Medicare Program; Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2011
Federal RegisterNov 29, 2010
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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, and 424
[CMS-1503-FC]
RIN 0938-AP79
Medicare Program; Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2011
AGENCY:
Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION:
Final rule with comment period.
SUMMARY:
This final rule with comment period addresses changes to the physician fee schedule and other Medicare Part B payment policies to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services. It finalizes the calendar year (CY) 2010 interim relative value units (RVUs) and issues interim RVUs for new and revised procedure codes for CY 2011. It also addresses, implements, or discusses certain provisions of both the Affordable Care Act (ACA) and the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA). In addition, this final rule with comment period discusses payments under the Ambulance Fee Schedule (AFS), the Ambulatory Surgical Center (ASC) payment system, and the Clinical Laboratory Fee Schedule (CLFS), payments to end-stage renal disease (ESRD) facilities, and payments for Part B drugs. Finally, this final rule with comment period also includes a discussion regarding the Chiropractic Services Demonstration program, the Competitive Bidding Program for durable medical equipment, prosthetics, orthotics, and supplies (CBP DMEPOS), and provider and supplier enrollment issues associated with air ambulances.
DATES:
Effective date:
These regulations are effective on January 1, 2011.
Comment date:
To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on January 3, 2011.
ADDRESSES:
In commenting, please refer to file code CMS-1503-FC. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.
You may submit comments in one of four ways (please choose only one of the ways listed):
1.
Electronically.
You may submit electronic comments on this regulation to
http://www.regulations.gov
. Follow the instructions for “submitting a comment.”
2.
By regular mail.
You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services,
Attention:
CMS-1503-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-1503-FC, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
4.
By hand or courier.
If you prefer, you may deliver (by hand or courier) your written comments before the close of the comment period to either of the following addresses: a. For delivery in Washington, DC—Centers for Medicare & Medicaid Services, Department of Health and Human Services, Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201
(Because access to the interior of the Hubert H. Humphrey Building is not readily available to persons without Federal government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.)
b. For delivery in Baltimore, MD—Centers for Medicare & Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850.
If you intend to deliver your comments to the Baltimore address, please call telephone number (410) 786-9994 in advance to schedule your arrival with one of our staff members.
Comments mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period.
FOR FURTHER INFORMATION CONTACT:
Sara Vitolo, (410) 786-5714, for issues related to malpractice RVUs.
Erin Smith, (410) 786-0763, for issues related to end-stage renal disease-related services for home dialysis.
Michael Moore, (410) 786-6830, for issues related to geographic practice cost indices.
Ken Marsalek, (410) 786-4502, for issues related to the physician practice information survey, the multiple procedure payment reduction, and payment for the technical component of pathology services.
Regina Walker-Wren, (410) 786-9160, for issues related to outpatient mental health add-on provision and increased payment for certified nurse-midwife services.
Elizabeth Truong, (410) 786-6005, or Sara Vitolo, (410) 786-5714, for issues related to potentially misvalued services.
Elizabeth Truong, (410) 786-6005, for issues related to the sustainable growth rate or anesthesia or physician fee schedule conversion factors.
Dorothy Shannon, (410) 786-3396, for issues related to outpatient therapy services.
Pamela West, (410) 786-2302, for issues related to payment for diabetes self-management training programs and kidney disease education services.
Ryan Howe, (410) 786-3355, for issues related to direct practice expense inputs and telehealth services.
Sara Vitolo, (410) 786-5714, for issues related to pulmonary rehabilitation services, application of skin substitutes, canalith repositioning, intranasal/oral immunization, and the refinement panel.
Roberta Epps, (410) 786-4503, for issues related to portable x-ray and bone density tests.
Chava Sheffield, (410) 786-2298, for issues related to equipment utilization rate assumption for advanced imaging services.
Chava Sheffield, (410) 786-2298, or Larry Chan, (410) 786-6864, for issues related the physician fee schedule practice expense methodology.
Stephanie Frilling, (410) 786-4507, or Erin Smith, (410) 786-0763, for issues related to the incentive payment programs for primary care and general surgery services, and payment for the annual wellness visit and preventive services.
Cheryl Gilbreath, (410) 786-5919, for issues related to payment for covered outpatient drugs and biologicals.
Roechel Kujawa, (410) 786-9111, for issues related to ambulance services.
Glenn McGuirk, (410) 786-5723, for clinical laboratory issues.
Randall Ricktor, (410) 786-4632, for Federally Qualified Health Center Issues.
Pauline Lapin, (410) 786-6883, for issues related to the chiropractic services demonstration BN issue.
Troy Barsky, (410) 786-8873, or Kristin Bohl, (410) 786-8680, for issues related to physician self-referral.
Troy Barsky, (410) 786-8873, or Fred Grabau (410) 786-0206, for issues related to timely filing rules.
Henry Richter, (410) 786-4562, or Lisa Hubbard, (410) 786-5472, for issues related to renal dialysis provisions and payments for end-stage renal disease facilities.
Diane Stern, (410) 786-1133, for issues related to the physician quality reporting initiative and incentives for e-prescribing.
Sheila Roman, (410) 786-6004, or Pamela Cheetham, 410-786-2259, for issues related to the Physician Resource Use Feedback Program and value-based purchasing.
Joel Kaiser, (410) 786-4499, for issues related to the DME provisions.
Sandra Bastinelli, (410) 786-3630, for issues related to provider and supplier enrollment issues.
Rebecca Cole, (410) 786-4497, for issues related to physician payment not identified above.
SUPPLEMENTARY INFORMATION:
Comment Subject Areas:
We will consider comments on the following subject areas discussed in this final rule with comment period that are received by the date and time indicated in the
DATES
section of this final rule with comment period:
(1) The interim final work, practice expense, and malpractice RVUs (including the direct practice expense (PE) inputs and the equipment utilization rate assumption, and the applicability of a multiple procedure payment reduction (MPPR)), for new and revised CY 2011 HCPCS codes. These codes and their CY 2011 interim final RVUs are listed in Addendum C to this final rule with comment period.
(2) The physician self-referral designated health services codes listed in Tables 98 and 99.
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 regulations impact appears throughout the preamble and, therefore, is not discussed exclusively in section XI. 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 (MP) 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
D. Public Comments Received in Response to the CY 2011 PFS Proposed Rule
II. Provisions of the Final Rule for the Physician Fee Schedule
A. Resource-Based Practice Expense (PE) Relative Value Units (RVUs)
1. Overview
2. Practice Expense Methodology
a. Direct Practice Expense
b. Indirect Practice Expense per Hour Data
c. Allocation of PE to Services
(i) Direct costs
(ii) Indirect costs
d. Facility and Nonfacility Costs
e. Services with Technical Components (TCs) and Professional Components (PCs)
f. Alternative Data Sources and Public Comments on Final Rule for 2010
g. PE RVU Methodology
(1) Setup File
(2) Calculate the Direct Cost PE RVUs
(3) Create the Indirect Cost PE RVUs
(4) Calculate the Final PE RVUs
(5) Setup File Information
(6) Equipment Cost per Minute
3. PE Revisions for CY 2011
a. Equipment Utilization Rate
b. HCPCS Code-Specific PE Issues
(1) Biohazard Bags
(2) PE Inputs for Professional Component (PC) Only and Technical Component (TC) Only Codes Summing to Global Only Codes
(3) Equipment Time Inputs for Certain Diagnostic Tests
(4) Cobalt-57 Flood Source
(5) Venom Immunotherapy
(6) Equipment Redundancy
(7) Equipment Duplication
(8) Establishing Overall Direct PE Supply Price Inputs Based on Unit Prices and Quantities
c. AMA RUC Recommendations in CY 2010 for Changes to Direct PE Inputs
(1) Electrogastrography and Esophageal Function Test
(2) 64-Slice CT Scanner and Software
(3) Breath Hydrogen Test
(4) Radiographic Fluoroscopic Room
(5) Cystometrogram
d. Referral of Existing CPT Codes for AMA RUC Review
e. Updating Equipment and Supply Price Inputs for Existing Codes
f. Other Issues
B. Malpractice Relative Value Units (RVUs)
1. Background
2. Malpractice RVUs for New and Revised Services Effective Before the Next 5-Year Review
3. Revised Malpractice RVUs for Selected Disc Arthroplasty Services
C. Potentially Misvalued Services Under the Physician Fee Schedule
1. Valuing Services Under the PFS
2. Identifying, Reviewing, and Validating the RVUs of Potentially Misvalued Services Under the PFS
a. Background
b. Progress in Identifying and Reviewing Potentially Misvalued Codes
c. Validating RVUs of Potentially Misvalued Codes
3. CY 2011 Identification and Review of Potentially Misvalued Services
a. Codes on the Multispecialty Points of Comparison List
b. Codes with Low Work RVUs Commonly Billed in Multiple Units Per Single Encounter
c. Codes with High Volume and Low Work RVUs
d. Codes with Site-of-Service-Anomalies
e. Codes with “23-hour” Stays
4. Expanding the Multiple Procedure Payment Reduction (MPPR) Policy to Additional Nonsurgical Services
a. Background
b. CY 2011 Expansion of the Imaging Technical Component MPPR Policy to Additional Combinations of Imaging Services
c. CY 2011 Expansion of the MPPR Policy to Therapy Services
5. High Cost Supplies
a. Background
b. Future Updates to the Prices of High-Cost Supplies
D. Geographic Practice Cost Indices (GPCIs)
1. Background
2. GPCI Update
a. Physician Work GPCIs
b. Practice Expense GPCIs
(1) The Affordable Care Act Requirements for PE GPCIs
(A) General Methodology for the CY 2011 GPCIs
(B) Phase-In of PE GPCIs
(C) Data Analysis
(D) Determining the PE GPCI Cost Share Weights
(E) PE GPCI Floor for Frontier States
(2) Summary of CY 2011 PE GPCIs
c. Malpractice GPCIs
d. Public Comments and CMS Responses on the Proposed 6th GPCI Update
e. Summary of Final CY 2011 GPCIs
3. Payment Localities
E. PFS Update for CY 2010: Rebasing and Revising of the Medicare Economic Index (MEI)
1. Background
2. Use of More Current Data
3. Rebasing and Revising Expense Categories in the MEI
a. Developing the Weights for Use in the MEI
b. Physician's Own Time
c. Physician's Practice Expenses
(1) Nonphysician Employee Compensation
(2) Office Expenses
(3) Professional Liability Insurance (PLI) Expense
(4) Medical Equipment Expenses
(5) Medical Supplies Expenses
(6) Other Professional Expenses
4. Selection of Price Proxies for Use in the MEI
a. Cost (Expense) Categories in the MEI
(1) Physician's Own Time (Physician Compensation)
(2) Nonphysician Employee Compensation
(3) Utilities
(4) Chemicals
(5) Paper
(6) Rubber and Plastics
(7) Telephone
(8) Postage
(9) All Other Services
(10) All Other Products
(11) Fixed Capital
(12) Moveable Capital
(13) Professional Liability Insurance (PLI)
(14) Medical Equipment
(15) Medical Materials and Supplies
(16) Other Professional Expenses
(b) Productivity Adjustment to the MEI
5. Results of Rebasing
6. Medicare Economic Index Technical Advisory Panel
7. Summaries of Comments and the Associated Responses
a. Timing of Rebasing and Revising the MEI
b. PPIS Data
c. Office Expenses
d. Purpose of the MEI
e. Technical Panel
f. Other
8. Adjustments to the RVU Shares To Match the Proposed Rebased MEI Weights
F. Allowed Expenditures for Physicians' Services and the Sustainable Growth Rate
1. Medicare Sustainable Growth Rate
2. Physicians' Services
3. Preliminary Estimate of the SGR for 2011
4. Revised Sustainable Growth Rate for 2010
5. Final Sustainable Growth Rate for 2009
6. Calculation of 2011, 2010, and 2009 Sustainable Growth Rates
a. Detail on the CY 2011 SGR
(1) Factor 1 Changes in Fees for Physicians' Services (Before Applying Legislative Adjustments) for CY 2011
(2) Factor 2 The Percentage Change in the Average Number of Part B Enrollees From CY 2010 to CY 2011
(3) Factor 3 Estimated Real Gross Domestic Product Per Capita Growth in 2011
(4) Factor 4 Percentage Change in Expenditures for Physicians' Services Resulting From Changes in Statute or Regulations in CY 2011 Compared With CY 2010
b. Detail on the CY 2010 SGR
(1) Factor 1 Changes in Fees for Physicians' Services (Before Applying Legislative Adjustments) for 2010
(2) Factor 2 The Percentage Change in the Average Number of Part B Enrollees from CY 2009 to CY 2010
(3) Factor 3 Estimated Real Gross Domestic Product Per Capita Growth in CY 2010
(4) Factor 4 Percentage Change in Expenditures for Physicians' Services Resulting From Changes in Statute or Regulations in CY 2010 Compared With CY 2009
c. Detail on the CY 2009 SGR
(1) Factor 1 Changes in Fees for Physicians' Services (Before Applying Legislative Adjustments) for 2009
(2) Factor 2 The Percentage Change in the Average Number of Part B Enrollees from CY 2008 to CY 2009
(3) Factor 3 Estimated Real Gross Domestic Product Per Capita Growth in CY 2009
(4) Factor 4 Percentage Change in Expenditures for Physicians' Services Resulting From Changes in Statute or Regulations in CY 2009 Compared With CY 2008
G. The Update Adjustment Factor (UAF)
1. Calculation under Current Law
H. Physician and Anesthesia Fee Schedule Conversion Factors for CY 2011
1. Physician Fee Schedule Update and Conversion Factor
a. CY 2011 PFS Update
b. CY 2011 PFS Conversion Factor
2. Anesthesia Conversion Factor
III. Code-Specific Issues for the PFS
A. Therapy Services
1. Outpatient Therapy Caps for CY 2011
2. Alternatives to Therapy Caps
a. Background
b. Current Activities
c. Potential Short-Term Approaches to Therapy Caps
B. Diabetes Self-Management Training (DSMT) Services (HCPCS Codes G0108 and G0109)
1. Background
2. Payment for DSMT Services
C. End-Stage Renal Disease Related Services for Home Dialysis (CPT code 90963, 90964, 90965, and 90966)
1. End-Stage Renal Disease Home Dialysis Monthly Capitation Payment Services (CPT codes 90963, 90964, 90965, and 90966)
2. Daily and Monthly ESRD-Related Services (CPT Codes 90951 through 90970)
D. Portable X-Ray Set-Up (HCPCS code Q0092)
E. Pulmonary Rehabilitation Services (HCPCS Code G0424)
F. Application of Tissue Cultured Skin Substitutes to Lower Extremities (HCPCS Codes G0440 and G0441)
G. Canalith Repositioning (CPT code 95992)
H. Intranasal/Oral Immunization Codes (CPT codes 90467, 90468, 90473, and 90474)
I. Refinement Panel Process
J. Remote Cardiac Monitoring Services (CPT codes 93012, 93229, 93268, and 93271)
IV. Medicare Telehealth Services for the Physician Fee Schedule
A. Billing and Payment for Telehealth Services
1. History
2. Current Telehealth Billing and Payment Policies
B. Requests for Adding Services to the List of Medicare Telehealth Services
C. Submitted Requests for Addition to the List of Telehealth Services for CY 2011
1. Individual KDE Services
2. Individual DSMT Services
3. Group KDE, MNT, DSMT, and HBAI Services
4. Initial, Subsequent, and Discharge Day Management Hospital Care Services
5. Initial, Subsequent, Discharge Day Management, and Other Nursing Facility Care Services
6. Neuropsychological Testing Services
7. Speech-Language Pathology Services
8. Home Wound Care Services
9. Other Issues
D. Summary of CY 2011 Telehealth Policies
E. Telehealth Originating Site Facility Fee Payment Amount Update
V. Addressing Interim Final Relative Value Units from CY 2010 and Establishing Interim Relative Value Units for CY 2011
A. Background
B. Addressing Interim Final RVUs from CY 2010
1. CY 2010 Interim Final Work RVUs Referred to the Refinement Panel
2. CY 2010 Interim Final RVUs for which Public Comments Were Received
a. Insertion of Breast Prosthesis (CPT code 19340)
b. Computed Tomographic Colonography (CPT code 74261)
c. Myocardial Perfusion Imaging (CPT codes 78451, 78452, 78453, and 78454)
d. Nerve Conduction Test (CPT code 95905)
e. Kidney Disease Education Services (HCPCS codes G0420 and G0421)
f. Excision of Soft Tissue and Bone Tumors (CPT codes 21011 through 21016, 21552, 21554 through 21558, 21930 through 21933, 21395, 21936, 22900 through 22905, 23071, 23073, 23075 through 23078, 23200, 23210, 23220, 24071, 24073, 24075 through 24077, 24079, 24150 through 24153, 25071, 25073, 25075 through 25078, 25170, 26111, 26113, 26115 through 26118, 26250, 26255, 26260, 26262, 27043, 27045, 27047 through 27049, 27059, 27075 through 27078, 27327 through 27329, 27337, 27339, 27364, 27365, 27615, 27616, 27618, 27619, 27632, 27634, 27619, 27645 through 27647, 28039, 28041, 28043, 28045 through 28047, 28171, 28173, and 28175)
