at
various levels of complexity. To reflect this, we are establishing
three codes.
Practitioners taking a problem focused interval history, conducting
a problem focused examination, and engaging in medical decision making
that is straightforward or of low complexity, would bill a limited
service, using HCPCS code G0406. At this level of service,
practitioners would typically spend 15 minutes communicating with the
patient via telehealth.
Practitioners taking an expanded focused interval history,
conducting an expanded problem focused examination, and engaging in
medical decision making that is of moderate complexity, would bill an
intermediate service using HCPCS code G0407. At this level of service,
practitioners would typically spend 25 minutes communicating with the
patient via telehealth.
Practitioners taking a detailed interval history, conducting a
detailed examination, and engaging in medical decision making that is
of high complexity, would bill a complex service, using HCPCS code
G0408. At this level of service, practitioners would typically spend 35
minutes or more communicating with the patient via telehealth.
We are establishing the following HCPCS codes to describe follow-up
inpatient consultations approved for telehealth:
G0406, Follow-up inpatient telehealth consultation,
limited, typically 15 minutes communicating with the patient via
telehealth.
G0407, Follow-up inpatient telehealth consultation,
intermediate, typically 25 minutes communicating with the patient via
telehealth.
G0408, Follow-up inpatient telehealth consultation,
complex, typically 35 minutes or more communicating with the patient
via telehealth.
3. Other Issues
Comment: In 2005, CMS received a request to add the following
procedure codes to the list of approved telehealth services: initial
nursing facility care (as described by HCPCS codes 99304 through
99306); subsequent nursing facility care (HCPCS codes 99307 through
99310); nursing facility discharge services (HCPCS codes 99315 and
99316); and other nursing facility services (as described by HCPCS code
99318). In the CY 2007 PFS final rule with comment period, we did not
add these nursing facility care services to the list of approved
telehealth services because these procedure codes did not describe
services that were appropriate to the originating sites eligible in CY
2007. At that time, SNFs were not defined in the statute as originating
sites. (See 71 FR 69657.)
Section 149 of the MIPPA recognizes SNFs as telehealth originating
sites, effective for services furnished on or after January 1, 2009. In
light of this provision, the American Telemedicine Association (ATA)
urged us to add nursing facility care codes to the list of telehealth
services for CY 2009, as requested in 2005.
Response: Section 149 of the MIPPA did not add any services to the
approved telehealth list. Currently, telehealth may substitute for a
face-to-face, ``hands on'' encounter for professional consultations,
office visits, office psychiatry services, and a limited number of
other PFS services that we have determined to be appropriate for
telehealth. We will continue to review requests for additions to this
list using our existing criteria.
Telehealth is a delivery mechanism for otherwise payable Part B
services. Although the requested nursing facility services are not on
the approved telehealth list, we will pay eligible distant site
physicians or practitioners for eligible Medicare telehealth services
if the service is separately payable under the PFS when furnished in a
face-to-face encounter at a SNF effective January 1, 2009.
Since we believed it was not relevant to add these codes when SNFs
were not eligible originating sites, we did not include a full review
of these codes in the CY 2007 PFS proposed rule or final rule with
comment period. We also note that in considering nursing facility care
for telehealth, we would need to carefully evaluate the use of
telehealth for the personal visits that are currently required under
Sec. 483.40, (which are billed using procedure codes included in this
request). Overall, we believe that it would be more appropriate to
consider the addition of nursing facility care services for telehealth
through full notice and comment procedures.
In the CY 2010 PFS proposed rule, we will address the request to
add nursing facility care services to the list of approved telehealth
services, as received in 2005. In light of the previous request to add
these services and the new legislation adding SNFs as permissible
telehealth originating sites, we will accept additional information in
support of this request for consideration in the CY 2010 proposed rule
if received prior to December 31, 2008.
Comment: We received a request to add health and behavior
assessment and intervention codes (as described by HCPCS codes 96150
through 96154) to the list of approved telehealth services.
Response: Requests submitted before the end of CY 2008 will be
considered for the CY 2010 proposed rule. Requestors should be advised
that each request to add a service to the list of Medicare telehealth
services must include any supporting documentation the requestor wishes
us to consider as we review the request. For more information on
submitting a request for an addition to the list of Medicare telehealth
services, including where to directly mail these requests, visit our
Web site at http://www.cms.hhs.gov/telehealth/.
E. Specific Coding Issues Related to the Physician Fee Schedule
1. Payment for Preadministration-Related Services for Intravenous
Infusion of Immune Globulin
In the CY 2009 PFS proposed rule (73 FR 38518), we proposed to
discontinue payment for HCPCS code G0332, Services for intravenous
infusion of immunoglobulin prior to administration (this service is to
be billed in conjunction with administration of immunoglobulin), for
services furnished after December 31, 2008.
Immune globulin is a complicated biological product that is
purified from human plasma obtained from human plasma donors. In past
years, there have been issues reported with the supply of intravenous
immune globulin (IVIG) due to numerous factors including decreased
manufacturing capacity, increased usage, more sophisticated
[[Page 69748]]
processing steps, and low demand for byproducts from IVIG
fractionation.
When IVIG is furnished to a patient in a physician's office, three
different payments are usually recognized: payment for the IVIG product
itself (described by a HCPCS J code); payment for the administration of
the IVIG product (described by one or more CPT codes); and similar
payment for the preadministration-related services (HCPCS code G0332).
The Medicare payment rates for IVIG products are established through
the Part B average sales price (ASP) drug payment methodology.
As explained in detail in the CY 2006, CY 2007 and CY 2008 PFS
final rules with comment period (70 FR 70218 to 70221, 71 FR 69678 to
69679, and 72 FR 66254 to 66255, respectively), we created, in 2006, a
temporary code in order to pay separately for the IVIG
preadministration-related services in order to assist in ensuring
appropriate access to IVIG during a period of market instability. Part
of this instability was due to the implementation of the new ASP
payment methodology for IVIG drugs which began in 2005. The payment for
preadministration-related services was continued in 2007 and 2008
because of continued reported instability in the IVIG marketplace. The
preadministration-related payment was designed to pay the physician
practice for the added costs of obtaining adequate supplies of the
appropriate IVIG product and scheduling the patient infusion during a
period of market uncertainty.
The PFS rates for the pre-administration service codes were $72,
$75, and $75 respectively in 2006, 2007, and 2008.
In the CY 2009 PFS proposed rule, we noted that the Office of the
Inspector General's (OIG) study on the availability and pricing of IVIG
published in a April 2007 report entitled, ``Intravenous Immune
Globulin: Medicare Payment and Availability (OEI-03-05-00404),'' found
that for the third quarter of CY 2006, just over half of IVIG sales to
hospitals and physicians were at prices below Medicare payment amounts.
Relative to the previous three quarters, this represented a substantial
increase of the percentage of sales with prices below Medicare amounts.
During the third quarter of 2006, 56 percent of IVIG sales to hospitals
and over 59 percent of IVIG sales to physicians by the largest 3
distributors occurred at prices below the Medicare payment amounts. We
reviewed national claims data for IVIG drug utilization as well as
utilization of the preadministration-related services HCPCS code. The
data show modest increases in the utilization of IVIG drugs and the
preadministration-related services code, which suggest that IVIG
pricing and access may be improving.
In the CY 2009 PFS proposed rule, we noted that these factors,
taken as a whole, suggested a lessening of the instability of the IVIG
market. As a result of these developments, we proposed to discontinue
the preadministration-related service payment in 2009 for HCPCS code
G0332. For CY 2009, under the Outpatient Prospective Payment System
(OPPS), a proposal was made to package payment for HCPCS code G0332 (73
FR 41457).
The following is a summary of the comments received and our
responses.
Comment: We received several comments from beneficiaries, patient
advocate groups, manufacturers, and physicians. Most commenters opposed
the elimination of the preadministration-related services payment. A
few commenters requested that the preadministration-related services
payment become permanent for both the PFS and the OPPS. Some commenters
stated that the market conditions for IVIG are not fundamentally
different than they were when CMS initially instituted the
preadministration-related services payment in CY 2006. The commenters
requested that CMS continue the separate payment until there is more
stability in the IVIG market. Several commenters stated that the
information CMS presented in the CY 2009 PFS proposed rule did not
conclusively prove that the IVIG market was stabilizing. The commenters
stated that significant access problems remain.
In response to the findings of the OIG report, some commenters
stated that the lag inherent in the ASP pricing system may have played
a role in substantially increasing the percentage of IVIG sales at
prices below the Medicare payment amounts in the third quarter of 2006.
The preadministration-related service fee was cited as providing some
assistance to physicians and hospitals that are experiencing problems
obtaining IVIG. Several commenters noted that the OIG report could be
interpreted as leaving a large percent of hospitals and physicians
unable to acquire IVIG at prices below Medicare's payment amounts. Many
commenters stated that they do not believe the introduction of new
brand-specific reporting codes for IVIG will result in a more stable
marketplace.
One commenter presented patient surveys conducted in CYs 2006, 2007
and 2008 which described access limitations and shifts in the site of
service. These surveys were limited in size and surveyed only patients
receiving IVIG for primary immune deficiency. Another commenter
referred to a report on IVIG issued in February 2007 titled, ``Analysis
of Supply, Distribution, Demand and Access Issues Associated with
Immune Globulin Intravenous'' prepared by the Eastern Research Group
under contract (Contract No. HHSP23320045012XI) to the Assistant
Secretary of Planning and Evaluation in the U.S. Department of Health
and Human Services and cited this report as an important source of
information on IVIG usage and patient access.
Response: The separate payment for IVIG preadministration-related
service was designed to compensate the physician practice for the
additional, unusual, and temporary costs associated with obtaining IVIG
products and scheduling patient infusions during a temporary period of
market instability. This payment was never intended to subsidize
payment for drugs made under the ASP system.
In the CY 2009 PFS proposed rule, we referred to data from the OIG
study that indicated that for the third quarter of 2006, just over half
of IVIG sales to hospitals and physicians were at prices below Medicare
payment amounts. Relative to the previous three quarters, this
represented a substantial increase of the percentage of sales with
prices below Medicare amounts. We agree with the commenters that it is
likely that increased ASP payments were the result of previous price
increases from past quarters influencing future ASP data. Furthermore,
the new HCPCS codes for IVIG products allow the physician to report and
receive payment for the specific product furnished to the patient. We
stated clearly in the CY 2006 PFS final rule with comment period that
the preadministration-related services payment policy was a temporary
measure to pay physicians for the unusual and temporary costs
associated with procuring IVIG. We expected that these costs would
decline over time as practices became more familiar with the nuances of
the IVIG market and the availability of the limited primary and
secondary suppliers in their areas.
We did not reference the report conducted by the Eastern Research
Group (Contract No. HHSP23320045012XI) in the proposed rule. As the
commenter noted, this report provides important comprehensive
background on the IVIG marketplace. For example, it provides an
analysis of IVIG supply and distribution, and an analysis of the
[[Page 69749]]
demand for and utilization of IVIG products. This report describes how
IVIG is administered and paid and includes information from the
industry and others on physician and patient problems with access to
IVIG. The study is a collection of multi-source information that
provides an understanding of the IVIG marketplace. One limitation of
the study is it depicts the market only up through the first quarter of
2006 and it does not have detailed information on IVIG pricing as the
OIG report did. The OIG report also contains data from a later time
period because it includes data through the third quarter of 2006.
We note, based on the information that follows, that the IVIG
market today appears more stable than it was in CY 2006. We have
reviewed national claims data for IVIG drug utilization, as well as the
utilization of the preadministration-related services HCPCS code. These
data show a modest increase in the utilization of IVIG and the
preadministration-related services code in both physicians' offices and
hospital outpatient departments from CY 2006 to CY 2007, after a period
of decreased IVIG utilization in physicians' offices with a shift of
IVIG infusions to the hospital outpatient department in the previous
year, which suggests that IVIG pricing and access may be improving.
National Medicare claims history data show that there were about
3.1 million units of IVIG administered in physicians' offices in CY
2006, and 7.3 million units in hospital outpatient departments. In CY
2007, those numbers rose to estimates of 3.3 million units and 8.1
million units in the office and hospital outpatient department
settings, respectively. Under the OPPS, the total number of days of
IVIG administration increased modestly from CY 2006 to CY 2007, from
113,000 to 119,000. Aggregate allowed IVIG charges in the physician's
office setting for CY 2006 were $82 million, while total payments
(including beneficiary copayments) under the OPPS were $184 million for
the same time period. In CY 2007, aggregate allowed charges in the
physician's office setting are estimated at $8 million, while total
OPPS payments are estimated at $246 million.
In summary, beginning in CY 2007, IVIG utilization increased
modestly in both the physician's office setting and the hospital
outpatient department, after a prior shift to the hospital and away
from the physicians' offices, presumably reflecting increasing
availability of IVIG and appropriate payment for the drug in both
settings.
According to information on the Plasma Protein Therapeutics
Association (PPTA) Web site regarding the supply of IVIG, in the past
year, while the supply has spiked at various times throughout the year,
the supply has remained above or near the 12-month moving average.
While we acknowledge that the supply is only one of several factors
that influence the market, we believe that an adequate supply is one
significant factor that contributes to better access to IVIG for
patients.
Therefore, because we believe that the reported transient market
conditions that led us to adopt the separate payment for IVIG
preadministration-related services have improved, we believe that
continuation of the separate payment for preadministration services
beyond CY 2008 is not warranted.
After consideration of the public comments received, we are
finalizing our CY 2009 proposal, without modification, to discontinue
separate payment under the PFS for IVIG preadministration-related
services described by HCPCS code G0332. The treatment of payment for
preadministration-related services under the OPPS will be addressed
separately in that final rule. We will continue to work with IVIG
stakeholders to understand their concerns regarding the pricing of IVIG
and Medicare beneficiary access to this important therapy.
2. Multiple Procedure Payment Reduction for Diagnostic Imaging
In general, we price diagnostic imaging procedures in the following
three ways:
The PC represents the physician's interpretation (PC-only
services are billed with the 26 modifier).
The TC represents PE and includes clinical staff,
supplies, and equipment (TC-only services are billed with the TC
modifier).
The global service represents both PC and TC.
Effective January 1, 2006, we implemented a multiple procedure
payment reduction (MPPR) on certain diagnostic imaging procedures (71
FR 48982 through 49252 and 71 FR 69624 through 70251). When two or more
procedures within one of 11 imaging code families are furnished on the
same patient in a single session, the TC of the highest priced
procedure is paid at 100 percent and the TC of each subsequent
procedure is paid at 75 percent (a 25-percent reduction). The reduction
does not apply to the PC.
It is necessary to periodically update the list of codes subject to
the MPPR to reflect new and deleted codes. In the CY 2009 PFS proposed
rule, we proposed to subject several additional procedures to the MPPR
(73 FR 38519). Six procedures represent codes newly created since the
MPPR list was established. Four additional procedures have been
identified as similar to procedures currently subject to the MPPR. We
also proposed to remove CPT code 76778, a deleted code, from the list.
Table 6 contains the proposed additions to the list. After we adopted
the MPPR, section 5102 of the Deficit Reduction Act of 2005 (Pub. L.
109-171) (DRA) exempted the expenditure reductions resulting from this
policy from the statutory BN requirement. Therefore, we proposed that
expenditure reductions resulting from these changes be exempt from BN.
(See the Regulatory Impact Analysis in section XVI. of this final rule
with comment period for a discussion of BN.) The complete list of
procedures subject to the MPPR is in Addendum F of this final rule with
comment period.
Table 6--Procedures Proposed for Multiple Procedure Payment Reduction
------------------------------------------------------------------------
CPT code Short descriptor Code family
------------------------------------------------------------------------
70336......................... mri, Family 5 MRI and MRA
temporomandibula (Head/Brain/Neck).
r joint(s).
70554......................... Fmri brain by Family 5 MRI and MRA
tech. (Head/Brain/Neck).
75557......................... Cardiac mri for Family 4 MRI and MRA
morph. (Chest/Abd/Pelvis).
75559......................... Cardiac mri w/ Family 4 MRI and MRA
stress img. (Chest/Abd/Pelvis).
75561......................... Cardiac mri for Family 4 MRI and MRA
morph w/dye. (Chest/Abd/Pelvis).
75563......................... Cardiac mri w/ Family 4 MRI and MRA
stress img & dye. (Chest/Abd/Pelvis).
76776......................... Us exam k transpl Family 1 Ultrasound
w/doppler. (Chest/Abdomen/
Pelvis--Non-
Obstetrical).
76870......................... Us exam, scrotum. Family 1 Ultrasound
(Chest/Abdomen/
Pelvis--Non-
Obstetrical).
77058......................... Mri, one breast.. Family 4 MRI and MRA
(Chest/Abd/Pelvis).
[[Page 69750]]
77059......................... Mri, broth Family 4 MRI and MRA
breasts. (Chest/Abd/Pelvis).
------------------------------------------------------------------------
The following is a summary of the comments we received and our
responses.
Comment: Some commenters indicated that the MPPR should not be
extended to additional procedures without providing data supporting the
appropriateness of a 25-percent payment reduction for the additional
procedures. A commenter expressed concern that the MPPR was being
extended to include breast MRIs, but the commenter provided no other
information.
Response: As stated in the CY 2006 PFS final rule with comment
period (70 FR 70261), when multiple images are taken in a single
session, most of the clinical labor activities and supplies are not
duplicated for subsequent procedures. Specifically, the following
activities are not duplicated for subsequent procedures:
Greeting the patient.
Positioning and escorting the patient.
Providing education and obtaining consent.
Retrieving prior exams.
Setting up the IV.
Preparing and cleaning the room.
In addition, we considered that supplies, with the exception of
film, are not duplicated for subsequent procedures.
To determine the appropriate level of the payment reduction for
multiple procedures, we examined multiple pairs of procedure codes from
the families representing all modalities (that is, ultrasound, CT/CTA,
and MRI/MRA studies) that were frequently performed on a single day
based on historical claims data. Using PE input data provided by the
RUC, we factored out the clinical staff minutes for the activities we
indicated are not duplicated for subsequent procedures, and the
supplies, other than film, which we considered are not duplicated for
subsequent procedures. We did not assume any reduction in procedure
(scanning) time or equipment for subsequent procedures. However,
equipment time and indirect costs are allocated based on clinical labor
time; therefore, these inputs were reduced accordingly. Removing the PE
inputs for activities that are not duplicated, and adjusting the
equipment time and indirect costs for the individual pairs of
procedures studied, supported payment reductions ranging from 40 to 59
percent for the subsequent services. Because we found a relatively
narrow range of percentage payment reductions across modalities and
families, and taking into consideration that we did not eliminate any
duplicative image acquisition time for subsequent procedures in our
analysis, we originally proposed an across-the-board MPPR for all 11
families of 50 percent (which is approximately the midpoint of the
range established through our analysis). We believe this level of
reduction was both justified and conservative (70 FR 45849). To allow
for a transition of the changes in payments for these services
attributable to this policy, we implemented a 25 percent payment
reduction for all code families in CY 2006 which was scheduled to
increase to a 50 percent reduction in CY 2007.
Subsequent to the publication of the CY 2006 PFS final rule with
comment period, section 5102 (b) of the DRA capped the PFS payment for
most imaging services at the amount paid under the hospital outpatient
prospective payment system (OPPS). In addition, in response to our
request for data on the appropriateness of the 50 percent reduction in
the CY 2006 PFS final rule with comment period, the American College of
Radiology (ACR) provided information for 25 code combinations
supporting a reduction of between 21 and 44 percent. Given the expected
interaction between the MPPR policy and the further imaging payment
reductions mandated by section 5102(b) of the DRA, along with the
information we received from the ACR on the MPPR as it applies to
common combinations of imaging services, we decided it was prudent to
maintain the MPPR at its current 25 percent level while we continue to
examine the appropriate payment levels. Therefore, we have maintained
the MPPR at the 25 percent level.
In establishing the MPPR, we elected to use a single reduction
percentage for all code pairs. We adopted a percentage reduction that
is considerably lower than the range supported by our prior analysis,
and slightly higher than the lowest percentage supported by ACR's
analysis. We do not believe it is necessary to conduct another analysis
for the additional codes because we adopted a conservative reduction
percentage and are continuing use of a single reduction percentage for
all code pairs. We believe the payment reduction policy, described
above, represents an appropriate reduction for the typical delivery of
multiple imaging services furnished in the same session.
Furthermore, in establishing the MPPR, we limited it to codes in
the same family, that is, contiguous areas of the body that are
commonly furnished on the same patient, in the same session, on the
same day. We believe that the eight CPT codes that were newly created
for 2007 or 2008, and proposed for inclusion in the MPPR beginning in
CY 2009 (CPT codes 70554, 75557, 75559, 75561, 75563, 76776, 77058, and
77059), would have been included on the MPPR list when it was finalized
in CY 2006, had they existed at the time. These CPT codes are similar
to CPT codes that were selected for the list in CY 2006 and can be
classified into the 11 contiguous body area families already in
existence. For example, the procedure described by CPT code 76776
(Ultrasound, transplanted kidney, real time and duplex Doppler with
image documentation) is similar to the procedure described by CPT code
76705 (Ultrasound, abdominal, real time with image documentation;
limited (for example, single organ, quadrant, follow-up), which has
been subject to the MPPR since the creation of the policy in CY 2006.
Similarly, we believe we should add CPT codes 70336 and 76870, which
were in existence in CY 2006, to the list because they also share
characteristics with other procedures subject to the MPPR.
In response to the commenter expressing concern that we were adding
the breast MRI CPT codes 77058 and 77059 in particular, we are not
certain of the reason for his or her concern because none was stated.
However, we continue to believe it is appropriate to add these CPT
codes because their addition is consistent with our policy for other
procedures included in Family 4, which describe procedures involving
MRI of the chest area.
To the extent that the newly added procedures do not meet the MPPR
criteria (for example, if they are not performed in the same session),
they will be unaffected by the MPPR.
[[Page 69751]]
Comment: Commenters noted that we proposed to establish new
composite rates for certain multiple diagnostic imaging procedures
performed at the same time in hospital outpatient settings. One
commenter asked whether individual procedure payment rates, or the
composite payment rates under hospital OPPS will be used for purposes
of applying the OPPS cap to PFS services. The commenter also asked
whether we will continue our policy of applying the MPPR before
application of the OPPS cap.
Response: Under the PFS, services are paid based on the individual
CPT or HCPCS code. Therefore, the OPPS cap will continue to be applied
based on the hospital OPPS ambulatory payment classification (APC) rate
for the individual procedure, and not the composite rate. The policy of
applying the MPPR before applying the OPPS cap remains unchanged.
Comment: Several commenters expressed concern that the proposed
MPPR undervalues the procedures and jeopardizes beneficiary access to
care. One commenter indicated that we should examine any shifts in the
site-of-service that may have resulted due to the MPPR.
Response: The Government Accountability Office (GAO) and the Office
of the Inspector General (OIG) have been performing several reviews
relating to the utilization of imaging procedures including the effects
of the OPPS cap and the MPPR on utilization, payment, and access to
care. We will continue to monitor the effects of the policies to ensure
that beneficiaries have proper access to care.
After reviewing the public comments, we are proceeding with the
policy as proposed. The ten additional procedures listed in Table 6
will be subject to the MPPR, effective January 1, 2009.
3. HCPCS Code for Prostate Saturation Biopsies
In the CY 2009 PFS proposed rule, we proposed to create four new G
codes for prostate saturation biopsy as shown in Table 7, currently
reported with CPT code 88305, Surgical pathology, gross and microscopic
examination, which is separately billed by the physician for each core
sample taken. We also proposed to have Medicare contractors price these
codes.
Table 7--G Codes for Prostate Biopsy
------------------------------------------------------------------------
G code Descriptor
------------------------------------------------------------------------
G0416.................................. Surgical pathology, gross and
microscopic examination for
prostate needle saturation
biopsy sampling, 1-20
specimens.
G0417.................................. Surgical pathology, gross and
microscopic examination for
prostate needle saturation
biopsy sampling, 21-40
specimens.
G0418.................................. Surgical pathology, gross and
microscopic examination for
prostate needle saturation
biopsy sampling, 41-60
specimens.
G0419.................................. Surgical pathology, gross and
microscopic examination for
prostate needle saturation
biopsy sampling, greater than
60 specimens.
------------------------------------------------------------------------
The following is a summary of the comments we received and our
responses.
Comment: Some commenters expressed opposition to this proposal,
while others supported it but recommended modifications to the proposed
G codes. All commenters were opposed to Medicare contractor pricing the
G codes and stated that CMS, rather than the Medicare contractor,
should assign an appropriate work value for each specimen level to
capture the expertise, skill, time, and resources used to determine if
prostate cancer is present.
Response: First, for CY 2009, the CPT Editorial Panel changed
Category III code (0137T) to a Category I code, 55706, Biopsies,
prostate; needle, transperineal, stereotactic template guided
saturation sampling including image guidance, which the AMA RUC valued
at 6.15 work RVUs. As discussed in the proposed rule, we currently pay
$102.35 for CPT code 88305, which is the code used by pathologists when
interpreting prostate biopsy samples. Patients requiring a prostate
saturation biopsy generally have 30 to 60 specimens taken. The
pathologist would bill CPT code 88305 for evaluation of each individual
specimen. When CPT code 88305 is used to evaluate prostate saturation
biopsies, the average total payment for the evaluation of samples from
one prostate needle saturation biopsy ranges from $3000 to $6000,
depending on the number of biopsies taken. We believe the use of CPT
code 88305 to bill individually for the evaluation of each biopsy
sample would result in overpayment for this service. Therefore, we are
proceeding with the proposal to create four G codes for pathologic
examination of prostate needle saturation tissue sampling for services
furnished beginning in 2009.
However, we agree with commenters that, rather than having Medicare
contractors price the new G codes, it would be preferable for us to
specify the payment for these services. We generally use contractor
pricing when we do not have sufficient information to set the price.
Upon further reflection, we believe we can set prices for the new G-
codes by analogy to the current RVUs for two existing codes: 88304 and
88305. We selected the mid-point of the range of samples for G0417,
G0418, and G0419 to calculate the average number of samples for each
code. We assumed 15 percent of the samples taken require considerable
clinical expertise to differentiate and distinguish carcinoma from
hyperplasia. We assigned the work and PE values of 88305 to the 15
percent of samples requiring this level of expertise. The remaining 85
percent of samples require confirmation of prostate tissue and
interpretation indicating the presence of cancer or not since the
diagnosis had been identified in the 15 percent of samples. We assigned
the work and PE of 88304 to this group of samples. We assigned the full
work and PE payment to the 15 percent sample component to reflect the
skill, time, and effort required to identify and diagnose carcinoma. We
applied the multiple surgical procedure discount (RVUs were reduced by
50 percent in accordance with current CMS policy) to the remaining 85
percent of samples reviewed for identification and confirmation of
prostate tissue. We selected the 75th percentile of samples from G0416
to recognize the greater degree of skill, time, and effort required to
review, identify, and interpret the initial biopsy specimens sampled.
(See Addendum B for the values assigned to these G codes.)
Note: Under the PFS, CPT code 88305 will continue to be
recognized for those surgical pathology services unrelated to
prostate needle saturation biopsy sampling.
F. Part B Drug Payment
1. Average Sales Price (ASP) Issues
Medicare Part B covers a limited number of prescription drugs and
biologicals. For the purposes of this final rule with comment period,
the term ``drugs'' will hereafter refer to both drugs and biologicals,
unless otherwise specified. Medicare Part B covered drugs not paid on a
cost or prospective payment basis generally fall into the following
three categories:
Drugs furnished incident to a physician's service.
DME drugs.
[[Page 69752]]
Drugs specifically covered by statute (certain
immunosuppressive drugs, for example).
Beginning in CY 2005, the vast majority of Medicare Part B drugs
not paid on a cost or prospective payment basis are paid under the ASP
methodology. The ASP methodology is based on data submitted to us
quarterly by manufacturers. In addition to the payment for the drug,
Medicare currently pays a furnishing fee for blood clotting factors, a
dispensing fee for inhalation drugs, and a supplying fee to pharmacies
for certain Part B drugs.
In this section, we discuss recent statutory changes to the ASP
methodology and other drug payment issues.
a. Determining the Payment Amount Based on ASP Data
The methodology for developing Medicare drug payment allowances
based on the manufacturers' submitted ASP data is specified in 42 CFR
part 414, subpart K. We initially established this regulatory text in
the CY 2005 PFS final rule with comment period (69 FR 66424). We
further described the formula we use to calculate the payment amount
for each billing code in the CY 2006 PFS proposed rule (70 FR 45844)
and final rule with comment period (70 FR 70217). With the enactment of
the MMSEA, the formula we use changed beginning April 1, 2008. Section
112(a) of the MMSEA requires us to calculate payment amounts using a
specified volume-weighting methodology. In addition, section 112(b) of
the MMSEA sets forth a special rule for determining the payment amount
for certain inhalation drugs.
For each billing code, we calculate a volume-weighted, ASP-based
payment amount using the ASP data submitted by manufacturers.
Manufacturers submit ASP data to us at the 11-digit National Drug Code
(NDC) level, including the number of units of the 11-digit NDC sold and
the ASP for those units. We determine the number of billing units in an
NDC based on the amount of drug in the package. For example: a
manufacturer sells a box of four vials of a drug. Each vial contains 20
milligrams (mg). The billing code is per 10 MG. The number of billing
units in this NDC for this billing code is (4 vials x 20mg)/10mg = 8
billable units.
Prior to April 1, 2008, we used the following three-step formula to
calculate the payment amount for each billing code. First, we converted
the manufacturer's ASP for each NDC into the ASP per billing unit by
dividing the manufacturer's ASP for that NDC by the number of billing
units in that NDC. Then, we summed the product of the ASP per billing
unit and the number of units of the 11-digit NDC sold for each NDC
assigned to the billing code. Then, we divided this total by the sum of
the number of units of the 11-digit NDC sold for each NDC assigned to
the billing code.
Beginning April 1, 2008, we use a two-step formula to calculate the
payment amount for each billing code. We sum the product of the
manufacturer's ASP and the number of units of the 11-digit NDC sold for
each NDC assigned to the billing and payment code, and then divide this
total by the sum of the product of the number of units of the 11-digit
NDC sold and the number of billing units in that NDC for each NDC
assigned to the billing and payment code.
In addition to the formula change, the MMSEA established a special
payment rule for certain inhalation drugs furnished through an item of
durable medical equipment (DME). The ``grandfathering'' provision in
section 1847A(c)(6)(C)(ii) of the Act requires that certain drugs be
treated as multiple source drugs for purposes of calculating the
payment allowance limits. Section 112(b) of the MMSEA requires that,
effective April 1, 2008, the payment amount for inhalation drugs
furnished through an item of DME is the lesser of the amount determined
by applying the grandfathering provision or by not applying that
provision. We reviewed our payment determinations effective January 1,
2008 to identify the drugs subject to this special rule, and
implemented this new requirement in accordance with the statutory
implementation date of April 1, 2008. We identified that albuterol and
levalbuterol, in both the unit dose and concentrated forms, are subject
to the special payment rule. At this time, we have not identified other
inhalation drugs furnished through an item of DME to which section
112(b) of the MMSEA applies.
The provisions in section 112 of the MMSEA are self-implementing
for services on and after April 1, 2008. Because of the limited time
between enactment and the implementation date, it was not practical to
undertake and complete rulemaking on this issue prior to implementing
the required changes. As a result of the legislation, we proposed to
revise Sec. 414.904 to codify the changes to the determination of
payment amounts as required by section 112 of the MMSEA. We solicited
comments on the proposed regulatory text.
The following is a summary of the comments we received and our
responses.
Comment: We received a number of comments regarding our proposed
regulatory text. All of comments we received strongly supported our
proposed regulatory text. Several comments strongly urged CMS to ensure
that the methodology is properly applied to all drugs paid under the
ASP methodology.
Response: We appreciate the support from the public with regard to
the implementation of this statutory provision. We have been applying
the revised methodology since April 2008 and are unaware of payment
issues resulting from its usage. The new methodology is being applied
consistently across all Part B drugs subject to the ASP methodology.
Comment: One commenter requested that we limit the application of
the special payment rule, established by section 112(b) of MMSEA to
only albuterol and levalbuterol.
Response: We disagree with this comment. While we currently believe
that we have identified all of the drugs to which the special payment
rule applies, it would be imprudent to expressly limit its application
to albuterol and levalbuterol in the regulations text because the
statute does not do so. The statute refers to certain drugs described
in section 1842(o)(1)(G) of the Act. Thus, we believe the regulations
text, as proposed, adequately specifies the drugs to which the special
rule applies. We have committed, via postings on our web site, to
proceeding transparently when making pricing determinations and have
done so by posting our decisions on our web site. We will continue to
do so in the future.
After review of the public comments, we are finalizing our proposed
regulatory text at Sec. 414.904.
b. Average Manufacturer Price (AMP)/ Widely Available Market Prices
(WAMP)
Section 1847A(d)(1) of the Act states that ``the Inspector General
of HHS shall conduct studies, which may include surveys to determine
the widely available market prices (WAMP) of drugs and biologicals to
which this section applies, as the Inspector General, in consultation
with the Secretary, determines to be appropriate.'' Section 1847A(d)(2)
of the Act states that, ``Based upon such studies and other data for
drugs and biologicals, the Inspector General shall compare the ASP
under this section for drugs and biologicals with--
[[Page 69753]]
The WAMP for such drugs and biologicals (if any); and
The average manufacturer price (AMP) (as determined under
section 1927(k)(1) of the Act for such drugs and biologicals.''
