# Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2017; Medicare Advantage Bid Pricing Data Release; Medicare Advantage and Part D Medical Loss Ratio Data Release; Medicare Advantage Provider Network Requirements; Expansion of Medicare Diabetes Prevention Program Model; Medicare Shared Savings Program Requirements > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2016-26668 ## Record - **Collection:** Federal Register - **Document type:** Rule - **Published:** November 15, 2016 - **Citation:** 81 FR 80170 ## Text DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Parts 405, 410, 411, 414, 417, 422, 423, 424, 425, and 460 [CMS-1654-F] RIN 0938-AS81 Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2017; Medicare Advantage Bid Pricing Data Release; Medicare Advantage and Part D Medical Loss Ratio Data Release; Medicare Advantage Provider Network Requirements; Expansion of Medicare Diabetes Prevention Program Model; Medicare Shared Savings Program Requirements AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS. ACTION: Final rule. SUMMARY: This major final rule addresses changes to the physician fee schedule and other Medicare Part B payment policies, such as changes to the Value Modifier, to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services, as well as changes in the statute. This final rule also includes changes related to the Medicare Shared Savings Program, requirements for Medicare Advantage Provider Networks, and provides for the release of certain pricing data from Medicare Advantage bids and of data from medical loss ratio reports submitted by Medicare health and drug plans. In addition, this final rule expands the Medicare Diabetes Prevention Program model. DATES: These regulations are effective on January 1, 2017. FOR FURTHER INFORMATION CONTACT: Jessica Bruton, (410) 786-5991, for issues related to identification of potentially misvalued services and any physician payment issues not identified below. Gail Addis, (410) 786-4522, for issues related to diabetes self-management training. Jaime Hermansen, (410) 786-2064, for issues related to moderate sedation coding and anesthesia services. Roberta Epps, (410) 786-4503, for issues related to PAMA section 218(a) policy and the transition from traditional x-ray imaging to digital radiography. Ann Marshall, (410) 786-3059, for primary care issues related to chronic care management (CCM), burden reduction, telehealth services and evaluation and management services. Emily Yoder, (410) 786-1804, for issues related to resource intensive services, telehealth services and other primary care issues. Lindsey Baldwin, (410) 786-1694, for primary care issues related to behavioral health integration services. Geri Mondowney, (410) 786-4584, and Donta Henson, (410) 786-1947, for issues related to geographic practice cost indices. Michael Soracoe, (410) 786-6312, for issues related to the target and phase-in provisions, the practice expense methodology, impacts, conversion factor, and the valuation of pathology and surgical procedures. Pamela West, (410) 786-2302, for issues related to therapy. Patrick Sartini, (410) 786-9252, for issues related to malpractice RVUs, radiation treatment, mammography and other imaging services. Kathy Bryant, (410) 786-3448, for issues related to collecting data on resources used in furnishing global services. Donta Henson, (410) 786-1947, for issues related to ophthalmology services. Corinne Axelrod, (410) 786-5620, for issues related to rural health clinics or federally qualified health centers. Simone Dennis, (410) 786-8409, for issues related to FQHC-specific market basket. JoAnna Baldwin, (410) 786-7205, or Sarah Fulton, (410) 786-2749, for issues related to appropriate use criteria for advanced diagnostic imaging services. Robin Usi, (410) 786-0364, for issues related to open payments. Sean O'Grady, (410) 786-2259, or Julie Uebersax, (410) 786-9284, for issues related to release of pricing data from Medicare Advantage bids and release of medical loss ratio data submitted by Medicare Advantage organizations and Part D sponsors. Sara Vitolo, (410) 786-5714, for issues related to prohibition on billing qualified Medicare beneficiary individuals for Medicare cost-sharing. Michelle Peterman, (410) 786-2591, for issues related to Accountable Care Organization (ACO) participants who report PQRS quality measures separately. Katie Mucklow, (410) 786-0537 or John Spiegel, (410) 786-1909, for issues related to Provider Enrollment Medicare Advantage Program. Jen Zhu, (410) 786-3725, Carlye Burd, (410) 786-1972, or Nina Brown, (410) 786-6103, for issues related to Medicare Diabetes Prevention Program model expansion. Rabia Khan or Terri Postma, (410) 786-8084 or ACO@cms.hhs.gov , for issues related to the Medicare Shared Savings Program. Kimberly Spalding Bush, (410) 786-3232, or Fiona Larbi, (410) 786-7224, for issues related to Value-based Payment Modifier and Physician Feedback Program. Lisa Ohrin Wilson, (410) 786-8852, or Gabriel Scott, (410) 786-3928, for issues related to physician self-referral updates. SUPPLEMENTARY INFORMATION: Table of Contents I. Executive Summary and Background A. Executive Summary B. Background II. Provisions of the Final Rule for PFS A. Determination of Practice Expense Relative Value Units (PE RVUs) B. Determination of Malpractice Relative Value Units (MRVUs) C. Medicare Telehealth Services D. Potentially Misvalued Services Under the Physician Fee Schedule 1. Background 2. Progress in Identifying and Reviewing Potentially Misvalued Codes 3. Validating RVUs of Potentially Misvalued Codes 4. CY 2017 Identification and Review of Potentially Misvalued Services 5. Valuing Services That Include