g. Cryoablation of Prostate (CPT code 55873)
h. Urodynamics Studies (CPT Codes 51728 and 51729)
i. Coronary Computed Tomographic Angiography (CPT codes 75571, 75572, 75573, and 75574)
j. Adjacent Tissue Transfer or Rearrangement (CPT codes 14301 and 14302)
k. Insertion of a Temporary Prostatic Urethral Stent (CPT code 53855)
l. High Dose Rate Brachytherapy (CPT codes 77785, 77786, and 77787)
m. Injection of Facet Joint (CPT codes 64490, 64491, 64492, 64493, 64494, and 64495)
n. Knee Arthroscopy (CPT code 29870)
3. Status of Interim Final Work RVUs for Potentially Misvalued Site-of-Service Anomaly Codes from CY 2009 and CY 2010
4. Other New, Revised, or Potentially Misvalued Codes with CY 2010 Interim Final RVUs Not Specifically Discussed in the CY 2011 Final Rule with Comment Period
C. Establishment of Interim Final RVUs for CY 2011
1. Establishment of Interim Final Work RVUs for CY 2011
a. Background
b. CY 2011 Interim Final Work RVUs for New and Revised Codes
(i) CY 2011 New and Revised Codes that Do Not Represent Major New Comprehensive Services
(1) Excision and Debridement (CPT codes 11010, 11011, 11012, 11042, 11043, 11044, 11045, 11046, 11047, and 97598)
(2) Arthrodesis Including Discectomy (CPT code 22551)
(3) Strapping Lower Extremity (CPT codes 29540 and 29550)
(4) Paraesophageal Hernia Procedures (CPT codes 43333 and 43335)
(5) Vaginal Radiation Afterloading Apparatus for Clinical Brachytherapy (CPT codes 57155 and 57156)
(6) Vagus Nerve Stimulator (CPT codes 61885, 64568, 64569, and 64570)
(7) Ultrasound of Extremity (CPT codes 76881 and 76882)
(8) Evaluation of Fine Needle Aspirate (CPT code 88172)
(9) Immunization Administration (CPT code 90460 and 90461)
(10) Diabetic Retinopathy Imaging (CPT code 92228)
(11) Speech-Language Pathology Services (CPT codes 92508 and 92606)
(12) Sleep Testing (CPT codes 95806 and 95807)
(13) Subsequent Hospital Observation Care
(ii) Comprehensive Codes for a Bundle of Existing Component Services
(iii) Work Budget Neutrality for Clinical Categories of CPT Codes
c. CY 2011 Interim Final Work RVUs for Potentially Misvalued Codes
(1) Excision and Debridement (CPT codes 11043 and 11044)
(2) Strapping Lower Extremity (CPT code 29540)
(3) Control Nasal Hemorrhage (CPT code 30901)
(4) Cystourethroscopy (CPT codes 52281 and 52332)
(5) Vaginal Radiation Afterloading Apparatus for Clinical Brachytherapy (CPT code 51755)
(6) Obstetrical Care Codes (CPT codes 59440, 59410, 59510, 59515, 59610, 59614, 59618, and 59622)
(7) Vagus Nerve Stimulator (CPT code 61885)
(8) Transforaminal Epidural Injection (CPT code 64483)
(9) CT Thorax (CPT code 71250)
(10) CT Spine (CPT code 72125)
(11) CT Upper and CT Lower Extremity (CPT code 73200 and 73700)
(12) Radiation Treatment Management (CPT code 77427)
2. Establishment of Interim Final Direct PE Inputs for CY 2011
a. Background
b. CY 2011 Interim Final Direct PE Inputs for New, Revised, and Potentially Misvalued Codes
(1) General Equipment Time
(2) Equipment Time and Clinical Labor for Conscious Sedation
(3) Equipment Time for Add-On Codes
(4) Changes in Standard Uses of Certain Supplies
(5) New Supply and Equipment Items
(6) Endovascular Revascularization Stents
(7) Nasal/Sinus Endoscopy Supply and Equipment Items
3. Establishment of Interim Final Malpractice RVUs for CY 2011
VI. Provisions of the Affordable Care Act
A. Section 3002: Improvements to the Physician Quality Reporting System
B. Section 3003: Improvements to the Physician Feedback Program and Section 3007: Value-based payment modifier under the physician fee schedule
1. Background
2. Effect of the ACA of 2010 on the Program
3. Phase II Proposed Changes
4. Implementation of Sections 3003 and 3007 of ACA
5. Comments Sought on Specific Statistical Issues Related to ACA Sections 3003 and 3007
a. Risk Adjustment
b. Attribution
c. Benchmarking and Peer Groups
d. Cost and Quality Measures and Compositing Methods
C. Section 3102: Extension of the Work Geographic Index Floor and Revisions to the Practice Expense Geographic Adjustment under the Medicare Physician Fee Schedule, and Protections for Frontier States as amended by Section 10324
D. Section 3103: Extension of Exceptions Process for Medicare Therapy Caps
E. Section 3104: Extension of Payment for Technical Component of Certain Physician Pathology Services
F. Section 3105 and 10311: Extension of Ambulance Add-Ons
1. Amendment to Section 1834(l)(13) of the Act
2. Amendment to Section 146(b)(1) of MIPAA
3. Amendment to Section 1834(l)(12) of the Act
G. Section 3107: Extension of Physician Fee Schedule Mental Health Add-On
H. Section 3108: Permitting Physician Assistants to Order Post-Hospital Extended Care Services
I. Section 3111: Payment for Bone Density Tests
J. Section 3114: Improved Access for Certified Nurse-Midwife Services
K. Section 3122: Extension of Medicare Reasonable Costs Payments for Certain Clinical Diagnostic Laboratory Tests Furnished to Hospital Patients in Certain Rural Areas
L. Section 3134: Misvalued Codes Under the Physician Fee Schedule
M. Section 3135: Modification of Equipment Utilization Factor for Advanced Imaging Services
1. Adjustment in Practice Expense to Reflect Higher Presumed Utilization
2. Adjustment in Technical Component “Discount” on Single-Session Imaging to Consecutive Body Parts
N. Section 3136: Revision for Payment for Power-Driven Wheelchairs
1. Payment Rules for Power Wheelchairs
2. Revision of Payment Amounts for Power Wheelchairs
3. Elimination of Lump Sum Payment for Standard Power Wheelchairs
O. Section 3139: Payment for Biosimilar Biological Products
P. Section 3401: Revision of Certain Market Basket Updates and Incorporation of Productivity Improvements into Market Basket Updates That Do Not Already Incorporate Such Improvements
1. ESRD Market Basket Discussion
2. Productivity Adjustment regarding Ambulatory Surgical Center, Ambulance, Clinical Laboratory and DMEPOS Fee Schedules
a. Ambulatory Surgery Centers (ASCs)
b. Ambulance Fee Schedule (AFS)
c. Clinical Lab Fee Schedule
d. DMEPOS Fee Schedule
Q. Section 4103: Medicare Coverage of Annual Wellness Visit Providing a Personalized Prevention Plan
1. Background and Statutory Authority
a. Medicare Coverage of Preventive Physical Examinations and Routine Checkups
b. Requirements for Coverage of an Annual Wellness Visit
2. Regulatory Revisions—Summary of Proposed Rule and Comments
a. Revisions to § 411.15, Particular Services Excluded from Coverage
b. Revisions to Part 410, Subpart B—Medical and Other Health Services
(1) Definitions
(2) Requirements of the First Annual Wellness Visit Providing Personalized Prevention Plan Services
(3) Requirements of Subsequent Annual Wellness Visits Providing Personalized Prevention Plan Services
3. Payment for the Annual Wellness Visit Providing Personalized Prevention Plan Services (PPPS)
R. Section 4104: Removal of Barriers to Preventive Services in Medicare
1. Definition of “Preventive Services”
2. Deductible and Coinsurance for Preventive Services
3. Extension of Waiver of Deductible to Services Furnished in Connection With or in Relation to a Colorectal Cancer Screening Test that Becomes Diagnostic or Therapeutic
S. Section 5501: Expanding Access to Primary Care Services and General Surgery Services
1. Section 5501(a): Incentive Payment Program for Primary Care Services
a. Background
b. Primary Care Incentive Payment Program (PCIP)
(1) Primary Specialty Designation
(2) Primary Care Percentage Calculation
(3) Period of Claims Data for Primary Care Percentage Calculation
(4) PCIP Payment
(5) Summary of Final PCIP Policies
2. Section 5501(b): Incentive Payment Program for Major Surgical Procedures Furnished in Health Professional Shortage Areas
a. Background
b. HPSA Surgical Incentive Payment Program (HSIP)
3. Sections 5501(a) and (b) of the Affordable Care Act and Payment for Critical Access Hospital Professional Services Under the Optional Method
T. Section 6003: Disclosure Requirements for In-Office Ancillary Services Exception to the Prohibition on Physician Self-Referral for Certain Imaging Services
1. Background
2. Disclosure Requirement
a. Services the Trigger the Disclosure Requirement
b. General Disclosure Requirements
c. List of Alternate Suppliers
d. Documentation of Disclosure
e. Effective Date
f. Other comments
U. Section 6404: Maximum Period for Submission of Medicare Claims Reduced to Not More than 12 Months
1. Background
2. Provisions of ACA
V. Section 6410 of the Affordable Care Act and Section 154 of MIPPA: Adjustments to the Metropolitan Statistical Areas (MSA) for Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Competitive Acquisition Program
1. Background
2. Subdividing Large MSAs under Round 2
3. Exclusions of Certain Areas after Round 2 and Prior to 2015
4. Expansion of Round 2
W. Section 10501(i)(3): Collection of HCPCS data for Development and Implementation of a Prospective Payment System for the Medicare Federally Qualified Health Center Program
VII. Other Provisions of the Final Rule
A. Part B Drug Payment: Average Sales Price (ASP) Issues
1. “Carry Over” ASP
2. Partial Quarter ASP Data
3. Determining the Payment Amount for Drugs and Biologicals Which Include Intentional Overfill
4. WAMP/AMP
5. AMP Threshold and Price Substitutions
6. Out of Scope Comments
B. Ambulance Fee Schedule: Policy for Reporting Units when Billing for Ambulance Fractional Mileage
1. History of Medicare Ambulance Services
a. Statutory Coverage of Ambulance Services
b. Medicare Regulations for Ambulance Services
2. Mileage Reporting—Summary of the Provisions of the CY 2011 Proposed Rule
a. Background and Current Process for Reporting Ambulance Mileage
b. Concerns Regarding the Potential for Inaccuracies in Reporting Units and Associated Considerations
c. Billing of Fractional Units for Mileage
3. Analysis of and Responses to Public Comments
a. Basis for Reconsideration of the Ambulance Mileage Reporting Requirements
b. Appropriateness of Fractional Mileage Reporting Policy
(1) Financial Impact of Fractional Mileage Policy
c. Administrative Impact
(2) Technical and Other Considerations
(A) Ability to Measure Fractional Miles
(B) Ambulance Provider versus Supplier Billing
(C) Billing Software
(D) Enforcement and Compliance
(E) Air Ambulance
(F) Miscellaneous Comments
4. Applicability of the Fractional Billing Policy to Other Services
5. Final Fractional Mileage Billing Policy
C. Clinical Laboratory Fee Schedule: Signature on Requisition
D. Discussion of Budget Neutrality for the Chiropractic Services Demonstration
E. Provisions Related to Payment for Renal Dialysis Services Furnished by End-Stage Renal Disease (ESRD) Facilities
(1) Update to the Drug Add-on Adjustment to the Composite Rate
(2) Estimating Per Patient Growth
(3) Update to the Drug Add-on Adjustment
(4) Update to the Geographic Adjustments to the Composite Rate
(5) Updates to Core-Based Statistical Area (CBSA) Definitions
(6) Updated Wage Index Values
(7) Wage index Values for Areas With No Hospital Data
(8) Reduction to the ESRD Wage Index Floor
(9) Budget Neutrality Adjustment
(10) ESRD Wage Index Tables
F. Issues Related to the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA)
1. Section 131: Physician Payment, Efficiency, and Quality Improvements—Physician Quality Reporting System
a. Program Background and Statutory Authority
b. Incentive Payments for the 2011 Physician Quality Reporting System
c. 2011 Reporting Periods for Individual Eligible Professionals
d. 2011 Physician Quality Reporting System Reporting Mechanisms for Individual Eligible Professionals
(1) Final Requirements for Individual Eligible Professionals Who Choose the Claims-based Reporting Mechanism
(2) Final Requirements for Individual Eligible Professionals Who Choose the Registry-based Reporting Mechanism
(3) Final Requirements for Individual Eligible Professionals Who Choose the EHR based Reporting Mechanism
(4) Final Qualification Requirements for Registries
(5) Final Qualification Requirements for EHR Vendors and Their Products
e. Criteria for Satisfactory Reporting of Individual Quality Measures for Individual Eligible Professionals
f. Criteria for Satisfactory Reporting Measures Groups for Individual Eligible Professionals
g. Reporting Option for Satisfactory Reporting on Quality Measures by Group Practices
(1) Background and Authority
(2) Definition of “Group Practice”
(3) Process for Physician Group Practices to Participate as Group Practices and Criteria for Satisfactory Reporting
A. Group Practice Reporting Option for Physician Group Practices with 200 or More NPIs GPRO I
B. Group Practice Reporting Option for Group Practices of 2-199 NPIs—GPRO-II
h. Statutory Requirements and Other Considerations for 2011 Physician Quality Reporting System Measures
(1) Statutory Requirements for 2011 Physician Quality Reporting System Measures
(2) Other Considerations for 2011 Physician Quality Reporting System Measures
(3) Summary of Comments and Responses
i. The Final 2011 Physician Quality Reporting System Quality Measures for Individual Eligible Professionals
(1) 2011 Individual Quality Measures Selected From the 2010 Physician Quality Reporting System Quality Measures Set Available for Claims based Reporting and Registry-based Reporting
(2) 2011 Individual Quality Measures Selected From the 2010 Physician Quality Reporting System Quality Measures Set Available for Registry-based Reporting Only
(3) New Individual Quality Measures for 2011
(4) 2011 Measures Available for EHR-based Reporting
(5) Measures Proposed for Inclusion in 2011 Measures Groups
j. 2011 Physician Quality Reporting System Quality Measures for Group Practices Selected to Participate in the Group Practice Reporting Option (GPRO I)
k. Public Reporting of Physician Quality Reporting System Data
l. Other Relevant ACA Provisions
(1) Section 3002 (b)—Incentive Payment Adjustment for Quality Reporting
(2) Section 3002(c)—Maintenance of Certification Programs and Section 10327 Improvements to the Physician Quality Reporting System
(3) Section 3002(d)—Integration of Physician Quality Reporting and EHR Reporting
(4) Section 3002(e)—Feedback
(5) Section 3002(f)—Appeals
2. Section 132: Incentives for Electronic Prescribing (eRx)- The Electronic Prescribing Incentive Program
a. Program Background and Statutory Authority
b. The 2011 eRx Incentive
(1) The 2011 Reporting Period for the eRx Incentive Program
(2) Criteria for Determination of Successful Electronic Prescriber for Eligible Professionals
(A) Reporting the Electronic Prescribing Measure
(B) The Reporting Denominator for the Electronic Prescribing Measure
(C) Qualified Electronic Prescribing System—Required Functionalities and Part D eRx Standards
(D) The Reporting Numerator for the Electronic Prescribing Measure
(E) Criteria for Successful Reporting of the Electronic Prescribing Measure
(3) Determination of the 2011 Incentive Payment Amount for Individual Eligible Professionals Who Are Successful Electronic Prescribers
(4) Reporting Option for Satisfactory Reporting of the Electronic Prescribing Measure by Group Practices
(A) Definition of “Group Practice”
(B) Process for Group Practices to Participate as Group Practices and Criteria for Successful Reporting of the Electronic Prescribing Measure by Group Practices
c. The 2012 eRx Payment Adjustment
(1) The eRx Payment Adjustment Reporting Period
(2) Criteria for Determining Applicability of the 2012 eRx Payment Adjustment to Individual Eligible Professionals
(3) Criteria for Determining Applicability of the 2012 eRx Payment Adjustment to Group Practices
(4) Significant Hardship Exemption
d. The 2013 eRx Payment Adjustment
e. Public Reporting of Names of Successful Electronic Prescribers
G. DMEPOS Provisions
1. Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program (CBP)
a. Legislative and Regulatory History of DMEPOS CBP
b. Implementation of a National Mail Order DMEPOS Competitive Bidding Program (CBP) for Diabetic Testing Supplies
(1) Future Competitions for Diabetic Testing Supplies
(2) Definition of Mail Order Item
(3) Special Rule in Case of Competition for Diabetic Testing Strips
(4) Anti-switching Rule in Case of Competition for Diabetic Test Strips
c. Off-the-Shelf (OTS) Orthotics Exemption
d. Grandfathering Rules Resulting in Additional Payments to Contract Suppliers under the DMEPOS Competitive Bidding Program (CBP)
e. Appeals Process
(1) Purpose and Definitions: (§ 414.402)
(2) Applicability
(3) Contract Termination
(4) Notice of Termination
(5) Corrective Action Plan
(6) Right to Request a Hearing by the CBIC Hearing Officer (HO)
(7) Scheduling of the Hearing
(8) Burden of Proof
(9) Role of the Hearing Officer (HO)
(10) CMS's Final Determination
(11) Effective Date of the Contract Termination
(12) Effect of Contract Termination
2. Changes to Payment Rules for Oxygen and Oxygen Equipment
a. Background
b. Furnishing Oxygen Equipment after the 36-Month Rental Period (CAP)
c. Furnishing Oxygen Equipment during the 36-Month Rental Period (CAP)
H. Provider and Supplier Enrollment Issue: Air Ambulance Provision