Section 1847A(d)(3)(A) of the Act states that, ``The Secretary may
disregard the average sales price (ASP) for a drug or biological that
exceeds the WAMP or the AMP for such drug or biological by the
applicable threshold percentage (as defined in subparagraph (B)).'' The
applicable threshold percentage is specified in section
1847A(d)(3)(B)(i) of the Act as 5 percent for CY 2005. For CY 2006 and
subsequent years, section 1847A(d)(3)(B)(ii) of the Act establishes
that the applicable threshold percentage is ``the percentage applied
under this subparagraph subject to such adjustment as the Secretary may
specify for the WAMP or the AMP, or both.'' In CY 2006 through CY 2008,
we specified an applicable threshold percentage of 5 percent for both
the WAMP and AMP comparisons. We based this decision on the limited
data available to support a change in the current threshold percentage.
For CY 2009, we proposed to specify an applicable threshold
percentage of 5 percent for the WAMP and the AMP comparisons. As we
stated in the proposed rule, the OIG is continuing its ongoing
comparison of both the WAMP and the AMP. However, information on how
recent changes to the ASP weighting methodology may affect the
comparison of WAMP/AMP to ASP was not available in time for
consideration prior to developing our proposal to maintain the
applicable threshold percentage at 5 percent for CY 2009. Although we
have recently received reports comparing ASP to AMP in which the OIG
states it has applied the new volume-weighting methodology
consistently, we have not had sufficient time to analyze these reports.
Thus, we do not have data suggesting a more appropriate level for the
threshold at this time. Therefore, we believe that continuing the 5
percent applicable threshold percentage for both the WAMP and AMP
comparisons is appropriate for CY 2009.
As we noted in the CY 2008 PFS final rule with comment period (72
FR 66259), we understand that there are complicated operational issues
associated with potential payment substitutions. We will continue to
proceed cautiously in this area and provide stakeholders, particularly
manufacturers of drugs impacted by potential price substitutions, with
adequate notice of our intentions regarding such, including the
opportunity to provide input with regard to the processes for
substituting the WAMP or the AMP for the ASP. As part of our approach,
we intend to develop a better understanding of the issues that may be
related to certain drugs for which the WAMP and AMP may be lower than
the ASP over time.
We solicited comments on our proposal to continue the applicable
threshold at 5 percent for both the WAMP and AMP for CY 2009.
The following is a summary of the comments we received and our
responses.
Comment: Most commenters supported maintaining the threshold at 5
percent. Other commenters suggested that we exercise caution in the
determination of price substitutions and that we develop a formal
process and criteria to determine when substitutions are necessary.
Commenters also recommended that we provide adequate notice prior to
making a price substitution.
Response: We appreciate the comments to maintain the threshold at 5
percent. As we noted in the CY 2008 PFS final rule with comment period
(72 FR 66259), we understand that there are complicated operational
issues associated with potential payment substitutions. We will
continue to proceed cautiously in this area and provide stakeholders,
particularly manufacturers of drugs impacted by potential price
substitutions, with adequate notice of our intentions regarding such,
including the opportunity to provide input with regard to the processes
for substituting the WAMP or the AMP for the ASP. As part of our
approach, we intend to develop a better understanding of the issues
that may be related to certain drugs for which the WAMP and AMP may be
lower than the ASP over time.
After reviewing of the public comments, we are finalizing our
proposal to establish the WAMP/AMP threshold at 5 percent for CY 2009.
2. Competitive Acquisition Program (CAP) Issues
Section 303(d) of the MMA requires the implementation of a
competitive acquisition program (CAP) for certain Medicare Part B drugs
not paid on a cost or PPS basis. The provisions for acquiring and
billing drugs under the CAP were described in the Competitive
Acquisition of Outpatient Drugs and Biologicals Under Part B proposed
rule (March 4, 2005, 70 FR 10746) and the interim final rule (July 6,
2005, 70 FR 39022), and certain provisions were finalized in the CY
2006 PFS final rule with comment period (70 FR 70236). The CY 2007 PFS
final rule with comment period (72 FR 66260) then finalized portions of
the July 6, 2005 IFC that had not already been finalized.
The CAP is an alternative to the ASP (buy and bill) methodology of
obtaining certain Part B drugs used incident to physicians' services.
Physicians who choose to participate in the CAP obtain drugs from
vendors selected through a competitive bidding process and approved by
CMS. Under the CAP, physicians agree to obtain all of the approximately
190 drugs on the CAP drug list from an approved CAP vendor. A vendor
retains title to the drug until it is administered, bills Medicare for
the drug, and bills the beneficiary for cost sharing amounts once the
drug has been administered. The physician bills Medicare only for
administering the drug to the beneficiary. The CAP currently operates
with a single CAP drug category. CAP claims processing began on July 1,
2006.
After the CAP was implemented, section 108 of the MIEA-TRHCA made
changes to the CAP payment methodology. Section 108(a)(2) of the MIEA-
TRHCA requires the Secretary to establish (by program instruction or
otherwise) a post-payment review process (which may include the use of
statistical sampling) to assure that payment is made for a drug or
biological only if the drug or biological has been administered to a
beneficiary. The Secretary is required to recoup, offset, or collect
any overpayments. This statutory change took effect on April 1, 2007.
Conforming changes were proposed in the CY 2008 PFS proposed rule (72
FR 38153) and finalized in the CY 2008 PFS final rule with comment
period (72 FR 66260).
In the CY 2009 PFS proposed rule, we proposed several refinements
to the CAP regarding the annual CAP payment amount update mechanism,
the definition of a CAP physician, the restriction on physician
transportation of CAP drugs, and the dispute resolution process (73 FR
38522). However, since the publication of our proposed rule, we have
announced the postponement of the CAP for 2009 due to contractual
issues with the successful bidders. As a result, CAP physician election
for participation in the CAP in 2009 is not being held this Fall, and
CAP drugs will not be available from an Approved CAP Vendor for dates
of service after December 31, 2008.
Moreover, we are currently soliciting public feedback on the CAP
from participating physicians, potential vendors, and other interested
parties. We are soliciting public comments
[[Page 69754]]
about a range of issues, including, but not limited to the following
issues: the categories of drugs provided under the CAP; the
distribution of areas that are served by the CAP; and procedural
changes that may increase the program's flexibility and appeal to
potential vendors and physicians. Interested parties can submit
feedback about the CAP electronically or request to meet with us in
person. Feedback about the CAP and meeting requests can be submitted
electronically to: MMA303DDrugBid@cms.hhs.gov.
We will also host a CAP Open Door Forum (ODF) this December for
participating physicians, potential vendors, and other interested
parties. Participants will have an opportunity to discuss the
postponement and suggest changes to the program. Additional information
about this event will be available on the CMS CAP Web site at http://
www.cms.hhs.gov/CompetitiveAcquisforBios/.
We will assess information from the public and consider
implementing changes to the CAP before proceeding with another bid
solicitation for Approved CAP Vendor contracts. Furthermore, in light
of the postponement of the CAP, we believe it would be prudent to
consider the additional information that is being collected before
finalizing any further changes to the program. For this reason, we will
not finalize the CAP items in the CY 2009 proposed rule at this time.
We appreciate the comments that we have received and we will consider
these comments as we assess potential changes to the program and future
rulemaking.
G. Application of the HPSA Bonus Payment
Section 1833(m) of the Act provides for an additional 10-percent
bonus payment for physicians' services furnished in a year to a covered
individual in an area that is designated as a geographic Health
Professional Shortage Area (HPSA) as identified by the Secretary prior
to the beginning of such year. The statute indicates that the HPSA
bonus payment will be made for services furnished during a year in
areas that have been designated as HPSAs prior to the beginning of that
year. As a result, the HPSA bonus payment is made for physicians'
services furnished in an area designated as of December 31 of the prior
year, even if the area's HPSA designation is removed during the current
year. However, for physicians' services furnished in areas that are
designated as geographic HPSAs after the beginning of a year, the HPSA
bonus payment is not made until the following year, if the area is
still designated as of December 31 of that year.
In the CY 2005 PFS final rule with comment period (69 FR 66297), we
stated that determination of zip codes for automatic HPSA bonus payment
will be made on an annual basis and that there would be no updates to
the zip code file during the year. We also stated that physicians
furnishing covered services in ``newly designated'' HPSAs may add a
modifier to their Medicare claims to collect the HPSA bonus payment
until our next annual posting of zip codes for which automatic payment
of the bonus will be made.
In the CY 2009 PFS proposed rule, we proposed to revise Sec.
414.67 to clarify that physicians who furnish services in areas that
are designated as geographic HPSAs as of December 31 of the prior year
but not included on the list of zip codes for automated HPSA bonus
payments should use the AQ modifier to receive the HPSA bonus payment.
Comment: We received comments in support of using the AQ modifier
to ensure that all physicians furnishing services in a geographic HPSA
that is not included in the list of zip codes eligible for automatic
bonus payments will still receive the 10-percent HPSA bonus payment.
One commenter emphasized that this clarification would lessen the
administrative burdens they experienced from the lack of a modifier in
the past.
A few commenters expressed concern that many physicians may not be
aware of the AQ modifier requirement for services furnished in areas
that are not on the list of zip codes for automatic payment. One
commenter urged us to use educational materials and outreach in order
to ensure physicians are aware they may need to use the AQ modifier
when submitting their Medicare claims. Another commenter requested that
we develop a method to ensure payments are received automatically for
all physicians that would qualify for the HPSA bonus payment.
One commenter suggested that we change the HPSA bonus payment
program to include nonphysicians and work with the Congress to allow
all persons who directly bill under Part B to be eligible for the 10-
percent bonus for working in a designated HPSA.
Response: We appreciate the comments in support of our efforts to
ensure all physicians furnishing services to Medicare beneficiaries in
an area that is designated as a geographic HPSA on December 31 of the
prior year receive the HPSA bonus payment.
As a result of refinements in our systems, we expect that more
areas that are eligible for the bonus payment will be on the list of
zip codes eligible for automatic payment of the HPSA bonus, thereby
reducing the number of physicians who need to use the modifier.
However, we acknowledge that some physicians may not be aware of the
need to use the modifier if they are furnishing services in a
geographic HPSA that was designated after the list of eligible zip
codes was created but prior to December 31. We will continue to utilize
our provider education resources to increase awareness of the
appropriate application of the AQ modifier. We will also continue to
refine our systems to include as many areas as possible to the list of
zip codes that receive automatic HPSA bonus payments.
We recognize that there can be shortages of all types of healthcare
practitioners and we indeed appreciate the value of these
nonphysicians. However, section 1833(m) of the Act provides for the
payment of an additional amount only to physicians and a change would
require a statutory revision.
After careful consideration of all of the comments, we are adopting
our proposal to add Sec. 414.67(d) with minor revisions to clarify
that physicians who furnish services in areas that are designated as
geographic HPSAs as of December 31 of the prior year but not included
on the list of zip codes for automated HPSA bonus payments should use
the AQ modifier to receive the HPSA bonus payment.
H. Provisions Related to Payment for Renal Dialysis Services Furnished
by End-Stage Renal Disease (ESRD) Facilities
In the CY 2009 PFS proposed rule (73 FR 38527), we outlined for CY
2009 the proposed updates to the case-mix adjusted composite rate
payment system established under section 1881(b)(12) of the Act, added
by section 623 of the MMA. These included updates to the drug add-on
component of the composite rate system, as well as the wage index
values used to adjust the labor component of the composite rate.
Specifically, we proposed the following provisions which are
described in more detail below in this section:
A zero growth update to the proposed 15.5 percent drug
add-on adjustment to the composite rates for 2009 required by section
1881(b)(12)(F) of the Act (resulting in a $20.33 per treatment drug
add-on amount).
An update to the wage index adjustment to reflect the
latest available
[[Page 69755]]
wage data, including a revised BN adjustment factor of 1.056672;
The completion of the 4-year transition from the previous
wage-adjusted composite rates to the CBSA wage-adjusted rates, where
payment will be based on 100 percent of the revised geographic
adjustments; and
A reduction of the wage index floor from 0.7500 to 0.7000.
A total of 56 comments were submitted under the caption ``ESRD
PROVISIONS.'' Eight of these comments pertained to the proposed changes
to ESRD payment related provisions listed above. The remaining 48
comments responded to the solicitation for public comment pertaining to
the application of preventable hospital-acquired condition (HAC)
payment provisions for IPPS hospitals in settings other than IPPS
hospitals, including ESRD facilities. Please refer to section II.H.6.
of this final rule with comment period for a discussion of the
applicability of the HAC payment provision for IPPS hospitals in
settings other than IPPS hospitals.
The ESRD payment related comments are discussed in detail below in
this section. In addition, subsequent to the publication of the CY 2009
PFS proposed rule, section 153 of the Medicare Improvements for
Patients and Providers Act of 2008 (MIPPA) (Pub. L. 110-275), enacted
on July 15, 2008, mandates changes in ESRD payment effective January 1,
2009.
Section 153(a) of the MIPPA amends section 1881(b)(12)(G) of the
Act to increase the composite rate component of the payment system and
amends section 1881(b)(12)(A) to revise payments to ESRD facilities.
The amendments that are effective January 1, 2009 include an update of
1 percent to the composite rate component of the payment system (for
services furnished on or after January 1, 2009, and before January 1,
2010), and the establishment of a site neutral composite rate for both
hospital-based and independent dialysis facilities which, when applying
the geographic index, shall reflect the labor share based on the labor
share otherwise applied for renal dialysis facilities. The labor share
for both hospital-based and independent dialysis facilities is 53.711.
In addition, since we compute the drug add-on adjustment as a
percentage of the weighted average base composite rate, the drug add-on
percentage is decreased to account for the higher composite payment
rate and will result in a 15.2 percent drug add-on adjustment for CY
2009. Since the statutory increase only applies to the composite rate,
this adjustment to the drug add-on percentage is needed to ensure that
the total drug add-on dollars remains constant.
Prior to the MIPPA provisions, effective for CY 2008, hospital-
based dialysis facilities received a base composite rate of $136.68 and
independent dialysis facilities received a base composite rate of
$132.49, and so the CY 2009 base composite rate for independent
dialysis facilities prior to the MIPPA was $132.49. The MIPPA mandates
that payments for both the hospital-based dialysis facilities and
independent dialysis facilities be based on the independent dialysis
facilities rate. The 1 percent increase to the independent dialysis
facility's 2008 composite rate of $132.49 results in a 2009 base
composite rate for both hospital-based and independent dialysis
facilities of $133.81. A drug add-on amount of $20.33 per treatment
remains the same for 2009, which results in a 15.2 percent increase
over the base independent composite rate of $133.81.
1. Growth Update to the Drug Add-On Adjustment to the Composite Rates
Section 623(d) of the MMA added section 1881(b)(12)(B)(ii) of the
Act which requires us to establish an add-on to the composite rate to
account for changes in the drug payment methodology stemming from
enactment of the MMA. Section 1881(b)(12)(C) of the Act provides that
the drug add-on must reflect the difference in aggregate payments
between the revised drug payment methodology for separately billable
ESRD drugs and the AWP payment methodology. In 2005, we generally paid
for ESRD drugs based on average acquisition costs. Thus, the difference
from AWP pricing was calculated using acquisition costs. However, in
2006 when we moved to ASP pricing for ESRD drugs, we recalculated the
difference from AWP pricing using ASP prices.
In addition, section 1881(b)(12)(F) of the Act requires that
beginning in CY 2006, we establish an annual update to the drug add-on
to reflect the estimated growth in expenditures for separately billable
drugs and biologicals furnished by ESRD facilities. This growth update
applies only to the drug add-on portion of the case-mix adjusted
payment system.
The CY 2008 drug add-on adjustment to the composite rate is 15.5
percent. The drug add-on adjustment for 2008 incorporates an inflation
adjustment of 0.5 percent. This computation is explained in detail in
the CY 2008 PFS final rule with comment period (72 FR 66280 through
66282).
a. Estimating Growth in Expenditures for Drugs and Biologicals for CY
2009
In the CY 2007 PFS final rule with comment period (71 FR 69682), we
established an interim methodology for annually estimating the growth
in ESRD drugs and biological expenditures that uses the Producer Price
Index (PPI) for pharmaceuticals as a proxy for pricing growth, in
conjunction with 2 years of ESRD drug data, to estimate per patient
utilization growth. We indicated that this methodology would be used to
update the drug add-on to the composite rate until such time that we
had sufficient ESRD drug expenditure data to project the growth in ESRD
drug expenditures beginning in CY 2010.
For CY 2009, we proposed revising the interim methodology for
estimating the growth in ESRD drug expenditures by using ASP pricing
instead of the PPI to estimate the price component of the update
calculation.
As detailed below in this section, we proposed for CY 2009 to
estimate price growth using historical ASP pricing data for ESRD drugs
for CY 2006 through CY 2008, and to estimate growth in per patient
utilization of drugs by using ESRD facility historical drug expenditure
data for CY 2006 and CY 2007.
b. Estimating Growth in ESRD Drug Prices
For CY 2009, we proposed to estimate price growth using ASP pricing
data for the four quarters of CY 2006 and CY2007, and the two available
quarters of CY 2008. For this final rule with comment period, we are
using four quarters of ASP prices for CYs 2006, 2007, and 2008. We
calculated the weighted price change, for the original top ten ESRD
drugs for which we had acquisition pricing, plus Aranesp. In CY 2006
and CY 2007, we calculated a weighted average price reduction of 1.8
percent. We also calculated a weighted average price reduction of 2.1
percent between CY 2007 and CY 2008. The overall average price
reduction is 1.9 percent over the 3-year period. Thus, the weighted
average ESRD drug pricing change projected for CY 2009 is a reduction
of 1.9 percent.
Comment: Commenters were generally opposed to the use of ASP prices
to estimate the price component of the drug add-on adjustment. One
commenter stated that although the price of EPO has declined in the
past few years, it has now stabilized and will likely not decline again
in CY 2009. Two commenters, including MedPAC, supported the use of ASP
prices stating that it is more closely related to the
[[Page 69756]]
actual ESRD drug pricing than the use of the overall drug PPI. Another
commenter stated that the PPI was a more accepted proxy for predicting
drug price increases compared to ASP price trends which have never been
used in forecasting drug price changes. Some suggested that we use a
blend of ASP and PPI to soften the impact of the change in the
methodology.
Response: Given that the statutory language mandates that we
estimate the growth in ESRD drug expenditures in order to update the
drug add-on adjustment, we believe we have an obligation to utilize the
best data available to make those estimates. Although the PPI is a well
recognized measure of overall drug price growth, it is not specific to
ESRD drug prices. Given that ESRD drug pricing trends are very
different from overall drug pricing trends, we do not believe it would
be appropriate to continue using the PPI when more specific data are
available. ASP pricing data that are specific to ESRD drugs provide the
most accurate measure for estimating the price component of the total
ESRD drug expenditure estimate for CY 2009. Therefore, for this final
rule with comment period, we used ASP pricing data to estimate price
growth in ESRD drugs.
c. Estimating Growth in per Patient Drug Utilization
To isolate and project the growth in per patient utilization of
ESRD drugs for CY 2009, we removed the enrollment and price growth
components from the historical drug expenditure data, and considered
the residual to be utilization growth. As discussed previously in this
section, we proposed to use ESRD facility drug expenditure data from CY
2006 and CY 2007 to estimate per patient utilization growth for CY
2009.
We first estimated total drug expenditures for all ESRD facilities.
For the CY 2009 PFS proposed rule (73 FR 38528), we used the final CY
2006 ESRD claims data and the latest available CY 2007 ESRD facility
claims, updated through December 31, 2007 (that is, claims with dates
of service from January 1 through December 31, 2007, that were
received, processed, paid, and passed to the National Claims History
File as of December 31, 2007). For this final rule with comment period,
we are using additional updated CY 2007 claims with dates of service
for the same time period. This updated CY 2007 data file will include
claims received, processed, paid, and passed to the National Claims
History File as of June 30, 2008.
For the CY 2009 PFS proposed rule, we adjusted the December 2007
file to reflect our estimate of what total drug expenditures would be
using the final June 30, 2008 bill file for CY 2007. The net adjustment
we applied to the CY 2007 claims data was an increase of 12.6 percent
to the December 2007 claims file. To calculate the proposed per patient
utilization growth, we removed the enrollment component by using the
growth in enrollment data between CY 2006 and CY 2007. This was
approximately 3 percent. To remove the price effect, we calculated the
weighted change between CY 2006 and CY 2007 ASP pricing for the top
eleven ESRD drugs. We weighted the differences using 2007 ESRD facility
drug expenditure data.
This process led to an overall 1.8 percent reduction in price
between CY 2006 and CY 2007.
After removing the enrollment and price effects from the
expenditure data, the residual growth would reflect the per patient
utilization growth. To do this, we divided the product of the
enrollment growth of 3 percent (1.03) and the price reduction of 1.8
percent (1.00 - 0.018 = 0.982) into the total drug expenditure change
between 2006 and 2007 of 0 percent (1.00 - 0.00 = 1.00). The result is
a utilization factor equal to 0.99 or 1.00/(1.03 * 0.982) = 0.99.
Since we observed a 1 percent drop in per patient utilization of
drugs between CY 2006 and CY 2007, we projected a 1 percent drop in per
patient utilization for ESRD facilities in CY 2009.
Comment: A few commenters suggested that the use of CY 2007 billing
data to predict utilization change in CY 2009 is not accurate since the
utilization change in CY 2007 was driven by a revision to the EPO
monitoring policy which caused a one-time decline in utilization that
has since leveled off.
Response: We agree that the revised monitoring policy for
erythropoesis stimulating agents (ESAs) that took effect in CY 2007
could have contributed to the observed decrease in ESRD drug
utilization between CY 2006 and CY 2007, especially given that EPO and
Aranesp make up over 75 percent of all ESRD drug expenditures.
Moreover, this effect could distort our estimate of per patient
utilization growth in CY 2009. Since CY 2007, we have analyzed 2 years
of historical claims data for estimating growth in utilization (CY 2005
and CY 2006). During that period, utilization based on an analysis of
independent ESRD facility drug data has indicated no growth. We believe
the use of CY 2005 and CY 2006 drug data is the best data available for
use in projecting utilization in CY 2009. Therefore, for CY 2009, we
will continue to use our estimate of growth in utilization based on CY
2005 and CY 2006 data (72 FR 66282). That is, we are finalizing an
estimation of no growth in utilization for CY 2009.
2. Applying the Proposed Growth Update to the Drug Add-on Adjustment
In the CY 2007 PFS final rule with comment period (71 FR 69684), we
revised our update methodology by applying the growth update to the per
treatment drug add-on amount. That is, for CY 2007, we applied the
growth update factor of 4.03 percent to the $18.88 per treatment drug
add-on amount for an updated amount of $19.64 per treatment (71 FR
69684). For CY 2008, the per treatment drug add-on amount was updated
to $20.33.
For CY 2009, we proposed no update to the per treatment drug add-on
amount of $20.33 established in CY 2008.
3. Update to the Drug Add-On Adjustment
In the CY 2009 PFS proposed rule (73 FR 38529), we estimated a 1
percent reduction in per patient utilization of ESRD drugs for CY 2009.
Using the projected decline of the CY 2009 ASP pricing for ESRD drugs
of 1.9 percent, we projected that the combined growth in per patient
utilization and pricing for CY 2009 would result in a negative update
equal to -2.9 percent (0.99 * 0.981 = 0.971). However, we proposed to
apply a zero percent update to the drug add-on adjustment and maintain
the $20.33 per treatment drug add-on amount for CY 2009 that reflects a
15.5 percent drug add-on adjustment to the composite rate for CY 2009.
In addition, for CY 2009 we presented an alternative approach to
the zero percent update. The alternative approach would be to apply an
adjustment of less than 1.0 to the drug add-on adjustment. For CY 2009,
we would ``increase'' the drug add-on by 0.971. Applying the 0.971
increase to the $20.33 per treatment adjustment would yield a drug add-
on amount of $19.74 per treatment, which represents a 0.4 percent
decrease in the CY 2008 drug add-on percentage of 15.5 percent. As
such, the drug add-on adjustment to the composite rate for CY 2009
would be equal to 1.155 * 0.996 = 1.15 or 15.0 percent.
We solicited public comment on our proposal of a zero update, as
well as the alternative approach presented above, so that we could make
an informed decision with respect to the final update
[[Page 69757]]
to the CY 2009 drug add-on adjustment to the composite rate.
Comment: Commenters were uniformly opposed to any decrease in the
drug add-on adjustment, citing the plain reading of the statute which
calls for an annual ``increase'' in the adjustment. As support for the
reliance on the plain reading of the statute, several commenters cited
case law examples in which courts have relied on dictionary
definitions, biblical text, and common usage of terms for purposes of
interpreting statutory text. One commenter disagreed with CMS'
alternative reading of 1881(b)(12)(F) of the Act, under which an
increase in the drug add-on could not be implemented when estimated
drug growth is negative, pointing to MMA Conference Report language
that referenced a payment update that would be based on a ``growth'' in
drug spending and ``drug cost increases.'' Commenters further argued,
citing case law the priority on plain language over policy arguments
and cautioned against identifying gaps in statutes.
One commenter suggested that we should use the methodology to
estimate growth in ESRD drug expenditures that yields a positive
adjustment as required by the statute. Another commenter stated that if
we believe ESRD drug expenditures will decline, this would indicate
that the spread between AWP and ASP pricing will widen in CY 2009, thus
justifying an increase in the drug add-on adjustment.
Response: We agree that the plain reading of the statute would
preclude any decrease in the drug add-on adjustment and would not
support a negative growth update. Specifically, section 1881(b)(12)(F)
of the Act states in part that ``the Secretary shall annually
increase'' the drug add-on amount based on the growth in expenditures
for separately billed ESRD drugs. We interpret the statutory language
``annually increase'' to mean a positive or zero update to the drug
add-on given that the statute also requires that the annual
``increase'' to the drug add-on adjustment reflect our estimate of the
growth in ESRD drug expenditures. Since our analysis indicates a
projected reduction in ESRD drug expenditures for CY 2009, we do not
believe it would be appropriate to provide an increase that cannot be
substantiated by the best data available.
Therefore, we are finalizing our proposal to provide a zero update
to the drug add-on adjustment for CY 2009. If the statute had included,
instead of the word ``increase,'' a broader term, we believe we would
have had authority to decrease the rate to take into account the
projected reduction.
4. Final Growth Update to the Drug Add-On Adjustment for 2009
As we indicated earlier, we have decided not to use CY 2007
expenditure data to estimate utilization growth for CY 2009, because of
the potential distortion of our estimates due to the implementation of
the ESA monitoring policy in 2007. Therefore, for this final rule with
comment period, we are using the same data we use to estimate growth in
utilization for CY 2008 as outlined in the CY 2008 PFS final rule with
comment period (72 FR 66282). That is, for CY 2009, we estimate no
growth in per patient utilization of ESRD drugs for CY 2009.
Similar to the CY 2009 PFS proposed rule, we estimated growth in
ESRD drug prices using ASP pricing data for CYs 2006, 2007 and 2008. In
the proposed rule, we had only 2 quarters of data for 2008, but for
this final rule all four quarters of ASP pricing data are available. We
calculated the weighted price change for the top eleven ESRD drugs.
Tables 8 and 9 show the average ASP prices and the 2007 weights used.
We note that the final CY 2007 weights are derived from the final CY
2007 ESRD facility claims file as of June 30, 2008. For CY 2006 and CY
2007, we calculated a weighted average price reduction of 1.8 percent.
We also calculated a weighted average price reduction of 1.9 percent
between CY 2007 and CY 2008. The overall average price reduction is 1.8
percent over the 3-year period. Thus, the weighted average ESRD drug
pricing change projected for CY 2009 is a reduction of 1.8 percent.
We project that the combined growth in per patient utilization and
pricing of ESRD drugs for CY 2009 would result in a negative update
equal to -1.8 percent (1.00 * 0.982 = 0.982). If we implement this
decrease in the update to the drug-on adjustment, the resulting savings
would have been $14 million. However, as indicated above, for this
final rule with comment period, we are applying no update to the drug
add-on adjustment for CY 2009. Thus, we are applying a zero update to
the $20.33 per treatment drug add-on amount for CY 2009. After
adjusting for the MIPPA changes as discussed earlier in this section,
the final drug add-on adjustment to the composite rate for CY 2009 is
15.2 percent.
Table 8--CY 2006, 2007 and 2008 ESRD Drug ASP Prices
----------------------------------------------------------------------------------------------------------------
Independent drugs CY 2006 CY 2007 CY 2008
----------------------------------------------------------------------------------------------------------------
EPO............................................................. $9.46 $9.17 $9.05
Paricalcitol.................................................... 3.81 3.79 3.78
Sodium-ferric-glut.............................................. 4.88 4.76 4.81
Iron-sucrose.................................................... 0.36 0.37 0.36
Levocarnitine................................................... 9.44 8.07 6.31
Doxercalciferol................................................. 2.97 2.68 2.75
Calcitriol...................................................... 0.55 0.54 0.40
Iron-dextran.................................................... 11.94 11.69 11.69
Vancomycin...................................................... 3.23 3.43 3.19
Alteplase....................................................... 31.63 33.21 33.06
Aranesp......................................................... 3.01 3.29 2.86
----------------------------------------------------------------------------------------------------------------
Table 9--CY 2007 Drug Weights for ESRD Facilities
------------------------------------------------------------------------
CY 2007
Independent drugs weights (%)
------------------------------------------------------------------------
EPO..................................................... 69.1
Paricalcitol............................................ 11.9
Sodium-ferric-glut...................................... 2.5
Iron-sucrose............................................ 6.1
Levocarnitine........................................... 0.2
Doxercalciferol......................................... 2.8
[[Page 69758]]
Calcitriol.............................................. 0.1
Iron-dextran............................................ 0.0
Vancomycin.............................................. 0.1
Alteplase............................................... 1.0
Aranesp................................................. 6.2
------------------------------------------------------------------------
5. Update to the Geographic Adjustments to the Composite Rates
Section 1881(b)(12)(D) of the Act, as added by section 623(d) of
the MMA, gives the Secretary the authority to revise the wage indexes
previously applied to the ESRD composite rates. The wage indexes are
calculated for each urban and rural area. The purpose of the wage index
is to adjust the composite rates for differing wage levels covering the
areas in which ESRD facilities are located.
a. Updates to Core-Based Statistical Area (CBSA) Definitions
In the CY 2006 PFS final rule with comment period (70 FR 70167), we
announced our adoption of the OMB's CBSA-based geographic area
designations to develop revised urban/rural definitions and
corresponding wage index values for purposes of calculating ESRD
composite rates. OMB's CBSA-based geographic area designations are
described in OMB Bulletin 03-04, originally issued June 6, 2003, and is
available online at http://www.whitehouse.gov/omb/bulletins/b03-
04.html. In addition, OMB has published subsequent bulletins regarding
CBSA changes, including changes in CBSA numbers and titles. We wish to
point out that this and all subsequent ESRD rules and notices are
considered to incorporate the CBSA changes published in the most recent
OMB bulletin that applies to the hospital wage index used to determine
the current ESRD wage index. The OMB bulletins may be accessed online
at http://www.whitehouse.gov/omb/bulletins/index.html.
b. Updated Wage Index Values
In the CY 2007 PFS final rule with comment period (71 FR 69685), we
stated that we intended to update the ESRD wage index values annually.
The current ESRD wage index values for CY 2008 were developed from FY
2004 wage and employment data obtained from the Medicare hospital cost
reports. The ESRD wage index values are calculated without regard to
geographic classifications authorized under sections 1886(d)(8) and
(d)(10) of the Act and utilize pre-floor hospital data that is
unadjusted for occupational mix. To calculate the ESRD wage index,
hospital wage index data for FY 2004 for all providers in each urban/
rural geographic area are combined. The sum of the wages for all
providers in each geographic area was divided by the total hours for
all providers in each area. The result is the average hourly hospital
wage for that geographic locale. The ESRD wage index was computed by
dividing the average hourly hospital wage for each geographic area by
the national average hourly hospital wage. The final step was to
multiply each wage index value by the ESRD wage index budget neutrality
factor (BNF).
We proposed to use the same methodology for CY 2009, with the
exception that FY 2005 hospital data will be used to develop the CY
2009 wage index values. The CY 2009 ESRD wage index BNF is 1.056689.
This figure differs slightly from the figure in the proposed rule
(1.056672) because we used updated hospital wage data and treatment
counts from the most current claims data. (See section II.H.5.c. of
this final rule with comment period for details about this adjustment.)
For a detailed description of the development of the CY 2009 wage index
values based on FY 2005 hospital data, see the FY 2009 ``Hospital
Inpatient Prospective Payment Systems (IPPS) and Final Fiscal Year 2009
Rates'' rule (73 FR 23630). Section III.G. of the preamble to the FY
2009 IPPS final rule, Computation of the Final FY 2009 Unadjusted Wage
Index, describes the cost report schedules, line items, data elements,
adjustments, and wage index computations. The wage index data affecting
ESRD composite rates for each urban and rural locale may also be
accessed on the CMS Web site at http://www.cms.hhs.gov/
AcuteInpatientPPS/WIFN/list.asp. The wage data are located in the
section entitled, ``FY 2009 Final Rule Occupational Mix Adjusted and
Unadjusted Average Hourly Wage and Pre-reclassified Wage Index by
CBSA.''
i. Fourth Year of the Transition
In the CY 2006 PFS final rule with comment period (70 FR 70167
through 70169), we indicated that we would apply a 4-year transition
period to mitigate the impact on the composite rates resulting from our
adoption of CBSA-based geographic designations. Beginning January 1,
2006, during each year of the transition, an ESRD facility's wage-
adjusted composite rate (that is, without regard to any case-mix
adjustments) is a blend of its old MSA-based wage-adjusted payment rate
and its new CBSA-based wage adjusted payment rate for the transition
year involved. In CY 2006, the first year of the transition, we
implemented a 75/25 blend. In CY 2007, the second year of the
transition, we implemented a 50/50 blend. In CY 2008, the third year of
the transition, we implemented a 25/75 blend. Consistent with the
transition blends announced in the CY 2006 PFS final rule with comment
period (70 FR 70170), in CY 2009, each ESRD facility's composite
payment rate will be based entirely on the CBSA-based wage index.