I. Technical Corrections
1. Physical Therapy, Occupational Therapy and Speech-language Pathology
2. Scope of Benefits
J. Physician Self-Referral Prohibition: Annual Update to the List of CPT/HCPCS Codes
1. General
2. Annual Update to the Code List
a. Background
b. Response to Comments
c. Revisions Effective for 2011
VIII. Waiver of Proposed Rulemaking and Delay in Effective Date
IX. Collection of Information Requirements
A. ICRs Regarding Diagnostic X-ray Tests, Diagnostic Laboratory Tests, and Other Diagnostic Tests: Conditions (§ 410.32)
B. ICRs Regarding General Exceptions to the Referral Prohibition Related to Both Ownership/Investment and Compensation (§ 411.355)
C. ICRs Regarding Appeals Process for Termination of Competitive Bidding Contract (§ 414.423)
D. ICRs Regarding Additional Provider and Supplier Requirements for Enrolling and Maintaining Active Enrollment status in the Medicare Program (§ 424.516)
E. Additional Information Collection Requirements
1. Part B Drug Payment
2. Physician Quality Reporting Initiative (PQRI)
3. Electronic Prescribing (eRx) Incentive Program
X. Response to Comments
XI. Regulatory Impact Analysis
A. RVU Impacts
1. Resource Based Work, PE, and Malpractice RVUs
2. CY 2011 PFS Impact Discussion
a. Changes in RVUs
b. Combined Impact
B. Geographic Practice Cost Indices (GPCIs)
C. Rebasing and Revising of the MEI
D. The Affordable Care Act Provisions
1. Section 3002: Improvements to the Physician Quality Reporting System
2. Sections 3003 and 3007: Improvements to the Physician Feedback Program and Value-Based Payment Under the Physician Fee Schedule
2. Section 3103: Extension of Exceptions Process for Medicare Therapy Caps
3. Section 3102: Extension of the Work Geographic Index Floor and Revisions to the Practice Expense Geographic Adjustment under the Medicare Physician Fee Schedule, and Protections for Frontier States as amended by Section 10324
4. Section 3103: Extension of Exceptions Process for Medicare Therapy Caps
5. Section 3104: Extension of Payment for Technical Component of Certain Physician Pathology Services
6. Sections 3105 and 10311: Extension of Ambulance Add-Ons
7. Section 3107: Extension of Physician Fee Schedule Mental Health Add-On
8. Section 3108: Permitting Physician Assistants to Order Post-Hospital Extended Care Services
9. Section 3111: Payment for Bone Density Tests
10. Section 3114: Improved Access for Certified Nurse-Midwife Services
11. Section 3122: Extension of Medicare Reasonable Costs Payments for Certain Clinical Diagnostic Laboratory Tests Furnished to Hospital Patients in Certain Rural Areas
12. Section 3134: Misvalued Codes Under the PFS
13. Section 3135: Modification of Equipment Utilization Factor For Advanced Imaging Services
14. Section 3136: Revisions in Payments for Power Wheelchairs
15. Section 3139: Payment for Biosimilar Biological Products
16. Section 3401: Revisions of Certain Market Basket Updates and Incorporation of Productivity Adjustments
17. Section 4103: Medicare Coverage of Annual Wellness Visit Providing a Personalized Prevention Plan
18. Section 4104: Removal of Barriers to Preventive Services in Medicare
19. Section 5501: Expanding Access to Primary Care Services and General Surgery Services
20. Section 6003: Disclosure Requirements for In-office Ancillary Services Exception to the Prohibition of Physician Self-referral for Certain Imaging Services
21. Section 6404: Maximum Period for Submission of Medicare Claims Reduced to Not More Than 12 Months
22. Section 6410 of Patient Accountability and Affordable Care Act and Section 154 of MIPPA: Adjustments to the Metropolitan Statistical Areas (MSA) for Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Competitive Acquisition Program
23. Section 10501(i)(3): Collection of HCPCS Data for the Development and Implementation of a Prospective Payment System for the Medicare FQHC Program
E. Other Provisions of the Proposed Regulation
1. Part B Drug Payment: ASP Issues
2. Ambulance Fee Schedule: Proposed Policy for Reporting Units when Billing for Ambulance Fractional Mileage
3. Chiropractic Services Demonstration
4. Renal Dialysis Services Furnished by ESRD Facilities
5. Section 131(b) of the MIPPA: Physician Payment, Efficiency, and Quality Improvements—Physician Quality Reporting System
6. Section 132 of the MIPPA: Incentives for Electronic Prescribing (eRx)—The eRx Incentive Program
7. Durable Medical Equipment-Related Issues
a. Off-the-Shelf (OTS) Orthotics Exemption
b. Changes to Payment for Oxygen Equipment
c. Diabetic Testing Supplies
d. Metropolitan Statistical Areas
8. Air Ambulance
F. Alternatives Considered
G. Impact on Beneficiaries
H. Accounting Statement
Regulations Text
Addendum A—Explanation and Use of Addendum B
Addendum B—Relative Value Units and Related Information Used In Determining Medicare Payments for CY 2011
Addendum C—Codes With Interim RVUS
Addendum D—Final 2011 Geographic Adjustment Factors (GAFS)
Addendum E—Final 2011****Geographic Practice Cost Indicies (GPCIS) By State and Medicare Locality
Addendum F—CY 2011 Diagnostic Imaging Services Subject To The Multiple Procedure Payment Reduction
Addendum G—CPT/HCPCS Imaging Codes Defined By Section 5102(B) of the DRA
Addendum H—CY 2011 “Always Therapy” Services* Subject to the Multiple Procedure Payment Reduction
Addendum I—[Reserved]
Addendum J—List of CPT1/HCPCS Codes Used to Define Certain Designated Health Service Categories
2
Under Section 1877 of the Social Security Act Effective January 1, 2011
Addendum K—CY 2011 ESRD Wage Index For Urban Areas Based On CBSA Labor Market Areas
Addendum L— CY 2011 Wage Index For Rural Areas Based On CBSA Labor Market Areas
Acronyms
In addition, because of the many organizations and terms to which we refer by acronym in this proposed rule, we are listing these acronyms and their corresponding terms in alphabetical order below:
AA Anesthesiologist assistant
AACVPR American Association of Cardiovascular and Pulmonary Rehabilitation
AANA American Association of Nurse Anesthetists
ABMS American Board of Medical Specialties
ABN Advanced Beneficiary Notice
ACA “Affordable Care Act”
ACC American College of Cardiology
ACGME Accreditation Council on Graduate Medical Education
ACLS Advanced cardiac life support
ACP American College of Physicians
ACR American College of Radiology
ACS American Community Survey
AED Automated external defibrillator
AFROC Association of Freestanding Radiation Oncology Centers
AFS Ambulance Fee Schedule
AHA American Heart Association
AHFS-DI American Hospital Formulary Service-Drug Information
AHRQ [HHS] Agency for Healthcare Research and Quality
AMA American Medical Association
AMA-DE American Medical Association Drug Evaluations
AACE American Association of Clinical Endocrinologists
AADE American Association of Diabetes Educators
AMP Average manufacturer price
AO Accreditation organization
AOA American Osteopathic Association
APA American Psychological Association
APC Administrative Procedures Act
APTA American Physical Therapy Association
ARRA American Recovery and Reinvestment Act (Pub. L. 111-5)
ASC Ambulatory surgical center
ASP Average sales price
ASRT American Society of Radiologic Technologists
ASTRO American Society for Therapeutic Radiology and Oncology
ATA American Telemedicine Association
AWP Average wholesale price
AWV Annual Wellness Visit
BBA Balanced Budget Act of 1997 (Pub. L. 105-33)
BBRA [Medicare, Medicaid and State Child Health Insurance Program] Balanced Budget Refinement Act of 1999 (Pub. L. 106-113)
BPM Benefit Policy Manual
BIPA Medicare, Medicaid, and SCHIP Benefits Improvement Protection Act of 2000 (Pub. L. 106-554)
BLS Bureau of Labor Statistics
BN Budget neutrality
BPM Benefit Policy Manual
CABG Coronary artery bypass graft
CAD Coronary artery disease
CAH Critical access hospital
CAHEA Committee on Allied Health Education and Accreditation
CAP Competitive acquisition program
CARE Continuity Assessment Record and Evaluation
CBIC Competitive Bidding Implementation Contractor
CBP Competitive Bidding Program
CBSA Core-Based Statistical Area
CDC Centers for Disease Control and Prevention
CEM Cardiac Event Monitoring
CF Conversion factor
CFC Conditions for Coverage
CFR Code of Federal Regulations
CKD Chronic kidney disease
CLFS Clinical laboratory fee schedule
CMA California Medical Association
CMD Contractor Medical Director
CMHC Community mental health center
CMP Civil money penalty
CMS Centers for Medicare & Medicaid Services
CNS Clinical nurse specialist
CoP Condition of participation
COPD Chronic obstructive pulmonary disease
CORF Comprehensive Outpatient Rehabilitation Facility
COS Cost of service
CPEP Clinical Practice Expert Panel
CPI Consumer Price Index
CPI-U Consumer price index for urban consumers
CPR Cardiopulmonary resuscitation
CPT [Physicians] Current Procedural Terminology (4th Edition, 2002, copyrighted by the American Medical Association)
CR Cardiac rehabilitation
CRNA Certified registered nurse anesthetist
CRP Canalith repositioning
CRT Certified respiratory therapist
CSW Clinical social worker
CT Computed Tomography
CTA Computed Tomography Angography
CSC Computer Sciences Corporation
CWF Common Working File
CY Calendar year
DEA Drug Enforcement Agency
DOTPA Development of Outpatient Therapy Alternatives
DHS Designated health services
DHHS Department of Health and Human Services
DME Durable medical equipment
DMEPOS Durable medical equipment, prosthetics, orthotics, and supplies
DOQ Doctors Office Quality
DOS Date of service
DRA Deficit Reduction Act of 2005 (Pub. L. 109-171)
DSMT Diabetes self-management training
EGC Electrocardiogram
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
eRx Electronic Prescribing
ESO Endoscopy Supplies
ESRD End-stage renal disease
FAA Federal Aviation Administration
FAX Facsimile
FDA Food and Drug Administration (HHS)
FFS Fee-for-service
FOTO Focus On Therapeutic Outcomes
FQHC Federally Qualified Health Center
FR
Federal Register
GAF Geographic adjustment factor
GAO General Accounting Office
GEM Generating Medicare [Physician Quality Performance Measurement Results]
GFR Glomerular filtration rate
GPRO Group Practice Reporting Option
GPO Group purchasing organization
GPCI Geographic practice cost index
GPS Geographic Positioning System
GSA General Services Administration
HAC Hospital-acquired conditions
HBAI Health and behavior assessment and intervention
HCC Hierarchal Condition Category
HCPAC Health Care Professional Advisory Committee
HCPCS Healthcare Common Procedure Coding System
HCRIS Healthcare Cost Report Information System
HEMS Helicopter Emergency Medical Services
HDRT High dose radiation therapy
HH PPS Home Health Prospective Payment System
HHA Home health agency
HHRG Home health resource group
HHS [Department of] Health and Human Services
HIPAA Health Insurance Portability and Accountability Act of 1996 (Pub. L. 104-191)
HIT Health information technology
HITECH Health Information Technology for Economic and Clinical Health Act (Title IV of Division B of the Recovery Act, together with Title XIII of Division A of the Recovery Act)
HITSP Healthcare Information Technology Standards Panel
HIV Human immunodeficiency virus
HOPD Hospital outpatient department
HPSA Health Professional Shortage Area
HRA Health Risk Assessment
HRSA Health Resources Services Administration (HHS)
HSIP HPSA Surgical Incentive Program
HUD Housing and Urban Development
IACS Individuals Access to CMS Systems
ICD International Classification of Diseases
ICF Intermediate care facilities
ICF International Classification of Functioning, Disability and Health
ICR Intensive cardiac rehabilitation
ICR Information collection requirement
IDTF Independent diagnostic testing facility
IGI IHS Global Insight, Inc.
IFC Interim final rule with comment period
IMRT Intensity-Modulated Radiation Therapy
IOM Internet Only Manual
IPCI indirect practice cost index
IPPE Initial preventive physical examination
IPPS Inpatient prospective payment system
IRS Internal Revenue Service
ISO Insurance services office
IVD Ischemic Vascular Disease
IVIG Intravenous immune globulin
IWPUT Intra-service work per unit of time
TJC Joint Commission
JRCERT Joint Review Committee on Education in Radiologic Technology
KDE Kidney disease education
LCD Local coverage determination
MA Medicare Advantage
MA-PD Medicare Advantage-Prescription Drug Plans
MAC Medicare Administrative Contractor
MAV Measure Applicability Validation
MCMP Medicare Care Management Performance
MCP Monthly Capitation Payment
MDRD Modification of Diet in Renal Disease
MedCAC Medicare Evidence Development and Coverage Advisory Committee (formerly the Medicare Coverage Advisory Committee (MCAC))
MedPAC Medicare Payment Advisory Commission
MGMA Medical Group Management Association
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
MOC Maintenance of certification
MP Malpractice
MPC Mulitspecialty Points of Comparison
MPPR Multiple procedure payment reduction
MQSA Mammography Quality Standards Act of 1992 (Pub. L. 102-539)
MRA Magnetic Resonance Angiography
MRI Magnetic Resonance Imaging
MSA Metropolitan Statistical Area
MSP Medicare Secondary Payer
MUE Medically Unlikely Edit
NCCI National Correct Coding Initiative
NCD National Coverage Determination
NCQA National Committee for Quality Assurance
NCQDIS National Coalition of Quality Diagnostic Imaging Services
NDC National drug code
NF Nursing facility
NISTA National Institute of Standards and Technology Act
NP Nurse practitioner
NPI National Provider Identifier
NPP Nonphysician practitioner
NQF National Quality Forum
NBRC National Board for Respiratory Care
NRC Nuclear Regulatory Commission
NTSB National Transportation Safety Board
NUBC National Uniform Billing Committee
OACT [CMS] Office of the Actuary
OBRA Omnibus Budget Reconciliation Act
OCR Optical Character Recognition
ODF Open door forum
OES Occupational Employment Statistics
OGPE Oxygen generating portable equipment
OIG Office of Inspector General
OMB Office of Management and Budget
ONC [HHS] Office of the National Coordinator for Health IT
OPPS Outpatient prospective payment system
OSCAR Online Survey and Certification and Reporting
PA Physician assistant
PACE Program of All-inclusive Care for the Elderly
PAT Performance assessment tool
PC Professional component
PCI Percutaneous coronary intervention
PCIP Primary Care Incentive Payment Program
PDP Prescription drug plan
PE Practice expense
PE/HR Practice expense per hour
PEAC Practice Expense Advisory Committee
PECOS Provider Enrollment Chain and Ownership System
PERC Practice Expense Review Committee
PFS Physician Fee Schedule
PGP [Medicare] Physician Group Practice
PHI Protected health information
PHP Partial hospitalization program
PIM [Medicare] Program Integrity Manual
PLI Professional liability insurance
POA Present on admission
POC Plan of care
PPI Producer price index
PPIS Physician Practice Information Survey
PPPS Personalized Prevention Plan Services
PPS Prospective payment system
PPTA Plasma Protein Therapeutics Association
PQRI Physician Quality Reporting Initiative
PR Pulmonary rehabilitation
PRA Paperwork Reduction Act
PSA Physician scarcity areas
PT Physical therapy
PTCA Percutaneous transluminal coronary angioplasty
PTA Physical therapy assistant
PVBP Physician and Other Health Professional Value-Based Purchasing Workgroup
QDCs (Physician Quality Reporting System) Quality Data Codes
RA Radiology assistant
RAC Medicare Recovery Audit Contractor
RBMA Radiology Business Management Association
RFA Regulatory Flexibility Act
RHC Rural health clinic
RHQDAPU Reporting Hospital Quality Data Annual Payment Update Program
RIA Regulatory impact analysis
RN Registered nurse
RNAC Reasonable net acquisition cost
RPA Radiology practitioner assistant
RRT Registered respiratory therapist
RUC [AMAs Specialty Society] Relative (Value) Update Committee
RVRBS Resource-Based Relative Value Scale
RVU Relative value unit
SBA Small Business Administration
SCHIP State Children's Health Insurance Programs
SDW Special Disability Workload
SGR Sustainable growth rate
STATS Short Term Alternatives for Therapy Services
SLP Speech-language pathology
SMS [AMAs] Socioeconomic Monitoring System
SNF Skilled nursing facility
SOR System of record
SRS Stereotactic radiosurgery
SSA Social Security Administration
SSI Social Security Income
STARS Services Tracking and Reporting System
STATS Short Term Alternative Therapy Services
TC Technical Component
TIN Tax identification number
TRHCA Tax Relief and Health Care Act of 2006 (Pub. L. 109-432)
TTO Transtracheal oxygen
UAF Update Adjustment Factor
UPMC University of Pittsburgh Medical Center
URAC Utilization Review Accreditation Committee
USDE United States Department of Education
USP-DI United States Pharmacopoeia-Drug Information
VA Veterans Administration
VBP Value-based purchasing
WAC Wholesale Acquisition Cost
WAMP Widely available market price
WHO World Health Organization
CPT (Current Procedural Terminology) Copyright Notice
Throughout this final rule with comment period, we use CPT codes and descriptions to refer to a variety of services. We note that CPT codes and descriptions are copyright 2010 American Medical Association. All Rights Reserved. CPT is a registered trademark of the American Medical Association (AMA). Applicable FARS/DFARS apply.
I. Background
Since January 1, 1992, Medicare has paid for physicians' services under section 1848 of the Social Security Act (the Act), “Payment for Physicians' Services.” The Act requires that payments under the physician fee schedule (PFS) are based on national uniform relative value units (RVUs) based on the relative resources used in furnishing a service. Section 1848(c) of the Act requires that national RVUs be established for physician work, practice expense (PE), and malpractice expense. Before the establishment of the resource-based relative value system, Medicare payment for physicians' services was based on reasonable charges. We note that throughout this final rule with comment period, unless otherwise noted, the term “practitioner” is used to describe both physicians and eligible nonphysician practitioners (such as physician assistants, nurse practitioners, clinical nurse specialists, certified nurse-midwives, psychologists, or social workers) that are permitted to furnish and bill Medicare under the PFS for the services under discussion.
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, with appropriate adjustment of the conversion factor (CF), in a manner to assure that fee schedule amounts for anesthesia services are consistent with those for other services of comparable value. We established a separate CF for anesthesia services, and we continue to utilize time units as a factor in determining payment for these services. As a result, there is a separate payment methodology for anesthesia services.
We establish physician work RVUs for new and revised codes based on our review of 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), enacted on October 31, 1994, amended section 1848(c)(2)(C)(ii) of the Act and required us to develop resource-based PE RVUs for each physicians' service beginning in 1998. We were to consider general categories of expenses (such as office rent and wages of personnel, but excluding malpractice expenses) comprising PEs.
Section 4505(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33), amended section 1848(c)(2)(C)(ii) of the Act to delay implementation of the resource-based PE RVU system until January 1, 1999. In addition, section 4505(b) of the BBA provided for a 4-year transition period from charge-based PE RVUs to resource-based RVUs.
We established the resource-based PE RVUs for each physicians' 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 physicians' 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 (HOPD). The difference between the facility and nonfacility RVUs reflects the fact that a facility typically receives separate payment from Medicare for its costs of providing the service, apart from payment under the PFS. The nonfacility RVUs reflect all 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 the calendar year (CY) 2007 PFS final rule with comment period (71 FR 69624), we revised the methodology for calculating direct PE RVUs from the top-down to the bottom-up methodology beginning in CY 2007 and provided for a 4-year transition for the new PE RVUs under this new methodology. This transition ended in CY 2010 and direct PE RVUs are calculated in CY 2011 using this methodology, unless otherwise noted.
In the CY 2010 PFS final rule with comment period, we updated the PE/hour (HR) data that are used in the
calculation of PE RVUs for most specialties (74 FR 61749). For this update, we used the Physician Practice Information Survey (PPIS) conducted by the AMA. The PPIS is a multispecialty, nationally representative, PE survey of both physicians and nonphysician practitioners (NPPs) using a survey instrument and methods highly consistent with those of the SMS and the supplemental surveys used prior to CY 2010. We note that in CY 2010, for oncology, clinical laboratories, and independent diagnostic testing facilities (IDTFs), we continued to use the supplemental survey data to determine PE/HR values (74 FR 61752).
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 CY 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 Five-Year Review of the physician work RVUs was published on November 22, 1996 (61 FR 59489) and was effective in 1997. The second Five-Year Review was published in the CY 2002 PFS final rule with comment period (66 FR 55246) and was effective in 2002. The third Five-Year Review of 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 Five-Year Review of physician work RVUs were addressed in the CY 2008 PFS final rule with comment period (72 FR 66360).) The fourth Five-Year Review of physician work RVUs was initiated in the CY 2010 PFS final rule with comment period where we solicited candidate codes from the public for this review (74 FR 61941). Changes due to the fourth Five-Year Review of physician work RVUs will be effective January 1, 2012.
In 1999, the AMA RUC established the Practice Expense Advisory Committee (PEAC) for the purpose of refining the direct PE inputs. Through March 2004, the PEAC provided recommendations to CMS for over 7,600 codes (all but a few hundred of the codes currently listed in the AMAs Current Procedural Terminology (CPT) codes). As part of the CY 2007 PFS final rule with comment period (71 FR 69624), we implemented a new bottom-up methodology for determining resource-based PE RVUs and transitioned the new methodology over a 4-year period. A comprehensive review of PE was undertaken prior to the 4-year transition period for the new PE methodology from the top-down to the bottom-up methodology, and this transition was completed in CY 2010. In CY 2010, we also incorporated the new PPIS data to update the specialty-specific PE/HR data used to develop PE RVUs. Therefore, the next Five-Year Review of PE RVUs will be addressed in CY 2014.
In the CY 2005 PFS final rule with comment period (69 FR 66236), we implemented the first Five-Year Review of the MP RVUs (69 FR 66263). Minor modifications to the methodology were addressed in the CY 2006 PFS final rule with comment period (70 FR 70153). The second Five-Year Review and update of resource-based malpractice RVUs was published in the CY 2010 PFS final rule with comment period (74 FR 61758) and was effective in CY 2010.
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 revisions to the RVUs cause expenditures to change by more than $20 million, we make adjustments to ensure that expenditures do not increase or decrease by more than $20 million.
For CY 2010, we adopted a number of new payment policies for which we estimated the potential for a redistributive effect under the PFS, including the use of the new PPIS data to develop the specialty-specific PE/HR used for the PE RVUs (74 FR 61749 through 61752) and the elimination of the reporting of all CPT consultation codes in order to allow for correct and consistent coding and appropriate payment for evaluation and management services under the PFS (74 FR 61767 through 61775). In the CY 2011 PFS proposed rule (75 FR 40047), we acknowledged that clinical experience with these new PFS policies has been growing over the first 6 months of CY 2010 and noted that as we seek to improve future PFS payment accuracy for services, we were interested in public comments on the perspectives of physicians and nonphysician practitioners caring for Medicare beneficiaries under the current PFS coding and payment methodologies for physicians' services.
Comment:
Many commenters expressed various concerns regarding new Medicare coding and payment methodologies adopted for CY 2010 and continuing in CY 2011. Some commenters indicated that the effects of using PPIS data to develop the specialty-specific practice expense per hour (PE/HR) significantly reduced the payment for certain services and procedures. Commenters were concerned that the reductions in practice costs reflected in the PPIS data were inaccurate and that CMS reliance on the PPIS data caused undue hardship to certain specialties. Some commenters requested that CMS utilize new PE survey data for specific specialties.
A number of commenters were also particularly concerned with the decision by CMS to no longer recognize the CPT consultation codes for Part B payment of evaluation and management (E/M) services beginning in CY 2010. Many commenters recommended resuming payment for consultation codes under the PFS to recognize the unique physician work and practice expenses when consultation services are furnished at the request of other practitioners. Several commenters argued that consultation services were especially important to ensuring high-quality, coordinated care for complex patients and to prevent unnecessary, expensive tests. Based on findings from a survey of affected specialties, these commenters expressed concern that CMS policy decision to no longer recognize the CPT consultation codes for PFS payment purposes resulted in: (1) A reduction in the number of new Medicare patients seen by specialists; (2) a reduction in overall specialist time spent with individual Medicare patients; (3) a reduction in the number of consultations provided to hospital inpatients; (4) diminished continuity and coordination of care; and (5) the elimination of physicians' office staff and postponement of physicians purchasing new equipment because of practice cost concerns. Finally, other commenters requested that, in the absence of recognition of the CPT consultation codes for PFS payment, CMS should revise the current prolonged services and new patient definitions in order to allow for higher payments for services that, prior to CY 2010, would have been billed using the CPT consultation codes. Specifically,
the commenters believe that CMS should adopt the current CPT policy of identifying patients seen by physicians in a different subspecialty within a group practice as “new” patients, rather than continuing to use the same physician specialty as the decision point. In addition, some commenters encouraged CMS to adopt the CPT inpatient setting guidelines for determining whether a service meets the prolonged service criteria, which allow physicians to include time spent on a patients floor or unit performing tasked related to the patients care, rather than just face-to-face time as specified under current CMS policy.
Response:
We appreciate the concerns of the commenters regarding current PFS coding and payment methodologies. We welcome the perspective of physicians and nonphysician practitioners caring for Medicare beneficiaries. We understand that in some cases, recent policy changes under the PFS reduced payments for certain professional services, albeit with the goal of providing payment for services that appropriately reflects their relative value in the context of PFS payment for all other services. It is in the nature of any budget neutral payment system for changes, such as the use of PPIS data and the elimination of PFS payment for the CPT consultation codes, to have a somewhat differential impact on various groups of physicians and/or nonphysician practitioners. Furthermore, we note that all physicians benefited from the budget neutral increase in the payment levels for the other evaluation and management (E/M) CPT codes that resulted from the consultation code policy change.
For CY 2010, we adopted the PPIS data for developing the PE RVUs as the most recent data on physicians office practice expenses that used a consistent survey instrument across all specialty and healthcare professional groups. The PPIS was a nationally representative survey providing the most up-to-date and comprehensive data available from 51 specialties, using a survey instrument that was carefully designed, tested, and implemented. As discussed in the CY 2010 PFS final rule with comment period (75 FR 61751), because we recognized that some specialties would likely experience significant payment reductions with the use of the PPIS data, we adopted a 4-year transition from the previous PE RVUs to the PE RVUs developed using the new PPIS data in order to allow physicians and others time to adjust to the payment changes. We note that CY 2010 was the first year of the transition, with payment based upon 75 percent of the previous PE RVUs and 25 percent of the PE RVUs using the new PPIS data. This blend will move to 50/50 in CY 2011, and we intend to continue to closely monitor Medicare PFS utilization data to detect any emerging issues that may be of concern during this transition period, such as access problems for Medicare beneficiaries. To date, we have identified no specific problems that would warrant our proposal of a change with respect to the final CY 2010 policy regarding development of the PE RVUs based on the PPIS data. Going forward, as discussed further in section II.A.2.f. of this final rule with comment period, we remain interested in the thoughts of stakeholders regarding the MedPAC comment that “CMS should consider alternatives to collecting specialty-specific cost data or options to decrease the reliance on such data.” We encourage interested parties to contact us at any time if they have information to share or discuss in this regard.
In response to extensive public comment on the CY 2010 PFS proposal to eliminate payment for the CPT consultation codes, we explained our rationale in detail in the CY 2010 PFS final rule with comment period (75 FR 61767 through 61775). Prior to the CY 2010 PFS rulemaking cycle, we had made numerous attempts to resolve issues related to the reporting of the CPT consultation codes, including developing and implementing relevant guidance and educating physicians regarding documentation, transfer of care, and consultation policy. Despite these efforts, there was still substantial disagreement and inconsistency within the physician community regarding these issues. In addition, we believe that in most cases there is no substantial difference in physician work between E/M visits and services that would otherwise be reported with CPT consultation codes. Therefore, we continue to believe that E/M services that could previously have been reported using the CPT consultation codes may now be appropriately reported and paid using other E/M codes, specifically office and other outpatient, initial hospital and nursing facility care, and subsequent hospital and nursing facility care E/M codes. This policy allows for correct and consistent coding for E/M services furnished by physicians and nonphysician practitioners, as well as provides for appropriate payment for the specific services that were previously billed using the CPT consultation codes.
While we continue to believe that promoting effective coordination of care must be an essential goal of our payment systems, we are currently not aware of any evidence that the CY 2010 policy change to no longer recognize the CPT consultation codes is creating problems regarding care coordination and communication among physicians that negatively impact the health of Medicare beneficiaries. As we stated in the CY 2010 PFS final rule with comment period in response to similar hypothetical concerns expressed by some commenters (75 FR 61774), if we become aware of such evidence in the future, we would certainly consider whether there is an appropriate policy response to promote more effective coordination of care. However, we continue to believe it is premature to consider what the appropriate responses might be unless specific evidence of an issue affecting the health of Medicare beneficiaries comes to our attention. We will continue to be attentive to any concerns that develop about the effects of the policy on the goal of promoting effective coordination of care.
In the CY 2010 PFS final rule with comment period (75 FR 61772), we explained that, although we estimated that there would be redistributional effects among specialties, we did not believe the estimated impacts of the change in consultation code policy were disproportionate to the goals we sought to achieve in finalizing the proposal. While we understand that commenters are concerned with the effects of this policy change and that these comments were submitted after only a half year's experience with the revised policy, the commenters on the CY 2011 proposed rule did not fundamentally address the underlying issues that led to our decision to no longer recognize the consultation codes for PFS payment purposes.
We appreciate the suggestions of the commenters regarding policy changes to the definitions of new patients and prolonged services. Regarding the definition of “new” patient, we note that we continue to consider requests on an ongoing basis for new Medicare physician specialty codes and may establish new codes upon evaluating the submissions based on the criteria listed in the Medicare Claims Processing Manual, Pub. 100-04, chapter 26, section 10.8. In fact, we have approved four new Medicare physician specialty codes in the past 2 years. These additions allow more patients of those subspecialties to be considered new based on the narrower range of services provided by the subspecialty within a broader specialty group practice. We encourage interested stakeholders to submit requests for new specialty codes
if they desire a specific code for a different medical specialty or subspecialty. We do not believe it is necessary to change our current policy to one that would routinely adopt the CPT policy of identifying patients seen by physicians in a different subspecialty as “new” patients because our current criteria for establishing new Medicare physician specialty codes already accounts for many of these scenarios. Medicare physician specialty codes describe the unique types of medicine that physicians practice. Therefore, we believe our current definition of “new” for reporting office visits to a group practice appropriately relies upon the Medicare definition of a different specialty so that that the differential physician resources required to care for a patient who is truly new to the physician's unique type of medical practice are appropriately recognized.
Finally, we note that our prolonged service criterion that allows counting only of face-to-face time for inpatients, as it does for outpatients, is longstanding. Given that the highest level initial hospital care E/M visit by a physician typically extends for 70 minutes, in order to report the prolonged physician service CPT code in the inpatient setting, a physician would need to spend at least an additional 30 minutes caring for the patient. We are uncertain whether many inpatient E/M services that would otherwise be reported as CPT consultation codes extend beyond 100 minutes, even if we were to consider adopting a policy change to allow counting of unit/floor time in addition to face-to-face time. If we were to consider such a policy change in the counting of physician time, we are also concerned that available documentation in the medical record could make evaluating the medical necessity of a prolonged service especially problematic. Therefore, we do not believe it would be appropriate to modify our interpretation of the counting of time for purposes of reporting the prolonged service inpatient codes. In most cases, we believe that the additional time that may be required for an E/M visit to a hospital inpatient that would otherwise be reported by a CPT consultation code may be appropriately paid through the Medicare payment for the level of initial or subsequent hospital care E/M code that is reported that takes into consideration the face-to-face time the consulting physician spends with the patient.