For CY 2009, we proposed to reduce the wage index floor from 0.75
to 0.70. For this final year of the transition (CY 2009), we believe
that a reduction to 0.70 is appropriate as we continue to reassess the
need for a wage index floor in future years. We believe that a gradual
reduction in the floor is still needed to ensure patient access to
dialysis in areas that have low wage index values, especially Puerto
Rico, and to prevent sudden adverse effects to the payment system.
However, we note that our goal is the eventual elimination of all wage
index floors.
The wage index floor and blended share applicable for CY 2009 are
shown in Table 10.
Table 10--Wage Index Transition Blend
----------------------------------------------------------------------------------------------------------------
CY payment Floor Ceiling Old MSA New CBSA
----------------------------------------------------------------------------------------------------------------
2009......................... 0.70* None....................... 0% 100%
----------------------------------------------------------------------------------------------------------------
* Each wage index floor is multiplied by a BN adjustment factor. For CY 2009 the BN adjustment is 1.056689
resulting in an actual wage index floor of 0.7397.
[[Page 69759]]
Because CY 2009 is the final year of the 4-year transition period, each
ESRD facility's composite payment rate will be based entirely on its
applicable new CBSA-based wage index value.
Comment: We received a few comments that commend CMS for its use of
a transition policy in shifting the Medicare ESRD program into a new
geographic wage index system. Commenters stressed that prior to the
elimination to the floor, we should provide protection to facilities in
areas that would otherwise not be able to support dialysis facilities,
which will ensure that access to care for beneficiaries is not
compromised.
Response: We note that our goal is the eventual elimination of all
wage index floors. However, we believe that a gradual reduction in the
floor is still needed to ensure patient access to dialysis in areas
that have low wage index values, especially Puerto Rico, and to prevent
sudden adverse effects to the payment system. We will continue to
reassess the need for a wage index floor in future years.
ii. Wage Index Values for Areas With No Hospital Data
In CY 2006, while adopting the CBSA designations, we identified a
small number of ESRD facilities in both urban and rural geographic
areas where there are no hospital wage data from which to calculate
ESRD wage index values. The affected areas were rural Massachusetts,
rural Puerto Rico, and the urban area of Hinesville, GA (CBSA 25980).
For CY 2006, CY 2007, and CY 2008, we calculated the ESRD wage index
values for those areas as follows:
For rural Massachusetts, because we had not determined a
reasonable wage proxy, we used the FY 2005 wage index value in CY 2006
and CY 2007. For CY 2008, we used an alternative methodology as
explained below.
For rural Puerto Rico, the situation was similar to rural
Massachusetts. However, because all geographic areas in Puerto Rico
were subject to the wage index floor in CY 2006, CY 2007, and CY 2008,
we applied the ESRD wage index floor to rural Puerto Rico as well.
For the urban area of Hinesville, GA, we calculated the CY
2006, CY 2007, and CY 2008 wage index value based on the average wage
index value for all urban areas within the State of Georgia.
For CY 2008, we adopted an alternative methodology for establishing
a wage index value for rural Massachusetts. Because we used the same
wage index value for 2 years with no update, we believed it was
appropriate to establish a methodology which employed reasonable proxy
data for rural areas (including rural Massachusetts), and also
permitted annual updates to the wage index based on that proxy data.
For rural areas without hospital wage data, we used the average wage
index values from all contiguous CBSAs as a reasonable proxy for that
rural area.
In determining the imputed rural wage index, we interpreted the
term ``contiguous'' to mean sharing a border. In the case of
Massachusetts, the entire rural area consists of Dukes and Nantucket
Counties. We determined that the borders of Dukes and Nantucket
counties are contiguous with Barnstable and Bristol counties. We will
continue to use the same methodology for CY 2009. Under this
methodology, the CY 2009 wage index values for the counties of
Barnstable (CBSA 12700, Barnstable Town, MA-1.2643) and Bristol (CBSA
39300, Providence-New Bedford-Fall River, RI-MA-1.0696) were averaged
resulting in an imputed proposed wage index value of 1.1670 for rural
Massachusetts in CY 2009.
For rural Puerto Rico, we continued to apply the wage index floor
in CY 2008. Because all areas in Puerto Rico that have a wage index
were eligible for the ESRD wage index floor of 0.75, we applied that
floor to ESRD facilities located in rural Puerto Rico. For CY 2009, all
areas in Puerto Rico that have a wage index are eligible for the final
ESRD wage index floor of 0.70. Therefore, we will apply the ESRD wage
index floor of 0.70 to all ESRD facilities that are located in rural
Puerto Rico.
For Hinesville, GA (CBSA 25980), which is an urban area without
specific hospital wage data, we proposed to apply the same methodology
in 2009 that we used to impute a wage index value in CY 2006, CY 2007,
and CY 2008. Specifically, we proposed to use the average wage index
value for all urban areas within the State of Georgia. We are
finalizing our proposal, which results in a CY 2009 wage index value of
0.9110 for the Hinesville-Fort Stewart GA CBSA.
In the CY 2008 PFS final rule with comment period (72 FR 66283
through 66284), we stated that we would continue to evaluate existing
hospital wage data and possibly wage data from other sources such as
the Bureau of Labor Statistics, to determine if other methodologies
might be appropriate for imputing wage index values for areas without
hospital wage data for CY 2009 and subsequent years. To date, no data
from other sources, superior to that currently used in connection with
the IPPS wage index, have emerged. Therefore, for ESRD purposes, we
continue to believe this is an appropriate policy. We received no
comments on this section and are finalizing our policies for wage areas
with no hospital data as proposed.
iii. Evaluation of Wage Index Policies Adopted in the FY 2008 IPPS
Final Rule
We stated in the CY 2008 PFS final rule with comment period (72 FR
66284) that we planned to evaluate any policies adopted in the FY 2008
IPPS final rule (72 FR 47130, 47337 through 47338) that affect the wage
index, including how we treat certain New England hospitals under
section 601(g) of the Social Security Amendments of 1983 (Pub. L. 98-
21). This is relevant for the ESRD composite payment system, because
the ESRD wage index is calculated using the same urban/rural
classification system and computation methodology applicable under the
IPPS, except that it is not adjusted for occupational mix and does not
reflect geographic classifications authorized under sections 1886(d)(8)
and (d)(12) of the Act. We also proposed to use the FY 2009 wage index
data (collected from cost reports submitted by hospitals for cost
reporting periods beginning during FY 2005), to compute the ESRD
composite payment rates effective beginning January 1, 2009.
(1) CY 2009 Classification of Certain New England Counties
We are addressing the change in the treatment of ``New England
deemed counties'' (that is, those counties in New England listed in
Sec. 412.64(b)(1)(ii)(B) that were deemed to part of urban areas under
section 601(g) of the Social Security Amendments of 1983), that were
made in the FY 2008 IPPS final rule with comment period (72 FR 47337
through 47338). These counties include the following: Litchfield
County, Connecticut; York County, Maine; Sagadahoc County, Maine;
Merrimack County, New Hampshire; and Newport County, Rhode Island. Of
these five ``New England deemed counties'', three (York County,
Sagadahoc County, and Newport County) are also included in the MSAs
defined by OMB, and therefore, used in the calculations of the urban
hospital wage index values reflected in the ESRD composite payment
rates. The remaining two counties, Litchfield County and Merrimack
County, are geographically located in areas that are considered
``rural'' under the current IPPS and ESRD composite payment system
labor market definitions, but have been previously deemed urban under
the IPPS in certain circumstances as discussed below.
[[Page 69760]]
In the FY 2008 IPPS final rule with comment period, for purposes of
IPPS, Sec. 412.64(b)(1)(ii)(B) was amended such that the two ``New
England deemed counties'' that are still considered rural under the OMB
definitions (Litchfield County, CT and Merrimack County, NH) are no
longer considered urban effective for discharges occurring on or after
October 1, 2007, and therefore, are considered rural in accordance with
Sec. 412.64(b)(1)(ii)(C). For purposes of the ESRD wage index, we have
recognized OMB's CBSA designations, as well as generally followed the
policies under the IPPS with regard to the definitions for ``urban''
and ``rural'' for the wage index, but we do not to take into account
IPPS geographic reclassifications in determining payments under the
composite payment system. Accordingly, to reflect our general policy
for the ESRD wage index, these two counties will be considered
``rural'' under the ESRD composite payment system effective with the
next update of the payment rates on January 1, 2009, and will no longer
be included in urban CBSA 25540 (Hartford-West Hartford-East Hartford,
CT) and urban CBSA 31700 (Manchester-Nashua, NH), respectively.
(2) Multi-Campus Hospital Wage Index Data
In the CY 2008 ESRD composite payment system final rule (72 FR
66280), we established ESRD wage index values for CY 2008 calculated
from the same data (collected from cost reports submitted by hospitals
for cost reporting periods beginning during FY 2004) used to compute
the FY 2008 acute care hospital inpatient wage index, without taking
into account geographic reclassification under sections 1886(d)(8) and
(d)(10) of the Act. However, the IPPS policy that apportions the wage
data for multi-campus hospitals was not finalized before the ESRD
composite payment system final rule. Therefore, the CY 2008 ESRD wage
index values reflected the IPPS wage data that were based on a
hospital's actual location without regard to the urban or rural
designation of any related or affiliated provider. Accordingly, all
wage data from different campuses of a multi-campus hospital were
included in the calculation of the CBSA wage index of the main
hospital. In the proposed rule, we noted that the IPPS wage data used
to determine the proposed CY 2009 ESRD wage index values were computed
from wage data submitted by hospitals for cost reporting periods
beginning in FY 2005, and reflect our policy adopted under the IPPS
beginning in FY 2008, which apportions the wage data for multi-campus
hospitals located in different labor market areas, CBSAs, to each CBSA
where the campuses are located (see the FY 2008 IPPS final rule with
comment period (72 FR 47317 through 47320)). Specifically, under the CY
2009 ESRD composite payment system, the wage index was computed using
IPPS wage data (published by hospitals for cost reporting periods
beginning in 2005, as with the FY 2009 IPPS wage index). This resulted
in the allocation of salaries and hours to the campuses of two multi-
campus hospitals, with campuses that are located in different labor
areas, one in Massachusetts and the other is Illinois. The ESRD wage
index values proposed for CY 2009 in the following CBSAs are affected
by this policy: Boston-Quincy, MA (CBSA 14484), Providence-New Bedford-
Falls River, RI-MA (CBSA 39300), Chicago-Naperville-Joliet, IL (CBSA
16974), and Lake County-Kenosha County, IL-WI (CBSA 29404). (Please
refer to Addenda G and H of this final rule with comment period.)
For CY 2009, we will use the FY 2009 wage index data (collected
from cost reports submitted by hospitals for cost reporting periods
beginning during FY 2005) to compute the ESRD composite payment rates
effective beginning January 1, 2009.
Although we solicited comments, we did not receive any comments on
this section and are implementing these provisions in this final
notice. (For a detailed explanation of the multi-campus and New England
deemed counties policies, refer to the CY 2009 PFS proposed rule (73 FR
38531 through 38532)).
c. Budget Neutrality Adjustment
Section 1881(b)(12)(E)(i) of the Act, as added by section 623(d) of
the MMA, requires that any revisions to the ESRD composite rate payment
system as a result of the MMA provision (including the geographic
adjustment), be made in a budget neutral manner. This means that
aggregate payments to ESRD facilities in CY 2008 should be the same as
aggregate payments that would have been made if we had not made any
changes to the geographic adjusters. We note that this BN adjustment
only addresses the impact of changes in the geographic adjustments. A
separate BN adjustment was developed for the case-mix adjustments
currently in effect. As we did not propose any changes to the case-mix
measures for CY 2009, the current case-mix BN adjustment will remain in
effect for CY 2009. As in CY 2008, for CY 2009, we again proposed to
apply a BN adjustment factor directly to the ESRD wage index values. As
explained in the CY 2007 PFS final rule with comment period (71 FR
69687 through 69688), we believe this is the simplest approach because
it allows us to maintain our base composite rates during the transition
from the current wage adjustments to the revised wage adjustments
described previously in this section. Because the ESRD wage index is
only applied to the labor-related portion of the composite rate, we
computed the BN adjustment factor based on that proportion (53.711
percent).
To compute the final CY 2009 wage index BN adjustment factor
(1.056689), we used the most current FY 2005 pre-floor, pre-
reclassified, non-occupational mix-adjusted hospital data to compute
the wage index values, treatment counts from the most current 2007
outpatient claims (paid and processed as of June 30, 2008), and
geographic location information for each facility which may be found on
the Dialysis Facility Compare Web page on the CMS Web site at http://
www.cms.hhs.gov/DialysisFacilityCompare/. The FY 2005 hospital wage
index data for each urban and rural locale by CBSA may also be accessed
on the CMS Web site at http://www.cms.hhs.gov/AcuteInpatientPPS/WIFN/
list.asp. The wage index data are located in the section entitled, ``FY
2009 Final Proposed Rule Occupational Mix Adjusted and Unadjusted
Average Hourly Wage and Pre-Reclassified Wage Index by CBSA.''
Using treatment counts from the 2007 claims and facility-specific
CY 2008 composite rates, we computed the estimated total dollar amount
each ESRD provider would have received in CY 2008 (the 3rd year of the
4-year transition). The total of these payments became the target
amount of expenditures for all ESRD facilities for CY 2009. Next, we
computed the estimated dollar amount that would have been paid to the
same ESRD facilities using the proposed ESRD wage index for CY 2009
(the 4th year of the 4-year transition). The total of these payments
became the fourth year new amount of wage-adjusted composite rate
expenditures for all ESRD facilities. Section 153(a) of the MIPPA
updated section 1881(b)(12)(G) of the Act and revised payments to ESRD
facilities. The revisions that are effective January 1, 2009 include an
update of 1 percent to the composite rate component of the payment
system, and the establishment of a site neutral composite rate to
hospital-based and independent dialysis facilities. We note that when
computing the 4th year new amount, we did not
[[Page 69761]]
include the MIPPA provisions because they are not budget neutral.
After comparing these two dollar amounts (target amount divided by
the 4th year new amount), we calculated an adjustment factor that, when
multiplied by the applicable CY 2009 ESRD wage index value, would
result in aggregate payments to ESRD facilities that will remain within
the target amount of composite rate expenditures. When making this
calculation, the ESRD wage index floor value of 0.7000 is used whenever
appropriate. The BN adjustment factor for the CY 2009 wage index is
1.056689. This figure differs slightly from the figure in the proposed
rule (1.056672) because we have used updated hospital wage data and
treatment counts from the most current claims data.
To ensure BN, we also must apply the BN adjustment factor to the
wage index floor of 0.7000 which results in a adjusted wage index floor
of 0.7397 (0.7000 x 1.056689) for CY 2009.
d. ESRD Wage Index Tables
The 2009 wage index tables are located in Addenda G and H of this
final rule with comment period.
6. Application of the Hospital-Acquired Conditions Payment Policy for
IPPS Hospitals to Other Settings
Value-based purchasing (VBP) ties payment to performance through
the use of incentives based on measures of quality and cost of care.
The implementation of VBP is rapidly transforming CMS from being a
passive payer of claims to an active purchaser of higher quality, more
efficient health care for Medicare beneficiaries. Our VBP initiatives
include hospital pay for reporting (the Reporting Hospital Quality Data
for the Annual Payment Update), physician pay for reporting (the
Physician Quality Reporting Initiative), home health pay for reporting,
the Hospital VBP Plan Report to Congress, and various VBP demonstration
programs across payment settings, including the Premier Hospital
Quality Incentive Demonstration and the Physician Group Practice
Demonstration.
The preventable hospital-acquired conditions (HAC) payment
provision for IPPS hospitals is another of our value-based purchasing
initiatives. The principle behind the HAC payment provision (Medicare
will not provide additional payments to IPPS hospitals to treat certain
preventable conditions acquired during a beneficiary's IPPS hospital
stay) could be applied to the Medicare payment systems for other
settings of care. Section 1886(d)(4)(D) of the Act requires the
Secretary to select for the HAC IPPS payment provision conditions that
are: (1) High cost, high volume, or both; (2) assigned to a higher
paying Medicare Severity-Diagnosis Related Group (MS-DRG) when present
as a secondary diagnosis; and (3) could reasonably have been prevented
through the application of evidence-based guidelines. Beginning October
1, 2008, Medicare can no longer assign an inpatient hospital discharge
to a higher paying MS-DRG if a selected HAC was not present, or could
not be identified based on clinical judgment, on admission. That is,
the case will be paid as though the secondary diagnosis related to the
HAC was not present. Medicare will continue to assign a discharge to a
higher paying Medicare Severity-Diagnosis Related Group (MS-DRG) if a
selected condition was present on admission.
The broad principle articulated in the HAC payment provision for
IPPS hospitals (that is, Medicare not paying more for certain
reasonably preventable hospital-acquired conditions) could potentially
be applied to other Medicare payment systems for conditions that occur
in settings other than IPPS hospitals. Other possible settings of care
include, but are not limited to: hospital outpatient departments,
ambulatory surgical centers, SNFs, HHAs, ESRD facilities, and physician
practices. Implementation would be different for each setting, as each
payment system is different and the level of reasonable prevention
through the application of evidence-based guidelines would vary for
candidate conditions across different settings of care. However,
alignment of incentives across settings of care is an important goal
for all of our VBP initiatives, including the HAC payment provision.
A related application of the broad principle behind the HAC payment
provision for IPPS hospitals could be considered through Medicare
secondary payer policy by requiring the provider that failed to prevent
the occurrence of a preventable condition in one setting to pay for all
or part of the necessary follow up care in a second setting. This would
help shield the Medicare program from inappropriately paying for the
downstream effects of a reasonably preventable condition acquired in
the first setting but treated in the second setting.
We note that we did not propose new Medicare policy in this
discussion of the possible application of the HAC payment policy for
IPPS hospitals to other settings, as some of these approaches may
require new statutory authority. Instead of proposing policy, we
solicited public comment on the application of the preventable HAC
payment provision for IPPS hospitals to other Medicare payment systems.
We also stated that we look forward to working with stakeholders in the
fight against all healthcare-associated conditions.
The following is a summary of the comments we received and our
responses.
Comment: Commenters recommended that CMS work with technical
experts, such as physicians and hospitals, to determine the impact,
burden, and accuracy of POA indicator reporting in the inpatient
setting before it is expanded to other settings of care. Commenters
specifically recommended that CMS consider issues of adverse selection
and access to care for vulnerable populations. Many commenters had
concerns with CMS' authority and ability to implement such a policy for
the physician office setting.
Response: We agree that the HAC payment provision should be studied
to determine its impact. We also recognize the importance of aligning
VBP policy across all Medicare payment systems. We believe it is
appropriate to consider policies of not paying more for medical care
that harms patients or leads to complications that could have been
prevented. For example, we note that CMS is currently considering
National Coverage Determinations (NCDs) for three of the National
Quality Forum's Serious Reportable Events: (1) Surgery on the wrong
body part, (2) surgery on the wrong patient, and (3) wrong surgery
performed on a patient. NCDs can address physician services as well as
institutional services. We will work with stakeholders as we move
forward in combating healthcare-associated conditions in all Medicare
payment settings. Any additional policies, within statutory authority,
addressing these issues would be proposed through notice and comment
rulemaking.
Comment: Some commenters stated that CMS may need to implement a
Present on Admission (POA)-type indicator to recognize healthcare-
acquired conditions in the physician office and ESRD settings of care,
similar to the IPPS POA indicator.
Response: We agree that a POA-type indicator would aid in
determining the onset of a healthcare-acquired condition. We welcome
the opportunity to work with stakeholders to consider expansion of a
POA-type indicator to all Medicare settings of care. We look forward to
working with entities such as the National Uniform Billing Committee
(NUBC) on the implementation of a
[[Page 69762]]
POA-type indicator for all settings of care.
Comment: Many commenters identified attribution of a healthcare-
acquired condition to an individual physician who is broadly managing
the patient's care as a challenge in expanding the principle behind the
HAC payment provision to the physician office setting. Some commenters
noted that several physicians may be responsible for the care of a
patient, therefore attribution of the adverse event to a single
physician may be difficult.
Response: We recognize that because health care is delivered by a
team of professionals, several providers could potentially share
responsibility for the occurrence of a healthcare-associated condition.
We have extensive experience in testing various attribution
methodologies in our cost of care measurement initiative. We refer
readers to section III.C. of this final rule with comment period
(section 131(c) of the MIPPA) for further discussion of attribution.
Comment: Some commenters expressed concern regarding implementation
of the Medicare secondary payer policy to hold the provider in which a
health-care associated condition occurred liable for the cost of
subsequent care required to treat the condition.
Response: We appreciate the comments regarding MSP policy and
payment for health-care associated conditions in downstream care
settings. We look forward to further exploring these issues with
stakeholders.
Comment: A few commenters recognized that the HAC payment provision
targets a portion of an MS-DRG payment and were unsure how this concept
could be transferred to the physician office setting. Further, several
commenters mentioned bundled or global payment as a more rational way
to pay for Medicare services, which could obviate the need for a
healthcare-acquired condition payment provision.
Response: As commenters noted, the HAC payment provision prohibits
payment for a portion of the MS-DRG when a HAC occurs in the inpatient
setting. In that the HAC payment provision results in payment being
adjusted to a lower level of payment, the basic payment concept could
be made applicable to other Medicare payment settings. Implementation
of such policies would likely depend on the specific coding and payment
systems used for each payment system.
Comment: Several commenters expressed the need to adjust for
patient-specific factors like severity of illness and patient
compliance. A few commenters stated that unlike the inpatient setting,
the physician office setting does not lend itself to close monitoring
of patient compliance.
Response: We recognize that certain beneficiaries may pose a
greater risk of contracting a healthcare-acquired condition. We also
note that providers must carefully consider those risk factors to avoid
preventable conditions. We refer readers to the FY 2009 Inpatient
Prospective Payment System final rule (73 FR 48487 through 48488
(http://edocket.access.gpo.gov/2008/pdf/E8-17914.pdf)) where we
discussed risk-adjustment as a potential enhancement to the IPPS HAC
provision.
Comment: Many commenters believe that it could be more effective to
combat healthcare-acquired conditions by adjusting payments based on a
provider's rates of healthcare-associated conditions rather than to
directly adjust the payment for an individual service.
Response: We agree that capturing rates of healthcare-associated
conditions and using those rates for performance-based payment may be a
more sophisticated and effective way to adjust payment. Rates of
healthcare-associated conditions may be good candidates as possible
quality measures for VBP programs like the PQRI as discussed in more
detail in section II.O. of this final rule with comment period.
Further, the ESRD pay-for-performance program and the forthcoming
Physician VBP Plan Report to Congress may also address healthcare-
associated conditions.
Comment: Commenters raised concern regarding the use of financial
incentives to combat healthcare-associated conditions. Many commenters
suggested that CMS should encourage compliance with evidence-based
guidelines rather than use direct payment adjustments to address
healthcare-associated conditions in the physician office setting.
Response: We agree that it is important for Medicare providers to
provide care that is consistent with evidence-based guidelines. We
intend to consider all of our statutory and regulatory authorities,
including the implementation of quality measures and payment
adjustments, to encourage provision of care that is consistent with
evidence-based guidelines. We look forward to working with stakeholders
to further identify and apply available methods to combat healthcare-
acquired conditions.
Comment: Many commenters supported the alignment of incentives
across all Medicare settings of care.
Response: We appreciate the public's support of our efforts to
align incentives across all Medicare payment settings. We look forward
to working with stakeholders to expand VBP initiatives in all Medicare
payment settings. Further, we intend to host a public listening session
toward the end of CY 2008 to discuss the expansion of the HAC payment
provision, specifically targeting both the inpatient and hospital
outpatient department (HOPD) settings of care.
I. Independent Diagnostic Testing Facility (IDTF) Issues
In the CY 2007 and 2008 PFS final rules with comment period, we
established performance standards for suppliers enrolled in the
Medicare program as an IDTF (71 FR 69695 and 72 FR 66285). These
standards were established to improve the quality of care for
diagnostic testing furnished to Medicare beneficiaries by a Medicare-
enrolled IDTF and to improve our ability to verify that these suppliers
meet minimum enrollment criteria to enroll or maintain enrollment in
the Medicare program. These performance standards were established at
Sec. 410.33. In the proposed rule, we proposed to expand on the
quality and program safeguard activities that we implemented
previously.
1. Improving Quality of Diagnostic Testing Services Furnished by
Physician and Nonphysician Practitioner Organizations
During the CY 2008 PFS proposed rule comment period, we received
comments requesting that we require that the IDTF performance standards
adopted in Sec. 410.33, including prohibitions regarding the sharing
of space and leasing/sharing arrangements, apply to physicians and
nonphysician practitioners (NPPs) who are furnishing diagnostic testing
services for Medicare beneficiaries, and who have enrolled in the
Medicare program as a clinic, group practice, or physician's office.
The commenters stated that standards for imaging services were not
applied consistently for all imaging centers and that two distinct
compliance and regulatory standards would emerge depending on how the
similarly situated imaging centers were enrolled. In addition, one
commenter stated that we should not prohibit space sharing when done
with an adjoining physician practice or radiology group that is an
owner of an IDTF. Because these comments were outside of the scope of
the provisions in the CY 2008 PFS proposed rule, we were not able to
take action regarding these comments in the
[[Page 69763]]
CY 2008 PFS final rule with comment period.
In the CY 2009 PFS proposed rule, we stated that we are concerned
that--
Certain physician entities, including physician group
practices, and clinics, can enroll as a group practice or clinic and
furnish diagnostic testing services without the benefit of qualified
nonphysician personnel, as defined in Sec. 410.33(c), to conduct
diagnostic testing.
Some physician entities expect to furnish diagnostic
testing services for their own patients and the general public and are
making the decision to enroll as a group or clinic thereby
circumventing the performance standards found in the IDTF requirements
in Sec. 410.33.
Some physician organizations are furnishing diagnostic
tests using mobile equipment provided by an entity that furnishes
mobile diagnostic services.
Therefore, we proposed certain exceptions to the established
performance standards found in Sec. 410.33(g) because we believe that
physician organizations already meet or exceed some of these standards.
For example, their liability insurance coverage usually far exceeds the
$300,000 per incident threshold, and there are a host of ways in which
patients may make clinical complaints concerning their physicians. In
addition, we believe that compliance with some of the performance
standards would be costly and burdensome and possibly limit beneficiary
access, particularly in rural or medically underserved areas. For these
reasons, we proposed that physician entities do not need to comply with
the following standards:
Maintaining additional comprehensive liability insurance
for each practice location as required under Sec. 410.33(g)(6).
Maintaining a formal clinical complaint process as
required under Sec. 410.33(g)(8).
Posting IDTF standards as required under Sec.
410.33(g)(9).
Maintaining a visible sign posting business hours as
required under Sec. 410.33(g)(14)(ii).
Separately enrolling each practice location as required
under Sec. 410.33(g)(15)(i).
Accordingly, we proposed to add Sec. 410.33(j) which states that,
``A physician or NPP organization (as defined in Sec. 424.502)
furnishing diagnostic testing services, except diagnostic mammography
services: (1) Must enroll as an independent diagnostic testing facility
for each practice location furnishing these services; and (2) is
subject to the provisions found in Sec. 410.33, except for Sec.
410.33(g)(6), Sec. 410.33(g)(8), Sec. 410.33(g)(9), Sec.
410.33(g)(14)(ii), and Sec. 410.33(g)(15)(i).'' As discussed in
section II.J. of this preamble, we proposed to define a ``physician or
nonphysician practitioner organization'' as any physician or NPP entity
that enrolls in the Medicare program as a sole proprietorship or
organizational entity such as a clinic or group practice.
We maintained that this enrollment requirement is necessary to
ensure that beneficiaries are receiving the quality of care that can
only be administered by appropriately licensed or credentialed
nonphysician personnel as described in Sec. 410.33(c). Moreover, we
proposed that physician or NPP organizations that do not enroll as an
IDTF and meet the provisions at Sec. 410.33 may be subject to claims
denial for diagnostic testing services or a revocation of their billing
privileges.
We solicited comments on whether we should consider establishing
additional exceptions to the established performance standards in Sec.
410.33(g) for physician and NPP organizations furnishing diagnostic
testing services. We stated in the proposed rule that while we believe
that most physician and NPP organizations utilize nonphysician
personnel described in Sec. 410.33(c) to furnish diagnostic testing
services, we also solicited comments on whether physician or NPPs
conduct diagnostic tests without benefit of qualified nonphysician
personnel and under what circumstances the testing occurs.
While we proposed to apply the IDTF requirement to all diagnostic
testing services furnished in physicians' offices, we stated that we
were considering whether to limit this enrollment requirement to less
than the full range of diagnostic testing services, such as to
procedures that generally involve more costly testing and equipment. We
solicited comments about whether the policy should apply only to
imaging services or whether it should also include other diagnostic
testing services such as electrocardiograms or other diagnostic testing
services frequently furnished by primary care physicians. Within the
scope of imaging services, we solicited comments about whether the
policy should be limited to advanced diagnostic testing procedures
which could include diagnostic magnetic resonance imaging, computed
tomography, and nuclear medicine (including positron emission
tomography), and other such diagnostic testing procedures described in
section 1848(b)(4)(B) of the Act (excluding X-ray, ultrasound, and
fluoroscopy). We also solicited comments on what would be appropriate
criteria to limit this provision.
Finally, since these changes, if adopted, would take time to
implement for suppliers that have enrolled in the Medicare program, we
proposed an effective date of September 30, 2009, rather than the
effective date of the final rule with comment period. For newly
enrolling suppliers, we proposed the effective date of this rule which
is January 1, 2009.
With the enactment of section 135 of the MIPPA legislation and
after reviewing public comments, we are deferring the implementation of
these proposals while we continue to review the public comments
received on this provision and we will consider finalizing this
provision in a future rulemaking effort if we deem it necessary.
Section 135 of the MIPPA requires that the Secretary establish an
accreditation process for those entities furnishing advanced diagnostic
testing procedures which include diagnostic magnetic resonance imaging,
computed tomography, and nuclear medicine (including positron emission
tomography), and other such diagnostic testing procedures described in
section 1848(b)(4)(B) of the Act (excluding X-ray, ultrasound, and
fluoroscopy) by January 1, 2012.
Accordingly, we are not adopting our proposal to require physicians
and NPPs to meet certain quality and performance standards when
providing diagnostic testing services, except mammography services,
within their medical practice setting and have removed the paperwork
burden and regulatory impact analysis associated with this provision in
this final rule with comment period.
2. Mobile Entity Billing Requirements
To ensure that entities furnishing mobile services are providing
quality services and are billing for the diagnostic testing services
they furnish to Medicare beneficiaries, we proposed a new performance
standard for mobile entities at Sec. 410.33(g)(16), which would
require that entities furnishing mobile diagnostic services enroll in
Medicare and bill directly for the mobile diagnostic services that they
furnish, regardless of where the services are furnished. We believe
that entities furnishing mobile diagnostic services to Medicare
beneficiaries must be enrolled in the Medicare program, comply with the
IDTF performance standards, and directly bill Medicare for the services
they furnish.
[[Page 69764]]
While we understand that a mobile entity can furnish diagnostic
testing services in various types of locations, we stated that we
believe that it is essential that mobile entities use qualified
physicians or nonphysician personnel to furnish diagnostic testing
procedures and that the enrolled mobile supplier bill for the services
furnished. We maintain that it is essential to our program integrity
and quality improvement efforts that an entity furnishing mobile
diagnostic testing services complies with the performance standards for
IDTFs and bill the Medicare program directly for the services furnished
to Medicare beneficiaries.
Since we believe that most mobile entities are already billing for
the services they furnish, whether the service was provided in a fixed-
based location or in a mobile facility, we proposed that this provision
would be effective with the effective date of this final rule with
comment period.
Comment: Several commenters supported our proposal to require
mobile diagnostic service providers to enroll in Medicare as IDTFs and
to be required to bill Medicare directly for the TC services they
furnish.
Another commenter stated that this provision creates a single,
universal quality standard for outpatient imaging that eliminates any
possible inequity in standards that could exist between office-based
imaging and IDTF imaging.
Several other commenters support the concept that all providers and
suppliers serving Medicare beneficiaries must be enrolled to be
eligible to receive payments from Medicare, directly or indirectly.
Response: We agree with these comments and thank the commenters for
their support.
Comment: One commenter stated that this provision would eliminate
two distinct and unfair competitive advantages that mobile cardiac
nuclear imaging providers enjoy under existing regulations. One
advantage is the ability to operate under a ``mobile'' Nuclear
Regulatory Commission Radioactive Materials license, which does not
require the same regulatory filings as fixed-site cardiac nuclear
medicine laboratories, and in the case of some state Radioactive
Materials licenses, it does not subject the mobile provider to the same
pre-opening inspections that the fixed sites are subject to. Second,
some mobile providers are able to secure accreditation from certain
accrediting agencies that furnish a global, or ``hub'', accreditation
certification.
Response: We thank the commenter for its support.
Comment: One commenter stated that our proposal to require mobile
providers to enroll in Medicare as IDTFs, be subject to all IDTF
performance standards, and to bill Medicare directly, not only would it
create a single, universal standard for quality among all imaging
providers, but would also level the playing field in the competitive
market for management services for companies which provide high quality
fixed site programs for Medicare-enrolled physician practices and their
Medicare enrollees.
Response: We appreciate the comments and thank the commenter for
their support.