We appreciate the commenters' varied perspectives on caring for Medicare beneficiaries under the recent PFS coding and payment changes adopted for CY 2010 and continuing in CY 2011. While we did not make CY 2011 proposals to modify our established policies regarding the use of the PPIS data to calculate the PE RVUs or the reporting of E/M visits that would otherwise be reported under the CPT consultation codes, and we are not modifying them for CY 2011, we will continue to monitor the impact of these policies. We look forward to continuing our dialogue with stakeholders regarding these and future policy changes under the PFS.
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 expense in an area compared to the national average costs for each component.
RVUs are converted to dollar amounts through the application of a CF, which is calculated by CMS Office of the Actuary (OACT).
The formula for calculating the Medicare fee schedule payment amount for a given service and fee schedule area can be expressed as:
Payment = [(RVU work × GPCI work) + (RVU PE × GPCI PE) + (RVU malpractice × GPCI malpractice)] × CF.
C. Most Recent Changes to the Fee Schedule
The CY 2010 PFS final rule with comment period (74 FR 61738) implemented changes to the PFS and other Medicare Part B payment policies. It also finalized some of the CY 2009 interim RVUs and implemented interim RVUs for new and revised codes for CY 2010 to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services. The CY 2010 PFS final rule with comment period also addressed other policies, as well as certain provisions of the MIPPA.
As required by the statute at the time of its issuance on October 30, 2009, the CY 2010 PFS final rule with comment period announced the following for CY 2010: The PFS update of −21.2 percent; the initial estimate for the sustainable growth rate of −8.8 percent; and the CF of $28.4061.
On December 10, 2009, we published a correction notice (74 FR 65449) to correct several technical and typographical errors that occurred in the CY 2010 PFS final rule with comment period. This correction notice announced a revised CF for CY 2010 of $28.3895.
On December 19, 2009, the Department of Defense Appropriations Act, 2010 (Pub. L. 111-118) was signed into law. Section 1011 of Public Law 111-118 provided a 2-month zero percent update to the CY 2010 PFS effective only for dates of service from January 1, 2010 through February 28, 2010.
On March 2, 2010, the Temporary Extension Act of 2010 (Pub. L. 111-144) was signed into law. Section 2 of Public Law 111-144 extended through March 31, 2010 the zero percent update to the PFS that was in effect for claims with dates of service from January 1, 2010 through February 28, 2010.
In addition, on April 15, 2010, the Continuing Extension Act of 2010 (Pub. L. 111-157) was signed into law. Section 4 of Public Law 111-157 extended through May 31, 2010 the zero percent update to the PFS that was in effect for claims with dates of services from January 1, 2010 through March 31, 2010. The provision was retroactive to April 1, 2010.
In the May 11, 2010
Federal Register
(75 FR 26350), we published a subsequent correction notice to correct several technical and typographical errors that occurred in the CY 2010 PFS final rule with comment period and the December 10, 2009 correction notice. The May 11, 2010 correction notice announced a revised CF for CY 2010 of $28.3868.
On June 25, 2010, the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (Pub. L. 111-192) was signed into law. This law required application of a 2.2 percent update to the PFS for claims with dates of services from June 1, 2010 through November 30, 2010. As a result of this change, the PFS conversion factor was revised to $36.8729 for services furnished during this time period.
On March 23, 2010 the Patient Protection and Affordable Care Act (Pub. L. 111-148) was signed into law. Shortly thereafter, on March 30, 2010, the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152) was signed into law. These two laws are discussed in this final rule with comment period and are collectively referred to as the “Affordable Care Act” (ACA) throughout this final rule with comment period.
D. Public Comments Received in Response to the CY 2011 PFS Proposed Rule
We received approximately 8,500 timely pieces of correspondence containing multiple comments on the CY 2011 PFS proposed rule. We note that we received some comments that were outside the scope of the CY 2011 PFS proposed rule, including public comments on new CY 2011 HCPCS codes that were not presented in the CY 2011 PFS proposed rule and existing CY 2010 HCPCS codes with final values for which we made no proposals for CY 2011. These comments are not addressed in this CY 2011 PFS final rule with comment period. New and revised CY 2011 HCPCS codes and their CY 2011 interim PFS work, malpractice, and PE RVUs are displayed in Addendum C to this final rule with comment period, and these values are open to public comment on this final rule with comment period. Summaries of the public comments that are within the scope of the proposals and our responses to those comments are set for the in the various sections of this final rule with comment period under the appropriate headings.
II. Provisions of the Final Rule for the Physician Fee Schedule
A. Resource-Based Practice Expense (PE) Relative Value Units (RVUs)
1. Overview
Practice expense (PE) is the portion of the resources used in furnishing the service that reflects the general categories of physician and practitioner expenses, such as office rent and personnel wages but excluding malpractice expenses, as specified in section 1848(c)(1)(B) of the Act. Section 121 of the Social Security Amendments of 1994 (Pub. L. 103-432), enacted on October 31, 1994, required CMS to develop a methodology for a resource-based system for determining PE RVUs for each physician's service. We develop PE RVUs by looking at the direct and indirect physician practice resources involved in furnishing each service. Direct expense categories include clinical labor, medical supplies, and medical equipment. Indirect expenses include administrative labor, office expense, and all other expenses. The sections that follow provide more detailed information about the methodology for translating the resources involved in furnishing each service into service-specific PE RVUs. In addition, we note that section 1848(c)(2)(B)(ii)(II) of the Act provides that adjustments in RVUs for a year may not cause total PFS payments to differ by more than $20 million from what they would have been if the adjustments were not made. Therefore, if revisions to the RVUs cause expenditures to change by more than $20 million, we make adjustments to ensure that expenditures do not increase or decrease by more than $20 million. We refer readers to the CY 2010 PFS final rule with comment period (74 FR 61743 through 61748) for a more detailed history of the PE methodology.
2. Practice Expense Methodology
a. Direct Practice Expense
We use a bottom-up approach to determine the direct PE by adding the costs of the resources (that is, the clinical staff, equipment, and supplies) typically required to provide each service. The costs of the resources are calculated using the refined direct PE inputs assigned to each CPT code in our PE database, which are based on our review of recommendations received from the American Medical Association's (AMA's) Relative Value Update Committee (RUC). For a detailed explanation of the bottom-up direct PE methodology, including examples, we refer readers to the Five-Year Review of Work Relative Value Units Under the PFS and Proposed Changes to the Practice Expense Methodology proposed notice (71 FR 37242) and the CY 2007 PFS final rule with comment period (71 FR 69629).
b. Indirect Practice Expense per Hour Data
We use survey data on indirect practice expenses incurred per hour worked (PE/HR) in developing the indirect portion of the PE RVUs. Prior to CY 2010, we primarily used the practice expense per hour (PE/HR) by specialty that was obtained from the AMA's Socioeconomic Monitoring Surveys (SMS). These surveys were conducted from 1995 through 1999. For several specialties that collected additional PE/HR data through supplemental surveys, we incorporated these data in developing the PE/HR values used annually.
While the SMS was not specifically designed for the purpose of establishing PE RVUs, we found these data to be the best available at the time. The SMS was a multispecialty survey effort conducted using a consistent survey instrument and method across specialties. The survey sample was randomly drawn from the AMA Physician Master file to ensure national representativeness. The AMA discontinued the SMS survey in 1999.
As required by the Balanced Budget Refinement Act of 1999 (BBRA) (Pub. L. 106-113), we also established a process by which specialty groups could submit supplemental PE data. In the May 3, 2000
Federal Register
, we issued the Medicare Program; Criteria for Submitting Supplemental Practice Expense Survey Data interim final rule (65 FR 25664) in which we established criteria for acceptance of supplemental data. The criteria were modified in the CY 2001 and CY 2003 PFS final rules with comment period (65 FR 65380 and 67 FR 79971, respectively). In addition to the SMS, we previously used supplemental survey data for the following specialties: Cardiology; dermatology; gastroenterology; radiology; cardiothoracic surgery; vascular surgery; physical and occupational therapy; independent laboratories; allergy/immunology; independent diagnostic testing facilities (IDTFs); radiation oncology; medical oncology; and urology.
Because the SMS data and the supplemental survey data were from different time periods, we historically inflated them by the Medicare Economic Index (MEI) to put them on as comparable a time basis as we could when calculating the PE RVUs. This MEI proxy was necessary in the past due to the lack of contemporaneous, consistently collected, and comprehensive multispecialty survey data.
The AMA administered a new survey in CY 2007 and CY 2008, the Physician Practice Expense Information Survey (PPIS), which was expanded (relative to the SMS) to include nonphysician practitioners (NPPs) paid under the PFS. The PPIS was designed to update the specialty-specific PE/HR data used to develop PE RVUs. The AMA and the CMS contractor, The Lewin Group (Lewin), analyzed the PPIS data and calculated the PE/HR for physician and nonphysician specialties, respectively. The AMA's summary worksheets and Lewin's final report are available on the CMS Web site at
http://www.cms.gov/PhysicianFeeSched/PFSFRN/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=4&sortOrder=descending&itemID=CMS1223902&intNumPerPage=10.
(
See
downloads labeled AMA PPIS Worksheets 1-3 and Physician Practice Expense non MDDO Final Report)
The PPIS is a multispecialty, nationally representative, PE survey of both physicians and NPPs using a consistent survey instrument and methods highly consistent with those used for the SMS and the supplemental surveys. The PPIS gathered information
from 3,656 respondents across 51 physician specialty and healthcare professional groups.
We believe the PPIS is the most comprehensive source of PE survey information available to date. Therefore, we used the PPIS data to update the PE/HR data for almost all of the Medicare-recognized specialties that participated in the survey for the CY 2010 PFS. When we changed over to the PPIS data beginning in CY 2010, we did not change the PE RVU methodology itself or the manner in which the PE/HR data are used in that methodology. We only updated the PE/HR data based on the new survey. Furthermore, as we explained in the CY 2010 PFS final rule with comment period (74 FR 61751), because of the magnitude of payment reductions for some specialties resulting from the use of the PPIS data, we finalized a 4-year transition (75/25 for CY 2010, 50/50 for CY 2011, 25/75 for CY 2012, and 0/100 for CY 2013) from the previous PE RVUs to the PE RVUs developed using the new PPIS data.
Section 303 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173) added section 1848(c)(2)(H)(i) of the Act, which requires us to use the medical oncology supplemental survey data submitted in 2003 for oncology drug administration services. Therefore, the PE/HR for medical oncology, hematology, and hematology/oncology reflects the continued use of these supplemental survey data.
We do not use the PPIS data for reproductive endocrinology, sleep medicine, and spine surgery since these specialties are not separately recognized by Medicare, and we do not know how to blend these data with Medicare-recognized specialty data.
Supplemental survey data on independent labs, from the College of American Pathologists, were implemented for payments in CY 2005. Supplemental survey data from the National Coalition of Quality Diagnostic Imaging Services (NCQDIS), representing IDTFs, were blended with supplementary survey data from the American College of Radiology (ACR) and implemented for payments in CY 2007. Neither IDTFs nor independent labs participated in the PPIS. Therefore, we continue to use the PE/HR that was developed from their supplemental survey data.
Finally, consistent with our past practice, the previous indirect PE/HR values from the supplemental surveys for medical oncology, independent laboratories, and IDTFs were updated to CY 2006 using the MEI to put them on a comparable basis with the PPIS data. In the CY 2010 PFS final rule with comment period (74 FR 61753), we miscalculated the indirect PE/HR for IDTFs as part of this update process. Therefore, for CY 2011, we are using a revised indirect PE/HR of $479.81 for IDTFs, consistent with our final policy to update the indirect PE/HR values from prior supplemental survey data that we are continuing to use in order to put these data on a comparable basis with the PPIS data. This revision changes the IDTF indirect percentage from 51 percent to 50 percent for CY 2011.
Previously, we had established PE/HR values for various specialties without SMS or supplemental survey data by crosswalking them to other similar specialties to estimate a proxy PE/HR. For specialties that were part of the PPIS for which we previously used a crosswalked PE/HR, we instead use the PPIS-based PE/HR. We continue previous crosswalks for specialties that did not participate in the PPIS. However, beginning in CY 2010 we changed the PE/HR crosswalk for portable x-ray suppliers from radiology to IDTF, a more appropriate crosswalk because these specialties are more similar to each other with respect to physician time.
In the CY 2010 PFS final rule with comment period (74 FR 61752), we agreed that, under the current PE methodology, the PPIS data for registered dieticians should not be used in the calculation of PE RVUs since these dieticians are paid 85 percent of what a physician would be paid for providing the service. To include their survey data in the PE calculation would influence the ratesetting by incorporating what the services would be paid if performed by registered dieticians and not strictly what the payment rates would be if provided by physicians. We further stated that we would utilize the “All Physicians” PE/HR, as derived from the PPIS, in the calculation of resource-based PE RVUs in lieu of the PE/HR associated with registered dieticians. In the resource-based PE methodology for CY 2010, while we removed the specialty of registered dieticians from the ratesetting step we did not assign the “All Physicians” PE/HR to services furnished by registered dieticians. Instead, we allowed the PE/HR for those services to be generated by a weighted average of all the physician specialties that also furnished the services. This method was consistent with our policy to not use the registered dietician PPIS PE/HR in calculating the PE RVUs for services furnished by registered dieticians but we did not actually crosswalk the specialty of registered dietician to the “All Physicians” PE/HR data as we had intended according to the final policy. Nevertheless, we are affirming for CY 2011 that the final resource-based PE RVUs have been calculated in accordance with the final policy adopted in the CY 2010 PFS final rule with comment period (74 FR 61752) for registered dietician services that crosswalks the specialty to the “All Physicians” PE/HR data.
As provided in the CY 2010 PFS final rule with comment period (74 FR 61751), CY 2011 is the second year of the 4-year transition to the PE RVUs calculated using the PPIS data. Therefore, in general, the CY 2011 PE RVUs are a 50/50 blend of the previous PE RVUs based on the SMS and supplemental survey data and the new PE RVUS developed using the PPIS data as described above. Note that the reductions in the PE RVUs for expensive diagnostic imaging equipment attributable to the change to an equipment utilization rate assumption of 75 percent (
see
74 FR 61753 through 61755 and section II.A.3. of this final rule with comment period) are not subject to the transition.
CMS' longstanding policy in a PFS transition payment year is that if the CPT Editorial Panel creates a new code for that year, the new code would be paid at its fully implemented PFS amount and not at a transition rate for that year. Consistent with this policy, all new CY 2011 CPT codes will not be paid based on transitional PE RVUs in CY 2011. Instead, we will pay these services based on the fully implemented PE RVUs in CY 2011. Additionally, existing CPT codes for which the global period has changed in CY 2011 will not be subject to the PPIS PE RVU transition. We believe that changing the global period of a code results in the CPT code describing a different service to which the previous PE RVUs would no longer be relevant when the code is reported for a service furnished in CY 2011. The five CY 2011 existing CPT codes with global period changes from CY 2010 to CY 2011 are: 11043 (Debridement, muscle, and/or fascia (includes epidermis, dermis, and subcutaneous tissue, if performed); first 20 sq cm or less); 11044 (Debridement, bone (includes epidermis, dermis, subcutaneous tissue, muscle and/or fascia, if performed); first 20 sq cm or less); 57155 (Insertion of uterine tandems and/or vaginal ovoids for clinical brachytherapy); 97597 (Debridement (e.g., high pressure waterjet with/without suction, sharp selective debridement with scissors,
scalpel and forceps), open wound, (e.g., fibrin, devitalized epidermis and/or dermis, exudate, debris, biofilm), including topical application(s), wound assessment, use of a whirlpool, when performed and instruction(s) for ongoing care, per session, total wound(s) surface area; first 20 square centimeters or less); and 97598 (Debridement (e.g., high pressure waterjet with/without suction, sharp selective debridement with scissors, scalpel and forceps), open wound, (e.g., fibrin, devitalized epidermis and/or dermis, exudate, debris, biofilm), including topical application(s), wound assessment, use of a whirlpool, when performed and instructions(s) for ongoing care, per session, total wound(s) surface area; each additional 20 square centimeters, or part thereof (List separately in addition to code for primary procedure)).
c. Allocation of PE to Services
To establish PE RVUs for specific services, it is necessary to establish the direct and indirect PE associated with each service.
(i)
Direct costs.
The relative relationship between the direct cost portions of the PE RVUs for any two services is determined by the relative relationship between the sum of the direct cost resources (that is, the clinical staff, equipment, and supplies) typically required to provide the services. The costs of these resources are calculated from the refined direct PE inputs in our PE database. For example, if one service has a direct cost sum of $400 from our PE database and another service has a direct cost sum of $200, the direct portion of the PE RVUs of the first service would be twice as much as the direct portion of the PE RVUs for the second service.
(ii)
Indirect costs.