Comment: One commenter supports the proposal requiring these
entities to enroll in Medicare and as such, for them to be required to
abide by applicable Medicare policies. The commenter continued to state
that they do not oppose the direct billing requirement but that if the
proposal is finalized, CMS needs to provide a great amount of detail in
how the provision will work and its impact on hospital billing
practices.
Response: We have revised the provision at Sec. 410.33(g)(17) for
those IDTFs that are billing under arrangement with hospitals as
described in section 1862(a)(14)of the Act and Sec. 482.12(e).
Comment: Several commenters urged CMS to clarify that its proposal
to require mobile testing entities to bill directly for services they
furnish would not apply when such services are furnished ``under
arrangement to hospital inpatients and outpatients.'' In addition,
these commenters recommended that mobile diagnostic testing facilities
that furnish these services to hospitals be excluded from the proposed
IDTF performance standards.
Response: Although we are requiring all mobile entities that
furnish diagnostic testing services to enroll in the Medicare program,
we are not requiring mobile testing entities to bill directly for the
services they furnish when such services are furnished under
arrangement with hospitals as described in sections 1861(w)(1) and
1862(a)(14)of the Act and Sec. 482.12(e).
Comment: One commenter urges CMS to exclude from the definition of
entities furnishing mobile diagnostic testing services those entities
that do the following: lease equipment and provide technicians who
conduct diagnostic tests in the office of the billing physician or
physician organization; and furnish testing under the supervision of a
physician who shares an office with the billing physician or physician
organization.
Response: We disagree with the commenter. We maintain that a mobile
entity providing diagnostic testing services must enroll for any
diagnostic imaging services that it furnishes to a Medicare
beneficiary, regardless of whether the service is furnished in a mobile
or fixed base location so that CMS knows which entity is providing
these diagnostic testing services.
Comment: One commenter stated that the proposed IDTF performance
standard is contrary to the Medicare ``under arrangement'' provisions
and if the IDTF performance standard were extended into the hospital
setting, it would prohibit hospitals from providing diagnostic imaging
services under arrangement and present significant administrative and
operational challenges for hospitals and their patients.
Response: We agree and have revised the provision to account for
mobile IDTFs billing under arrangement with hospitals as described in
sections 1861(w)(1) and 1862(a)(14)of the Act and Sec. 482.12(e).
Comment: Several commenters requested that we not require mobile
units that furnish diagnostic testing services to enroll in Medicare or
be required to bill for all of the services they furnish.
Response: We disagree with the commenters. In order to maintain
program integrity and enable CMS to monitor services furnished by
mobile units providing diagnostic testing services, we maintain that a
mobile entity providing diagnostic testing services must enroll for
diagnostic imaging services that it furnishes to a Medicare
beneficiary, regardless of whether the service is furnished in a mobile
or fixed base location. We are requiring these mobile IDTFs to bill for
the services that they furnish unless they are billing under
arrangement with hospitals.
Comment: One commenter stated the contractual arrangement between
mobile diagnostic imaging services companies and hospitals are
commonplace throughout the United States health care industry and these
long-standing arrangements, which can be short-term or long-term
depending upon hospital demand, service a variety of important needs
within the hospital and provider community, including a valuable means
to address capacity, volume and equipment cost issue and limitations
imposed by State Certificate of Need (CON) requirements.
[[Page 69765]]
Response: We understand the commenters' concerns and we are
requiring these mobile IDTFs to bill for the services that they furnish
unless they are billing under arrangement with hospitals.
Comment: One commenter suggested that we should provide clear and
concise guidance on billing protocols that permit hospitals to continue
billing for mobile diagnostic testing services furnished as inpatient
and outpatient hospital services and allow informational billing (that
is, no payment impact) by the mobile entities through the use of a
billing modifier.
Response: We believe these comments are outside the scope of the
rule.
Comment: One commenter does not support a restriction of an
enrolled provider/supplier that would preclude them from arrangements
that are allowed under the purchased diagnostic test or purchased
interpretation rules due to their method of connecting a patient with
testing equipment.
Response: We understand the commenters' concerns and we are
requiring these mobile IDTFs to bill for the services they furnish
unless they are billing under arrangement with hospitals.
Comment: One commenter states that they believe that the provision
of diagnostic and other therapeutic services by a contracted provider
to registered inpatients and outpatients is fully consistent with
longstanding Medicare provisions expressly permitting hospitals to
furnish services directly or ``under arrangements,'' and that the
mobile entities that may furnish these services under arrangement would
not bill directly for their services but would be under the control of
another entity.
Response: We agree with the commenter and although we are requiring
all mobile entities that provide diagnostic testing services to enroll
in the Medicare program, we are not requiring mobile testing entities
to bill directly for the services they furnish when such services are
furnished under arrangement to hospitals.
After reviewing public comments, we are finalizing the provision at
Sec. 410.33(g)(16), which would require that entities furnishing
mobile diagnostic services enroll in Medicare program as an IDTF
regardless of where the services are furnished. By enrolling in the
Medicare program, CMS or our contractor can determine if the mobile
IDTF meets all of the performance standards found in Sec. 410.33(g)
and that its owners are not otherwise excluded or barred from
participation in the Medicare program. We believe that requiring mobile
IDTFs to enroll in order to furnish services to Medicare beneficiaries
is consistent with the existing enrollment regulation found at Sec.
424.505 which states that to receive payment for covered Medicare items
or services from either Medicare or a Medicare beneficiary, a provider
or supplier must be enrolled in the Medicare program. Moreover, by
requiring mobile IDTFs to enroll in order to furnish services to
Medicare beneficiaries, the Medicare contractor will be able to certify
that mobile IDTFs are in compliance with the requirements for enrolling
and maintaining enrollment set forth at Sec. 424.520. Finally, the
owner of a mobile IDTF is responsible for ensuring that the mobile IDTF
meets all applicable regulatory requirements to maintain their
enrollment in the Medicare program.
In addition, we are finalizing the provision at Sec. 410.33(g)(17)
requiring that mobile diagnostic services bill for the mobile
diagnostic services that they furnish, unless the mobile diagnostic
service is part of a hospital service and furnished under arrangement
with that hospital as described in section 1862(a)(14)of the Act and
Sec. 482.12(e). To ensure that IDTFs are actually furnishing services
under arrangement with a hospital, we will require that mobile IDTFs
provide documentation of the arrangement with their initial or
revalidation enrollment application, or change in enrollment
application.
3. Revocation of Enrollment and Billing Privileges of IDTFs in the
Medicare Program
Historically, we have allowed IDTFs whose Medicare billing numbers
have been revoked to continue billing for services furnished prior to
revocation for up to 27 months after the effective date of the
revocation. Since we believe that permitting this extensive billing
period poses a significant risk to the Medicare program, we proposed to
limit the claims submission timeframe after revocation. In Sec.
424.535(g) (redesignated as Sec. 424.535(g)), we proposed that a
revoked IDTF must submit all outstanding claims for not previously
submitted items and services furnished within 30 calendar days of the
revocation effective date. We stated that this change is necessary to
limit the Medicare program's exposure to future vulnerabilities from
physician and NPP organizations and individual practitioners that have
had their billing privileges revoked. Accordingly, the proposed change
would allow a Medicare contractor to conduct focused medical review on
the claims submitted during the claims filing period to ensure that
each claim is supported by medical documentation that the contractor
can verify. We maintain that focused medical review of these claims
will ensure that Medicare only pays for services furnished by a
physician or NPP organization or individual practitioner and that these
entities and individuals receive payment in a timely manner. In
addition, we also proposed to add a new provision at Sec. 424.44(a)(3)
to account for this provision related to the requirements for the
timely filing of claims. The timely filing requirements in Sec.
424.44(a)(1) and (a)(2) will no longer apply to physician and NPP
organizations, physicians, NPPs and IDTFs whose billing privileges have
been revoked by CMS.
Comment: Several commenters recommended that we withdraw all of our
proposed changes to the requirements for physician enrollment in
Medicare, including changes to the effective date of billing
privileges, eligibility to participate in the program, enrollment
processing, reporting requirements, and revocation of billing
privileges. Many of the commenters were concerned that it would be
burdensome to add new requirements where they must submit all claims
within 60 days of the effective date of revocation because of the time
it takes to process claims and that it would be easier to leave the
retrospective billing rules as they are.
Response: We are not adopting this recommendation. Instead, we will
respond to the specific comments received in response to our specific
proposals.
Comment: Several commenters requested that we make no revisions to
current physician and NPP enrollment rules at this time.
Response: We are not adopting this recommendation. Instead, we will
respond to the specific comments received in response to our specific
proposals.
After reviewing public comments, we are finalizing the provisions
found at Sec. 424.535(h) (formerly Sec. 424.535(g)) that require a
revoked physician organization, a physician, a NPP, or an IDTF to
submit all outstanding claims not previously submitted within 60
calendar days of the revocation effective date. Since IDTFs are already
afforded approximately 30 days notification before the effective date
of revocation (except for revocations identified in Sec. 405.874(b)(2)
and Sec. 424.535(f) of this final rule), we believe that almost 90
days is more than sufficient time to file any outstanding claims.
In addition, we are finalizing the provisions found at Sec.
424.44(a) related
[[Page 69766]]
to the requirements for the timely filing of claims. The timely filing
requirements in Sec. 424.44(a)(1) and (a)(2) will no longer apply to
physician and NPP organizations, physicians, NPPs or IDTFs. We revised
this provision so that it is consistent with Sec. 424.521 which limits
the ability of these suppliers to bill Medicare retrospectively.
J. Physician and Nonphysician Practitioner (NPP) Enrollment Issues
1. Effective Date of Medicare Billing Privileges
In accordance with Sec. 424.510, physician and NPP organizations
(that is, groups, clinics, and sole owners) and individual
practitioners including physicians and NPPs, operating as sole
proprietorships or reassigning their benefits to a physician and
nonphysician organization may submit claims as specified in Sec.
424.44 after they are enrolled in the Medicare program. This provision
permits newly enrolled physician and NPP organizations and individual
practitioners, as well as existing physicians and nonphysician
organizations and individual practitioners to submit claims for
services that were furnished prior to the date of filing or the date
the applicant received billing privileges to participate in the
Medicare program.
For the purposes of this final rule with comment period, we believe
that an NPP includes, but is not limited to, the following individuals:
anesthesiology assistants, audiologists, certified nurse midwives,
certified registered nurse anesthetists (CRNA), clinical social
workers, nurse practitioners (NPs), physician assistants (PAs),
clinical psychologists, psychologists billing independently, speech
language pathologists, and registered dieticians or nutrition
professionals.
Once enrolled, physician and NPP organizations and individual
physicians and NPPs, depending on their effective date of enrollment,
may retroactively bill the Medicare program for services that were
furnished up to 27 months prior to being enrolled to participate in the
Medicare program. For example, if a supplier is enrolled in the
Medicare program in December 2008 with an approval date back to October
2006, that supplier could retrospectively bill for services furnished
to Medicare beneficiaries as early as October 1, 2006.
Currently, physician and NPP organizations and individual
practitioners, including physicians and NPPs, are allowed to bill
Medicare prior to their enrollment date. Therefore, it is possible that
the physician and NPP organizations and individual practitioners who
meet our program requirements on the date of enrollment may not have
met those same requirements prior to the date of enrollment, even
though that supplier could bill Medicare and receive payments for
services furnished up to 27 months prior to their enrolling in the
Medicare program. In the proposed rule, we stated our concern that some
physician and NPP organizations and individual practitioners may bill
Medicare for services when they are not meeting our other program
requirements, including those related to providing beneficiary
protections, such as Advance Beneficiary Notices.
We solicited public comment on two approaches for establishing an
effective date for Medicare billing privileges for physician and NPP
organizations and for individual practitioners.
The first approach would establish the initial enrollment date for
physician and NPP organizations and for individual practitioners,
including physician and NPPs, as the date of approval by a Medicare
contractor. This approach would prohibit physician and NPP
organizations and individual practitioners from billing for services
furnished to a Medicare beneficiary before they are approved and
enrolled by a designated Medicare contractor to participate in the
Medicare program and Medicare billing privileges are conveyed to their
National Provider Identifier (NPI). Physicians and NPPs are eligible
for NPIs and may apply for their NPIs at any time. To enroll in
Medicare, a physician or NPP must have an NPI. If an enrollment
application is received that is absent the NPI, it will be rejected.
The NPI regulation, at 45 CFR 162.410(a)(1), requires a health care
provider who is a covered entity under HIPAA to obtain an NPI. At 45
CFR 162.410(b), the NPI regulation states that a health care provider
who is not a covered entity under HIPAA may obtain an NPI. The
definition of ``health care provider'' is found at 45 CFR 160.103. The
preamble of the NPI final rule (69 FR 3450) states that HIPAA does not
prohibit a health plan from requiring its enrolled health care
providers to obtain NPIs if those health care providers are eligible
for NPIs (that is, that they meet the definition of ``health care
provider''). With exceptions for the two entities that are eligible to
enroll in Medicare but are not eligible for NPIs, Medicare requires all
providers, including physicians and NPPs, who apply for enrollment to
have NPIs, and to report them on their Medicare enrollment
applications. When applying for NPIs, providers indicate they are one
of the following: An Entity type 1 (an individual person, such as a
physician or an NPP, to include a sole proprietor/sole proprietorship);
or an Entity type 2 (an organization, which is any legal entity other
than an individual).
The date of approval is the date that a designated Medicare
contractor determines that the physician or NPP organization or
individual practitioner meets all Federal and State requirements for
their supplier type
Given this first approach, in proposed Sec. 424.520, we stated
that we may implement regulations text that reads similar to: ``The
effective date of billing privileges for physician and NPP
organizations and individual practitioners, including physicians and
NPPs, is the date a Medicare contractor conveys billing privileges to a
NPI.''
We also stated in the CY 2009 PFS proposed rule that we believe
that this approach--
Prohibits physicians, NPP organizations, and individual
practitioners from receiving payments before a Medicare contractor
conveys Medicare billing privileges to an NPI (69 FR 3434);
Is consistent with our requirements in Sec. 489.13 for
those providers and suppliers that require a State survey prior to
being enrolled and the requirements for durable medical equipment,
prosthetics, orthotics, and supplies (DMEPOS) suppliers in Sec.
424.57(b)(2);
Is consistent with our requirements for providers
identified in Sec. 400.202 and surveyed suppliers that are allowed to
bill for services only after they are approved to participate in the
Medicare program. Surveyed suppliers are those suppliers who have been
certified by either CMS or a State certification agency and are in
compliance with Medicare requirements. Surveyed suppliers may include
ASCs or portable x-ray suppliers; and
Ensures that we are able to verify a supplier's
qualifications, including meeting any performance standards before
payment for services can occur.
The second approach would establish the initial enrollment date for
physician and NPP organizations and individual practitioners, including
physician and NPPs, as the later of: (1) The date of filing of a
Medicare enrollment application that was subsequently approved by a
fee-for-service (FFS) contractor; or (2) the date an enrolled supplier
first started furnishing services at a new practice location. The date
of filing the enrollment application is the date that the Medicare FFS
contractor receives a signed Medicare enrollment application that the
Medicare FFS
[[Page 69767]]
contractor is able to process to approval. This option would allow a
supplier that is already seeing non-Medicare patients to start billing
for Medicare patients beginning on the day they submit an enrollment
application that can be fully processed. In contrast to the first
option, newly enrolling physicians and NPP organizations, and
individual practitioners or physician and NPP organizations and
individual practitioners that are establishing or changing a practice
location would be allowed to bill the Medicare program for services
furnished to Medicare beneficiaries on or after the date of filing if a
Medicare contractor approves Medicare billing privileges and conveys
billing privileges to an NPI. It is also important to note that if a
Medicare contractor rejects or denies an enrollment application, then
the physician or NPP organization or individual practitioner is at risk
of not receiving payment for any services furnished after the date of
filing.
Given this second approach, in proposed Sec. 424.520, we stated
that we may implement regulations text that reads similar to: ``The
effective date of billing privileges for physician and NPP
organizations and for individual practitioners, physicians and NPPs, is
the later of--(1) The filing date of the Medicare enrollment
application that was subsequently approved by a FFS contractor; or (2)
The date that the physician or NPP organization or individual
practitioner first furnished services at a new practice location.''
We also stated in the CY 2009 PFS proposed rule that we believe
that this approach--
Prohibits physician and NPP organizations and individual
practitioners, including physician and NPPs, from receiving payments
before a Medicare contractor conveys Medicare billing privileges to an
NPI (69 FR 3434);
Is consistent with our requirements found at Sec.
410.33(i) that limit the retrospective billing for IDTFs and ensures
that Medicare billing privileges are conveyed to physician and NPP
organizations and to individual physicians and NPPs in a similar manner
similar to IDTFs; and
Addresses the public's concern regarding contractor
processing timeliness while appropriately ensuring that Medicare
payments are made to physician and NPP organizations and to individual
physicians and NPPs who have enrolled in a timely manner.
We maintain that it is not possible to verify that a supplier has
met all of Medicare's enrollment requirements prior to submitting an
enrollment application. Therefore, the Medicare program should not be
billed for services before the later of the two dates that a physician
or NPP organization, physician, or NPP has submitted an enrollment
application that can be fully processed or when the enrolled supplier
is open for business.
To assist physician and NPP organizations and individual
practitioners in enrolling and updating their existing enrollment
record, we established an Internet-based enrollment process known as
the Internet-based Provider Enrollment, Chain and Ownership System
(PECOS) that is more streamlined and efficient than the traditional
paper-application enrollment method.
By using Internet-based PECOS, we expect that physician and NPP
organizations and individual practitioners will be able to reduce the
time necessary to enroll in the Medicare program or to make a change in
their Medicare enrollment record by reducing common errors in the
application submission process. We expect that Medicare contractors
will fully process most complete Internet-based PECOS enrollment
applications within 30 to 45 calendar days compared to 60 to 90
calendar days in the current paper-based enrollment process. Thus, if
physician and NPP organizations and individual practitioners enroll in
the Medicare program or make a change in their existing Medicare
enrollment using Internet-based PECOS and submit required supporting
documentation, including a signed certification statement, licensing
and education documentation, and, if necessary, the electronic funds
transfer authorization agreement (CMS-588) 45 days before their
effective date, a Medicare contractor should be able to process the
enrollment application without a delay in payment.
The date of filing for Internet-based PECOS will be the date the
Medicare FFS contractor receives all of the following: (1) A signed
certification statement; (2) an electronic version of the enrollment
application; and (3) a signature page that the Medicare FFS contractor
processes to approval.
In Sec. 424.502, we also proposed to define a physician and NPP
organization to mean any physician or NPP entity that enrolls in the
Medicare program as a sole proprietorship or organizational entity such
as a clinic or a group practice. In addition to establishing an
organizational structure as a sole proprietorship, physicians and NPPs
are able to establish various organizational relationships including
corporations, professional associations, partnerships, limited
liability corporations, and subchapter S corporations. We believe that
the proposed definition would include sole proprietorships that receive
a type 1 NPI and any organizational entity that is required to obtain a
type 2 NPI.
Comment: Several commenters urged CMS to adopt the proposal to
limit retrospective billing to the later of the date of filing or date
the practice location was established.
Response: We agree with these commenters and have finalized this
approach in this final rule with comment period.
Comment: One commenter recommended that we should not implement the
revised effective date for billing privileges until January 1, 2010.
Response: We disagree with the commenter because we believe that it
is essential that Medicare only pay for services to eligible
practitioners that are qualified to bill for services.
Comment: Several commenters recommended that we refrain from
implementing any proposed changes to the effective date of Medicare
billing privileges until the Provider Enrollment, Chain and Ownership
System (PECOS) system is fully functional and a thorough discussion is
held between all affected parties and/or all current National Provider
Identifier (NPI) applications are processed.
Response: While we understand this comment, we disagree with these
commenters. By establishing an effective date of billing for
physicians, NPPs, and physician and NPP organizations, we believe that
Medicare will only pay for services furnished by licensed practitioners
that meet all of the Medicare program requirements. In addition, we
implemented the NPI on May 23, 2008. Accordingly, we do not believe
that there is a nexus between the implementation of the effective date
for physicians, NPPs, and physician and NPP organizations and the
implementation of the Internet-based PECOS or the implementation of the
NPI.
Comment: One commenter suggested that payment not commence until
the provider's application has been processed and approved and that if
the approval date is after the date the provider first started to
render services, then payments will be paid retroactive to the
rendering date. The commenter also requested that CMS implement an
electronic enrollment processing system.
Response: We are finalizing a provision that allows physicians,
NPPs (including CRNAs), and physician or NPP organizations to
retrospectively bill
[[Page 69768]]
for services up to 30 days prior to their effective date of billing
when the physician or NPP organization met all program requirements,
including State licensure requirements, where services were provided at
the enrolled practice location prior to the date of filing and
circumstances precluded enrollment in advance of providing services to
Medicare beneficiaries in Sec. 424.521(a)(1). Further, we are
implementing Internet-based PECOS for physicians and NPPs by the end of
CY 2008 to facilitate the electronic enrollment process.
Comment: One commenter suggested that the enrollment payment policy
for CRNAs remain as it is.
Response: We are finalizing a provision that allows physicians,
NPPs (including CRNAs), and physician or NPP organizations to
retrospectively bill for services up to 30 days prior to their
effective date of billing when the physician or nonphysician
organization has met all program requirements, including State
licensure requirements, where services were provided at the enrolled
practice location prior to the date of filing and circumstances, such
as, when a physician is called to work in a hospital emergency
department which precluded enrollment in advance of providing services
to Medicare beneficiaries in Sec. 424.521(a)(1).
Comment: One commenter would like to recommend that CMS not make
the new Web-based enrollment system too cumbersome. Their concerns are
based on current member experiences with the IACS for review of PQRI
claims. The requirements for the practice to designate a security
officer, submit old IRS documents, etc., are extremely time-consuming,
burdensome and serve as disincentives to physician participation.
Response: This comment is outside the scope of the proposed rule
and cannot be addressed within this final rule.
Comment: One commenter asked that if we adopt either of these
enrollment strategies, we should consider an exemption for hospital-
based emergency physicians and NPP organizations to allow a period of
retroactive billing and payment once an enrollment application is
approved by the contractor.
Response: We are finalizing a provision that allows physicians,
NPPs, and physician or NPP organizations to retrospectively bill for
services up to a 30 days prior to their effective date of billing when
the physician or NPP organization met all program requirements,
including State licensure requirements, where services were furnished
at the enrolled practice location prior to the date of filing and
circumstances precluded enrollment in advance of providing services to
Medicare beneficiaries in Sec. 424.521(a)(1).
Comment: One commenter stated that they support our efforts to
ensure participating providers and suppliers of services are complying
with Medicare program requirements in a matter consistent with policy
and are not attempting to ``game'' the system. However, should we move
forward with this proposal, the commenter advises the drafting of
policies to identify unusual activities beyond the control of the
provider or supplier, such as hurricanes and other natural disasters,
that necessitate a provider or supplier of services obtaining
additional Medicare billing privileges in order to provide services.
Response: We are finalizing a provision that allows physicians,
NPPs, physician or NPP organizations to retrospectively bill for
services up to a 90 days prior to their effective date of billing when
the physician or NPP organization met all program requirements,
including State licensure requirements, services were furnished at the
enrolled practice location prior to the date of filing and a
Presidentially-declared disaster under the Robert T. Stafford Disaster
Relief and Emergency Assistance Act, 42 U.S.C. Sec. Sec. 5121-5206
(Stafford Act) precluded enrollment in advance of providing services to
Medicare beneficiaries in Sec. 424.521(a)(2).
Comment: A large number of commenters do not support either
approach and go further to state that both proposals will negatively
impact the ability of hospital emergency departments and their
physicians to meet their statutory obligations under the Emergency
Medical Treatment and Active Labor Act (EMTALA). Many of these
commenters stated that in these emergency department situations,
physicians are hired in very short timeframes, sometimes just days
before they begin working in a new location that they cannot submit an
enrollment application in such a short timeframe. They also continued
to state that if we adopted the enrollment provisions as proposed,
these emergency department enrollment situations would cause the
physicians to forgo payment because they would not be able to submit an
enrollment application before they begin furnishing services. Other
commenters were opposed to both proposed approaches to limit
retrospective billing after enrolling in the Medicare program and asked
that we withdraw any proposed changes to the enrollment process.
Response: We disagree with the commenters. We believe that we have
adopted an approach that balances the need to strengthen the Medicare
enrollment process, protect the Medicare Trust Funds, and ensure that
individual practitioners and physician and NPP organizations receive
payment for services furnished to Medicare beneficiaries. The revised
provision allows up to 30 days after furnishing services to submit an
enrollment application (and up to 90 days when a Presidentially-
declared disaster under the Robert T. Stafford Disaster Relief and
Emergency Assistance Act, 42 U.S.C. 5121-5206 (Stafford Act)) so the
physician, NPP or physician or NPP organization has sufficient time to
submit their enrollment application.
Comment: One commenter stated that they believe that it is
unreasonable to expect physicians to furnish care to their patients
without the ability to be paid for their services until they are
officially enrolled in the Medicare program.
Response: While we agree that physicians should be reimbursed for
the services furnished to Medicare beneficiaries, we also believe that
physicians, NPPs and physician and NPP organizations are responsible
for enrolling or making a change in their enrollment in a timely
manner. In most cases, we believe that physicians and NPP practitioners
can submit an enrollment application prior to providing Medicare
services at a new practice location.
Comment: One commenter stated that in emergency room situations
these enrollment scenarios will not work and gives the example using
the second approach of when an emergency department is in desperate
need of a provider. The department is able to obtain a physician almost
immediately who is already employed within the organization and is also
an approved provider in the Medicare program at their current practice
location. Simply because the events in this example happened so
quickly, the physician's CMS-855R was submitted to the Medicare
contractor 1 week after he began providing services in the emergency
department. If the second approach were in effect, 1 week of services
the physician furnished to Medicare beneficiaries in the emergency
department would be denied as his enrollment at this location was not
in effect.
Response: We understand this commenter's concerns and are
finalizing a provision that allows physicians, NPPs, physician or NPP
organizations to retrospectively bill for services up to 30
[[Page 69769]]
days prior to their effective date of billing when the physician or NPP
organization met all program requirements, including State licensure
requirements, where services were furnished at the enrolled practice
location prior to the date of filing and circumstances precluded
enrollment in advance of providing services to Medicare beneficiaries
in Sec. 424.521(a)(1).
Comment: One commenter stated that should we adopt the second
approach, they requested that a standard be established that defines
what constitutes the receipt of a substantially complete application
form for which the effective date under approach two may be
established. This approach would address the situations where denial
errors and clarifications can be corrected without delaying the
effective date.
Response: As a general rule, applicants are given at least 30 days
to cure any deficiencies/technicalities before a contractor rejects an
enrollment application (see Sec. 424.525). During the application
review process, contractors notify applicants about missing information
and documentation and afford the applicant at least 30 days to correct
deficiencies. With the implementation of Internet-based PECOS, we
expect that physicians and NPPs using the Web process will
significantly decrease the number of incomplete applications and the
need for contractors to request additional information. With the
implementation of this final rule, we would require contactor to deny,
rather than reject paper or Web applications when a physician, NPP, or
physician or NPP organization fails to cure any deficiencies/
technicalities.
Comment: One commenter urged CMS to adopt a standard establishing
that the filing date for an enrollment application is when a signed
application is first received by a contractor and not when the
application is deemed complete and ready for approval by that
contractor. Otherwise, delays associated with contractor processing
could become a larger concern.
Response: We agree with this commenter and have adopted the ``date
of filing'' as the date that the Medicare contractor receives a signed
provider enrollment application that the Medicare contractor is able to
process to approval.
Comment: Several commenters strongly opposed the approach where
billing privileges would be conveyed based on the date of approval by
the Medicare contractor and maintain that tying billing privileges to a
contractor's approval of a practitioner's Medicare enrollment
application could create unintended access problems for some patients.
Other commenters added that in certain situations, the physicians would
furnish services and would not be able to be compensated which they do
believe is an unintended consequence by CMS.
Response: We agree with the commenters and have not adopted the
proposed approach as it was proposed but revised it so that it would
establish the effective date of billing for physicians, NPPs, and
physician and NNP organizations as the later of date of filing of a
Medicare enrollment application that was subsequently approved by a
Medicare contractor or the date they first began furnishing services at
a new practice location.
Comment: The suggestion to use the Medicare contractor's date of
approval as the initial enrollment date would mean that an employer can
expect to generate no revenue from a new hire for a minimum of 3 to 6
months, which is unacceptable.
Response: As stated above, we have not adopted the proposed
approach but revised it so that it would establish the effective date
of billing for physicians, NPPs, and physician and NNP organizations as
the later of date of filing of a Medicare enrollment application that
was subsequently approved by a Medicare contractor or the date they
first began furnishing services at a new practice location.
Comment: One commenter supports the establishment of an effective
billing date for physicians, NPPs, and physician and NPP organizations
as the later of: (1) The date of filing of a Medicare enrollment
application that was subsequently approved by a Medicare contractor; or
(2) the date an enrolled physician or NPP first started furnishing
services at a new practice location. The commenter further urges the
agency to tie enrollment and when billing privileges begins to offering
services at a new practice location.
Response: We appreciate this comment and have adopted a modified
approach where that date of filing is the effective date of billing for
physicians, NPPs, and physician and NPP organizations.
Comment: One commenter requests that current procedures change and
allow enrollment applications to be submitted 60 days prior to a
change.
Response: We disagree with the commenter and maintain that
permitting billing 30 days before the filing of an enrollment
application will provide a sufficient amount of time in most cases.
Comment: One commenter stated that the establishment of an
effective billing date for physicians, NPPs, and physician and NPP
organizations as: (1) The date of filing of a Medicare enrollment
application that was subsequently approved by a Medicare contractor; or
(2) the date an enrolled physician or NPP first started furnishing
services at a new practice location will improve patient access to
Medicare providers, since patients could be scheduled for appointments
based on the date that a Medicare provider submits an enrollment
application to the Medicare Administrative Contractor (MAC). This also
allows new Medicare providers more flexibility when initiating services
under Medicare.
Response: We thank the commenter for their support of this
provision.
Comment: Several commenters recommend that providers should be able
to submit enrollment applications with a requested effective date.
Response: We believe limiting retrospective payments will ensure
that physicians, NPPs, and physician and NPP organizations will ensure
that only qualified practitioners are able to bill for services
furnished to Medicare beneficiaries. Moreover, we believe that
establishing an effective date of Medicare billing privileges and
establishing limited retrospective payments will encourage physicians,
NPPs, and physician and NPP organizations to enroll and maintain their
enrollment in with the Medicare program. However, the effective date of
billing privileges is 30 days prior to the later of the date an
enrollment application is filed or the date services were furnished at
a new practice location.
Comment: Several commenters urged CMS to retain its current
retrospective billing policy for physicians and NPPs. However, these
commenters stated that if CMS revised its retrospective billing policy
for physicians, NPPs, and NPP organizations that they preferred option
2 (establishment of an effective billing date for physicians, NPPs, and
physician and NPPs as the later of: (1) The date of filing of a
Medicare enrollment application that was subsequently approved by a
Medicare contractor; or (2) the date an enrolled physician or NPP first
started furnishing services at a new practice location), which limited
retrospective billing to the later of the date of filing or the date
the practice location was established.
Response: We agree with these commenters and have adopted this
approach in this final rule.
Comment: One commenter recommends allowing those physicians
[[Page 69770]]
who are about to complete their fellowship to submit an application to
Medicare for a generic provider number which at a later date can be
linked to an eventual employer.
Response: Since we do not establish a provisional enrollment status
for physicians or other suppliers, but rather convey billing privileges
to a NPI, we disagree with this commenter.
Comment: One commenter suggests that to improve the Medicare
enrollment process, the processing of enrollment applications should
take 30 to 45 days versus a 90 to 120 days activity. Medicare could
follow the process employed by private payers and utilize one central
repository for provider enrollment given that all processes basically
require the same essential information.
Response: CMS already utilizes a single national repository of
enrollment information. The national enrollment repository is known as
the Provider Enrollment, Chain and Ownership System (PECOS).
Comment: Several commenters supported our proposed approach that
would establish the initial enrollment date for individual
practitioners and physician and NPP organizations as the date an
enrolled supplier started furnishing services at the new practice
location as it would be the fairest option for all enrollees.
Response: We appreciate this comment, and as stated above, we are
finalizing this proposal with revisions so that it would establish the
effective date of billing for physicians, NPPs, and physician and NNP
organizations as the later of date of filing of a Medicare enrollment
application that was subsequently approved by a Medicare contractor or
the date they first began furnishing services at a new practice
location.
Comment: One commenter stated that physician practices that allow
new practitioners to treat Medicare patients before their applications
are approved run the risk of submitting an application that is
ultimately returned on a technicality, forcing them to begin the
application process all over again.
Response: As stated above, to address the concern that enrollment
applications are returned based on a technicality, we expect that
physicians and NPPs using the Web process will significantly decrease
the number of incomplete applications and the need for contractors to
request additional information. With the implementation of this final
rule, we would require contactor to deny, rather than reject paper or
Web applications when a physician, NPP, or physician or NPP
organization fails to cure any deficiencies/technicalities.
Comment: One commenter stated that new physicians' practices must
begin paying rent, salaries and other expenses the minute they become
operational, if not before. This commenter also stated that many of
these physicians are already forced to take out loans to pay expenses
in the early days of operation until they enroll and can bill for
services furnished in the interim. Finally, this commenter stated that
our proposal to limit retrospective billing to the later of the date of
filing or the date the practice location is operational will inhibit
the ability of physicians and NPPs to create their own organizations,
and instead, it will force them to join already existing entities.
Response: We do not believe that the Medicare program pays for
services rendered prior to the date a new practice location is
established. As described above, the physician or NPP would be allowed
to file his or her enrollment application 30 days prior to the opening
of new practice location and receive payments for services provided
from the day the practice location was established or opened assuming
that the physician met State licensing requirements and other Medicare
program requirements at the time of filing and subsequently thereafter.
Comment: One commenter urged CMS to withdraw any proposed changes
to the enrollment process, but stated that they would consider
supporting limiting retrospective billing to the later of the date of
filing or the date the practice location is operational but only after
Internet-based PECOS has been proven to facilitate timely enrollment
processing (fewer than 30 days). Another commenter supported CMS
implementing this requirement once the enrollment processing time is at
a period of 30 to 45 days.
Response: We do not believe that a change to the effective date of
Medicare billing privileges has a nexus to the implementation of the
Internet-based PECOS.
Comment: One commenter suggested that we allow 30 to 60 days before
submission of an application to serve as the date of approval because
this timeline will allow for practices to obtain provider signatures,
licenses, and certifications so that we can approve back to the date of
licensure and/or the date the provider started furnishing services with
a minimum of 30 to 60 days.
Response: We disagree with this commenter, because physicians, NPPs
and physician and NPP organizations should have all the necessary
licenses/certifications at the time of filing, not 30 or 60 days after
filing an enrollment application.
Comment: Several commenters asked for clarification of the ``date
of filing'' when submitting an application for enrollment.
Response: We have clarified the ``date of filing'' in the provision
of the final rule as the date that the Medicare contractor receives a
signed provider enrollment application that the Medicare contractor is
able to process to approval.
Comment: One commenter recommends that we wait until the Internet-
based PECOS system has been released and used by the physician
population before making these changes.
Response: As stated above, we do not believe that a change to the
effective date of Medicare billing privileges has a nexus to the
implementation of the Internet-based PECOS.
Comment: Several commenters recommended that we shorten the period
of time during which retrospective billing is permitted from 27 months
to 12 months. Another commenter stated that reducing retrospective
billing from 27 months to 12 months would provide sufficient time for
enrollment to occur, reduce the possibility of improper billing and
eliminate the unreasonable administrative burden that the our
alternatives would place on all new physicians.
Response: We appreciate these comments, but continue to believe
that allowing retrospective billing for 12 months prior to enrollment
poses a significant risk to the Medicare program. Accordingly, with the
implementation of this final rule, physician and NPPs and physician and
NPP organizations will have a limited time period to submit claims
before the effective date of their respective Medicare billing
privileges.
Comment: Several commenters urged CMS to establish the new Web-
based program and determine the accuracy and ease of the system before
making new enrollment rules. This commenter also stated the new Web-
based system should be far easier to use than the current process.
Response: We agree with these commenters and, as previously stated,
we expect to implement Internet-based PECOS for individuals by the end
of CY 2008.
Comment: One commenter stated that they have been advised by
Medicare that this change means upon receiving notice that a graduate
nurse anesthetist
[[Page 69771]]
had passed his or her certifying exam that the ``graduate'' now a CRNA
can retain any Medicare claims from his or her certification date
forward and then submit these held claims upon receiving his or her
National Provider Identifier (NPI). Further, the commenter stated that
Medicare carriers have allowed this payment practice with the
understanding that graduate nurse anesthetists are qualified to bill
Medicare for their services upon their certification date.
Response: While we understand this comment, we believe that
physicians and NPPs must meet all State licensing requirements before
Medicare can convey billing privileges. Moreover, with the
implementation of this final rule, physician and NPPs and physician and
NPP organizations will have a limited time period to submit claims
before the effective date of their Medicare billing privileges.
Comment: One commenter stated that they understand that there have
been Medicare Carriers that allow CRNAs to hold their claims and back
bill for up to 1 year prior to the date they are certified, consistent
with Medicare payment policy.
Response: We believe that physician and NPPs must meet all State
licensing requirements before Medicare can convey billing privileges.
Moreover, with the implementation of this final rule, physician and
NPPs and physician and NPP organizations will have a limited time
period to submit claims before their effective date of Medicare billing
privileges.
Comment: One commenter urged CMS to adopt the Council for
Affordable Quality Healthcare's (CAQH) Universal Credentialing Database
(UCD) as its provider credentialing information gathering tool. This
commenter stated that CAQH has over 600,000 providers and suppliers in
its database and is working with hospitals and State Medicaid programs
as well.
Response: While we appreciate this comment, this comment is outside
the scope of this final rule. However, it is important to understand
that CMS' national enrollment repository, PECOS, maintains Medicare
enrollment records on more than 610,000 physicians, 280,000 NPPs,
75,000 single specialty clinics, and 130,000 multi-specialty clinics.
In addition, PECOS maintains enrollment records for all other provider
and supplier types, except durable medical equipment, prosthetics,
orthotics, and supplies (DMEPOS) suppliers. This means that we have
collected and retained current enrollment information on approximately
80 percent of physicians and 98 percent of the NPPs enrolled in and
billing the Medicare program. In addition, since the information
obtained during the enrollment process for physician and NPP
organizations updates our claims payment systems for Part B services,
we are able to help ensure claims processing accuracy by utilizing its
existing processes.
Comment: One commenter urged CMS to produce educational materials
beyond the vague tip sheets located at the beginning of each
application. In addition, this commenter recommends that we develop a
series of frequently asked questions on Medicare provider enrollment.
Response: We already maintain a link to provider enrollment
frequently asked questions at http://www.cms.hhs.gov/
MedicareProviderSupEnroll. In addition, this Web site maintains more
than 10 different provider enrollment outreach documents that the
public can view online or download for future reference.
In an attempt to ensure that all physicians, NPPs, and NPP
organizations are aware of and comply with their reporting
responsibilities, we developed and posted reporting responsibilities
for physicians, NPPs, and physician organizations on our provider
enrollment Web page at http://www.cms.hhs.gov/MedicareProviderSupEnroll
on September 16, 2008. In addition, on September 17, 2008, we issued a
listserv announcement to those individual physicians and NPPs who
subscribe to the CMS Physician Open Door Forum and to more than 150
national and State-level organizations that subscribe to the CMS
provider partnership network. We also expect that contractors will
continue to notify physicians and NPP organizations about their
reporting responsibilities by listserv, bulletin, and/or direct mail in
FY 2009 and beyond. With the implementation of this final rule with
comment period on January 1, 2009, we will revise the educational
materials found on our Web site and distribute this information through
our established communication channels. Finally, we will post
educational material, including fact sheets and frequent asked
questions, regarding Internet-based PECOS as soon as this system is
available to the public.
Comment: One commenter asked that we create extensive educational
programming on provider enrollment for both our contractors and
providers to ensure that both sides thoroughly understand the process
and expectations.
Response: We provide Medicare contractors with manual instructions
and other directives to ensure consistent enrollment processing. In
addition, as stated above, we are disseminating additional educational
materials to ensure that the public understands their reporting
responsibilities.
Comment: One commenter suggested a process for the Medicare
Contractor to notify the provider that the application has been
received and it is being processed to ensure the approved billing date
is the same between the provider and the Medicare contractor.
Response: Due to cost constraints, most Medicare contractors can
not notify an applicant when their paper enrollment application is
received; however, Medicare contractors are required to notify an
applicant when the application is missing information or if additional
supporting documentation is needed to process the enrollment request.
Comment: One commenter stated that the NPP nomenclature is
ambiguous because CMS lists all suppliers as NPPs (including
audiologists and physical and occupational therapists) on page 38535 of
the proposed rule, rather than limiting this term to physician
assistants, nurse practitioners, and clinical nurse specialists as
defined in Medicare policy manuals.
Response: We have revised this rule to refer to individual
physicians and NPPs and physician and NPP organizations.
Comment: One commenter urges CMS to require contractors to provide
accurate and complete information to applicants, allowing their
practices to complete their enrollment applications in an easy and
efficient manner.
Response: While we appreciate this comment, this comment is outside
the scope of this proposed rule and can not be addressed in this final
rule.
Comment: One commenter urged CMS to require Medicare contractors to
communicate requests for additional information in such a manner that
the communications can be easily tracked.
Response: We believe that this issue is outside the scope of the
proposed rule and can not be addressed in this final rule.
Comment: One commenter urged a ``timeout'' on the release of new
rules and regulations surrounding the Medicare provider enrollment
process.
Response: We recognize that we have published several regulations
within the last 3 years and a number of program integrity manual
instructions designed to strengthen the enrollment process. However, we
continue to believe that CMS must maintain the flexibility to issue
regulations in accordance with the Administrative Procedures Act.
[[Page 69772]]
Comment: One commenter urged CMS to clarify the apparent
inconsistent policies on revalidation as set forth in the April 21,
2006 provider enrollment rule titled, ``Medicare Program: Requirements
for Providers and Suppliers to Establish and Maintain Medicare
Enrollment (CMS-6002-F)'' and the June 27, 2008 provider enrollment
rule titled, ``Medicare Program: Appeals of CMS or CMS Contractor
Determinations When a Provider or Supplier Fails to Meet the
Requirements for Medicare Billing Privileges (CMS-6003-F).''
Response: In response to comment in the April 21, 2006 final rule
(71 FR 20754), we stated, ``We expect that a fee-for-service contractor
would notify the provider or supplier in writing regarding the need to
revalidate its enrollment information. Once notified, providers and
suppliers would be expected to review, update, and submit any changes
and supporting documentation regarding the enrollment record within 60
days. If no changes have occurred, a provider or supplier would simply
sign, date, and return the revalidation application.'' In addition, we
stated in the provisions of the final rule that, ``We will contact all
providers and suppliers directly as to when their 5-year revalidation
cycle starts beginning with those providers and suppliers currently
enrolled in the Medicare program but that have not submitted a
completed enrollment application. The revalidation process would ensure
that we collect and maintain complete and current information on all
Medicare providers and suppliers and ensure continued compliance with
Medicare requirements. In addition, this process further ensures that
Medicare beneficiaries are receiving items or services furnished only
by legitimate providers and suppliers, and strengthens our ability to
protect the Medicare Trust Funds.''
In response to a comment in the June 27, 2008 final rule (73 FR
36448), we stated, ``Therefore, providers and suppliers that enrolled
in the Medicare program prior to 2003, but who have not completed a
Medicare enrollment application since then, have had more than 2 years
to come into voluntary compliance with our enrollment criteria by
submitting a complete enrollment application. With this final rule, we
are again notifying physicians, providers, and suppliers that they may
voluntarily complete and submit a Medicare enrollment application and
the necessary supporting documentation prior to our formal request for
revalidation. Accordingly, providers and suppliers who choose not to
come into voluntary compliance or fail to respond to a revalidation
request in a complete and timely manner fail to satisfy our enrollment
criteria and may be subject to revocation of their billing
privileges.'' Accordingly, we do not believe that these policies are
inconsistent. We continue to encourage all physicians, providers, and
suppliers to update their enrollment records when a reportable change
occurs, and absent a reportable change we encourage all physicians,
providers, and suppliers who have not updated their enrollment record
within the last 5 years to do so in advance of contractor's
revalidation request. Once we initiate revalidation efforts, physicians
and other providers and suppliers will only be provided 60 days to
respond to a contractor's request.
Comment: One commenter stated that we should monitor, track, and
make publicly available the average length of time from submission of
an enrollment application for new procedures to the time the Medicare
contractors actually process and notify the providers of acceptance of
that enrollment application.
Response: While we monitor contractor provider enrollment
processing timeliness using PECOS, we do not currently calculate an
average length of time for initial enrollments, changes, and
reassignments. We will consider calculating the average length of time
for initial enrollment applications, changes of information, and
reassignments and making this information available to the public.
Comment: One commenter requests that if we finalize these
provisions, a notice of onsite review should be provided 14 days in
advance to allow the pharmacy to appropriately schedule for the onsite
review.
Response: We disagree with this commenter. We believe that onsite
reviews provide CMS and our contractors a valuable tool to ensure that
providers and suppliers are in compliance.
Comment: Several commenters remain concerned about the failure of
CMS to permit the use of electronic signatures and electronic documents
which would provide practitioners and practices the opportunity to
complete and submit the entire application package online.
Response: This comment is outside the scope of this proposed rule
and can not be addressed in this final rule.
Comment: One commenter recommended that we hold an open and
thorough dialogue with its contractors and the provider community
regarding the enrollment process as it currently stands and the
problems encountered by all.
Response: We believe that this issue is outside the scope of the
proposed rule and can not be addressed in this final rule.
Comment: One commenter stated that they support CMS and the
establishment of an electronic enrollment process but they do not
believe it will address the provisions in the rule.
Response: While we do not expect that Internet-based PECOS will
remedy all provider enrollment processing issues, we do believe that an
Internet-based enrollment process will allow physicians and other
providers and suppliers to reduce the time necessary to enroll or make
a change in enrollment in the Medicare program.
Comment: One commenter recommended that we establish streamlined
and user-friendly procedures that will encourage high rates of
physician participation in the Medicare program.
Response: We appreciate this comment and believe that Internet-
based PECOS will allow physicians and NPPs the ability to enroll or
make changes in their enrollment records faster and more accurately
than the paper-based enrollment process.
Comment: One commenter commended CMS for PECOS as it will provide
timely ease of use for enrollment as well as updating the enrollment
record.
Response: We appreciate this comment.
Comment: One commenter requested that we consider modifying
existing provider enrollment applications to include an attestation
statement for which an applicant would attest to those certain
requisite program requirements having been met prior to the filing of
the application.
Response: This recommendation is outside the scope of the proposed
rule and can not be addressed in this final rule.
Comment: One commenter stated that we should provide notice 14 days
in advance of conducting an onsite review and that reviews on Mondays
should be avoided.
Response: This comment is outside the scope of this proposed rule
and can not be addressed in this final rule.
Comment: One commenter urged that CMS and the NSC coordinate so
that only a single onsite review would be required and the least
disruptive to an operation.
[[Page 69773]]
Response: This comment is outside the scope of the proposed rule
and can not be addressed in this final rule.
After reviewing public comments, we are finalizing the definition
of ``physician or nonphysician practitioner (NPP) organization'' at
Sec. 424.502 as ``any physician or NPP organization that enrolls in
the Medicare program as a sole proprietorship or any organizational
entity.'' Organizational entities include, but are not limited to,
limited liability corporations, Subchapter S corporations,
partnerships, professional limited liability corporations, professional
corporations, and professional associations.
After reviewing public comments, we are finalizing the provision at
Sec. 424.520(d) to state that we will establish an effective date of
billing for physicians, NPPs and physician and NPP organizations that
would be the later of: (1) The date of filing of a Medicare enrollment
application that was subsequently approved by Medicare contractor (that
is, carrier, fiscal intermediary or A/B Medicare Administrative
Contractor); or (2) the date a physician, NPP or physician and NPP
organization first started furnishing services at its new practice
location.
In Sec. 424.521, Request for Payment by Physicians, Nonphysician
Practitioners, Physician or Nonphysician Organizations, we are
finalizing the proposals.
In Sec. 424.521(a)(1), we are finalizing a provision that allows
physicians, NPPs, physician or NPP organizations to retrospectively
bill for services up to 30 days prior to their effective date of
billing when the physician or NPP organization met all program
requirements, including State licensure requirements, services were
furnished at the enrolled practice location prior to the date of filing
and circumstances precluded enrollment in advance of providing services
to Medicare beneficiaries. Thus, physicians, NPPs, and physician or NPP
organizations would be limited to receiving reimbursement for services
for a maximum of 30 days prior to filing an enrollment application that
was subsequently approved by a Medicare contractor.
In Sec. 424.521(a)(2), we are finalizing a provision that allows a
physician, NPP, and physician or NPP organization to retrospectively
bill for services up to 90 days prior to their effective date of
billing privileges when the physician or NPP organization met all
program requirements, including State licensure requirements, services
were furnished at the enrolled practice location prior to the date of
filing, and a Presidentially-declared disaster under the Robert T.
Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C.
Sec. Sec. 5121-5206 (Stafford Act) precluded enrollment in advance of
providing services to Medicare beneficiaries.
While these changes limit the retrospective payments that a
physician, NPP, or physician and NPP organization may obtain from the
Medicare program, we believe that this approach will ensure that a
Medicare contractor is able to verify that a physician, NPP or
physician and NPP organization meets all program requirements at the
time of filing, including State licensure. In addition, this approach
will afford Medicare beneficiaries the appropriate protections under
the statute, regulations, and CMS policy.
To ensure that eligible physicians, NPPs or physician and NPP
organizations receive reimbursement for services furnished, we will
require that Medicare contractors deny Medicare billing privileges when
a Medicare contractor is not able to process an incomplete enrollment
application that is submitted by a physician, NPP or physician and NPP
organization. This is a change from our earlier final rule, ``Medicare
Program; Requirements for Providers and Suppliers to Establish and
Maintain Medicare Enrollment,'' (CMS-6002-F) which was published on
April 21, 2006. In this earlier rulemaking effort, we stated that we
would reject an incomplete enrollment application. In order to provide
physician and NPP organizations and individual practitioners with the
opportunity to preserve an initial application filing date, we will
deny incomplete applications for these supplier types. We believe that
Sec. 424.530(a)(1) permit a Medicare contractor to deny an incomplete
enrollment application.
By denying billing privileges for enrollment in the Medicare
program or to establish a new practice location, rather than rejecting
an enrollment application, physicians, NPPs or physician and NPP
organizations will be afforded appeal rights which will preserve the
original date of filing the application. Reimbursement for services
furnished back to the effective date of billing will be permitted as
long as the applicant submits a corrective action plan or appeal in
accordance with Sec. 405.874 and submits the necessary information to
cure any application deficiencies. However, if the applicant does not
submit a corrective action plan or appeal within the timeframe
established in Sec. 405.874, then the applicant would not preserve the
right to bill the Medicare program for services furnished from the date
of the initial filing of the application or the date the practitioner
or organization first started furnishing services at its new practice
location.
We are also adopting the ``date of filing'' as the date that the
Medicare contractor receives a signed provider enrollment application
that the Medicare contractor is able to process to approval. If the
Medicare contractor denies an enrollment application that is not later
overturned during the appeals process, the new date of filing would be
established when a physician or NPP organization submits a new
enrollment application that the contractor is able to process to
approval.
PECOS is the system that supports the Medicare provider and
supplier enrollment process by collecting and storing provider and
supplier information obtained from the Medicare enrollment application
(that is, the CMS-855). The PECOS database retains enrollment
information on Part A providers that bill fiscal intermediaries (FIs)
or A/B Medicare Administrative Contractors (A/B MAC) and Part B
providers, including physicians and NPPs that bill carriers or A/B
MACs.
Medicare contractors use PECOS to establish new enrollment records
for providers and suppliers, update provider and supplier information,
and process requests from individual health care practitioners for
assignment of benefits. PECOS standardized the Medicare enrollment
process and supplies enrollment data to the Part A and Part B claims
processing systems.
In June 2002 and November 2003, we implemented PECOS for fiscal
intermediaries (FIs) and carriers respectively. Today, PECOS is used by
carriers, FIs, and A/B MACs to enter data submitted on the Medicare
enrollment application. However, by establishing an Internet-based
enrollment process, we will allow providers and suppliers (except
suppliers of durable medical equipment, prosthetics, orthotics, and
supplies (DMEPOS)) suppliers, the option of enrolling or making a
change in their Medicare enrollment information via the Internet.
Internet-based PECOS will allow Medicare providers and suppliers to
enroll or make a change in their Medicare enrollment record. The
primary objectives for the Web enablement of PECOS are to: (1) Reduce
the time necessary for providers and suppliers to enroll or make a
change in their Medicare information; (2) streamline the enrollment
process for providers and suppliers; (3) allow
[[Page 69774]]
physicians and NPPs to manage their enrollment information and verify
their reassignments of benefits; and (4) reduce the administrative
burden associated with completing and submitting enrollment information
to Medicare.
Additional information regarding Internet-based PECOS will be made
available later this year. This information will be posted on the
Medicare provider/supplier enrollment Web site at http://
www.cms.hhs.gov/MedicareProviderSupEnroll.
With the implementation of an Internet enrollment process referred
to as the Internet-based PECOS, the date of filing for individual
practitioners submitted through Internet-based PECOS is the date the
Medicare contractor receives both: (1) An electronic version of the
enrollment application; and (2) a signature page containing an original
signature that the Medicare contractor processes to approval. The date
of filing for organizational entities submitted through Internet-based
PECOS is the date the Medicare contractor receives all of the
following: (1) An electronic version of the enrollment application; (2)
a signature page containing an original signature that the Medicare
contractor processes to approval.
To address public concerns regarding the burden and complexity
associated with the Medicare enrollment process, we will implement
Internet-based PECOS in three distinct phases. We will implement
Internet-based PECOS for all individual physicians and NPPs enrolling
or making a change to an existing enrollment record in Phase I. In
Phase II, we will implement Internet-based PECOS for all organizational
providers and suppliers, except DMEPOS suppliers, enrolling or making a
change to an existing enrollment record. In Phase III, we will
implement Internet-based PECOS for DMEPOS suppliers.
Based on current operating assumptions, we expect to begin
implementation of Phase I by the end of CY 2008, with full
implementation scheduled for completion in January 2009. We also expect
to make Internet-based PECOS available to physicians and NPPs in all
States, including California, Missouri, and New York.
Phase II is tentatively scheduled for implementation beginning in
Spring 2009, with full implementation scheduled for completion by June
30, 2009. Phase III is tentatively scheduled for implementation in CY
2010.
Since Internet-based PECOS is a scenario-driven application process
with front-end editing capabilities and built-in help screens, we
believe that this new enrollment application process will significantly
simplify and streamline the enrollment process for physicians,
providers and suppliers, reduce the time necessary to enroll or make a
change to a Medicare enrollment record, reduce the administrative
burden associated with completing and submitting enrollment information
to Medicare, decrease the errors during the application submission
process, and allow physicians and NPPs to take personal responsibility
for their Medicare enrollment in a timely manner. Moreover, unlike the
paper-based enrollment process, Internet-based PECOS' scenario-driven
application process will ensure that prospective providers and
suppliers or enrolled providers and suppliers only complete and submit
the information necessary to apply or make a change in their Medicare
enrollment record. Physicians and NPPs will no longer see questions
that are not applicable for their supplier-type.
While we will encourage all physicians, NPPs, physicians and NPP
organizations and other providers and suppliers to utilize Internet-
based PECOS when it is made available for their provider/supplier type
and their State, all providers and suppliers will continue to have the
option of submitting an enrollment application by paper.
In order to use Internet-based PECOS to enroll or make a change in
an enrollment record, physicians and NPPs will be required to use the
User ID and user password obtained when applying for or updating their
National Provider Identifier (NPI) with the National Plan and Provider
Enumeration System (NPPES). Accordingly, physicians and NPPs will need
to know their NPPES User ID/password information before trying to
enroll or change their enrollment record with Medicare via Internet-
based PECOS. To ensure privacy and security for these individual
practitioners, we encourage that physicians and NPPs to reset their
user password prior to initiating their first enrollment action via
Internet-based PECOS, reset their user password at least once a year
thereafter, and that physicians and NPPs not share their NPPES User ID/
password with billing agents, clearinghouses, academic medical
institutions, or staff within their practice.
Physicians and NPPs choosing to use billing agents, clearinghouses,
academic medical institutions, etc. will be required to submit a paper
enrollment application to enroll or make a change in their Medicare
enrollment record.
In order to use Internet-based PECOS to enroll or make a change in
an organizational enrollment record, we will verify that the authorized
official associated with the Medicare enrollment record is employed by
the organization and is authorized by the organization to submit or
make changes to the organization enrollment record.
Over the last 2 years, we have stressed the importance of filing a
complete application at the time of filing or in response to a
contractor's request for additional information. However, Medicare
contractors continue to report that a significant number of
applications are incomplete at the time of filing or that applicants do
not respond timely and completely to a contractor's request for
additional information.
Finally, in the April 21, 2006 final rule, physicians, NPPs, and
physician and NPP organizations learned about our intent to begin a
revalidation process.
Specifically, Sec. 424.515 states that a provider or supplier
(other than a DMEPOS supplier), must resubmit and recertify the
accuracy of its enrollment information every 5 years. Therefore,
physicians, NPPs and physician and NPP organizations that enrolled in
the Medicare program prior to 2003, but who have not completed a
Medicare enrollment application since then, have had more than 2 years
to come into voluntary compliance with our enrollment criteria by
submitting a complete enrollment application. To date, approximately 80
percent of the enrolled physicians and 98 percent of NPPs have updated
their Medicare enrollment record within the last 5 years.
To ensure that Medicare only pays eligible physicians and NPPs, we
are again notifying physicians and NPPs that they may voluntarily
complete and submit a Medicare enrollment application and the necessary
supporting documentation prior to our formal request for revalidation.
In accordance with the existing provision at Sec. 424.535(a)(1)(ii),
providers and suppliers who choose not to come into voluntary
compliance or fail to respond to a revalidation request within 60 days
of the Medicare contractor's request may be subject to the revocation
of their billing privileges.
2. Medicare Billing Privileges and Existing Tax Delinquency
The Government Accountability Office (GAO) found that over 21,000
of the physicians, health professionals, and suppliers paid under
Medicare Part B during the first 9 months of CY 2005 had tax debts
totaling over $1 billion.
[[Continued on page 69775]]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
]
[[pp. 69775-69824]] Medicare Program; Payment Policies Under the Physician Fee
Schedule and Other Revisions to Part B for CY 2009; E-Prescribing
Exemption for Computer-Generated Facsimile Transmissions; and Payment
for Certain Durable Medical Equipment, Prosthetics, Orthotics, and[[Page 69775]]
[[Continued from page 69774]]
[[Page 69775]]
The GAO report titled, ``Medicare, Thousands of Medicare Part B
Providers Abuse the Federal Tax System (GAO-07-587T)'' found abusive
and potentially criminal activity, including failure to remit to IRS
individual income taxes or payroll taxes or both withheld from their
employees.
While we do not currently consider whether an individual physician,
NPP currently enrolled in the Medicare program has delinquent tax debts
with the Internal Revenue Service (IRS), we do consider whether a
physician or NPP was convicted of a Federal or State felony offense,
including income tax evasion, that we have determined to be detrimental
to the best interest of the Medicare program. Moreover, if a physician
or NPP was convicted of Federal or State felony offense within the 10
years preceding enrollment or revalidation of enrollment that we
determined to be detrimental to the best interest of the Medicare
program, we could deny or revoke the Medicare billing privileges of the
physician or NPP.
The Financial Management Service (FMS), a bureau of the Department
of Treasury, initiated the Federal Payment Levy Program (FPLP) portion
of the Continuous Levy Program in July 2000 to recover delinquent
Federal tax debts. The FPLP is a program whereby delinquent Federal
income tax debts are collected by levying non-tax payments, as
authorized by the Taxpayer Relief Act of 1997 (Pub. L. 105-34). The
FPLP includes vendor and Social Security benefit payments, and Medicare
payments. It is accomplished through a process of matching delinquent
debtor data with payment record data. This automated collection of debt
at the time of payment occurs after the delinquent taxpayer has been
afforded due process, in accordance with the Internal Revenue Code.
In July 2000, the IRS in conjunction with the Department of
Treasury's FMS started the FPLP which is authorized by section 6331(h)
of the Internal Revenue Code as prescribed by section 1024 of the
Taxpayer Relief Act of 1997. Through this program, the IRS can collect
overdue taxes through a continuous levy on certain Federal payments
disbursed by FMS; it generally allows Medicare to match a claim to a
delinquent taxpayer, offset the payment, and recover a percentage of
the amount due.
The FPLP is a collection and enforcement tool used by the IRS for
individuals that have received all requisite notification of tax
delinquency and who have either exhausted or neglected to use their
respective appeal rights; therefore, the FPLP is only applied after all
previous IRS collections efforts have failed. Accordingly, the FPLP is
an automated levy program where certain delinquent taxpayers are
systematically matched and levied on their Federal payments disbursed
by Treasury's FMS.
In 2001, we implemented the FPLP process for Medicare Part C and
vendor payments, and in FY 2009, we will implement the FPLP process for
payments made to providers and suppliers reimbursed under Part A and
Part B of the Medicare program. However, the FPLP does not allow CMS to
offset a payment when an individual reassigns his or her benefits to a
third-party, such as a group practice where an existing Federal tax
delinquency exists.
Consistent with statutory authority found under sections
1866(j)(1)(A) and 1871 of the Act, we believe that we have the
authority to establish and make changes to the enrollment process for
providers and suppliers of service. Accordingly, to ensure that the
Federal government is able to recoup delinquent Federal tax debts from
physicians and NPPs who are enrolled in the Medicare program and are
receiving payments, we are considering revoking the billing privileges
for those individuals for whom a tax delinquency exists and we are
unable to directly levy future payments through the FPLP. While we did
not propose this change in this year's PFS proposed rule, we will
consider proposing this type of change in a future rulemaking effort
after we have implemented the FPLP process, monitored and evaluated the
implementation of FPLP process, and analyzed the potential impact of
this change on physician and NPPs who are subject to the FPLP but for
whom we are unable to directly levy future payments through the FPLP.
In addition, we expect to conduct outreach regarding our implementation
of the FPLP in FY 2009.
We believe that this change, if proposed and adopted, would
prohibit an individual with a tax delinquency from shielding their
future payments through reassignment of benefits to a third party.
Finally, since the tax delinquency would be incurred by an individual
who has reassigned his or her benefits to a third party, we do not
believe that it is appropriate to take action against the third-party.
We believe that this is consistent with the protections already
afforded to an individual by the IRS but ensures that Medicare does not
enroll or allow continued enrollment to an individual with a serious
tax delinquency.
We maintain that it is essential that a physician or NPP resolve
any existing Federal tax delinquency before entering the Medicare
program. This will ensure that the Medicare program is not making
payments to an individual who has not met his or her obligation to pay
their tax debts.
Finally, we solicited comments on whether we should consider
revoking a physician's billing privileges or taking some other type of
administrative action when a physician or NPP has a Federal tax
delinquency that can not be levied through the FPLP process. We also
solicited comments on whether we should consider revoking the billing
privileges of an organizational entity or taking some other type of
administrative action against organizational entities when the owners
of an organizational entity have a Federal tax delinquency that can not
be levied through the FPLP process.
Comment: One commenter recommends an alternative to payment denial
where an individual with a tax delinquency has reassigned their
benefits to a group. The commenter suggested that the government
garnish a portion of the individual practitioner's salary directly, as
appropriate. Another commenter does not believe it is appropriate to
penalize all of the partners in a practice, when only one individual is
guilty of tax evasion. One commenter requests that we define, in
greater detail, the term ``reliable information,'' and also that we
assure some formal type of appeals process apart from a simple
rebuttal. Another commenter questions if there is a mechanism in place
whereby a potential new hire can be held harmless should his or her
potential employer find itself in a delinquent status within a 12-month
period. One commenter questions whether the burden of reporting an
adverse legal action would be placed upon the individual saddled with
the action rather than his or her group managing partners, for
sometimes the principals are not aware of the actions of their
employees. Another commenter stated that at a minimum, the third party
involved should be sent notification of the provider's revoked billing
privileges 18 months before the date of revocation. One commenter
believes that this provision is not logistically possible because it
raises too many issues, including taxpayer privacy, equal opportunity
employment concerns, and perhaps even whistleblower triggers regarding
noncompliance.
Response: Section 189 of the MIPPA requires that CMS take all
necessary steps to participate in the Federal
[[Page 69776]]
Payment Levy Program (FPLP) under section 6331(h) of the Internal
Revenue Code of 1986. The FPLP process allows CMS to levy current and
future payments until the tax delinquency is eliminated.
After reviewing comments received in response to our solicitation
for comments regarding whether we should consider revoking billing
privileges or taking some other administrative action when a physician
or NPP has a Federal tax delinquency that cannot be levied through the
FPLP process, we are considering whether future rulemaking or
administrative action is needed in this area. We appreciate the public
insight regarding our solicitation for comments and will consider these
comments in developing any future rulemaking proposals; however, we
continue to maintain that physicians and NPPs should resolve any
existing Federal tax delinquency before enrolling in the Medicare
program or as soon as practical if the physician is enrolled in
Medicare.
3. Denial of Enrollment in the Medicare Program (proposed Sec.
424.530(a)(6) and (a)(7))
Currently, owners, authorized officials, and delegated officials of
physician and NPP organizations and individual practitioners, including
physicians and NPPs, can obtain additional billing privileges by
establishing a new tax identification number (TIN), reassigning
benefits to another entity, or by submitting an enrollment application
as another provider or supplier type even though the entity for which
the provider or supplier furnished services and has had its billing
privileges revoked, suspended, or has an outstanding Medicare
overpayment. Absent a reason to reject or deny a Medicare enrollment
application, the Medicare FFS contractor is required to approve the
enrollment application for a provider or supplier who meets all other
Federal and State enrollment requirements for their provider or
supplier type.
By submitting and having an enrollment application (for example, an
initial application or a change of ownership) with a new TIN, some
physician and NPP organizations and individual practitioners are able
to circumvent existing Medicare revocation, payment suspension,
overpayment recovery, and medical review processes by obtaining
additional Medicare billing privileges. By obtaining additional billing
privileges for multiple locations, these providers and suppliers are
able to discontinue the use of the NPI that has an administrative
action against it and bill and receive payment under another NPI.
Consistent with existing Sec. 405.371, we will impose a payment
suspension when we possess reliable information that an overpayment or
fraud, or willful misrepresentation exists, or that payments to be made
may not be correct. Suspension procedures give providers and suppliers
an opportunity to submit a rebuttal to CMS' payment suspension
determination. We believe that it is essential that we resolve the
payment suspension determination before we grant additional billing
privileges to these providers or suppliers. In concert with Sec.
405.372(c), once a payment suspension has been terminated, providers
and suppliers may then apply for billing privileges.