Section II.A.2.b. of this final rule with comment period describes the current data sources for specialty-specific indirect costs used in our PE calculations. We allocate the indirect costs to the code level on the basis of the direct costs specifically associated with a code and the greater of either the clinical labor costs or the physician work RVUs. We also incorporate the survey data described earlier in the PE/HR discussion. The general approach to developing the indirect portion of the PE RVUs is described below.
• For a given service, we use the direct portion of the PE RVUs calculated as described above and the average percentage that direct costs represent of total costs (based on survey data) across the specialties that perform the service to determine an initial indirect allocator. For example, if the direct portion of the PE RVUs for a given service were 2.00 and direct costs, on average, represented 25 percent of total costs for the specialties that performed the service, the initial indirect allocator would be 6.00 since 2.00 is 25 percent of 8.00.
• We then add the greater of the work RVUs or clinical labor portion of the direct portion of the PE RVUs to this initial indirect allocator. In our example, if this service had work RVUs of 4.00 and the clinical labor portion of the direct PE RVUs was 1.50, we would add 6.00 plus 4.00 (since the 4.00 work RVUs are greater than the 1.50 clinical labor portion) to get an indirect allocator of 10.00. In the absence of any further use of the survey data, the relative relationship between the indirect cost portions of the PE RVUs for any two services would be determined by the relative relationship between these indirect cost allocators. For example, if one service had an indirect cost allocator of 10.00 and another service had an indirect cost allocator of 5.00, the indirect portion of the PE RVUs of the first service would be twice as great as the indirect portion of the PE RVUs for the second service.
• We next incorporate the specialty-specific indirect PE/HR data into the calculation. As a relatively extreme example for the sake of simplicity, assume in our example above that, based on the survey data, the average indirect cost of the specialties performing the first service with an allocator of 10.00 was half of the average indirect cost of the specialties performing the second service with an indirect allocator of 5.00. In this case, the indirect portion of the PE RVUs of the first service would be equal to that of the second service.
d. Facility and Nonfacility Costs
For procedures that can be furnished in a physician's office, as well as in a hospital or facility setting, we establish two PE RVUs: Facility and nonfacility. The methodology for calculating PE RVUs is the same for both the facility and nonfacility RVUs, but is applied independently to yield two separate PE RVUs. Because Medicare makes a separate payment to the facility for its costs of furnishing a service, the facility PE RVUs are generally lower than the nonfacility PE RVUs.
e. Services With Technical Components (TCs) and Professional Components (PCs)
Diagnostic services are generally comprised of two components: A professional component (PC) and a technical component (TC), each of which may be performed independently or by different providers, or they may be performed together as a “global” service. When services have PC and TC components that can be billed separately, the payment for the global component equals the sum of the payment for the TC and PC. This is a result of using a weighted average of the ratio of indirect to direct costs across all the specialties that furnish the global components, TCs, and PCs; that is, we apply the same weighted average indirect percentage factor to allocate indirect expenses to the global components, PCs, and TCs for a service. (The direct PE RVUs for the TC and PC sum to the global under the bottom-up methodology.)
f. Alternative Data Sources and Public Comments on Final Rule for 2010
In the CY 2010 PFS final rule with comment period (74 FR 61749 through 61750), we discussed the Medicare Payment Advisory Commission's (MedPAC's) comment that in the future, “CMS should consider alternatives to collecting specialty-specific cost data or options to decrease the reliance on such data.” We agreed with MedPAC that it would be appropriate to consider the future of the PE RVUs moving forward. We sought comments from other stakeholders on the issues raised by MedPAC for the future. In particular, we requested public comments regarding MedPAC's suggestion that we consider alternatives for collecting specialty-specific cost data or options to decrease the reliance on such data. We noted MedPAC's comment that, “CMS should consider if Medicare or provider groups should sponsor future data collection efforts, if participation should be voluntary (such as surveys) or mandatory (such as cost reports), and whether a nationally representative sample of practitioners would be sufficient for either a survey or cost reports.” MedPAC also stated that one option for decreasing the reliance on specialty-specific cost data would be the elimination of the use of indirect PE/HR data in the last step of establishing the indirect cost portion of the PE RVUs as described previously.
Almost all of the commenters on the CY 2010 PFS final rule with comment period that addressed this issue expressed a general willingness to work with CMS on methodological improvements or future data collection efforts. Although no commenters detailed a comprehensive overall alternative methodology, several commenters did provide suggestions regarding future data collection efforts
and specific aspects of the current methodology.
The commenters on the CY 2010 PFS final rule with comment period that addressed the issue of surveys supported the use of surveys if they yielded accurate PE information. The few commenters that addressed the issue of cost reports were opposed to physician cost reports. The commenters varied with respect to their opinions regarding whether data collection efforts should be led by organized medicine, individual specialty societies, or CMS. Several commenters that addressed the issue of voluntary versus mandatory data collection efforts supported voluntary data collection efforts and opposed mandatory data collection efforts.
Some commenters recommended no changes to the methodology or PE data in the near future. Other commenters indicated that the methodology and data changes needed to be made for CY 2011. Although most commenters did not directly address the use of the indirect PE/HR data, those that did predominately opposed the elimination of the use of these data.
Many commenters addressed specifics of the PE methodology (as further described in section II.A.2.c. of this final rule with comment period). Some were opposed to the scaling factor applied in the development of the direct PE portion of the PE RVUs so that in the aggregate the direct portion of the PE RVUs do not exceed the proportion indicated by the survey data (See Step 4 in g.(ii) below). Several of these commenters advocated the elimination of this direct scaling factor, while others indicated that the issue should be examined more closely.
A few commenters recommended that physician work not be used as an allocator in the development of the indirect portion of the PE RVUs as described earlier in this section. A few indicated that physician time, but not physician work, should be used in the allocation. Other commenters suggested that indirect costs should be allocated solely on the basis of direct costs.
We note that many of the issues raised by commenters on the CY 2010 PFS final rule with comment period are similar to issues raised in the development of the original resource-based PE methodology and in subsequent revisions to the methodology, including the adoption of the bottom-up methodology. While we did not propose a broad methodological change or broad data collection effort in the CY 2011 PFS proposed rule, we invited comments on our summary of the issues raised by the commenters on the CY 2010 PFS final rule with comment period, as discussed in the CY 2011 PFS proposed rule (75 FR 40050). The complete public comments on the CY 2010 PFS final rule with comment period are available for public review at
http://www.regulations.gov
by entering “CMS-1413-FC” in the search box on the main page.
Comment:
A number of commenters believe the PPIS data are flawed and, therefore, should not be used to set the PE RVUs for all or certain categories of PFS services. Other commenters supported the adoption of the PPIS data and, whether ultimately favoring the adoption of the PPIS data or not, many commenters stated that the 4-year transition adopted by CMS is important to physicians and Medicare beneficiaries to ensure access to care. The commenters explained that the transition gives physician specialty societies the opportunity to collect new and more detailed data where appropriate for refinement and CMS the opportunity to more carefully analyze the new data and its appropriateness. Although once again the commenters did not provide specific recommendations on alternatives to a comprehensive survey of practice expenses or options to decrease the PFS reliance on specialty-specific cost data, the commenters offered the following suggestions regarding future practice expense data collection.
• Select a reputable company with experience in health care market research.
• Base changes on a comprehensive data source with adequate participation rates.
• Have data independently reviewed in order to ensure accuracy.
• Make data publicly available in time to allow for review and comment by stakeholders.
Several commenters emphasized the administrative complexity and burden if CMS were to require all physicians to submit cost reports. One commenter supported a limited study of practice costs estimated by cost reports to determine if the current PE RVUs were appropriately paying physicians for the physician's office costs of services. The commenter believes that cost reports would be more accurate than the PPIS methodology. Finally, several commenters indicated a willingness to engage CMS in more detailed discussion about potential refinements to the current PE/HR data.
Response:
We appreciate the commenters' recommendations regarding factors we should consider in developing future practice expense data collection efforts in order to improve the accuracy of the information. While we are continuing the transition that was adopted in the CY 2010 PFS final rule with comment period (74 FR 61751) under the CY 2011 PFS to full implementation of the PPIS data for the CY 2013 PFS PE RVUs, we continue to remain interested in the thoughts of stakeholders regarding the MedPAC comment that “CMS should consider alternatives to collecting specialty-specific cost data or options to decrease the reliance on such data.” More specifically, we encourage stakeholders to contact us at any time if they encounter additional information to share, develop further ideas or analyses that could inform our ongoing consideration of physicians' practice expenses, or otherwise would like to discuss this topic further as part of an open dialogue with us. While to date, no stakeholders have presented a comprehensive overall alternative methodology, we remain interested in potential novel or refined approaches. We also continue to welcome more limited suggestions for improvements to our current PE methodology or future practice expense information collection activities.
g. PE RVU Methodology
For a more detailed description of the PE RVU methodology, we refer readers to the CY 2010 PFS final rule with comment period with comment period (74 FR 61745 through 61746).
(1) Setup File
First, we create a setup file for the PE methodology. The setup file contains the direct cost inputs, the utilization for each procedure code at the specialty and facility/nonfacility place of service level, and the specialty-specific PE/HR data from the surveys.
(2) Calculate the Direct Cost PE RVUs
Sum the costs of each direct input.
Step 1:
Sum the direct costs of the inputs for each service. Apply a scaling adjustment to the direct inputs.
Step 2:
Calculate the current aggregate pool of direct PE costs. This is the product of the current aggregate PE (aggregate direct and indirect) RVUs, the CF, and the average direct PE percentage from the survey data.
Step 3:
Calculate the aggregate pool of direct costs. This is the sum of the product of the direct costs for each service from Step 1 and the utilization data for that service.
Step 4:
Using the results of Step 2 and Step 3 calculate a direct PE scaling adjustment so that the aggregate direct cost pool does not exceed the current aggregate direct cost pool and apply it
to the direct costs from Step 1 for each service.
Step 5:
Convert the results of Step 4 to an RVU scale for each service. To do this, divide the results of Step 4 by the CF. Note that the actual value of the CF used in this calculation does not influence the final direct cost PE RVUs, as long as the same CF is used in Step 2 and Step 5. Different CFs will result in different direct PE scaling factors, but this has no effect on the final direct cost PE RVUs since changes in the CFs and changes in the associated direct scaling factors offset one another.
(3) Create the Indirect Cost PE RVUs
Create indirect allocators.
Step 6:
Based on the survey data, calculate direct and indirect PE percentages for each physician specialty.
Step 7:
Calculate direct and indirect PE percentages at the service level by taking a weighted average of the results of Step 6 for the specialties that furnish the service. Note that for services with TCs and PCs, the direct and indirect percentages for a given service do not vary by the PC, TC, and global components.
Step 8:
Calculate the service level allocators for the indirect PEs based on the percentages calculated in Step 7. The indirect PEs are allocated based on the three components: The direct PE RVUs, the clinical PE RVUs, and the work RVUs.
For most services the indirect allocator is: Indirect percentage * (direct PE RVUs/direct percentage) + work RVUs.
There are two situations where this formula is modified:
• If the service is a global service (that is, a service with global, professional, and technical components), then the indirect allocator is: Indirect percentage (direct PE RVUs/direct percentage) + clinical PE RVUs + work RVUs.
• If the clinical labor PE RVUs exceed the work RVUs (and the service is not a global service), then the indirect allocator is: Indirect percentage (direct PE RVUs/direct percentage) + clinical PE RVUs.
Note:
For global services, the indirect allocator is based on both the work RVUs and the clinical labor PE RVUs. We do this to recognize that, for the PC service, indirect PEs will be allocated using the work RVUs, and for the TC service, indirect PEs will be allocated using the direct PE RVUs and the clinical labor PE RVUs. This also allows the global component RVUs to equal the sum of the PC and TC RVUs.)
For presentation purposes in the examples in Table 2, the formulas were divided into two parts for each service.
• The first part does not vary by service and is the indirect percentage (direct PE RVUs/direct percentage).
• The second part is either the work RVUs, clinical PE RVUs, or both depending on whether the service is a global service and whether the clinical PE RVUs exceed the work RVUs (as described earlier in this step).
Apply a scaling adjustment to the indirect allocators.
Step 9:
Calculate the current aggregate pool of indirect PE RVUs by multiplying the current aggregate pool of PE RVUs by the average indirect PE percentage from the survey data.
Step 10:
Calculate an aggregate pool of indirect PE RVUs for all PFS services by adding the product of the indirect PE allocators for a service from Step 8 and the utilization data for that service.
Step 11:
Using the results of Step 9 and Step 10, calculate an indirect PE adjustment so that the aggregate indirect allocation does not exceed the available aggregate indirect PE RVUs and apply it to indirect allocators calculated in Step 8.
Calculate the indirect practice cost index.
Step 12:
Using the results of Step 11, calculate aggregate pools of specialty-specific adjusted indirect PE allocators for all PFS services for a specialty by adding the product of the adjusted indirect PE allocator for each service and the utilization data for that service.
Step 13:
Using the specialty-specific indirect PE/HR data, calculate specialty-specific aggregate pools of indirect PE for all PFS services for that specialty by adding the product of the indirect PE/HR for the specialty, the physician time for the service, and the specialty's utilization for the service across all services performed by the specialty.
Step 14:
Using the results of Step 12 and Step 13, calculate the specialty-specific indirect PE scaling factors.
Step 15:
Using the results of Step 14, calculate an indirect practice cost index at the specialty level by dividing each specialty-specific indirect scaling factor by the average indirect scaling factor for the entire PFS.
Step 16:
Calculate the indirect practice cost index at the service level to ensure the capture of all indirect costs. Calculate a weighted average of the practice cost index values for the specialties that furnish the service. (
Note:
For services with TCs and PCs, we calculate the indirect practice cost index across the global components, PCs, and TCs. Under this method, the indirect practice cost index for a given service (for example, echocardiogram) does not vary by the PC, TC, and global component.)
Step 17:
Apply the service level indirect practice cost index calculated in Step 16 to the service level adjusted indirect allocators calculated in Step 11 to get the indirect PE RVUs.
(4) Calculate the Final PE RVUs
Step 18:
Add the direct PE RVUs from Step 6 to the indirect PE RVUs from Step 17 and apply the final PE budget neutrality (BN) adjustment, MEI rebasing adjustment, and multiple procedure payment reduction (MPPR) adjustment.
The final PE BN adjustment is calculated by comparing the results of Step 18 (prior to the MEI rebasing and MPPR adjustments) to the current pool of PE RVUs. This final BN adjustment is required primarily because certain specialties are excluded from the PE RVU calculation for ratesetting purposes, but all specialties are included for purposes of calculating the final BN adjustment. (
See
“Specialties excluded from ratesetting calculation” below in this section.)
As discussed in section II.E.5. of this final rule with comment period, we are rebasing and revising the Medicare Economic Index (MEI) for CY 2011. As discussed in section II.C.4. of this final rule with comment period, section 1848(c)(2)(K) of the Act (as added by section 3134 of the ACA) specifies that the Secretary shall identify potentially misvalued codes by examining multiple codes that are frequently billed in conjunction with furnishing a single service. There is inherent duplication in the PE associated with those services which are frequently furnished together, so reducing PFS payment for the second and subsequent services to account for the efficiencies in multiple service sessions may be appropriate. Consistent with this provision of the ACA, we are adopting a limited expansion of the current MPPR policy for imaging services for CY 2011 and a new MPPR policy for therapy services.
(5) Setup File Information
• Specialties excluded from ratesetting calculation: For the purposes of calculating the PE RVUs, we exclude certain specialties, such as certain nonphysician practitioners paid at a percentage of the PFS and low-volume specialties, from the calculation. These specialties are included for the purposes of calculating the BN adjustment. They are displayed in Table 1.
Table 1—Specialties Excluded from Ratesetting Calculation
Specialty code
Specialty description
42
Certified nurse midwife.
49
Ambulatory surgical center.
50
Nurse practitioner.
51
Medical supply company with certified orthotist.
52
Medical supply company with certified prosthetist.
53
Medical supply company with certified prosthetist-orthotist.
54
Medical supply company not included in 51, 52, or 53.
55
Individual certified orthotist.
56
Individual certified prosthestist.
57
Individual certified prosthetist-orthotist.
58
Individuals not included in 55, 56, or 57.
59
Ambulance service supplier, e.g., private ambulance companies, funeral homes, etc.
60
Public health or welfare agencies.
61
Voluntary health or charitable agencies.
73
Mass immunization roster biller.
74
Radiation therapy centers.
87
All other suppliers (e.g., drug and department stores).
88
Unknown supplier/provider specialty.
89
Certified clinical nurse specialist.
95
Competitive Acquisition Program (CAP) Vendor.
96
Optician.
A0
Hospital.
A1
SNF.
A2
Intermediate care nursing facility.
A3
Nursing facility, other.
A4
HHA.