Moreover, we are obligated to recover Medicare overpayments as
expeditiously as possible. Providers and suppliers can pay the debt or
Medicare can reduce present or future Medicare payments and apply the
amount withheld to the indebtedness. When we identify an overpayment
and provide notice of the overpayment, physician and NPP organizations
and individual practitioners are given an opportunity to appeal the
determination. Under certain conditions, the overpayment collection
process is suspended during the appeals process. However, if the
physician and NPP organization or individual practitioner does not
appeal the overpayment determination, or if the overpayment
determination is upheld on appeal, we will initiate a recovery action.
Accordingly, we proposed to add a new Sec. 424.530(a)(6) and
(a)(7) to deny enrollment applications for additional Medicare billing
privileges if the physician or NPP organization or individual
practitioner has an active payment suspension or has an existing
overpayment that has not been repaid. We proposed to allow a Medicare
FFS contractor to deny enrollment applications from those authorized
officials, delegated officials, owners, and individual practitioners
that own a supplier or provider at the time of filing until such time
as the suspension has been terminated or the Medicare overpayment has
been repaid in full. Specifically, we proposed to deny enrollment to
any current owner (as defined in Sec. 424.502), physician, or NPP, who
is participating in the Medicare program and is under a current
Medicare payment suspension.
We stated that we believe that the change to our denial policy
would help protect the Medicare program from unscrupulous or
problematic physician and NPP organizations and individual
practitioners. Moreover, we believe this change would: (1) Allow
Medicare FFS contractors to improve customer service to all providers
and suppliers that are already enrolled in the Medicare program; (2)
facilitate the enrollment of all providers and suppliers seeking to
enroll in the Medicare program for the first time; and (3) expand on
existing efforts to process changes in a timely manner and provide
better customer service.
Comment: Several commenters stated that our proposal to deny
additional billing privileges to a physician or an NPP when the
physician or NPP is suspended or has an outstanding overpayment is a
denial of due process and is in conflict with the principle of innocent
until proven guilty.
Response: We believe that we have an obligation to protect the
Medicare program from inappropriate payments. Conversely, physicians
and NPPs have an obligation to the Medicare program to resolve payment
suspensions and overpayment actions in a timely manner. Finally, as a
payer of health care, we believe that additional billing privileges
should not be conveyed to a physician, NPP or owners, authorized and
delegated officials who have an existing payment suspension or
overpayment. To grant additional billing privileges to individuals with
an existing payment suspension or overpayment exposes the Medicare
Trust Funds to additional risks.
With Medicare's implementation of the NPI on May 23, 2008, Medicare
contractors no longer issue billing numbers to providers and suppliers
participating in the Medicare program. However, Medicare contractors do
convey billing privileges to providers and suppliers that have an NPI
and meet all of the program requirements for their provider or supplier
type. Once enrolled, providers and suppliers are required to use their
NPI to submit claims to Medicare, and based on the NPI final rule,
organizations may obtain one or more NPIs.
After reviewing public comments, we are finalizing the provisions
at Sec. 424.530(a)(6) and (a)(7) to deny enrollment applications for
additional Medicare billing privileges if a physician, NPP, physician
or NPP organization has an existing payment suspension or has an
existing overpayment that has not been repaid. We believe that
permitting a Medicare contractor to deny enrollment applications
submitted by individual practitioners, authorized officials, delegated
officials, and owners until such time as the Medicare overpayment
[[Page 69777]]
has been repaid in full will require providers and suppliers to resolve
overpayments in a timely manner. Once CMS has imposed a payment
suspension, a provider or supplier may submit a rebuttal to CMS for the
purpose of reducing or terminating the payment suspension. As long as
the payment suspension is effective, the contractor has the task of
making an overpayment determination. Specifically, we are adopting the
provision to deny enrollment to any physician, or NPP current owner (as
defined in Sec. 424.502), authorized or delegated official who is
participating in the Medicare program and is under an existing Medicare
payment suspension or has an outstanding overpayment that has not been
repaid in full. As adopted, physicians and NPPs will not be allowed to
enroll and reassigning payments to a third-party if the individual
practitioner has an existing payment suspension or overpayment that
have not been repaid.
4. Reporting Requirements for Providers and Suppliers (Sec. 424.516
and Sec. 424.535(a)(10))
Currently, Sec. 424.520(b) requires that providers and suppliers,
except DMEPOS and IDTF suppliers, report to CMS most changes to the
information furnished on the enrollment application and furnish
supporting documentation within 90 calendar days of the change (changes
in ownership must be reported within 30 days). As specified in Sec.
424.57(c)(2), DMEPOS suppliers have only 30 calendar days to submit
changes of information to CMS. As specified in Sec. 410.33(g)(2),
IDTFs, must report changes in ownership, changes in location, changes
in general supervision, and final adverse actions within 30 calendar
days. All other changes to the enrollment application must be reported
within 90 days.
While physician and NPP organizations and individual practitioners
are required to report changes within 90 days of the reportable event,
in many cases, there is little or no incentive for them to report a
change that may adversely affect their ability to continue to receive
Medicare payments. For example, physician and NPP organizations and
individual practitioners purposely may fail to report a felony
conviction as described in Sec. 424.535(a)(3), or other final adverse
action, such as a revocation or suspension of a license to a provider
of health care by any State licensing authority, or a revocation or
suspension of accreditation, because reporting this action may result
in the revocation of their Medicare billing privileges. Thus, unless
CMS or our designated contractor becomes aware of the conviction or
final adverse action through other means, the change may never be
reported by a physician and NPP organization or individual
practitioner. Alternatively, if CMS or our designated contractor
becomes aware of the conviction or final adverse action after the fact,
we have lacked the regulatory authority to collect overpayments for the
period in which the physician and NPP organizations and individual
practitioners should have had their billing privileges revoked.
Since we believe that physician and NPP organizations and
individual practitioners must furnish updates to their Medicare
enrollment information in a timely manner, we are adopting a new Sec.
424.516(d) which would establish more stringent reporting requirements
for physician NPP organizations and individual practitioners. (We
proposed to redesignate Sec. 424.520 as Sec. 424.516 and amend the
provisions in new Sec. 424.516.) In addition to a change of ownership
(as currently specified in redesignated Sec. 424.516(d)(1)(i)), we
proposed to add Sec. 424.516(d)(1)(ii) requiring all physician and NPP
organizations and individual practitioners to notify our designated
contractor of any final adverse action within 30 days. We stated that
final adverse actions include, but are not limited to, felonies,
license suspensions, and the HHS Office of the Inspector General (OIG)
exclusion or debarment. We believe that a physician and NPP
organizations and individual practitioner's failure to comply with the
reporting requirements within the time frames described above may
result in the revocation of Medicare billing privileges and a Medicare
overpayment from the date of the reportable change. Specifically, we
believe that a final adverse action may preclude payment, and thus,
establish an overpayment from the date of the adverse action. As such,
we believe that physician and NPP organizations and individual
practitioners should not be allowed to retain any reimbursement they
receive after the final adverse action.
In addition, we added the word ``final'' to the beginning of the
term ``adverse legal action'' in the regulation text in Sec. 424.535
on overpayment. We define the term as a ``final adverse action'' in the
definition section at Sec. 424.502 and want to be consistent with that
definition. Also, we want to be consistent with our definition of this
term in the Durable medical Equipment prosthetics Orthotics and
Supplies surety bond rule (CMS-6006-F). Moreover, we want this term to
be consistent with the definition of ``final adverse action'' found in
section 221(g)(1)(A) of the Health Insurance Portability and
Accountability Act (HIPAA) of 1996. Finally, we believe that a final
adverse action has occurred when the sanction is imposed and not when a
supplier has exhausted all of the appeal rights associated with the
action itself.
We believe that it is essential that this type of change be
reported in a timely manner (that is within 30 days). For example, if
CMS or our designated contractor determines in February 2008 that a
physician failed to notify Medicare about a final adverse action that
occurred on June 30, 2007, that physician may be subject to an
overpayment for all Medicare payments beginning June 30, 2007 and have
their Medicare billing privileges revoked effective retroactively back
to June 30, 2007 as well.
Additionally, we proposed to add a requirement for change in
location at Sec. 424.516(d)(1)(iii). Since a change in location may
impact the amount of payment for services furnished by placing the
physician and NPP organizations and individual practitioners into a new
Core Based Statistical Area (CBSA). We believe that it is essential
that physician and NPP organizations and individual practitioners
report changes in practice location including those that impact the
amount of payments they receive within a timely period (that is, 30
days). However, unlike a final adverse action, which may preclude all
payments if reported, failure to report a change in practice location
may impact the amount of payment, not whether a physician and NPP
organizations and individual practitioners may be eligible to receive
payments. Accordingly, we believe that failing to report changes in
practice location would result in an overpayment for the difference in
payment rates retroactive to the date the change in practice location
occurred and may result in the revocation of Medicare billing
privileges. For example, if a physician and NPP organization moves its
practice location in New York, from urban Herkimer County to Hamilton
County or Lewis County, which are both rural, but fails to update its
provider enrollment information; then it would no longer be able to
receive the higher payment rate associated with Herkimer County. We
believe that reporting these types of changes is essential for making
correct and appropriate payments.
We proposed to add Sec. 424.535(a)(9) which would specify that
failure to comply with the reporting requirements
[[Page 69778]]
specified in Sec. 424.516(d) would be a basis for revocation.
Additionally, we proposed in Sec. 424.565, ``Failure to comply with
the reporting requirements specified in Sec. 424.516(d) would result
in a Medicare overpayment from the date of a final adverse action or a
change in practice location.'' In this situation, an overpayment for
failure to timely report these changes would be calculated back to the
date of the final adverse action or the date of the change in practice
location. Once an overpayment has been assessed, we will follow the
overpayment regulations established at 42 CFR part 405 subpart C. We
previously addressed these procedures in Chapter 4 of the Medicare
Financial Management Manual (IOM Manual 100-06). Lastly, collection of
overpayments related to Sec. 424.516(d)(1)(iii) would not begin until
after the effective date of the final rule.
Since it is essential that physician and NPP organizations and
individual practitioners notify their designated contractor of these
types of reportable events in a timely manner and to ensure that the
provider or supplier continues to be eligible for payment, we believe
that it is essential that we establish an overpayment from the time of
the reportable event. We believe that establishing an overpayment and
revocation of billing privileges for noncompliance from the time of the
reportable event would provide the supplier with a compelling incentive
to report reportable changes in the 30-day reporting period.
In addition, if CMS or our designated contractor determines that a
physician and NPP organization or an individual practitioner has moved
and has not reported the reportable event within the 30-day reporting
period, CMS or our designated contractor would impose an overpayment,
if applicable, and revoke billing privileges for a period of not less
than 1 year.
Comment: One commenter would like to laud CMS for expounding on
reporting requirements for the updates regarding address changes, as
well as reporting an adverse legal action in a manner to be complete
within 30 days. The commenter continued to state that failure to report
changes in location, leading to potential overpayment, and revocation
of Medicare billing privileges needs to be highlighted for all
providers.
Response: We appreciate this comment and will consider expanding
this provision to all providers and suppliers in a future rulemaking
effort.
Comment: One commenter stated that it disagrees with our assumption
that all payments subsequent to an adverse legal action are collectable
overpayments.
Response: Since final adverse actions such as Federal exclusion or
debarment, felony convictions as described in Sec. 424.535(a)(3) or
license suspension or revocation that precluded continued enrollment in
the Medicare program.
Comment: One commenter stated that while a CMS representative
publicly stated that the proposed rule should have referenced adverse
legal actions that have been finally adjudicated, the commenter
recommends that CMS clarify this language in the final rule. Several
commenters recommended that only adverse legal actions that are
relevant to the practice of medicine should be required to be reported
to CMS.
Response: Based on these comments, we are adding a definition of a
final adverse action to Sec. 424.502(a). Specifically, we have defined
a final adverse action to mean one or more of the following actions:
(1) A Medicare-imposed revocation of any Medicare billing privileges;
(2) Suspension or revocation of a license to provide health care by any
State licensing authority; (3) Revocation or suspension by an
accreditation organization; (4) A conviction of a Federal or State
felony offense (as defined in Sec. 424.535(a)(3)(i)) within the last
10 years preceding enrollment, revalidation, or re-enrollment; or (5)
An exclusion or debarment from participation in a Federal or State
health care program.
Comment: One commenter suggested that we should clarify in the
final rule that with regard to adverse legal actions, the requirements
should apply only to notification within 30 days of ``final'' legal
actions that are relevant to or otherwise impact the practice of
medicine.
Response: While we understand that physicians and NPPs are afforded
different appeal rights depending on the type of final adverse action,
we do not believe that it is appropriate to allow physicians and NPPs
to continue to furnish services to Medicare beneficiaries if their
State medical license has been suspended or revoked, a Federal
exclusion or debarment or Medicare revocation has been imposed, or the
physician or NPP was found guilty or pled to felony conviction as
described in Sec. 424.535(a)(3).
Comment: One commenter believes that if CMS wants to collect
alleged overpayments for services paid during the 90 days as if they
were performed in a higher-paying locale, then they should also pay the
difference for underpayments when a physician provides services for up
to 90 days in a higher paying locality prior to notifying CMS of the
change in location.
Response: We maintain that it is the responsibility of the
physician, NPP or physician or NPP organization to update their
enrollment information within the appropriate timeframes. Further, note
that CMS will not reprocess claims for the services provided when there
has been a failure to report a change in practice location.
Comment: Several commenters stated that a State licensing board is
the proper authority to weigh the significance of legal actions against
a physician. Another commenter stated that State licensing and other
requirements already protect beneficiaries from the most important
kinds of issues that could arise in medical care.
Response: While we agree that State licensing boards are
responsible for determining whether an individual meets or continues to
meet the qualifications for a specific State medical license, we do not
agree that a State license is the only criteria that an individual must
maintain in order to receive billing privileges from the Medicare
program.
Comment: One commenter stated that they do not oppose changing the
time period for reporting adverse legal actions from 90 days to 30
days, as generally payments should not be made under these
circumstances.
Response: We appreciate this comment.
Comment: One commenter stated that they did not agree that a change
in practice location should be treated as an urgent matter that would
support a retroactive revocation of billing authority.
Response: We disagree with this commenter. Since physicians and
NPPs receive payments in part on locality adjustments based on the
place of service, we believe that physicians, NPPs, and physician and
NPP organizations are responsible for updating their enrollment record
within 30 days of a change in practice location. It is also important
to note that we already have existing authority to revoke the billing
privileges of a Part B supplier, including physicians and NPPs, if CMS
or our contractor determines that upon an on-site review or other
reliable evidence that the supplier is not operational (see Sec.
424.535(b)(5)).
Comment: One commenter stated that they oppose changing the time
period for reporting a change in location from 90 days to 30 days
because the physician is still eligible for payment and Medicare's
vulnerability to overpayments is limited.
Response: While we agree that a physician may still be eligible to
receive
[[Page 69779]]
payment, the issue in question is the amount of payment. Moreover, as a
payer of health care, we believe that physicians and all other
providers and suppliers have a responsibility to update their
enrollment record when a change in practice location occurs. This will
allow CMS or our contractor to verify that services are actually
furnished at the practice locations identified by the medical
practices.
Comment: One commenter stated that if we finalize our reporting
requirements, a better option would be to limit the types of actions
that are reportable to similar actions that are required to be reported
to the National Practitioner Data Bank (NPDB) which was established by
the Congress to address the need to improve the quality of medical care
by encouraging State licensing boards, health care entities such as
hospitals, and professional societies to identify and discipline those
who engage in unprofessional behavior, as well as restrict a
practitioner's ability to move from State to State without disclosure
of previous adverse action history.
Response: We disagree with this commenter. In considering the types
of events that should be reported within 30 days of the reportable
event, with this final rule with comment period, we have limited the
types of reportable events to three specific types of events: (1)
Change in ownership, (2) final adverse actions, and (3) change in
practice location. We believe that the failure to report any of these
types of reportable events may result in payments to the wrong
organization, erroneous payments if the physician or NPP payment no
longer meets State licensure requirements, or payments in the wrong
amount when a change in practice location impacts the payment to a
physician, NPP or physician or NPP organization.
Comment: One commenter stated that our proposal to revoke billing
privileges for a period of not less than 1 year for failure to comply
with the proposed 30-day reporting period is a harsh and unjust penalty
for a minor paperwork offense.
Response: While we understand this commenter's concern, we believe
that physicians, NPPs, physician and NPP organizations have an
obligation to report certain changes, including State license
suspensions and revocations, felony convictions as described in Sec.
424.535(a)(3), Federal debarments and exclusions, within 30 days since
these adverse actions may affect a physician, NPP or physician or NPP
organization's ability to continue to participate in the Medicare
program.
Comment: One commenter urged CMS to consider that the failure to
notify Medicare contractors of a change in location is an oversight
rather than a true attempt to defraud the Medicare program.
Response: Since physicians, NPPs, and physician and NPP
organizations routinely notify State medical societies, vendors,
employees, utility companies, leasing companies, and others prior to a
change in practice location, we disagree with this commenter that
change in location is an oversight.
Comment: One commenter stated that that while there is a need to
maintain timely provider records and track Medicare payments, proposed
penalties for failure to report an address change promptly are so out
of proportion to the offense as to be draconian.
Response: We disagree with this commenter. As stated above, we
understand that physicians, NPPs, and physician and NPP organizations
routinely notify other payers and affiliated business partners about a
change of practice location in advance of the change. In addition, to
ensure payment accuracy, it is essential that physicians, NPPs, and
physician and NPP organizations report changes in practice locations
prior to change, but not later than 30 days after the reportable event.
Comment: One commenter stated that it seemed sufficient to collect
any overpayment from providers that file their change of address notice
within the traditional 90-day window for updating enrollment records.
Response: As a payer of health care, it is essential that we make
every attempt to make correct payments for services furnished by
qualified providers and suppliers. To help ensure that we are making
the correct payments the first time, we believe that it is necessary
that physicians, NPPs, and physician and NPP organizations update their
enrollment records when a change in practice location occurs.
Comment: One commenter urges CMS to withdraw the proposal to
establish authority to require that physicians report a change in
ownership, ``any'' adverse legal action, or change in practice location
within 30 days since these events may be unrelated to the Medicare
program and the reporting time frame is unduly burdensome to
physicians.
Response: We disagree with this commenter. Since June 20, 2006,
physicians and NPP organizations have been required to report a change
in ownership within 30 days and changes in practice locations and final
adverse actions within 90 days (see Sec. 424.516(d)). Since we are
aware of situations where physicians and NPPs have not reported State
license suspensions/revocations or final adverse actions which may
affect a physician or NPPs eligibility to participate in the Medicare
program, we believe that it is essential to establish more stringent
reporting requirements than in the past. We believe that these
requirements along with corresponding enforcement procedures will
encourage physicians, NPPs and physician and NPP organizations to
report changes in ownership, final adverse actions, and changes in
practice location in a timely manner (that is, 30 days.)
Comment: One commenter stated that ``any adverse legal action'' is
not defined; therefore a 30-day reporting requirement is unreasonable
as are the other proposed requirements. The commenter also stated that
we should save our severe penalties for proven fraudulent behavior, not
minor clerical oversights.
Response: We disagree with this commenter that failure to report a
final adverse action is a minor clerical oversight. Since reporting a
final adverse action may affect a physician or NPP's ability to
continue to participate in the Medicare program, we understand why
these actions may not be reported to a Medicare contractor; however, we
believe that final adverse actions, including State licensing
suspensions and revocations, should be reported within 30 days of the
reportable event, even if the physician or NPP plans on appealing the
final adverse action. By reporting the final adverse action within 30
days, the Medicare program will carefully review any revocation action
and exercise its discretion as to whether to impose a revocation and
the length of time of the reenrollment bar.
Comment: One commenter stated that a revocation of billing
privileges seems to be a disproportionately severe penalty for
infractions such as: (1) Failure to report changes in ownership,
adverse legal actions, and changes in practice location, or (2) not
maintaining ordering and referring documentation for a 10-year period.
Response: We disagree with this commenter. As stated above, we
believe reporting changes in ownership, final adverse actions, and
changes in practice locations are essential to ensuring that the
Medicare program makes correct payments to eligible practitioners and
organizations. We also believe that it is essential that physicians and
NPPs maintain ordering and referring documentation to support the
claims submissions.
[[Page 69780]]
Comment: One commenter stated that levying an overpayment for
failure to report a ``reportable event,'' within 30 days is excessive
for what is likely an honest oversight.
Response: We disagree with this commenter that establishing an
overpayment is excessive when a physician, NPP or physician and NPP
organization fails to report a final adverse action, such as a State
license suspension or revocation or adverse legal action, that may
preclude participation in the continued participation in the Medicare
program in a timely manner (that is, 30 days).
Comment: One commenter stated that Federal regulations regarding
overpayments are already established at 42 CFR part 405, therefore,
changing the provider enrollment requirements to prevent overpayments
is not necessary.
Response: We disagree with this commenter because the existing
overpayment regulations do not allow us to assess an overpayment based
on the failure of a physician, NPP, or physician or NPP organizations
to report certain reportable enrollment events.
Comment: One commenter stated that they were concerned over
inconsistency in the verbiage of this section where we state in the CY
2009 PFS proposed rule (73 FR 38538 through 38539) that billing
privileges may be revoked in one place and in the other place state
that they would be revoked.
Response: We appreciate this comment and have clarified in this
final rule to use the word, ``may'' when referring to the revocation of
Medicare billing privileges.
Comment: One commenter recommends that a 60-day limit be imposed
rather than the proposed 30 days for notifying CMS about a ``reportable
event.''
Response: We believe that changes of ownership, adverse legal
actions, and changes in practice locations can and should be reported
within 30 days of the reportable event. By reporting these types of
reportable events within 30 days, the Medicare program can take the
necessary steps to ensure that we are paying physicians and NPPs
correctly and ensure that only eligible physicians and NPPs are
enrolled in the Medicare program.
After reviewing public comments, we are finalizing the provision at
proposed Sec. 424.516(d) which would require physicians, NPPs or
physician and NPP organizations to notify its Medicare contractor of a
change of ownership, change in practice location or any final adverse
action within 30 days of the reportable event. In addition, we believe
that physician and NPP organizations' and individual practitioners'
failure to comply with the reporting requirements within the time frame
described above may result in the revocation of Medicare billing
privileges and the imposition of a Medicare overpayment from the date
of the reportable change. Specifically, we believe that a final adverse
action may preclude payment, and thus, establish an overpayment from
the date of the adverse legal action. As such, we believe that
physician and NPP organizations and individual practitioners should not
be allowed to retain any reimbursement they receive after the date of
the adverse legal action. In addition, physicians, NPPs, or physician
and NPP organizations who voluntarily report a final adverse action
that prohibits further payment will have their Medicare billing
privileges revoked and have an overpayment assessed back to the date of
the reportable event. CMS has the discretion to revoke the supplier's
billing privileges. Moreover, revocation affords the supplier appeal
rights and by reporting an adverse legal action within 30 days of the
reportable event, a physician or NPP or physician or NPP organization
may regain billing privileges if the final adverse action no longer
impedes the applicant's reenrollment into the Medicare program.
We are also finalizing the provision at Sec. 424.516(d)(1)(iii)
which requires physicians, NPPs and physician and NPP organizations to
report a change of practice location within 30 days. While we may not
revoke the billing privileges of physicians, NPPs and physician and NPP
organizations if a change of practice location is reported by the
practitioner or organization after the prescribed 30-day timeframe, we
will assess an overpayment, if applicable, for the difference in
payment rates retroactive to the date the change in practice location
occurred. In addition, with limited exceptions such as a
Presidentially-declared disaster under the Robert T. Stafford Disaster
Relief and Emergency Assistance Act, 42 U.S.C. 5121-5206 (Stafford
Act), physicians, NPPs, and physician and NPP organizations can report
a change of practice location in advance of the reportable event. We
note that individual practitioners and physician and NPP organizations
routinely notify staff, the U.S. Post Office, telephone and electric
companies, suppliers, vendors, State medical associations and other
practitioner partners prior to a change in practice location.
Accordingly, we believe that it is appropriate that physicians and NPP
organizations notify the Medicare contractor in advance of any pending
change of practice location, but no later than 30 days after the
reportable event.
As such, we will not reprocess claims for those individual
practitioners and physician and NPP organizations that do not report a
change of practice location prior to a change in practice location
where the reported change would result in an underpayment, unless the
change of location was the direct result of a Presidentially-declared
disaster under the Robert T. Stafford Disaster Relief and Emergency
Assistance Act, 42 U.S.C. 5121-5206 (Stafford Act). We believe that
this change will create an incentive for physicians, NPPs, and
physician and NPP organizations to report changes in practice locations
prior to the change of practice location or, at a minimum, within the
30 days of the reportable event.
Moreover, if we determine that a change of practice location
occurred and it has not been reported within the 30 days of the
reportable event, we may revoke billing privileges and assess any
applicable overpayment for the difference in payment rates retroactive
to the date the change in practice location occurred. We believe that
the authority to revoke billing privileges has already been established
in Sec. 424.535(a)(5)(ii).
We are finalizing the provision at proposed Sec. 424.535(a)(9)
which would specify that failure to comply with the reporting
requirements specified in Sec. 424.516(d) would be a basis for
revocation. Additionally, we are also finalizing the provision we
proposed in Sec. 424.565(a), ``Failure to comply with the reporting
requirements specified in Sec. 424.516(d) would result in a Medicare
overpayment from the date of a final adverse action or a change in
practice location.'' In this situation, an overpayment for failure to
timely report these changes would be calculated back to the date of the
final adverse action or the date of the change in practice location.
Once an overpayment has been assessed, we will follow the overpayment
regulations established at 42 CFR Part 405 subpart C.
Based on public comments, we are adding a definition of final
adverse action to Sec. 424.502(a). A final adverse action means one or
more of the following actions: (1) A Medicare-imposed revocation of any
Medicare billing privileges; (2) Suspension or revocation of a license
to furnish health care by any State licensing authority; (3) Revocation
or suspension by an accreditation organization; (4) A conviction of a
Federal or State felony
[[Page 69781]]
offense (as defined in Sec. 424.535(a)(3)(i)) within the last 10 years
preceding enrollment, revalidation, or re-enrollment; or (5) An
exclusion or debarment from participation in a Federal or State health
care program.
5. Maintaining Ordering and Referring Documentation
We proposed to add a new Sec. 424.516(f) that would specify, ``A
provider or supplier is required to maintain ordering and referring
documentation, including the NPI, received from a physician or eligible
NPP. Physicians and NPPs are required to maintain written ordering and
referring documentation for 10 years from the date of service.'' We
believe that it is essential that providers and suppliers maintain
documentation regarding the specific service ordered or referred to a
Medicare beneficiary by a physician or NPP as defined in section
1842(b)(18)(c) of the Act, (which includes but is not limited to nurse
practitioners and physician assistants). We believe that ordering and
referring documentation maintained by a provider or supplier must match
the information on the Medicare claims form. Additionally, we proposed
to add Sec. 424.535(a)(10) that would state that failure to comply
with the documentation requirements specified in Sec. 424.516(f) would
serve as a reason for revocation. For example, a lab submits a claim
with Dr. Smith's NPI (1234512345) in the ordering and referring section
of the claim form. The number submitted on the claim form should match
the documentation in the provider or supplier's records. In addition,
we proposed to codify the requirement to maintain ordering and
referring documentation as required in the Medicare Program Integrity
Manual (PIM) Publication 100-08, Chapter 5. While the PIM currently
requires that providers and suppliers maintain ordering and referring
documentation for 7 years from the date of payment, we believe that the
industry generally maintains documentation from the date of service.
Accordingly, since there may be a delay in claims submission and
subsequent payment for up to 27 months from the date of service, we
believe that it would be administratively less burdensome for providers
and suppliers to maintain ordering and referring documentation for 7
years from the date of service, rather than requiring providers and
suppliers to maintain ordering and referring documentation associated
with the date of payment.
We maintain that a provider or supplier should retain the necessary
ordering and referring documentation received from physicians and NPPs
as defined in section 1842(b)(18)(C) of the Act to assure themselves
that coverage criterion for an item has been met. If the information in
the patient's medical record does not adequately support the medical
necessity for the item, the supplier would be liable for the dollar
amount involved unless a properly executed Advance Beneficiary Notice
of possible denial has been obtained.
Comment: One commenter urged CMS to adopt its proposal that would
specify that a provider or supplier is required to maintain ordering
and referring documentation, including the NPI received from the
physician or eligible NPP, for 10 years from the date of service, but
that this provision only apply to services furnished on or after the
effective date of this final rule with comment period.
Response: We agree with this commenter in that we are basing the
ordering and referring record retention requirement based upon the date
of service, however we are adopting the provision for 7 years from the
date of service. We believe that this approach is administratively
consistent with current manual record retention policy that requires
that suppliers retain ordering and referring documentation for 7 years
from the date of billing. We maintain that it is less burdensome for
providers and suppliers to maintain ordering and referring
documentation for 7 years from the date of service rather than
requiring providers and suppliers to maintain ordering and referring
documentation associated with the proposed provision for 10 years after
the date of payment.
Comment: One commenter disagrees with increasing the retention of
ordering and referring documentation beyond the current 7 years from
the date of payment. The commenter continued to state that the
provision as proposed may represent an additional cost for 3 years of
additional record retention.
Response: As stated above, we are establishing an ordering and
referring record retention period as 7 years from the date of service.
Comment: One commenter believes that CMS must understand that in
virtually all cases, the only information the laboratory receives is
the laboratory requisition submitted by the physician.
Response: We continue to believe that it is necessary that
providers and suppliers retain ordering and referring documentation for
services furnished 7 years from the date of service. However, we
understand that the supplier may not maintain the NPI documentation for
each service, but the provider or supplier must maintain sufficient
documentation to identify the individual who ordered or referred the
beneficiary for their services. In addition, upon review, CMS or our
contractor may validate the ordering/referring documentation maintained
by the billing provider or supplier with the individual practitioner
who ordered/ referred the beneficiary for these services.
Comment: One commenter recommends that CMS defer to the judgment of
the State boards of pharmacy regarding the length of record retention,
and also allow offsite electronic storage of ordering and referring
records.
Response: We appreciate the importance of the requirements of State
boards of pharmacy; however, we uphold that Medicare is a national
program and it is necessary to establish national standards for
maintaining the ordering and referring record retention period. We
believe that this approach will lead to consistency. Further, the
provisions of the final rule do not preclude offsite or electronic
storage as long as these records are readily accessible and
retrievable.
Comment: One commenter proposes CMS to abandon its proposal for the
10-year record retention period and allow pharmacies to follow record
retention requirements under State law.
Response: We appreciate the importance of the requirements of State
boards of pharmacy, however we uphold that Medicare is a national
program and it is necessary to establish national standards for
maintaining the ordering and referring record retention period. We
believe that this approach will lead to CMS consistency. While we are
not changing our record retention policy to account for different State
pharmacy laws, we are revising the proposed 10-year record retention
policy and establishing an ordering and referring record retention
period as 7 years from the date of service
Comment: One commenter believes that pharmacies should be allowed
to maintain their hard-copy records offsite electronically after a
certain time.
Response: The provisions of the final rule do not preclude offsite
or electronic storage as long as these records are readily accessible
and retrievable.
Comment: Several commenters recommended that pharmacies should
maintain the prescription record in written form for the greater of 3
years or the requirements in State law, and then allow the prescription
to be stored electronically for the remaining years. The commenter
continued to state that this would bring consistency to the Medicare
Parts B and D programs, and
[[Page 69782]]
reduce the need to create new storage capacity for paper prescription
records.
Response: Since Medicare is a Federal program that already requires
a 7-year retention period from the date of billing, we disagree that
this change will create a significant burden.
Comment: One commenter stated that the extension from 7 to 10 years
would add a substantial recordkeeping burden.
Response: We agree with this commenter and have revised this final
rule with comment period to establish an ordering and referring record
retention period as 7 years from the date of service.
Comment: One commenter urged CMS to reconsider our position
regarding maintaining ordering and referring documentation. In
addition, this commenter stated that this change would constitute an
unfunded mandate.
Response: We disagree with this commenter that this change is an
unfunded mandate because providers and suppliers are already required
by CMS' manual instructions to maintain ordering and referring
documentation for 7 years from the date of billing.
Comment: One commenter stated that we should allow offsite and
electronic storage of ordering and referring records.
Response: The provisions of the final rule do not preclude offsite
or electronic storage as long as these records are readily accessible.
Comment: One commenter urged CMS to adopt the proposed requirement
for record retention, but only with a provision that such record
retention requirements became effective as of the effective date of the
final rule. Further, the commenter states that those providers and
suppliers that, until now, have not kept ordering and referring
documentation for 10 years from the date of service (and were under no
other statutory or regulatory requirement to do so) would not be liable
and face possible revocation of billing privileges as long as the
provider or supplier was in compliance with currently existing
requirements.
Response: We agree with this commenter; however, we have revised
this final rule to establish the ordering and referring record
retention period as 7 years from the date of service.
After reviewing public comments, we are finalizing the provision at
proposed Sec. 424.516(f) that would require providers and suppliers to
maintain ordering and referring documentation, including the NPI,
received from a physician or eligible NPP. Physicians and NPPs are
required to maintain written ordering and referring documentation for 7
years from the date of service. In addition, we are finalizing the
provision found at Sec. 424.535(a)(10) that states that failure to
comply with the documentation requirements specified in Sec.
424.516(f) is a reason for revocation.
Finally, the aforementioned provisions regarding ordering and
referring documentation are effective with services furnished on or
after the implementation date of this final rule.