A5
Pharmacy.
A6
Medical supply company with respiratory therapist.
A7
Department store.
1
Supplier of oxygen and/or oxygen related equipment.
2
Pedorthic personnel.
3
Medical supply company with pedorthic personnel.
• Crosswalk certain low volume physician specialties: Crosswalk the utilization of certain specialties with relatively low PFS utilization to the associated specialties.
• Physical therapy utilization: Crosswalk the utilization associated with all physical therapy services to the specialty of physical therapy.
• Identify professional and technical services not identified under the usual TC and 26 modifiers: Flag the services that are PC and TC services, but do not use TC and 26 modifiers (for example, electrocardiograms). This flag associates the PC and TC with the associated global code for use in creating the indirect PE RVUs. For example, the professional service, CPT code 93010 (Electrocardiogram, routine ECG with at least 12 leads; interpretation and report only), is associated with the global service, CPT code 93000 (Electrocardiogram, routine ECG with at least 12 leads; with interpretation and report).
• Payment modifiers: Payment modifiers are accounted for in the creation of the file. For example, services billed with the assistant at surgery modifier are paid 16 percent of the PFS amount for that service; therefore, the utilization file is modified to only account for 16 percent of any service that contains the assistant at surgery modifier.
• Work RVUs: The setup file contains the work RVUs from this final rule with comment period.
(6) Equipment Cost Per Minute
The equipment cost per minute is calculated as:
(1/(minutes per year * usage)) * price * ((interest rate/(1−(1/((1 + interest rate)
‸
life of equipment)))) + maintenance)
Where:
minutes per year = maximum minutes per year if usage were continuous (that is, usage = 1); generally 150,000 minutes.
usage = equipment utilization assumption; 0.75 for certain expensive diagnostic imaging equipment (
see
74 FR 61753 through 61755 and section II.A.3. of this final rule with comment period) and 0.5 for others.
price = price of the particular piece of equipment.
interest rate = 0.11.
life of equipment = useful life of the particular piece of equipment.
maintenance = factor for maintenance; 0.05.
Note:
The use of any particular conversion factor (CF) in Table 2 to illustrate the PE calculation has no effect on the resulting RVUs.
TABLE 2—Calculation of PE RVUs Under Methodology for Selected Codes
Step
Source
Formula
99213
Office visit, est Nonfacility
33533
CABG, arterial, single facility
71020
Chest x-ray Nonfacility
71020-TC Chest x-ray Nonfacility
71020-26
Chest x-ray Nonfacility
93000
ECG, complete Nonfacility
93005
ECG, tracing Nonfacility
93010
ECG, report Nonfacility
(1) Labor cost (lab)
Step 1
AMA
13.32
77.52
5.74
5.74
0.00
6.12
6.12
0.00
(2) Supply cost (sup)
Step 1
AMA
2.98
7.34
3.39
3.39
0.00
1.19
1.19
0.00
(3) Equipment cost (eqp)
Step 1
AMA
0.19
0.65
8.17
8.17
0.00
0.12
0.12
0.00
(4) Direct cost (dir)
Step 1
=(1) + (2) + (3)
16.50
85.51
17.31
17.31
0.00
7.43
7.43
0.00
(5) Direct adjustment (dir adj)
Steps 2-4
See footnote*
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.50
(6) Adjusted labor
Steps 2-4
=Lab * Dir adj
=(1)*(5)
6.68
38.87
2.88
2.88
0.00
3.07
3.07
0.00
(7) Adjusted supplies
Steps 2-4
=Sup * Dir adj
=(2)*(5)
1.50
3.68
1.70
1.70
0.00
0.60
0.60
0.00
(8) Adjusted equipment
Steps 2-4
=Eqp * Dir adj
=(3)*(5)
0.10
0.33
4.10
4.10
0.00
0.06
0.06
0.00
(9) Adjusted direct
Steps 2-4
=(6) + (7) + (8)
8.27
42.87
8.68
8.68
0.00
3.73
3.73
0.00
(10) Conversion factor (CF)
Step 5
PFS
36.87
36.87
36.87
36.87
36.87
36.87
36.87
36.87
(11) Adj labor cost converted
Step 5
=(Lab * Dir adj)/CF
=(6)/(10)
0.18
1.05
0.08
0.08
0.00
0.08
0.08
0.00
(12) Adj supply cost converted
Step 5
=(Sup * Dir adj)/CF
=(7)/(10)
0.04
0.10
0.05
0.05
0.00
0.02
0.02
0.00
(13) Adj equipment cost converted
Step 5
=(Eqp * Dir adj)/CF
=(8)/(10)
0.00
0.01
0.11
0.11
0.00
0.00
0.00
0.00
(14) Adj. direct cost converted
Step 5
=(11) + (12) + (13)
0.22
1.16
0.24
0.24
0.00
0.10
0.10
0.00
(15) Work RVUs
Setup File
PFS
0.97
33.75
0.22
0.00
0.22
0.17
0.00
0.17
(16) Dir pct
Steps 6,7
Surveys
0.26
0.18
0.29
0.29
0.29
0.29
0.29
0.29
(17) Ind pct
Steps 6,7
Surveys
0.74
0.82
0.71
0.71
0.71
0.71
0.71
0.71
(18) Ind alloc formula (1st part)
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)
(19) Ind alloc (1st part)
Step 8
See (18)
0.65
5.29
0.58
0.58
0.00
0.25
0.25
0.00
(20) Ind alloc formulas (2nd part)
Step 8
See Step 8
(15)
(15)
(15) + (11)
(11)
(15)
(15) + (11)
(11)
(15)
(21) Ind alloc (2nd part)
Step 8
See (20)
0.97
33.75
0.30
0.08
0.22
0.25
0.08
0.17
(22) Indirect allocator (1st + 2nd)
Step 8
=(19) + (21)
1.62
39.04
0.88
0.66
0.22
0.50
0.33
0.17
(23) Indirect adjustment (ind adj)
Steps 9-11
See footnote**
0.37
0.37
0.37
0.37
0.37
0.37
0.37
0.37
(24) Adjusted indirect allocator
Steps 9-11
=Ind alloc * ind adj
0.60
14.47
0.33
0.24
0.08
0.19
0.12
0.06
(25) Ind. practice cost index (IPCI)
Steps 12-16
See Steps 12-16
1.11
0.83
0.90
0.90
0.90
0.92
0.92
0.92
(26) Adjusted indirect
Step 17
= Adj ind alloc * IPCI
=(24) * (25)
0.67
12.04
0.29
0.22
0.07
0.17
0.11
0.06
(27) MEI rebasing adjustment
Step 18
PFS
1.18
1.18
1.18
1.18
1.18
1.18
1.18
1.18
(28) MPPR adjustments
Step 18
PFS
1.01
1.01
1.01
1.01
1.01
1.01
1.01
1.01
(29) PE RVU
Step 18
=(Adj dir + Adj ind) * budn * MEI adj * MPPR adj
=((14) + (26)) * budn * (27) * (28)
1.06
15.68
0.63
0.54
0.09
0.32
0.25
0.07
Note:
PE RVUs in Table 2, row 29, may not match the values in Addendum B due to rounding.
* The direct adj = [current pe rvus * CF * avg dir pct]/[sum direct inputs] = [Step 2]/[Step 3].
** The indirect adj = [current pe rvus * avg ind pct]/[sum of ind allocators] = [Step 9]/[Step 10].
3. PE Revisions for CY 2011
a. Equipment Utilization Rate
As part of the PE methodology associated with the allocation of equipment costs for calculating PE RVUs, we currently use an equipment utilization rate assumption of 50 percent for most equipment, with the exception of expensive diagnostic imaging equipment (which is equipment priced at over $1 million, for example, computed tomography (CT) and magnetic resonance imaging (MRI) scanners), for which we adopted a 90 percent utilization rate assumption and provided for a 4-year transition beginning in CY 2010 (74 FR 61755). Therefore, CY 2010 is the first transitional payment year. Payment is made in CY 2010 for the diagnostic services listed in Table 3 (those that include expensive diagnostic imaging equipment in their PE inputs) of the CY 2011 PFS proposed rule (75 FR 40054) based on 25 percent of the new PE RVUs and 75 percent of the prior PE RVUs for those services.
Section 1848(b)(4)(C) of the Act (as added by section 3135(a) of the ACA) requires that with respect to fee schedules established for CY 2011 and subsequent years, in the methodology for determining PE RVUs for expensive diagnostic imaging equipment under the CY 2010 PFS final rule with comment period, the Secretary shall use a 75 percent assumption instead of the utilization rates otherwise established in that rule. The provision also requires that the reduced expenditures attributable to this change in the utilization rate for CY 2011 and subsequent years shall not be taken into account when applying the budget neutrality limitation on annual adjustments described in section 1848(c)(2)(B)(ii)(II) of the Act.
As a result, the 75 percent equipment utilization rate assumption will be applied to expensive diagnostic imaging equipment in a non-budget neutral manner for CY 2011, and the resulting changes to PE RVUs will not be transitioned over a period of years. We will apply the 75 percent utilization rate assumption in CY 2011 to all of the services to which we currently apply the transitional 90 percent equipment utilization rate assumption in CY 2010. These services are listed in a file on the CMS Web site that is posted under downloads for the CY 2010 PFS final rule with comment period at
http://www.cms.gov/physicianfeesched/downloads/CODES_SUBJECT_TO_90PCT_USAGE_RATE.zip.
These codes are also displayed in Table 3 at the end of this section.
Comment:
Several commenters argued that the 75 percent utilization rate assumption should not be applied because of the imprecise data on which the policy was based. The commenters explained that based on an independent survey, actual equipment utilization rates are close to 50 percent. In addition, the commenters postulated that rural imaging centers would be adversely affected by the change due to lower equipment utilization rates than non-rural centers. The commenters requested that CMS base equipment utilization rate assumptions on actual utilization data rather than assumptions.
Several other commenters supported the implementation of the 75 percent utilization rate assumption, and MedPAC recommended that CMS explore increasing the equipment utilization rate assumption for diagnostic imaging equipment that costs less than $1 million. Finally, several commenters clarified that certain procedures were not subject to the provision, including nuclear cardiology services and therapeutic interventional radiology.
Response:
Section 1848(b)(4)(C) of the Act (as added by section 3135(a) of the ACA) requires that with respect to fee schedules established for CY 2011 and subsequent years, in the methodology for determining PE RVUs for expensive diagnostic imaging equipment under the CY 2010 PFS final rule with comment period, the Secretary shall use a 75 percent assumption instead of the utilization rates otherwise established in that rule. We acknowledge that further data regarding actual equipment utilization in the physician's office setting may be informative, but our use of such data to set the equipment utilization rate assumption for expensive diagnostic imaging equipment at a value other than 75 percent would require a statutory change.
We did not propose to expand the 75 percent equipment utilization rate assumption for CY 2011 to other procedures beyond those that use CT and MRI scanners as listed in Table 4 of the CY 2011 PFS proposed rule (75 FR 40055) and Table 3 at the end of this section. Any future changes in equipment utilization rate assumptions, including any expansion of the 75 percent equipment utilization rate assumption to additional expensive diagnostic imaging equipment, would be made through the annual PFS notice and comment rulemaking cycle. Furthermore, any changes in equipment utilization rate assumptions for less costly diagnostic imaging equipment (less than $1 million) or for therapeutic imaging or other equipment would not be subject to the statutory provision that specifies a 75 percent assumption. We note that we are constantly reassessing our methodology for developing the PE RVUs and would propose any changes to the equipment utilization rate assumptions for these types of equipment through the annual PFS rulemaking cycle if we determine such changes could be appropriate.
After consideration of the public comments we received, we are finalizing our CY 2011 proposal without modification. The 75 percent equipment utilization rate assumption will be applied to expensive diagnostic imaging equipment in a non-budget neutral manner for CY 2011, and the changes to the PE RVUs will not be transitioned over a period of years. We will apply the 75 percent utilization rate assumption in CY 2011 to all of the services to which we currently apply the transitional 90 percent utilization rate assumption in CY 2010. The CY 2011 codes are displayed in Table 3 at the end of this section that lists all the codes to which the 75 percent equipment utilization rate assumption applies for CY 2011. In addition, the codes subject to this policy are posted under the downloads for the CY 2011 PFS final rule with comment period on the CMS Web site at
http://www.cms.gov/PhysicianFeeSched/PFSFRN/list.asp#TopOfPage.
Additionally, for CY 2011, we proposed to expand the list of services to which the higher equipment utilization rate assumption applies to include all other diagnostic imaging services that utilize similar expensive CT and MRI scanners. The additional 24 CPT codes (listed in Table 4 of the CY 2011 PFS proposed rule (75 FR 40055)) to which we proposed to apply the 75 percent equipment utilization rate assumption also have expensive diagnostic imaging equipment (priced at over $1 million) included in their PE inputs. These services are predominantly diagnostic computed tomographic angiography (CTA) and magnetic resonance angiography (MRA) procedures that include similar expensive CT and MRI scanners in their direct PE inputs. We indicated in the CY 2010 PFS final rule with comment period (74 FR 61754) that we were persuaded by PPIS data on angiography that the extrapolation of MRI and CT data (and their higher equipment utilization rate) may be inappropriate. However, this reference was limited to those procedures that include an angiography room in the direct PE inputs, such as CPT code 93510 (Left heart catheterization, retrograde, from
the brachial artery, axillary artery or femoral artery; percutaneous). In contrast, CTA and MRA procedures include a CT room or MRI room, respectively, in the direct PE inputs, and the PPIS data confirm that a higher assumed utilization rate than 50 percent would be appropriate. The PPIS angiography room data that reflected a 56 percent equipment utilization rate would not specifically apply to CTA and MRA procedures. Thus, on further review, we believe it is appropriate to include CTA and MRA procedures in the list of procedures for which we assume a 75 percent equipment utilization rate, and we proposed to do so beginning in CY 2011.
Consistent with section 1848(c)(2)(B)(v)(III) of the Act (as amended by section 3135 of the ACA), the reduced expenditures attributable to this change in the utilization rate assumption applicable to CY 2011 shall not be taken into account when applying the budget neutrality limitation on annual adjustments described in section 1848(c)(2)(B)(ii)(II) of the Act.
As provided in the CY 2010 PFS final rule with comment period (74 FR 61751), CY 2011 is the second year of the 4-year transition to the PE RVUs calculated using the PPIS data. We note that the reductions in the PE RVUs for expensive diagnostic imaging equipment attributable to the change to an equipment utilization rate assumption of 75 percent for CY 2011 are not subject to the transition.
Comment:
Several commenters urged CMS not to finalize the proposed expansion of the list of procedures to which the 75 percent equipment utilization rate assumption would apply, pending further evaluation of equipment utilization data. While noting the statutory requirement of section 1848(b)(4)(C) of the Act (as added by section 3135(a) of the ACA), the commenters believe that CMS is not required to add additional services to the policy for CY 2011. Other commenters, including MedPAC, supported the proposed increase in the equipment utilization rate assumption from 50 percent to 75 percent for the 24 additional services that use diagnostic imaging equipment priced at over $1 million.
Response:
No commenters presented a rationale for not including the proposed 24 additional services to the 75 percent equipment utilization rate assumption, when the proposed additions use the same diagnostic CT or MRI imaging equipment as the current codes to which the policy applies. We note that the 90 percent equipment utilization rate assumption that we finalized in the CY 2010 PFS final rule with comment period (74 FR 61755) applies to CT and MRI scanners when used as diagnostic imaging equipment, one of these two pieces of equipment is listed as a direct PE input for the proposed MRA and CTA services, and no commenters recommended that we remove the CT or MRI equipment inputs from the additional codes. Therefore, we continue to believe that it is appropriate to apply the 75 percent equipment utilization rate assumption beginning in CY 2011 to MRA and CTA procedures, as we proposed.
After consideration of the public comments we received, we are finalizing our CY 2011 proposal to include CTA and MRA procedures in the 75 percent equipment utilization rate assumption policy because they include expensive CT and MRI scanners that cost more than $1 million as direct PE inputs for these diagnostic imaging procedures. We are modifying our proposal, however, and will not include CPT code 77079 (Computed tomography, bone mineral density study, 1 or more sites; appendicular skeleton (peripheral) (e.g., radius, wrist, heel)) because, upon further analysis for this final rule with comment period, we noted that the procedure does not include a CT room in its direct PE inputs.
For CY 2011, we are also adding to the 75 percent equipment utilization rate assumption policy three new CY 2011 CPT codes for diagnostic imaging procedures that include a CT room in their direct PE inputs, specifically CPT codes 74176 (Computed tomography, abdomen and pelvis; without contrast material); 74177 (Computed tomography, abdomen and pelvis; with contrast material); and 74178 (Computed tomography, abdomen and pelvis; without contrast material in one or both body regions, followed by with contrast material(s) and further sections in one or both body regions). As new codes for CY 2011, the work, PE, and malpractice RVUs for these CPT codes that are displayed in Addendum C to this final rule with comment period are interim final values that are open to comment. Similarly, the assignment of the 75 percent equipment utilization rate assumption to these CPT codes, which contributes to the development of their PE RVUs, is being made on an interim final basis. We refer readers to section V.C. of this final rule with comment period for further discussion of the establishment of interim final RVUs for CY 2011 new and revised codes.
As a result of the CY 2011 changes, the 75 percent equipment utilization rate assumption will be applied to all diagnostic imaging procedures with nationally established rates under the PFS in CY 2011 and which include a CT or MRI scanner in their direct PE, consistent with the statutory requirement of section 1848(b)(4)(C) of the Act (as added by section 3135(a) of the ACA).
Consistent with section 1848(c)(2)(B)(v)(III) of the Act (as amended by section 3135 of the ACA), the reduced expenditures attributable to the change in the utilization rate assumption applicable to CY 2011 (from the CY 2011 transitional rate for the 90 percent equipment utilization rate assumption for expensive diagnostic imaging equipment costing over $1 million (CT and MRI scanners) that would have applied under the final policy established in the CY 2010 PFS final rule with comment period to the 75 percent rate required under section 1848(b)(4)(C) of the Act) shall not be taken into account when applying the budget neutrality limitation on annual adjustments described in section 1848(c)(2)(B)(ii)(II) of the Act.
Table 3 below lists the codes to which the 75 percent equipment utilization rate assumption applies for CY 2011. The codes subject to this policy are also posted under the downloads for the CY 2011 PFS final rule with comment period on the CMS Web site at
http://www.cms.gov/PhysicianFeeSched/PFSFRN/list.asp#TopOfPage.
Table 3—Final CPT Codes Subject to 75 Percent Equipment Utilization Rate Assumption in CY 2011
CPT code
Short descriptor
70336
Mri, temporomandibular joint(s).
70450
Ct head/brain w/o dye.
70460
Ct head/brain w/dye.
70470
Ct head/brain w/o & w/dye.
70480
Ct orbit/ear/fossa w/o dye.
70481
Ct orbit/ear/fossa w/dye.
70482
Ct orbit/ear/fossa w/o & w/dye.
70486
Ct maxillofacial w/o dye.
70487
Ct maxillofacial w/dye.
70488
Ct maxillofacial w/o & w/dye.
70490
Ct soft tissue neck w/o dye.
70491
Ct soft tissue neck w/dye.
70492
Ct soft tissue neck w/o & w/dye.
70496
Ct angiography, head.
70498
Ct angiography, neck.
70540
Mri orbit/face/neck w/o dye.
70542
Mri orbit/face/neck w/dye.
70543
Mri orbit/face/neck w/o & w/dye.
70544
Mri angiography head w/o dye.
70545
Mri angiography head w/dye.
70546
Mri angiography head w/o & w/dye.
70547
Mri angiography neck w/o dye.
70548
Mri angiography neck w/dye.
70549
Mri angiography neck w/o & w/dye.
70551
Mri brain w/o dye.
70552
Mri brain w/dye.
70553
Mri brain w/o & w/dye.
70554
Fmri brain by tech.
71250
Ct thorax w/o dye.
71260
Ct thorax w/dye.
71270
Ct thorax w/o & w/dye.
71275
Ct angiography, chest.
71550
Mri chest w/o dye.
71551
Mri chest w/dye.
71552
Mri chest w/o & w/dye.
71555
Mri angio chest w/or w/o dye.
72125
CT neck spine w/o dye.
72126
Ct neck spine w/dye.
72127
Ct neck spine w/o & w/dye.
72128
Ct chest spine w/o dye.
72129
Ct chest spine w/dye.
72130
Ct chest spine w/o & w/dye.
72131
Ct lumbar spine w/o dye.
72132
Ct lumbar spine w/dye.
72133
Ct lumbar spine w/o & w/dye.
72141
Mri neck spine w/o dye.
72142
Mri neck spine w/dye.
72146
Mri chest spine w/o dye.
72147
Mri chest spine w/dye.
72148
Mri lumbar spine w/o dye.
72149
Mri lumbar spine w/dye.
72156
Mri neck spine w/o & w/dye.
72157
Mri chest spine w/o & w/dye.
72158
Mri lumbar spine w/o & w/dye.
72159
Mri angio spine w/o & w/dye.
72191
Ct angiography, pelv w/o & w/dye.
72192
Ct pelvis w/o dye.
72193
Ct pelvis w/dye.
72194
Ct pelvis w/o & w/dye.
72195
Mri pelvis w/o dye.
72196
Mri pelvis w/dye.
72197
Mri pelvis w/o &w/dye.
72198
Mri angio pelvis w/or w/o dye.
73200
Ct upper extremity w/o dye.
73201
Ct upper extremity w/dye.
73202
Ct upper extremity w/o & w/dye.
73206
Ct angio upper extr w/o & w/dye.
73218
Mri upper extr w/o dye.
73219
Mri upper extr w/dye.
73220
Mri upper extremity w/o & w/dye.
73221
Mri joint upper extr w/o dye.
73222
Mri joint upper extr w/dye.
73223
Mri joint upper extr w/o & w/dye.
73225
Mri angio upr extr w/o & w/dye.
73700
Ct lower extremity w/o dye.
73701
Ct lower extremity w/dye.
73702
Ct lower extremity w/o & w/dye.
73706
Ct angio lower extr w/o & w/dye.
73718
Mri lower extremity w/o dye.
73719
Mri lower extremity w/dye.
73720
Mri lower extr w/& w/o dye.
73721
Mri joint of lwr extre w/o dye.
73722
Mri joint of lwr extr w/dye.
73723
Mri joint of lwr extr w/o & w/dye.
73725
Mri angio lower extr w or w/o dye.
74150
Ct abdomen w/o dye.
74160
Ct abdomen w/dye.
74170
Ct abdomen w/o & w/dye.
74175
Ct angio abdom w/o & w/dye.
74176
Ct abd & pelvis w/o contrast.
74177
Ct abdomen & pelvis w/contrast.
74178
Ct abd & pelv 1+ section/regns.
74181
Mri abdomen w/o dye.
74182
Mri abdomen w/dye.
74183
Mri abdomen w/o and w/dye.
74185
Mri angio, abdom w/or w/o dye.
74261
Ct colonography, w/o dye.
74262
Ct colonography, w/dye.
75557
Cardiac mri for morph.
75559
Cardiac mri w/stress img.
75561
Cardiac mri for morph w/dye.
75563
Cardiac mri w/stress img & dye.
75565
Card mri vel flw map add-on.
75571
Ct hrt w/o dye w/ca test.
75572
Ct hrt w/3d image.
75573
Ct hrt w/3d image, congen.
75574
Ct angio hrt w/3d image.
75635
Ct angio abdominal arteries.
76380
CAT scan follow up study.
77058
Mri, one breast.
77059
Mri, both breasts.
77078
Ct bone density, axial.
77084
Magnetic image, bone marrow.
b. HCPCS Code-Specific PE Issues
In this section, we discuss other specific CY 2011 proposals and changes related to direct PE inputs. The changes that follow were proposed in the CY 2011 PFS proposed rule and included in the proposed CY 2011 direct PE database, which is available on the CMS Web site under the downloads for the CY 2011 PFS proposed rule at
http://www.cms.gov/PhysicianFeeSched/
. The final direct PE database for CY 2011 is available under the downloads for the CY 2011 PFS final rule with comment period at the same location.
(1) Biohazard Bags
We identified 22 codes for which the supply item “biohazard bag” (SM004) is currently considered a direct PE input. The item is already properly accounted for in the indirect PE because it is not attributable to an individual patient service. Therefore, we proposed to remove the biohazard bag from the CY 2011 direct PE database and noted that the changes in direct PE inputs for the associated services were reflected in the proposed CY 2011 direct PE database.
We did not receive any public comments on our proposal to remove biohazard bags as a supply input. Therefore, we are finalizing our CY 2011 proposal to remove the supply item as a direct PE input for the associated services. This change is reflected in the final CY 2011 direct PE database.
(2) PE Inputs for Professional Component (PC) Only and Technical Component (TC) Only Codes Summing to Global Only Codes
In the case of certain diagnostic tests, different but related CPT codes are used to describe global, professional, and technical components of a service. These codes are unlike the majority of other diagnostic test CPT codes where modifiers may be used in billing a single CPT code in order to differentiate professional and technical components. When different but related CPT codes are used to report the components of these services, the different CPT codes are referred to as “global only,” “professional component (PC) only,” and “technical component (TC) only” codes. Medicare payment systems are programmed to ensure that the PE RVUs for global only codes equal the sum of the PE RVUs for the PC and TC only codes. However, it came to our attention that the direct PE inputs for certain global only codes do not reflect the appropriate summation of their related TC only and PC only component code PE inputs as they appear in the direct PE database. While the PFS payment calculations have been programmed to apply the correct PE RVUs for the global only code based on a summation of component code PE RVUs, the direct PE database has reflected incorrect inputs that are overridden by the payment system. Therefore, we proposed to correct the direct PE inputs for the global only codes so that the inputs reflect the appropriate summing of the PE inputs for the associated PC only and TC only codes. The proposed CY 2011 direct PE database included PE
corrections to the 14 CPT codes listed in Table 4.
Table 4—Groups of Related CPT Codes with Proposed Changes to PE Inputs so that Inputs for Professional Component (PC) Only and Technical Component (TC) Only Codes Sum to Global Only Codes
CPT Code
Long descriptor
93224
Wearable electrocardiographic rhythm derived monitoring for 24 hours by continuous original waveform recording and storage, with visual superimposition scanning; includes recording, scanning analysis with report, physician review and interpretation.
93225
Wearable electrocardiographic rhythm derived monitoring for 24 hours by continuous original waveform recording and storage, with visual superimposition scanning; recording (includes connection, recording, disconnection).
93226
Wearable electrocardiographic rhythm derived monitoring for 24 hours by continuous original waveform recording and storage, with visual superimposition scanning; scanning analysis with report.
93230
Wearable electrocardiographic rhythm derived monitoring for 24 hours by continuous original waveform recording and storage without superimposition scanning utilizing a device capable of producing a full miniaturized printout; including recording, microprocessor-based analysis with report, physician review and interpretation.
93231
Wearable electrocardiographic rhythm derived monitoring for 24 hours by continuous original waveform recording and storage without superimposition scanning utilizing a device capable of producing a full miniaturized printout; recording (includes connection, recording, and disconnection).
93232
Wearable electrocardiographic rhythm derived monitoring for 24 hours by continuous original waveform recording and storage without superimposition scanning utilizing a device capable of producing a full miniaturized printout; microprocessor-based analysis with report.
93268
Wearable patient activated electrocardiographic rhythm derived event recording with presymptom memory loop, 24-hour attended monitoring, per 30 day period of time; includes transmission, physician review and interpretation.
93270
Wearable patient activated electrocardiographic rhythm derived event recording with presymptom memory loop, 24-hour attended monitoring, per 30 day period of time; recording (includes connection, recording, and disconnection).
93271
Wearable patient activated electrocardiographic rhythm derived event recording with presymptom memory loop, 24-hour attended monitoring, per 30 day period of time; monitoring, receipt of transmissions, and analysis.
93720
Plethysmography, total body; with interpretation and report.
93721
Plethysmography, total body; tracing only, without interpretation and report.
93784
Ambulatory blood pressure monitoring, utilizing a system such as magnetic tape and/or computer disk, for 24 hours or longer; including recording, scanning analysis, interpretation and report.
93786
Ambulatory blood pressure monitoring, utilizing a system such as magnetic tape and/or computer disk, for 24 hours or longer; recording only.
93788
Ambulatory blood pressure monitoring, utilizing a system such as magnetic tape and/or computer disk, for 24 hours or longer; scanning analysis with report.
Comment:
A number of commenters expressed support for CMS' proposal to ensure that the direct PE inputs for certain global only codes reflect the appropriate summation of their related TC only and PC only component code PE inputs as they appear in the direct PE database. One commenter questioned why the prior clinical labor time for the global only codes in the PE database did not match the direct PE inputs that must have been used in CY 2010 to generate the PE RVUs, given that the PE RVUs for the global only codes were the sum of the PE RVUs for the component codes.
Response:
We appreciate the commenters' support for the proposal, and we are finalizing our correction of the direct PE inputs for the global only codes so that the inputs reflect the appropriate summing of the PE inputs for the associated PC only and TC only codes. In response to the commenter who questioned why prior clinical labor time for the global only codes in the PE database did not match the direct PE inputs that must have been used to generate the PE RVUs for payment, we note that Medicare payment systems are programmed to ensure that the PE RVUs for global only codes equal the sum of the PE RVUs for the PC and TC only codes. Therefore, rather than relying upon the direct PE inputs for the global only codes to determine the PE RVUs, which would have not resulted in values that equaled the summation of the component code PE RUVs, our PFS system was programmed so that the PE RVUs for the global only codes were set as the sum of the PE RVUS for the component codes. We expect the corrections to the inputs as incorporated in the direct PE database to alleviate any confusion caused by the prior inclusion of inputs associated with the global only codes that were not actually used to generate the PE RVUs.
After consideration of the public comments we received, we are finalizing our CY 2011 proposal to correct the direct PE inputs for the global only codes so that the inputs reflect the appropriate summing of the PE inputs for the associated PC only and TC only codes. The final CY 2011 direct PE database includes PE corrections to the 14 CPT codes listed in Table 4.
(3) Equipment Time Inputs for Certain Diagnostic Tests
In the CY 2011 PFS proposed rule (75 FR 40056), we stated that we had recently identified equipment time PE inputs that we believed were incorrect for four CPT codes associated with certain diagnostic tests (each is displayed in Table 4):
• CPT code 93225 is the TC only code that includes the connection, recording, and disconnection of the holter monitor (CMS Equipment Code EQ127) used in 24-hour continuous electrocardiographic rhythm derived monitoring. The CY 2010 equipment time input for the holter monitor is 42 minutes, which parallels the intra-service clinical labor input time for the CPT code. However, we believed that the equipment time should reflect the 24 hours of continuous monitoring in which the device is used exclusively by the patient. Therefore, we proposed to change the monitor equipment time for CPT code 93225 to 1440 minutes, the number of minutes in 24 hours.
• CPT code 93226 is the TC only code that includes the scanning analysis with report. We believed that the number of minutes the monitor (CMS Equipment
Code EQ127) is used in this service should parallel the intra-service clinical labor input time of 52 minutes during which the monitor is in use, instead of the CY 2010 equipment time of 1440 minutes, because this code does not represent 24 hours of device use. Therefore, we proposed to change the monitor equipment time for CPT code 93226 to 52 minutes.
• CPT 93224 is the global only code that includes the connection, recording, and disconnection of the monitor (CMS Equipment Code EQ127) and the scanning analysis with report, as well as the physician review and interpretation. We proposed direct PE inputs for CPT code 93224 to include 1492 total minutes of monitor time (which represents the total monitor time we proposed for CPT codes 93225 and 93226).
• CPT code 93788 is the TC only code that describes the scanning analysis with report for ambulatory blood pressure monitoring. We believed that the equipment time input for the blood pressure monitor should parallel the 10 minutes of clinical labor input for the CPT code since that is the time during which the monitor is in use. In CY 2010, the equipment time input for the monitor is 1440 minutes, which is appropriate only for CPT code 93786, the code that describes the 24 hours of ambulatory blood pressure monitoring recording. Therefore, we proposed to correct the equipment time input for the ambulatory blood pressure monitor in CPT code 93788 to 10 minutes.
• CPT code 93784 is the global only code that includes the recording, the scanning analysis with report, and the physician interpretation and report for ambulatory blood pressure monitoring. We proposed to establish the direct PE inputs for CPT code 93784 to include 1450 total minutes of time for the ambulatory blood pressure monitor (which represents the proposed total amount of monitor time included in CPT codes 93786 and 93788).
The proposed CY 2011 direct PE database reflected these changes.
Comment:
Several commenters pointed out that the prior assignment of the 1440 minutes of holter monitor equipment time to CPT code 93226 stemmed from discussions between CMS and provider groups that resulted in PE policies initially implemented in CY 2007 (72 FR 18910). The commenters recommended that CMS retain the 1440 minutes of holter monitor equipment for CPT code 93326, consistent with current policy, rather than reassign the 1440 minutes of holter monitor equipment time as proposed to CPT code 93226.
Response:
We agree with the commenters that it would be most appropriate to maintain our established policy for the equipment times associated with CPT codes 93225 and 93226, based upon further description of the direct practice expenses experienced by the current providers that typically furnish these services to Medicare beneficiaries. Therefore, we are not adopting the equipment time changes that we proposed for CPT codes
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