6. Revocation of Enrollment and Billing Privileges in the Medicare
Program (Sec. 424.535(h))
Historically, we have allowed providers and suppliers whose
Medicare billing numbers have been revoked to continue billing for
services furnished prior to revocation for up to 27 months after the
effective date of the revocation. Since we believe this extensive
billing period poses significant risk to the Medicare program, we
proposed to limit the claims submission timeframe after revocation. In
Sec. 424.535(g) (Redesignated as Sec. 424.535(h), we proposed that
revoked physician and NPP organizations and individual practitioners,
including physicians and NPPs, must submit all outstanding claims not
previously submitted within 30 calendar days of the revocation
effective date. We stated that this change is necessary to limit the
Medicare program's exposure to future vulnerabilities from physician
and NPP organizations and individual practitioners that have had their
billing privileges revoked. We know that some physician and NPP
organizations and individual practitioners are able to create false
documentation to support claims payment. Accordingly, we stated that
the proposed change would allow a Medicare contractor to conduct
focused medical review on the claims submitted during the claims filing
period to ensure that each claim is supported by medical documentation
that the contractor can verify. We also stated that focused medical
review of these claims will ensure that Medicare only pays for
furnished services by a physician organization or individual
practitioner and that these entities and individuals receive payment in
a timely manner. Since a physician organization or individual
practitioner generally submits claims on a nexus to the date of
service, we stated that the proposed change will not impose a
significant burden on physician organizations or individual
practitioners. In addition, we also proposed to add Sec. 424.44(a)(3)
to account for this provision related to the requirements for the
timely filing of claims.
Comment: One commenter supports our proposal to limit, to 30 days,
the time frame in which a provider whose billing services have been
revoked may continue to submit claims for services furnished prior to
such revocation.
Response: We appreciate this comment.
Comment: One commenter appreciated our concern regarding the
current period of up to 27 months but offered alternative time periods
of 60 or 90 days rather than the proposed time period of 30 days.
Response: We are finalizing the provisions at Sec. 424.535(h)
(proposed as Sec. 424.535(g)) that require a revoked physician, NPP or
a physician or NPP organization to submit all outstanding claims not
previously submitted within 60 calendar days of the effective date of
the revocation, (except for revocations identified in Sec.
405.874(b)(2) and Sec. 424.535(f) of this final rule).
Comment: Several commenters encouraged CMS to reset the period of
time a provider can submit claims after billing privileges have been
revoked from up to 27 months to 6 months, instead of the proposed 30
days.
Response: As stated above, we are finalizing the provisions found
at Sec. 424.535(g) (Redesignated as Sec. 424.535(h)) that require a
revoked physician, NPP or a physician or NPP organization to submit all
outstanding claims not previously submitted within 60 calendar days of
the effective date of the revocation, (except for revocations
identified in Sec. 405.874(b)(2) and Sec. 424.535(f) (redesignated as
Sec. 424.535(g)) of this final rule).
Comment: One commenter stated that 30 days is simply not enough
time to wrap up all of the details of a practice, in addition to the
other circumstances associated with a revocation of billing privileges.
Response: We are finalizing the provisions found at Sec.
424.535(h) (proposed as Sec. 424.535(g)) that require a revoked
physician, NPP or a physician or NPP organization to submit all
outstanding claims not previously submitted within 60 calendar days of
the effective date of the revocation, (except for revocations
identified in Sec. 405.874(b)(2) and Sec. 424.535(f) (redesignated as
Sec. 424.535(g)) of this final rule).
After reviewing public comments, we are finalizing the provisions
found at Sec. 424.535(h) (proposed as Sec. 424.535(g)) that require a
revoked physician, NPP or a physician or NPP organization to submit all
outstanding claims not previously submitted within 60 calendar days of
the effective date of the revocation. Since the physician, NPP or
[[Page 69783]]
a physician or NPP organization is already afforded approximately 30
days notification before the effective date of revocation (except for
revocations identified in Sec. 405.874(b)(2) and Sec. 424.535(f)
(redesignated as Sec. 424.535(g)) of this final rule), we believe that
almost 90 days is more than sufficient time to file any outstanding
claims with the Medicare program.
In addition, we are amending Sec. 424.44(a) to account for this
provision related to the requirements for the timely filing of claims.
We are revising the Sec. 424.44(a) to clarify that this provision is
consistent with Sec. 424.521 which limits the ability of physicians,
NPPs and physician and NPP organizations to bill retrospectively. The
timely filing requirements in Sec. 424.44(a)(1) and (a)(2) will no
longer apply to physician, NPPs, or physician or NPP organizations or
IDTFs.
7. Technical Changes to Regulations Text
We proposed to make the following technical changes:
Existing Sec. 424.510(d)(8) would be redesignated as
Sec. 424.517. This revision would separate our ability to conduct
onsite reviews from the provider and supplier enrollment requirements.
Existing Sec. 424.520 would be revised and redesignated
as Sec. 424.516. This redesignation would move the additional provider
and supplier enrollment requirements so that these requirements
immediately follow the provider and supplier enrollment requirements.
In new Sec. 424.520, we proposed to specify the effective
dates for Medicare billing privileges for the following entities:
Surveyed, certified, or accredited providers and suppliers; IDTFs; and
DMEPOS suppliers.
In Sec. 424.530, we proposed to add the phrase ``in the
Medicare program'' to the section heading to remain consistent with
other headings in the subpart.
After reviewing public comments, we are finalizing the following
technical changes:
Existing Sec. 424.510(d)(8) has been redesignated as
Sec. 424.517. This revision would separate our ability to conduct
onsite reviews from the provider and supplier enrollment requirements.
Existing Sec. 424.520 has been revised and redesignated
as Sec. 424.516. This redesignation would move the additional provider
and supplier enrollment requirements so that these requirements
immediately follow the provider and supplier enrollment requirements.
In new Sec. 424.520, we are adopting the effective dates
for Medicare billing privileges for the following entities: Surveyed,
certified, or accredited providers and suppliers; IDTFs; and DMEPOS
suppliers.
In Sec. 424.530, we are adding the phrase ``in the
Medicare program'' to the section heading to remain consistent with
other headings in the subpart.
K. Amendment to the Exemption for Computer-Generated Facsimile (Fax)
Transmissions From the National Council for Prescription Drug Programs
(NCPDP) SCRIPT Standard for Transmitting Prescription and Certain
Prescription-Related Information for Part D Covered Drugs Prescribed
for Part D Eligible Individuals
1. Legislative History
Section 101 of the MMA amended title XVIII of the Act to establish
a voluntary prescription drug benefit program. Prescription Drug Plan
(PDP) sponsors and Medicare Advantage (MA) organizations offering
Medicare Advantage-Prescription Drug Plans (MA-PDs) and other Medicare
Part D sponsors are required to establish electronic prescription drug
programs to provide for electronic transmittal of certain information
to the prescribing provider and dispensing pharmacy and dispenser. This
includes information about eligibility, benefits (including drugs
included in the applicable formulary, any tiered formulary structure
and any requirements for prior authorization), the drug being
prescribed or dispensed and other drugs listed in the medication
history, as well as the availability of lower cost, therapeutically
appropriate alternatives (if any) for the drug prescribed. Section 101
of the MMA established section 1860D-4(e)(4)(D) of the Act, which
directed the Secretary to issue uniform standards for the electronic
transmission of such data.
There is no requirement that prescribers or dispensers implement e-
prescribing. However, prescribers and dispensers who electronically
transmit prescription and certain other prescription-related
information for covered drugs prescribed for Medicare Part D eligible
individuals, directly or through an intermediary, are required to
comply with any applicable final standards that are in effect. For a
complete discussion of the statutory basis for the e-prescribing
portions of this final rule with comment period and the statutory
requirements at section 1860D-4(e) of the Act, please refer to the
``Background'' section of the E-Prescribing and the Prescription Drug
Program proposed rule published in the February 4, 2005 Federal
Register (70 FR 6256)
2. Regulatory History
a. Foundation Standards and Exemption for Computer-Generated Facsimiles
(Facsimiles)
In the E-Prescribing and the Prescription Drug Program final rule
(70 FR 67568, November 7, 2005), we adopted the National Council for
Prescription Drug Programs (NCPDP) SCRIPT standard, Implementation
Guide, Version 5, Release 0 (Version 5.0), May 12, 2004, excluding the
Prescription Fill Status Notification Transaction (and its three
business cases which include the following: Prescription Fill Status
Notification Transaction-Filled; Prescription Fill Status Notification
Transaction-Not Filled; and Prescription Fill Status Notification
Transaction-Partial Fill) hereafter referred to as ``NCPDP SCRIPT
5.0,'' as the standard for communicating prescriptions and
prescription-related information between prescribers and dispensers.
Subsequently, in the June 23, 2006 Federal Register (71 FR 36020), we
published an interim final rule with comment period (IFC) that
maintained NCPDP SCRIPT 5.0 as the adopted standard, but allowed for
the voluntary use of a subsequent backward compatible version of the
standard, NCPDP SCRIPT 8.1. In the April 7, 2008 Federal Register, we
published a final rule (73 FR 18918) that finalized the June 23, 2006
IFC; effective April 1, 2009, we will retire the NCPDP SCRIPT 5.0 and
adopt NCPDP SCRIPT 8.1 as the standard. Hereafter we refer to these
standards as ``NCPDP SCRIPT.''
The November 7, 2005 final rule also established an exemption to
the requirement to utilize the NCPDP SCRIPT standard for entities that
transmit prescriptions or prescription-related information for Part D
covered drugs prescribed for Part D eligible individuals by means of
computer-generated facsimiles (facsimiles generated by one computer and
electronically transmitted to another computer or facsimile machine
which prints out or displays an image of the prescription or
prescription-related information). Providers and dispensers who use
this technology are not compliant with the NCPDP SCRIPT standard. The
exemption was intended to allow such providers and dispensers time to
upgrade to software that utilizes the NCPDP SCRIPT standard, rather
than forcing them to revert to paper prescribing.
[[Page 69784]]
b. Amendment of Exemption
In the CY 2008 PFS proposed rule (72 FR 38194), we proposed to
revise Sec. 423.160(a)(3)(i) to eliminate the computer-generated
facsimile exemption to the NCPDP SCRIPT standard for the communication
of prescription or certain prescription-related information between
prescribers and dispensers for the transactions specified in Sec.
423.160(b)(1)(i) through (xii).
Since computer-generated facsimiles retain some of the
disadvantages of paper prescribing (for example, the administrative
cost of keying the prescription into the pharmacy system and the
related potential for data entry errors that may impact patient
safety), we believed it was important to take steps to encourage
prescribers and dispensers to move toward use of NCPDP SCRIPT. We
believed the elimination of the computer-generated facsimile exemption
would encourage prescribers and dispensers using this computer-
generated facsimile technology to, where available, utilize true e-
prescribing (electronic data interchange using the NCPDP SCRIPT
standard) capabilities.
We proposed to eliminate the computer-generated facsimile exemption
effective 1 year after the effective date of the CY 2008 PFS final rule
(that is, January 1, 2009). We believed that this would provide
sufficient notice to prescribers and dispensers who would need to
implement or upgrade e-prescribing software to look for products and
upgrades that are capable of generating and receiving transactions that
utilize NCPDP SCRIPT. It would also afford current e-prescribers time
to work with their trading partners to eventually eliminate computer-
to-facsimile transactions.
We solicited comments on the impact of the proposed elimination of
this exemption. Several commenters concurred with our proposal to
eliminate the exemption for computer-generated facsimiles, indicating
that eliminating the exemption for computer-generated facsimiles would
act as an incentive to move prescribers and dispensers toward true e-
prescribing (electronic data interchange using the NCPDP SCRIPT
standard), although many commenters suggested that we continue to allow
for the use of computer-generated facsimiles in the case of
transmission failure and network outages. Less than half of the
commenters disagreed with our proposal to eliminate the exemptions for
computer-generated facsimiles, citing concerns about increased
hardware/software costs, transaction fees, certification, and other
activation costs.
Several commenters indicated that the elimination of the exemption
could be problematic in certain e-prescribing transactions, namely
prescription refill requests, but only one of those commenters offered
substantiation to support this assertion. Absent receipt of substantial
industry data on the impact of the elimination of the computer-
generated facsimile exemption on prescription refill requests, and not
considering the industry's comments about prescription refill requests
to constitute widespread concern regarding the prescription refill
request function, in the CY 2008 PFS final rule with comment period (72
FR 66396), we amended the exemption to permit the use of computer-
generated facsimiles only in cases of temporary/transient network
transmission failures, effective January 1, 2009.
3. Proposal for CY 2009
Following the publication of the CY 2008 PFS final rule with
comment period, we received additional information regarding how the
modification of the exemption for computer-generated faxing to
eliminate use of computer-generated faxing in all instances other than
temporary/transient network transmission failures would adversely
impact the electronic transmission of prescription refill requests. The
submitted information offered additional support to the claim that in
all instances other than temporary/transient network transmission
problems, elimination of the use of computer-generated facsimiles would
adversely impact the electronic transmission of prescription refill
requests. These later materials substantiated the earlier claims that
the elimination of the exemption in all instances other than temporary/
transient network transmission failures would force dispensers who e-
prescribe and use these transactions to revert to paper prescribing.
These materials offered more specific information regarding the
economic and workflow impacts associated with the elimination of the
exemption for computer-generated facsimiles in all instances other than
temporary/transient network transmission failures that was not
forthcoming in the prior public comment period for the CY 2008 PFS
proposed rule. We also received unsolicited comments on this issue
during the comment period for the November 16, 2007 Part D e-
prescribing proposed rule (proposing the adoption of certain final Part
D e-prescribing standards and the use of NPI in Part D e-prescribing
transactions) (72 FR 64900). As a result of the new information, we
reexamined this issue and proposed additional modifications to the
computer-generated facsimile exemption in the CY 2009 PFS proposed rule
(73 FR 38502).
Dispensers have indicated that they use computer-generated
facsimiles for the majority of prescription refill requests, in
particular when communicating with prescribers that have not adopted e-
prescribing. Currently, regardless of how the initial prescription was
received by the pharmacy (that is, orally, via e-prescribing,
telephone, paper, or facsimile) nearly all prescription refill requests
from chain pharmacies to prescribers are sent electronically, either
via an e-prescribing application or via computer-generated facsimile.
When a prescription is received by a dispenser electronically, the
prescription refill request is sent to the prescriber via the same
technology. However, where the dispenser knows that the prescriber
lacks e-prescribing capability or has not activated it, or where the
prescriber does not respond to the request sent to his or her
prescribing device, the prescription refill request is sent or resent
via computer-generated facsimile. Commenters stated that the vast
majority of computer-generated facsimiles sent today from prescribers
to pharmacies are not electronic data interchange (EDI) transmissions,
but usually prescription refill requests sent from pharmacies to
prescribers who do not conduct true e-prescribing and, in many cases,
do not engage in any electronic transactions at all. One national drug
store chain estimates that it produces approximately 150,000 computer-
generated facsimile prescription refill requests every day.
The workflow and process for filling prescriptions would be
significantly disrupted if these computer-generated facsimile
transmissions were prohibited. Dispensers and other staff would be
forced to revert back to making phone calls or using a stand-alone
facsimile machine to contact prescribers each time a refill is
requested. Commenters indicated that not only would this be
counterproductive to the advances and efficiencies made in pharmacy
practice, it would impose an undue administrative burden on dispensing
pharmacies and pharmacists.
As a result of this additional information regarding the larger
than anticipated impact of the elimination of computer-generated
facsimiles for the prescription refill request transaction, we proposed
to further amend the
[[Page 69785]]
computer-generated facsimile exemption to also allow for an exemption
from the NCPDP SCRIPT standards for electronic prescription refill
request transactions that are conducted by computer-generated
facsimiles when the prescriber is incapable of receiving electronic
transmissions using the NCPDP SCRIPT standard. We proposed to retain
the computer-generated facsimile exemption in instances of transient/
temporary network transmission failures, effective January 1, 2009. We
also proposed to revisit the computer-generated facsimile exemption for
the purpose of ultimately eliminating it for the prescription refill
request transaction found at Sec. 423.160(b)(1)(vii), and specifically
solicited industry and interested stakeholder comments regarding what
would constitute an adequate time to allow the industry to transition
to the use of the NCPDP SCRIPT standard.
We also solicited industry input on any other e-prescribing
transaction that might be similarly adversely impacted by the
elimination of computer-generated facsimiles in all instances other
than transient/temporary network transmission failures.
We received 52 relevant and timely public comments on our proposal
to further amend the exemption of computer-generated facsimiles from
the NCPDP SCRIPT standard for Part D e-prescribing to include an
exemption for refill request transactions with prescribers who are not
capable of e-prescribing using the adopted NCPDP SCRIPT standard as
detailed in the CY 2009 PFS proposed rule (73 FR 38600). While the
comments were few in number, they tended to provide multiple detailed
comments on what had been proposed.
Comment: Several commenters recommended that we reinstate the
exemption for computer-generated facsimiles in its entirety. The
commenters referenced the Medicare Improvements for Patients and
Providers Act of 2008 (MIPPA) and its potential to help drive e-
prescribing adoption, stating that the e-prescribing incentives
contained in the MIPPA provide a better, more transitional path towards
that goal.
One commenter recommended that the elimination of the computer-
generated facsimile exemption coincide with the incentive provisions
contained in the MIPPA legislation. The commenter noted the eventual
penalty for Medicare providers who do not adopt e-prescribing by the
year 2012. The commenter also stated that structuring the elimination
of the computer-generated facsimile exemption to coincide with this
date would allow organizations the time needed to appropriately
implement e-prescribing.
Other commenters recommended that we adopt a computer-generated
facsimile exemption for pharmacies in areas where prescribers who do
not e-prescribe fall under the ``significant hardship'' exception
contained in the MIPPA. Commenters also recommended that the computer-
generated facsimile exemption be further modified so as to allow for
use of the computer-generated facsimile exemption that was adopted in
the November 7, 2005 final rule (the ``original'' computer-generated
facsimile exemption) until 2014, when provider disincentives/penalties
are maximized under the MIPPA, at which time a study could be conducted
to determine the number of prescriptions being e-prescribed. We assume
that the commenters' intent would be to use the information gleaned
from such a study as an indicator of whether or not e-prescribing had
reached an acceptable level of adoption among providers and pharmacies,
and that if an acceptable level of adoption among providers and
pharmacies had been demonstrated, that the computer-generated facsimile
exemption could be eliminated.
Similarly, other commenters suggested that the exemption should be
eliminated in 2012 when disincentives under the MIPAA e-prescribing
incentive program go into effect, or in 2014, when e-prescribing
provider disincentives/penalties are maximized under the MIPPA. Another
commenter urged that we reinstate the original (from the November 7,
2005 final rule (70 FR 67568)) exemption for computer-generated
facsimiles in its entirety, not just for prescription refill requests
and transmission failures.
Response: We agree with the commenters regarding the impact of the
MIPPA. In general, the MIPPA provides payment incentives for eligible
professionals who are ``successful electronic prescribers'' as that
term is defined in the law. The incentive payments are 2 percent of the
eligible professional's allowed charges under the PFS for CY 2009
through CY 2010; 1.5 percent in CY 2011 through CY 2012, and a 0.5
percent in CY 2013. Conversely, the MIPPA calls for payment reductions,
or disincentives, for those who are not successful electronic
prescribers beginning in CY 2012. For CY 2012, the payment amount under
the PFS will be reduced by 1 percent for eligible professionals who are
not successful electronic prescribers. In subsequent years, the payment
reduction is increased by 0.5 percent each year through CY 2014, and
then is fixed at 2 percent for later years. For more information on the
e-prescribing provisions of the MIPPA, please see section 132 of the
MIPPA legislation enacted on July 15, 2008 (Pub. L. 110-275, http://
frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_public_
laws&docid=f:publ275.110.pdf).
We envision that the MIPPA-created incentive payments for those
prescribers who successfully implement electronic prescribing in
accordance with MIPPA guidelines will provide the ``tipping point''--an
adequate level of industry adoption of e-prescribing using electronic
data interchange (EDI) that would in turn move the entire industry
toward widespread e-prescribing adoption. We believe that data from the
e-prescribing incentive program under the MIPPA and eventually from
Part D e-prescribing will offer evidence of the rate of e-prescribing
adoption, therefore making a study of e-prescribing for purposes of
determining e-prescribing adoption rates unnecessary.
We analyzed the industry feedback that we received in response to
the computer-generated facsimile exemption proposals in the CY 2009 PFS
proposed rule in light of the recent MIPPA legislation. While the MIPPA
legislation was not yet been enacted at the time of the CY 2009 PFS
proposed rule's publication, it was enacted in time for commenters to
discuss its provisions in their comments to our proposals. Based on
MIPPA-based and other comments received in response to our proposal to
further modify the computer-generated facsimile exemption, and taking
into consideration the potential positive impact on the industry of the
Part D e-prescribing incentives included in the recently-enacted MIPPA
legislation, we are reinstating the original exemption for computer-
generated facsimiles effective January 1, 2009. We also agree with
those commenters who suggested that the computer-generated facsimile
exemption should be eliminated (in all instances other than transient/
temporary network transmission failures) once provider e-prescribing
disincentives under the MIPAA program are initiated.
Although several commenters suggested that we should wait until the
disincentives are maximized in 2014, we feel that it is more
appropriate to eliminate the reinstated exemption (in all instances
other than temporary/transient network transmission problems) sooner,
when the MIPPA e-prescribing program disincentives for those who are
not successful electronic
[[Page 69786]]
prescribers begin in 2012. We believe that the January 1, 2012
compliance date for the elimination of the computer-generated facsimile
exemption (in all instances other than temporary/transient transmission
problems) will take advantage of the momentum that will be built by the
e-prescribing incentive program under the MIPPA, and affords the
industry an additional 3 years from the effective date of this final
rule with comment period to move toward true e-prescribing. We also
believe that the January 1, 2012 date will enable the industry to begin
taking advantage of the benefits of e-prescribing sooner, and in so
doing pass those advantages on to their patients in the way of
increased patient safety and convenience. Therefore effective January
1, 2012, we will eliminate the reinstated exemption to the requirement
to utilize the NCPDP SCRIPT standard for entities that transmit
prescriptions or prescription-related information for Part D covered
drugs prescribed for Part D eligible individuals by means of computer-
generated facsimiles in all instances other than transient/temporary
network transmission failures.
We do not believe that a computer-generated facsimile exemption is
needed for pharmacies in areas where prescribers who do not have access
to the technology that would allow them to e-prescribe under the
``significant hardship'' exception contained in the MIPPA. We would
expect that by the year 2012, the effective date of the elimination of
the computer-generated facsimile exemption (in all instances other than
temporary and transient network transmission failures), that most areas
would have the telecommunication and/or Internet connectivity capacity
to allow providers to conduct e-prescribing, and an exemption is not
warranted in the rare instance where this may not be the case.
Comment: We received feedback from 19 commenters who agreed with
the proposal to extend the exemption to computer-generated facsimiles
for the prescription refill request transaction in cases where the
physician is not NCPDP SCRIPT enabled.
Response: We agree with commenters. This issue will be resolved
with this final rule's reversal of the CY 2008 PFS final rule's e-
prescribing provisions that would have eliminated the computer-
generated faxing exemption (in all instances other than temporary and
transient network transmission failures) effective on January 1, 2009,
and concurrent reinstatement of the original exemption for computer-
generated facsimiles from the November 7, 2005 final rule effective
January 1, 2009. However, we will eliminate the reinstated exemption
for computer-generated facsimiles (in all instances other than
transient/temporary network transmission failures) effective when the
MIPPA e-prescribing program disincentives take effect on January 1,
2012.
Comment: Some commenters expressed opposition to the proposed
elimination of the exemption for computer-generated facsimiles in all
instances other than temporary/transient network transmission failures.
One commenter erroneously identified January 1, 2010 as the proposed
compliance date, but still asked for additional time for NCPDP SCRIPT-
noncompliant providers to become compliant with the NCPDP SCRIPT
standard.
Another commenter stated that the overall e-prescribing adoption
rate has not met a critical mass to justify a January 2009 deadline for
the elimination of the computer-generated facsimile exemption in all
instances other than transient/temporary network transmission failures.
The commenter noted that with the effective date fast approaching,
unless the computer-generated facsimile exemption is modified once
again, many organizations will have to hastily implement e-prescribing
solutions or revert back to paper prescribing.
Response: We agree with commenters that it is in the best interests
of the industry and consumers that the CY 2008 PFS final rule's
modifications to the computer-generated facsimile exemption be reversed
and the broad exemption originally created in the November 7, 2005
final rule for computer-generated facsimiles in Part D e-prescribing be
reinstated to prevent a reversion by providers to paper prescriptions,
and a reversion by pharmacies to traditional paper faxing. Therefore,
by this rule we have reinstated the original exemption for computer-
generated facsimiles effective January 1, 2009. However, we will
eliminate the reinstated computer-generated facsimiles exemption in all
instances other than transient/temporary network transmission failures
effective when the MIPPA e-prescribing program disincentives take
effect on January 1, 2012.
Comment: Some commenters requested clarification of our proposed
amendment to the exemption for computer-generated facsimiles. One
commenter stated that their customers believe that all Part D
prescriptions, without exception, must be sent via electronic
transmission as of January 1, 2009, and otherwise they may be liable
for conducting an ``illegal'' transaction. To avoid undue hardship,
costs, and confusion, the commenter asked that CMS clearly specify that
e-prescribing is preferred but still voluntary for providers and
dispensers; and those prescribers not currently e-prescribing under the
Medicare Part D pharmacy benefit program may still write paper
prescriptions, or call in or fax their prescriptions using a
traditional paper fax machine to a pharmacy.
Another commenter asked CMS to clarify that providers who use
prescription writing systems that enable computer based facsimiles but
do not enable NCPDP SCRIPT transactions are not subject to the
provisions of the computer-generated facsimile exemption. One commenter
asked CMS to clarify the definition of a ``true'' e-prescribing system.
Response: We recognize that there might be some confusion for
prescribers and dispensers with the elimination of certain portions of
the computer-generated facsimile exemption. In the November 7, 2005 e-
prescribing final rule (70 FR 67568), we defined ``e-prescribing'' to
mean the transmission, using electronic media, of prescription or
prescription-related information, between a prescriber, dispenser, PBM,
or health plan, either directly or through an intermediary, including
an e-prescribing network.
As we noted above, section 101 of the MMA amended title XVIII of
the Act to establish the Part D prescription drug benefit program. As
part of that program, the Congress required the establishment of a
``voluntary'' e-prescribing program. It is voluntary in that providers
and dispensers are not required to conduct e-prescribing for Medicare
covered drugs prescribed for Medicare Part D eligible beneficiaries,
but if they do conduct such e-prescribing, they must do so using the
applicable standards that are in effect at the time of the
transmission. Part D sponsors, in turn, must support e-prescribing so
that providers and dispensers who wish to conduct e-prescribing
transactions with plans will be able to do so using the adopted
standards that are in effect at the time of the transaction. We refer
those commenters with questions regarding the creation and scope of the
Medicare Part D e-prescribing program to the ``Background'' section of
the E-Prescribing and the Prescription Drug Program proposed rule
published in the February 4, 2005 Federal Register (70 FR 6256)
In the CY 2008 PFS proposed rule (72 FR 38194), we proposed to
revise
[[Page 69787]]
Sec. 423.160(a)(3)(i) to eliminate the computer-generated facsimile
exemption to the NCPDP SCRIPT standard for the communication of
prescription or certain prescription-related information between
prescribers and dispensers for the transactions specified in Sec.
423.160(b)(1)(i) through (xii). In keeping with the comments that we
received, we finalized modifications that required prescribers and
dispensers to use NCPDP SCRIPT compliant e-prescribing software when
they conduct e-prescribing transactions for Part D covered drugs that
are prescribed for Part D eligible individuals in all instances other
than transient/temporary network transmission failures, effective
January 1, 2009. Those prescribers who choose not to e-prescribe Part D
covered drugs for Part D eligible individuals can continue to use non-
computer-generated facsimiles as a means to deliver such prescriptions
to a dispenser.
Providers who use electronic prescription writing systems that are
only capable of producing computer-generated facsimiles are not in
conformance with the adopted standards because they do not transmit
information using the adopted NCPDP SCRIPT standard. Those who utilize
their NCPDP SCRIPT enabled systems to produce computer-generated
facsimiles are likewise not in compliance with the adopted standards
because computer-generated facsimiles on these systems also do not use
the adopted standard. We believed that eliminating the exemption (in
all instances other than transient/temporary network transmission
failures) might encourage those with NCPDP SCRIPT capabilities that
have not been activated to use the NCPDP SCRIPT standard in electronic
data interchanges, and those without such capabilities to upgrade their
current software products, or, where upgrades are not available, to
switch to new products that would enable such true e-prescribing.
We believe that eliminating the computer-generated facsimile
exemption in 2012 would provide sufficient notice to prescribers and
dispensers who would need to implement or upgrade e-prescribing
software to look for products and upgrades that are capable of
generating and receiving transactions that utilize NCPDP SCRIPT.
Eliminating the reinstated computer-generated facsimile exemption in
2012 would also afford current e-prescribers time to work with their
trading partners to eventually eliminate the use (in all instances
other than transient/temporary network transmission failures) of
computer-generated facsimiles in e-prescribing transactions.
From our analysis of the public comments that asked that the
elimination of the computer-generated facsimile exemption (in all
instances other than temporary/transient network transmission failures)
be reversed, and in view of the recent MIPPA legislation that provides
a more powerful incentive to providers to e-prescribe in accordance
with the standards adopted under Medicare Part D, we are reversing the
modifications to the computer-generated facsimile exemption that were
made in the CY 2008 PFS final rule with comment period and reinstating
the original computer-generated facsimile exemption that was adopted in
the November 7, 2005 e-prescribing final rule in its entirety,
effective January 1, 2009. However, we will eliminate the reinstated
exemption for computer-generated facsimiles in all instances other than
transient/temporary network transmission failures when the MIPPA e-
prescribing program disincentives take effect on January 1, 2012.
Comment: Several commenters who agreed with our proposal to
eliminate the computer-generated facsimile exemption (in all instances
other than transient/temporary network transmission failures) suggested
that we delay the January 1, 2009 effective date stated in the CY 2008
PFS final rule with comment period. One commenter urged CMS to conduct
studies on the barriers to use of NCPDP SCRIPT compliant systems, and
then work with stakeholders to identify pathways toward more widespread
use of e-prescribing systems. Another commenter noted that the recent
merger of the two major e-prescribing information exchange networks
still may hold unforeseen consequences for those vendors who have been
previously certified or are in the process of being certified by either
of those two networks. The commenter stated that any software changes
that the network may demand as a result of their merger may take time
to develop, and as a result, the effective date should be delayed.
A few commenters said that we should tie the computer-generated
facsimile exemption compliance to the April 1, 2009 compliance date of
the most recent round of final e-prescribing standards. One commenter
suggested that we delay the effective date of the CY 2008 PFS final
rule with comment period modifications to the computer-generated
facsimile exemption to 2012, when wireless broadband upload
connectivity is expected to achieve a speed of faster than 1MB/second.
Response: We do not see a correlation between the e-prescribing
network certification process, and the commenter's request to delay the
elimination of the computer-generated facsimile exemption based on what
may or may not take place in that process. Additionally, the process
for vendors to certify their products to an e-prescribing information
exchange network is a marketplace issue to which we are not a party.
We understand that some prescribers and dispensers may not have
been prepared to e-prescribe using the adopted standards by the January
1, 2009 effective date of the CY 2008 PFS final rule's e-prescribing
provisions. However, with this final rule's reversal of those
modifications and reinstatement of the original computer-generated
facsimile exemption that was adopted in the November 7, 2005 e-
prescribing final rule in its entirety, effective January 1, 2009, we
believe we have addressed commenters' concerns regarding effective
dates. However, we will eliminate the reinstated exemption for
computer-generated facsimiles in all instances other than transient/
temporary network transmission failures when the MIPPA e-prescribing
program disincentives take effect on January 1, 2012.
Comment: A comment concerning the computer-generated facsimile
exemption issue relative to non-NCPCP SCRIPT enabled pharmacies
(including many independent pharmacies) stated that there are still
significant segments of the retail pharmacy market not yet in a
position to receive electronic prescriptions because they are only
facsimile-enabled. The commenter cited national prescription
information exchange network data showing that only about 42,000 of the
nation's pharmacies are NCPDP SCRIPT e-prescribing enabled, and about
20,000 of the nation's pharmacies are only manual (traditional paper-
based) facsimile or computer-generated facsimile-enabled.
One commenter stated that e-prescribing technology has not yet been
perfected by its developers, and that the receiving parties (that is,
pharmacies) have not fully integrated this technology into their
workflows. The commenter also indicated that use of e-prescribing
technology is dependent on the availability of telecommunications
services and Internet connectivity, and this is problematic especially
in rural areas where there may be a lack of such telecommunications
and/or Internet connectivity services needed to support e-prescribing
systems.
[[Page 69788]]
A vendor expressed concern that their client pharmacies that rely
solely on computer-generated facsimiles may not be able to send or
receive computer-generated facsimile transmissions through national
prescription information exchange networks after January 1, 2009.
Response: We recognize that pharmacies that are not now conducting
e-prescribing transactions using the NCPDP SCRIPT standard will incur
costs to implement this capability, and that pharmacies will likely
experience an increase in e-prescribing transaction volumes and costs
as utilization of such transactions increases.
We agree that independent pharmacies and pharmacies that employ
only computer-generated facsimile capabilities need to be given the
opportunity to upgrade their systems and that elimination of the
computer-generated facsimile exemption (in all instances other than
transient/temporary network transmission failures) would place them at
a disadvantage at a time when the MIPPA incentive program is expected
to generate increased e-prescribing volumes. Therefore, for this reason
and the other reasons stated herein, we are reversing the modifications
to the computer-generated facsimile exemption that were made in the CY
2008 PFS final rule with comment period and reinstating the original
computer-generated facsimile exemption that was adopted in the November
7, 2005 e-prescribing final rule in its entirety, effective January 1,
2009. However, we will eliminate the exemption for computer-generated
facsimiles in all instances other than transient/temporary network
transmission failures when the MIPPA e-prescribing program
disincentives take effect on January 1, 2012.
Comment: We received comments requesting confirmation that the
proposed revisions to the computer-generated facsimile exemption would
not now apply to long term care providers. Another asked that CMS allow
long term care facilities to continue to transmit prescriptions via
computer-generated facsimile to pharmacies that are not yet using
systems capable of receiving NCPDP SCRIPT transactions appropriate to
this setting (NCPDP SCRIPT Version 10.2 or higher). A professional
association noted that eliminating the exemption for computer-generated
facsimiles (in all instances other than transient/temporary network
transmission failures) is unlikely to spur adoption among long term
care providers and could, if left standing, force some facilities to
resort to manual facsimiles. The commenter also urged CMS to eliminate
the e-prescribing exemption for long term care facilities.
Response: In Sec. 423.160(a)(3)(iii), long term care facilities
were specifically exempted from the requirement to use the adopted
standards in e-prescribing under Medicare Part D due to their unique
workflows and complexities associated with prescribing for patients in
long term care settings. This exemption remains in effect for long term
care facilities. Therefore, long term care facilities may continue to
use computer-generated facsimiles, and such facilities will continue to
be exempt from the requirement to use the NCPDP SCRIPT Standard in
prescription transactions between prescribers and dispensers where a
non-prescribing provider is required by law to be a part of the overall
transaction process.
Comment: Comments regarding other issues relevant to e-prescribing
in general, and the elimination of the computer-generated facsimile
exemption (in all instances other than transient/temporary network
transmission failures) specifically included comments requesting
amendments to the computer-generated facsimile exemption that would
address when a prescriber or dispenser is prohibited from using the
NCPDP SCRIPT standard for e-prescribing. The commenter noted that the
Drug Enforcement Administration's (DEA) prohibition of e-prescribing of
controlled substances would prevent a provider from prescribing such
controlled substances under the Part D program in accordance with the
adopted standards. One commenter stated that vendors would have to
disable electronic communication of prescriptions from their client
prescribers through the prescription information exchange network to
those pharmacies that are only computer-generated facsimile-enabled.
The vendor assumed that if their client prescriber attempts to send
those prescriptions electronically that the prescription will be
rejected by the prescription information exchange network because the
pharmacy is not activated with the network for electronic transactions
using the NCPDP SCRIPT standard. This same commenter noted that the
network has heretofore insulated the prescriber from having to be
concerned with whether or not the patient's choice of pharmacy was
enabled to receive prescriptions in a particular way. After the
proposed January 2009 compliance date, the commenter felt that
additional burdens would be placed on the prescriber to obtain this
information from the patient up front, or could compel patients to make
different pharmacy choices which could result in lost business for
pharmacies that are only facsimile-enabled.
Response: The DEA has authority through the Controlled Substances
Act over the electronic prescribing of controlled substances, and does
not currently allow for the electronic prescribing of Schedule II
drugs. As such substances currently may not be prescribed
electronically, there is no conflict of law at this time. As noted
previously, e-prescribing under Medicare Part D is voluntary for
prescribers and dispensers--they are not required to issue
prescriptions in electronic form. Although the DEA has published a
notice of proposed rulemaking to allow for the electronic prescribing
of controlled substances, we have no indication as to when the DEA will
make a final determination on this issue. We continue to work with the
DEA to help facilitate a solution that addresses both their enforcement
requirements with respect to the electronic prescribing of controlled
substances, and the needs of the healthcare community for a solution
that is interoperable with existing e-prescribing systems, scalable and
commercially viable.
After reviewing these comments, in the interest of patient care and
safety, and to foster the adoption of true e-prescribing among
prescribers and dispensers, we are reversing the modifications to the
computer-generated facsimile exemption that were made in the CY 2008
PFS final rule with comment period and reinstating the original
computer-generated facsimile exemption that was adopted in the November
7, 2005 e-prescribing final rule, effective January 1, 2009. However,
we will also eliminate the reinstated exemption for computer-generated
facsimiles in all instances other than transient/temporary network
transmission failures when the MIPPA e-prescribing program
disincentives take effect on January 1, 2012.
L. Comprehensive Outpatient Rehabilitation Facilities (CORF) and
Rehabilitation Agency Issues
Comprehensive outpatient rehabilitation facilities (CORFs) and
rehabilitation agencies are Medicare providers that are certified to
provide certain rehabilitation services. Currently covered CORF
clinical services and rehabilitation agency services are paid through
the PFS.
In the CY 2008 PFS final rule with comment period (72 FR 66399), we
[[Page 69789]]
revised the CORF regulations at 42 CFR parts 410 and 413 to ensure that
the regulations reflected the statutory requirements applicable to
CORFs under sections 1834(k) and 1861(cc) of the Act. Many of these
changes were technical in nature. Specifically, the regulatory changes:
(1) Revised the definitions of ``physicians' services,'' ``respiratory
therapy services,'' ``social and psychological services,'' ``nursing
services,'' ``drugs and biologicals,'' and ``supplies and durable
medical equipment,'' and ``home environment evaluation''; (2) amended
the payment provisions for CORF services; and (3) made other
clarifications and changes to the conditions for coverage for CORF
services.
In the CY 2009 PFS proposed rule, we addressed the comments
received in response to the CY 2008 PFS final rule with comment period
(72 FR 66222), proposed new provisions, and proposed revising other
provisions. We solicited comments on all of the proposed changes.
1. Personnel Qualifications
We stated in the CY 2008 PFS final rule with comment period that we
would propose updated qualifications for respiratory therapists in
future rulemaking (72 FR 66297). It has been our policy that only the
respiratory therapist (and not the respiratory therapy technician), who
possesses the educational qualifications necessary to provide the level
of respiratory therapy services required, is permitted to provide
respiratory therapy in a CORF setting.
In the CY 2008 PFS final rule with comment period, we received a
comment indicating that our regulations were outdated and did not
conform to current respiratory therapy professional standards.
Specifically, the American Association for Respiratory Care (AARC)
stated that the terms ``certified respiratory therapist (CRT)'' and the
``registered respiratory therapist (RRT)'' have replaced the terms
``respiratory therapy technician'' and ``respiratory therapist,''
respectively. In addition, the qualifications for CRTs and RRTs differ
from those applicable to respiratory therapy technicians and
respiratory therapists. The CRT designation is awarded after an
individual successfully passes the entry-level respiratory therapy
examination. In order to be eligible for the RRT examination, an
individual must be a graduate of an advanced level respiratory therapy
educational program and have obtained the RRT credential.
We proposed to revise Sec. 485.70(j) of the Conditions of
Participation of CORF services--setting forth the personnel
qualifications for respiratory therapists in CORFs--to be consistent
with current qualification requirements for RRTs, as recommended by
AARC. We also proposed to delete Sec. 485.70(k), which sets forth
personnel qualifications for CRTs (previously referred to as
respiratory therapy technicians) in CORFs. In the past, we have not
reimbursed CORFs for respiratory therapy services provided by
respiratory therapy technicians or CRTs, and we believe that removing
the technician definition would clarify our position. We stated that we
believed that current medical standards continue to require that the
provision of skilled respiratory therapy services to patients in the
CORF setting be furnished by RRTs. While CRTs furnish general
respiratory care procedures and may assume some clinical responsibility
for specified respiratory care modalities involving the application of
therapeutic techniques under the supervision of an RRT or a physician,
the educational qualifications that a RRT possesses allow him or her to
evaluate, treat, and manage patients of all ages with respiratory
illnesses. RRTs participate in patient education, implement respiratory
care plans, apply patient-driven protocols, follow evidence-based
clinical practice guidelines, and participate in health promotion,
disease prevention, and disease management. RRTs also may be required
to exercise considerable independent judgment.
This was implemented in the CY 2002 PFS final rule with comment
period (66 FR 55246 and 55311) and the CY 2003 PFS final rule with
comment period (67 FR 79966 and 79999) when we developed and discussed
G codes, CORF respiratory therapy services, and specifically recognized
the RRT as the appropriate level of personnel to provide these CORF
services. Finally, the CORF regulations at Sec. 485.58(d)(4) state
that as a condition of participation for CORFs, CORF personnel must
meet the qualifications described at Sec. 485.70.
For CY 2009, to maintain consistency in the conditions of
participation for both CORFs, home health agencies (HHAs), and other
outpatient service providers, we proposed to amend the material
addressing personnel qualifications in Sec. 485.70. Specifically, we
proposed to amend paragraphs Sec. 485.70(c) and Sec. 485.70(e) by
referencing the personnel qualifications for HHAs at Sec. 484.4. This
change would align CORF personnel requirements not only with HHA
requirements, but also with other regulations in Part 485 addressing
provision of physical therapy, speech-language pathology, and
occupational therapy services.
Also, at 485.58(a)(1)(i), we proposed to amend the duties of a CORF
physician to include medical supervision of nonphysician staff. This
change conforms to changes made to the CORF conditions for coverage in
the CY 2008 PFS final rule with comment period. We believe that adding
medical supervision of nonphysician staff to the duties of CORF
physicians more accurately reflects the duties and responsibilities of
the CORF physician. We also believe that this change could increase the
quality of care provided to patients of CORFs.
The following is a summary of the comments received concerning
Personnel Qualifications and our responses.
Comment: Commenters generally supported our proposed changes. We
received a comment that supported the spirit of our proposed changes to
the definitions of respiratory therapists and provided further
clarification regarding current professional standards. Specifically,
in previous comments, the commenter noted that the term ``respiratory
therapy technician'' is an obsolete term. This is because today's
curriculum and educational standards are no longer structured to teach
at a technician level.
The commenter noted that, in our discussion of the issue in the
proposed rule, we stated that it was AARC's belief that the term
``certified respiratory therapist'' (CRT) had replaced the obsolete
term ``respiratory therapy technician'' and the term ``registered
respiratory therapist'' (RRT) has replaced the term ``respiratory
therapist.'' The commenter informed us that our statement was
incorrect. According to the commenter, today's educational programs
prepare students for the registry (RRT) examinations administered by
the National Board for Respiratory Care (NBRC). Before graduates are
eligible to sit for the RRT examinations they must first pass the
NBRC's entry-level examination, which results in the CRT credential.
Thus the CRT-credentialed individual is considered an ``entry-level
respiratory therapist,'' but unlike other allied health professions,
the terms ``technician'' or ``assistant'' are not used in the
respiratory therapy profession.
According to AARC, in the profession today, it is accepted clinical
and medical terminology that individuals holding the credentials of
both CRT and RRT are known simply as ``respiratory therapists.'' Also,
most State laws that require licensing of respiratory therapists make
no distinction in the
[[Page 69790]]
license as to whether the individual holds a credential of CRT or RRT.
They are both licensed as ``respiratory therapists.'' To the best of
AARC's knowledge, there are only six States that require a separate
license for a CRT or a RRT. AARC recommended that the proposed
definition be revised.
Since CMS uses the term ``respiratory therapist'' in other
regulatory provisions and manual instructions where applicable, AARC
recommended that CMS delete the word ``registered'' from the proposed
definition. This would also be consistent with the terms ``physical
therapist'' and ``occupational therapist'' used to define qualified
personnel in those professions.
AARC also believes that CMS can ensure that only registered
respiratory therapists, and not individuals holding only the CRT, meet
the personnel qualifications by revising the curriculum requirements to
require that respiratory therapists have passed the registry
examination administered by the NBRC. AARC also noted that the name of
the Board administering the certification and registry exams is the
NBRC, not the National Board for Respiratory Therapy, Inc.
Response: We thank the commenters for their support of our proposed
revisions. We believe that the comments provided by AARC reflect and
further clarify our intent to provide appropriate respiratory care to
patients served by CORFs. We want to ensure that only respiratory
therapists with the highest level of education and training can furnish
respiratory therapy services in a CORF. Therefore, only those
individuals holding the credential of registered respiratory therapist
(RRT) conferred by the NBRC would qualify. Qualifying by being
``eligible to take the registry examination,'' as we proposed, results
in the unintended consequence of permitting CRTs who have not yet taken
the registry exam to meet the personnel qualifications.
As a result of the public comments, we are finalizing the proposed
revisions that reference personnel qualifications for HHAs at Sec.
485.70(c) and (e). We are also finalizing our proposed revision to
Sec. 485.58(a)(i)(1) that amends the duties of CORF physicians to
include medical supervision of nonphysician staff (we received no
comments on this provision). We are adopting the revisions to the
personnel qualifications for respiratory therapists at Sec. 485.70(j)
as suggested by AARC, to read as follows:
(j) A respiratory therapist must--
(1) Be licensed by the State in which practicing, if applicable;
and
(2) Have successfully completed a nationally-accredited educational
program that confers eligibility for the National Board for Respiratory
Care (NBRC) registry exams, and have passed the registry examination
administered by the NBRC, or
(3) Have equivalent training and experience as determined by the
National Board for Respiratory Care (NBRC) and passed the registry
examination administered by the NBRC.
2. Social and Psychological Services
In the CY 2008 PFS final rule with comment period (72 FR 66297), we
clarified that all CORF services, including social and psychological
services, must directly relate to or further the rehabilitation goals
established in the physical therapy, occupational therapy, speech-
language pathology, or respiratory therapy plan of treatment. We
believe that using a full range of clinical social and psychological
CPT codes to describe CORF social and psychological services is
inappropriate because social and psychological CORF services do not
include independent clinical treatment of mental, psychoneurotic, and
personality disorders. CPT codes 96150 through 96154 and CPT codes
90801 through 90899 are inappropriate for CORF use because all of these
CPT codes represent full-scale clinical treatment for these disorders.
As we stated in the CY 2008 PFS final rule with comment period, we
believe that for purposes of providing care in a CORF, social and
psychological services should represent only case management and
patient assessment components as they relate to the rehabilitation
treatment plan (72 FR 66297 through 66298). Consequently, after notice
and comment, we changed our policy and payment for CORF social and
psychological services; these services may no longer address a CORF
patient's mental health diagnoses except insofar as they relate
directly to other services provided by the CORF.
We specified in the CY 2008 final rule with comment period (72 FR
66298) that only the CPT code 96152 for health and behavior
intervention (with the patient) could be used to bill for CORF social
and psychological services. This code was part of a series of codes
that was created by CPT in 2002 to address health and behavior
assessment issues. These services are offered to patients who present
with established illnesses or symptoms, who are not diagnosed with
mental illness, and may benefit from evaluations that focus on the
biopsychosocial factors related to the patient's physical health
status, such as patient adherence to medical treatment, symptom
management and expression, health-promoting behaviors, health-related
risk-taking behaviors, and overall adjustment to medical illness. We
also adopted the more limited definition of CORF social and
psychological services in Sec. 410.100(h) (72 FR 66399). The
regulations state that social and psychological services include the
assessment and treatment of an individual's mental and emotional
functioning and the response to and rate of progress as it relates to
the individual's rehabilitation plan of treatment, including physical
therapy services, occupational therapy services, speech-language
pathology services, and respiratory therapy services.
We also noted that a HCPCS G-code could more accurately describe
these unique CORF services, but believed that it was inappropriate to
create such a G-code in the final rule with comment period without
first proposing to do so in proposed rulemaking.
Therefore, we proposed to create a CORF specific G-code, GXXX5,
Social work and psychological services, directly relating to and/or
furthering the patient's rehabilitation goals, each 15 minutes, face-
to-face; individual (services provided by a CORF-qualified social
worker or psychologist in a CORF), to accurately describe the unique
social and psychological services provided by CORF staff and to
establish appropriate payment for these services. We proposed to use
salary and wage data from the Bureau of Labor Statistics to institute a
blended social worker/psychologist clinical labor category using a
price per minute rate of $0.45 for the PE component of GXXX5. We
proposed to assign a malpractice RVU of 0.01. Because the services
described by GXXX5 are solely furnished by a CORF social worker or
clinical psychologist, and not by a physician, we did not propose to
allocate a work RVU for these services.
We also proposed to revise Sec. 410.100(h) to delete the reference
to ``and treatment.'' As discussed above and in the CY 2008 PFS final
rule with comment period (72 FR 66297), we believe all CORF services,
including social and psychological services, must directly relate to or
further the rehabilitation goals established in the physical therapy,
occupational therapy, speech-language pathology, or respiratory therapy
plan of treatment. Accordingly, social and psychological CORF services
do not include clinical treatment of mental, psychoneurotic, and
personality disorders. We stated that we are concerned that the phrase
``and treatment'' currently included in the definition of CORF social
and psychological services may be
[[Page 69791]]
misconstrued to include social and psychological services for the
independent clinical treatment of mental illness. Therefore, we
proposed to delete this language in order to clarify that only those
social and psychological services that relate directly to a
rehabilitation plan of treatment and the associated rehabilitation
goals are considered CORF social and psychological services.
In addition, we proposed to remove Sec. 410.155(b)(1)(ii)
regarding the application of mental health limitations to CORF social
and psychological services. As we previously stated, CORF services,
including social and psychological services, must directly relate to or
further the rehabilitation goals established in the physical therapy,
occupational therapy, speech-language pathology, or respiratory therapy
plan of treatment. In the CY 2008 PFS final rule with comment period
(72 FR 66400), we stated that CORF services must be furnished under a
written plan of treatment that indicates the diagnosis and
rehabilitation goals, and prescribes the type, amount, frequency, and
duration of the skilled rehabilitation services, including physical
therapy, occupational therapy, speech-language pathology and
respiratory therapy services. Section 410.155(b) specifies that the
mental health payment limitation applies when there is a diagnosis of
mental, psychoneurotic, and personality disorders (mental disorders
identified by a diagnosis code within the range of 290 through 319)
prior to beginning services. Under our revised definition, CORF social
and psychological services must directly relate to the physical therapy
or other rehabilitation plan of treatment and its associated goals.
Since these patients are receiving CORF services because they have a
need for skilled rehabilitation services, any social and psychological
services provided in a CORF under Sec. 410.100(h) must include an
assessment of the individual's mental and emotional functioning
exclusively as such functioning relates to their rehabilitation plan of
treatment. In our view, such services provided in a CORF would not be
``treatment of mental, psychoneurotic, and personality disorders of an
individual'' as set out in section 1833(c) of the Act, so that the
statutory mental health payment limitations would not apply. We
proposed changes to Sec. 410.155(b) to reflect our view regarding the
limited nature of these services.
The following is a summary of the comments received concerning our
proposal to create a HCPCS G-code to describe the unique CORF social
and psychological services and our responses.
Comment: One commenter stated that the G-code is more specific to
rehabilitation services and its implementation will support future
adoption as a CPT code. Another commenter stated that occupational
therapy services are a core CORF service. The commenter requested that
CMS clarify that the new G-code would not have a negative impact on the
provision of occupational therapy services to meet patient needs that
are similar to those addressed by the G-code. The commenter stated that
occupational therapy, as with all therapy services, includes assessment
of the patient level of functioning as an integral part of the therapy
services. Other commenters suggested that therapists and psychologists
assess and treat mental, cognitive, and emotional functioning as they
relate to a patient's rehabilitation plan of care. The commenters
further suggested that CMS revisit its decision not to allow CORF
therapists and psychologist to bill the Health and Behavioral
Assessment/Intervention codes (CPT codes 96150 through 96155), which
are used to identify and treat ``biopsycholosocial factors important to
physical health problems.'' One commenter also requested that the new
G-code include physician work in the RVUs since all other codes billed
by psychologist include physician work. Another commenter stated that
the statute clearly defines social and psychological services so there
is no need for the development of a G-code.
Response: Section 1861(cc)(2)(B) of the Act defines the term CORF
to mean a facility which provides at least physician services (as
defined at Sec. 410.100(a)), physical therapy services and social or
psychological services. As such, occupational therapy services are not
considered one of the core CORF services but are optional. The CORF
must provide the core CORF services. In addition it may furnish any of
the optional covered and medically necessary services and items such as
occupational therapy, speech-language pathology, or respiratory therapy
services. These optional services must directly relate to, and be
consistent with, the rehabilitation plan of treatment, and must be
necessary to achieve the rehabilitation goals. Occupational therapy
services include assessment of an individual's level of independent
functioning, selection and teaching of task-oriented therapeutic
activities to restore sensory-integrative functions, teaching of
compensatory techniques to permit an individual with a physical or
cognitive impairment or limitation to engage in daily activities. The
patient's plan of treatment will document all the covered and medically
necessary items and services that the patient requires which will
include the core CORF services as well as any of the optional services
such as occupational therapy.
In the CY 2007 PFS final rule with comment period, we revised Sec.
410.100(h) states that CORF social and psychological services include
the assessment and treatment of a CORF patient's mental health and
emotional functioning and the patient's response to/and rate of
improvement and progress towards the rehabilitation plan of treatment.
In our view, social and psychological services must contribute to the
improvement of the individual's rehabilitation condition and may not
relate to a mental health diagnoses. In the CY 2008 PFS final rule (72
FR 66298), we discussed the use of CPT codes 96150 through 96155 for
health and behavior assessment and treatment, which represent full-
scale clinical treatment of mental, psychoneurotic, personality
disorders and biopsychosocial functioning. We revised the previous
definition of CORF social and psychological services and instructed
that these services should be limited to those described by CPT code
96152. We stated that provision of other therapeutic services was
outside of the scope of coverage for CORFs. Since these CPT codes were
not a part of the proposed regulation, we will not revisit the use of
these CPT codes in this final regulation.
We are finalizing our proposal to create the CORF specific G-code
which will be G0409. The description of this G-code will be G0409,
Social work and psychological services. This code will directly relate
to and/or further the patient's rehabilitation goals, each 15 minutes,
face-to face; individual (services provided by a CORF-qualified social
worker or psychologist in a CORF), to accurately describe the unique
social and psychological services provided by CORF staff and to
establish appropriate payment for these services. The code does not
include any physician work RVUs because the social and psychological
services are performed by a CORF social worker with a Bachelor of
Science degree or a Masters-level psychologist and not by a physician
as defined in the statute at section 1861(r) of the Act.
We did not receive any comments on our proposal to eliminate the
mental health limitation requirement. The mental health limitation is
no longer
[[Page 69792]]
applicable because under our revised definition, CORF social and
psychological services must directly relate to the physical therapy or
other rehabilitation plan of treatment and its associated goals and do
not relate to a general diagnosis of mental, psychoneurotic, and
personality disorders which the mental health limitation addresses.
Therefore, we are finalizing our proposed change to remove Sec.
410.155(b)(1)(ii) regarding the application of mental health
limitations to CORD social and psychological services.
3. CORF Conditions of Participation
In the CY 2008 final rule with comment period (72 FR 66400), we
finalized changes to the CORF coverage and payment rules. However, all
conforming regulations in the CORF Conditions of Participation (CoPs)
were not updated at that time.
In the CY 2009 PFS proposed rule, we proposed to revise Sec.
485.58(e)(2). Section 485.58(e) currently provides that as a CoP, a
CORF facility must provide all CORF services on its premises with the
exception of--(1) physical therapy, occupational therapy, and speech-
language pathology services furnished away from the premises of the
CORF, if Medicare payment is not otherwise made for these services; and
(2) a single home visit for the purpose of evaluating the potential
impact of the patient's home environment on the rehabilitation goals.
We proposed to clarify that the alternate premises for provision of
physical therapy, occupational therapy, and speech-language pathology
services may be the patient's home.
The following is a summary of the comments received concerning CORF
CoPs and our responses.
Comment: Commenters concurred with the proposed clarification
regarding the patient's home as an alternate premise for provision of
physical therapy, occupational therapy, and speech-language pathology
services.
Response: We thank the commenters for their support of this
provision. As a result of the public comments, we are finalizing the
revisions to Sec. 485.58(e)(2) as proposed.
4. Extension Location
We proposed to add a definition for an ``extension location'' of a
rehabilitation agency to the definitions at Sec. 485.703. While there
are currently no provisions that allow rehabilitation agencies to offer
services in an extension location, there are currently 2,875
rehabilitation agency primary locations and 2,486 rehabilitation agency
offsite practice locations. While our State Operations Manual
recognizes that these rehabilitation agency extension locations exist,
it also includes language stating that the extension locations must
meet applicable rehabilitation agency CoPs. However, it is difficult to
apply CoP requirements to a location that currently is not identified
in the CoPs. Creating a definition in the CoPs that applies to the
extension locations will allow us to survey and monitor the care
provided in these extension locations on a consistent basis.
Therefore, we proposed to define an ``extension location'' as: (1)
A location or site from which a rehabilitation agency provides services
within a portion of the total geographic area served by the primary
site; (2) is part of the rehabilitation agency; and (3) is located
sufficiently close to share administration, supervision, and services
in a manner that renders it unnecessary for the extension location to
independently meet the conditions of participation as a rehabilitation
agency.
The following is a summary of the comments received concerning an
extension location and our responses.
Comment: Some commenters supported our proposed revisions and
suggested that we add additional clarifying information. One commenter
suggested that we clarify the status of space that a rehabilitation
agency may use within another facility (for example, a room used by the
agency within a nursing facility). Another commenter suggested that we
specify a mile radius from the rehabilitation agency's primary site
within which an extension location may exist.
Response: We thank the commenters for their input. Regarding a mile
radius, mileage, and travel times from the primary location to the
extension location are significant factors to consider because they are
implicitly referenced in the proposed regulation. However, each alone
would not be the single issue in determining appropriateness as a sole
means for approving an extension location. We have decided to leave it
to the rehabilitation agency to prove to the State survey agency that
the rehabilitation agency is close enough to the extension location to
provide supervision of staff during its hours of operation. Supervision
of the extension location staff must be adequate to support the care
needs of the patients. We believe that our proposed definition for an
extension location is adequate, as it has been used successfully in our
State Operations Manual for other provider types. We are not making any
changes to our proposed revisions based on public comments, and are
finalizing them as proposed.
5. Emergency Care
We proposed to revise Sec. 485.711(c), Standard: Emergency care,
to reflect current medical practice. We proposed to remove the
requirement that the rehabilitation agency provide for one or more
doctors of medicine or osteopathy to be available on call to furnish
necessary medical care in case of an emergency. We do not believe that
the patients serviced by rehabilitation agencies regularly experience
medical emergencies that necessitate the retention of an on-call
physician.
Therefore, we proposed that each rehabilitation agency establish
procedures to be followed by personnel in an emergency that cover
immediate care of the patient, persons to be notified, and reports to
be prepared.
The following is a summary of the comments received concerning
Emergency care and our responses.
Comment: Most commenters concurred with our proposed changes to the
emergency care standard. Specifically, the commenters supported our
proposed elimination of the requirement that rehabilitation agencies
retain a physician on call for emergencies. The commenters cited
difficulty in recruiting physicians for this role, and stated that it
is often impractical to contact a physician in the rare case of an
emergency. One commenter also supported the revisions to the emergency
provisions because they allow facilities to develop emergency care
plans most appropriate for an individual facility's location and
patient population.
Response: We thank the commenters for their support, and agree that
these revisions will allow facilities to plan for, and respond to,
emergency care situations in appropriate ways. As a result of the
public comments, we are finalizing the provision as proposed with
slight non-policy revisions for grammatical purposes. We are also
revising the stem statement to remove the reference to the physician's
presence in emergency situations.
6. Technical Changes for Rehabilitation Agencies
Under section 1861(p) of the Act, rehabilitation agencies are
tasked with furnishing outpatient physical therapy and speech-language
pathology services. Unlike CORFs, which provide comprehensive
outpatient rehabilitation services, rehabilitation agencies primarily
provide physical therapy services. Some of the other services
[[Page 69793]]
offered by CORFs, such as respiratory therapy and social services are
outside the scope of rehabilitation agency practice.
The current definition of ``rehabilitation agency'' at Sec.
485.703 (paragraph (2)(ii) of the definition) requires that
rehabilitation agencies provide social or vocational adjustment
services. This requirement is outside of the rehabilitation agency's
scope of practice and has caused confusion for these providers because
we do not reimburse rehabilitation agencies for furnishing social or
vocational services. Accordingly, in Sec. 485.703, we proposed to
delete the requirement in paragraph (2)(ii) of the rehabilitation
agency definition requiring a rehabilitation agency provide social or
vocational services.
The following is a summary of the comments received concerning the
technical change and our responses.
Comment: Most commenters responded in support of this proposed
revision. Some commenters stated that this requirement, which is an
unfunded mandate, is burdensome, and that patients often resent being
required to release their personal information to a social worker they
will likely never meet or work with. The commenters also agreed that
social and vocational services are outside the scope of practice for
rehabilitation agencies.
Response: We thank the commenters for their support of this change.
As a result of the public comments, we are finalizing the provision as
proposed.
We also proposed to make a conforming change at Sec. 485.717, the
Condition of participation: Rehabilitation program. At 485.711(b)(3),
we proposed to remove the reference to Sec. 410.61(e), since Sec.
410.61(e) no longer exists in regulation.
The following is a summary of the comments received concerning this
technical change and our responses.
Comment: Some commenters concurred with this conforming change
while others objected to this conforming change because the commenters
believe that we did not also address the statement in Sec.
485.711(b)(3) that states that the patient plan of care must be
reviewed by a physician, nurse practitioner, clinical nurse specialist,
or physician assistant at least every 30 days. The commenters believe
that this conflicts with CMS payment policy, which requires
recertification of the plan of care at least every 90 days. We also
received several unsolicited comments requesting that we correct this
perceived discrepancy.
Response: We did not propose to revise the language to conform to
changes in the timing for recertification of outpatient therapy plans
of care as discussed in the CY 2008 PFS final rule with comment period
(72 FR 66396). Currently, Sec. 485.711(b)(3) requires that the plan of
care and results of treatment be reviewed by the physician or by the
individual who established the plan at least as often as the patient's
condition requires, and the indicated action is taken, which for
Medicare patients being treated in rehabilitation agencies must be at
least every 30 days. We believe that this requirement is in the best
interests of rehabilitation agency patients, and note that by meeting
this condition of participation, facilities would automatically meet
the CMS payment policy requiring review at least every 90 days.
We are not making any changes to our proposed revisions as a result
of public comments, and are finalizing the conforming change as
proposed.
M. Technical Corrections for Therapy-Related Issues
We proposed the following technical changes to the regulations
concerning therapy services:
In Sec. 409.17(a), we proposed to delete the reference to
paragraph (a)(1)(ii) which no longer exists.
In Sec. 409.23, we proposed to revise the title of this
section from ``Physical, occupational and speech therapy'' to
``Physical therapy, occupational therapy and speech-language pathology
services.''
Commenters voiced no objections to these technical corrections, and
we are finalizing these technical corrections as proposed.
Several commenters brought to our attention changes made to the
text of a regulation in the CY 2008 PFS final rule with comment period
that did not reflect our policy as expressed in the preamble
discussion. We intended to modify our regulations to make the policies
for therapy services consistent across all settings. We added Sec.
485.635(e) for the purpose of conforming the policies for physical
therapy, occupational therapy and speech-language pathology in the
critical access hospitals (CAHs) to the policies for therapy services
in Sec. 409.17. Section 485.635(e) describes therapy services when
furnished at the CAH as those that ``are provided as direct services by
staff qualified under State law, and consistent with the requirements
for therapy services described in Sec. 409.17.'' The reference in the
regulation to ``direct services'' was not intended to address the
employment status of staff providing those services, but we now
recognize that it could be interpreted as such. Therefore, we are
making a technical correction to the regulatory language at Sec.
485.635(e) to remove the words ``as direct services.''
N. Physician Self-Referral and Anti-Markup Issues
1. Exception for Incentive Payment and Shared Savings Programs (Sec.
411.357(x))
a. Introduction
In the CY 2009 PFS proposed rule (73 FR 38502), we proposed a new
exception to the physician self-referral law for incentive payment and
shared savings programs. The proposed exception covered various types
of hospital-sponsored pay-for-performance (P4P), shared savings (for
example, gainsharing), and similarly-styled programs that offer
financial incentives to physicians intended to foster high quality,
cost-effective care. The exception, as proposed, would provide more
flexibility than existing physician self-referral exceptions available
for such programs (73 FR 38548).
When establishing a new exception to the physician self-referral
law, we rely on the authority granted to us in section 1877(b)(4) of
the Act, which mandates that financial relationships permitted under an
exception, such as the types of compensation arrangements contemplated
by the proposed exception, not pose a risk of program or patient abuse.
As described more fully in the CY 2009 PFS proposed rule, in order to
ensure that we did not exceed this authority, the proposed exception
was targeted and relatively narrow. We acknowledged that it was
unlikely to cover as many arrangements as interested stakeholders would
like, and sought comments on ways that we might expand the proposed
exception without a risk of program or patient abuse.
We received approximately 55 timely public comment letters
regarding the proposed exception for incentive payment and shared
savings programs. The majority of commenters supported the
establishment of the following: (1) An exception for incentive payment
and shared savings programs; or (2) two exceptions--one for incentive
payment programs and one for shared savings programs. However, most of
these commenters urged us to finalize such an exception or exceptions
only if substantial modifications were made to the conditions proposed.
We also received a number of comment letters urging us not to finalize
an exception for incentive payment and shared savings programs, some of
which asserted that
[[Page 69794]]
we lack statutory authority to do so and contended that any such
exception necessarily would pose a risk of program or patient abuse.
As we stated in the CY 2009 PFS proposed rule (73 FR 38548):
In reviewing various programs and industry suggestions, we have
been struck by the considerable variety and complexity of existing
arrangements, and the likelihood of continued future innovation in
the structure and method of these programs. This variety and
complexity make it difficult to craft a ``one-size-fits-all'' set of
conditions that are sufficiently ``bright line'' to facilitate
compliance and enforceability, yet sufficiently flexible to permit
innovation without undue risk of program or patient abuse.
Our goal in establishing an excepti |