Moderate Sedation as an Inherent Part of Furnishing the Procedure 6. Collecting Data on Resources Used in Furnishing Global Services E. Improving Payment Accuracy for Primary Care, Care Management Services, and Patient-Centered Services F. Improving Payment Accuracy for Services: Diabetes Self-Management Training (DSMT) G. Target for Relative Value Adjustments for Misvalued Services H. Phase-In of Significant RVU Reductions I. Geographic Practice Cost Indices (GPCIs) J. Payment Incentive for the Transition From Traditional X-Ray Imaging to Digital Radiography and Other Imaging Services K. Procedures Subject to the Multiple Procedure Payment Reduction (MPPR) and the OPPS Cap L. Valuation of Specific Codes M. Therapy Caps III. Other Provisions of the Final Rule for PFS A. Chronic Care Management (CCM) and Transitional Care Management (TCM) Supervision Requirements in Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) B. FQHC-Specific Market Basket C. Appropriate Use Criteria for Advanced Diagnostic Imaging Services D. Reports of Payments or Other Transfers of Value to Covered Recipients: Summary of Public Comments E. Release of Part C Medicare Advantage Bid Pricing Data and Part C and Part D Medical Loss Ratio (MLR) Data F. Prohibition on Billing Qualified Medicare Beneficiary Individuals for Medicare Cost-Sharing G. Recoupment or Offset of Payments to Providers Sharing the Same Taxpayer Identification Number H. Accountable Care Organization (ACO) Participants Who Report Physician Quality Reporting System (PQRS) Quality Measures Separately I. Medicare Advantage Provider Enrollment J. Expansion of the Diabetes Prevention Program (DPP) Model K. Medicare Shared Savings Program L. Value-Based Payment Modifier and Physician Feedback Program M. Physician Self-Referral Updates N. Designated Health Services IV. Collection of Information Requirements V. Regulatory Impact Analysis Regulations Text Acronyms In addition, because of the many organizations and terms to which we refer by acronym in this final rule, we are listing these acronyms and their corresponding terms in alphabetical order below: A1c Hemoglobin A1c AAA Abdominal aortic aneurysms ACO Accountable care organization AMA American Medical Association ASC Ambulatory surgical center ATA American Telehealth Association ATRA American Taxpayer Relief Act (Pub. L. 112-240) 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) BLS Bureau of Labor Statistics CAD Coronary artery disease CAH Critical access hospital CBSA Core-Based Statistical Area CCM Chronic care management CEHRT Certified EHR technology CF Conversion factor CG-CAHPS Clinician and Group Consumer Assessment of Healthcare Providers and Systems CLFS Clinical Laboratory Fee Schedule CoA Certificate of Accreditation CoC Certificate of Compliance CoR Certificate of Registration CNM Certified nurse-midwife CP Clinical psychologist CPC Comprehensive Primary Care CPEP Clinical Practice Expert Panel CPT [Physicians] Current Procedural Terminology ( CPT codes, descriptions and other data only are copyright 2015 American Medical Association. All rights reserved. ) CQM Clinical quality measure CSW Clinical social worker CT Computed tomography CW Certificate of Waiver CY Calendar year DFAR Defense Federal Acquisition Regulations DHS Designated health services DM Diabetes mellitus DSMT Diabetes self-management training eCQM Electronic clinical quality measures ED Emergency Department EHR Electronic health record E/M Evaluation and management EMT Emergency Medical Technician EP Eligible professional eRx Electronic prescribing ESRD End-stage renal disease FAR Federal Acquisition Regulations FDA Food and Drug Administration FFS Fee-for-service FQHC Federally qualified health center FR Federal Register FSHCAA Federally Supported Health Centers Assistance Act GAF Geographic adjustment factor GAO Government Accountability Office GPCI Geographic practice cost index GPO Group purchasing organization GPRO Group practice reporting option GTR Genetic Testing Registry HCPCS Healthcare Common Procedure Coding System HHS [Department of] Health and Human Services HOPD Hospital outpatient department HPSA Health professional shortage area IDTF Independent diagnostic testing facility IPPE Initial preventive physical exam IPPS Inpatient Prospective Payment System IQR Inpatient Quality Reporting ISO Insurance service office IT Information technology IWPUT Intensity of work per unit of time LCD Local coverage determination MA Medicare Advantage MAC Medicare Administrative Contractor MACRA Medicare Access and CHIP Reauthorization Act of 2015 (Pub. L. 114-10) MAP Measure Applications Partnership MAPCP Multi-payer Advanced Primary Care Practice MAV Measure application validity [process] MCP Monthly capitation payment MedPAC Medicare Payment Advisory Commission MEI Medicare Economic Index MFP Multi-Factor Productivity MIPPA Medicare Improvements for Patients and Providers Act (Pub. L. 110-275) MMA Medicare Prescription Drug, Improvement and Modernization Act of 2003 (Pub. L. 108-173, enacted on December 8, 2003) MP Malpractice MPPR Multiple procedure payment reduction MRA Magnetic resonance angiography MRI Magnetic resonance imaging MSA Metropolitan Statistical Areas MSPB Medicare Spending per Beneficiary MU Meaningful use NCD National coverage determination NCQDIS National Coalition of Quality Diagnostic Imaging Services NP Nurse practitioner NPI National Provider Identifier NPP Nonphysician practitioner NQS National Quality Strategy OACT CMS's Office of the Actuary OBRA ’89 Omnibus Budget Reconciliation Act of 1989 (Pub. L. 101-239) OBRA ’90 Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508) OES Occupational Employment Statistics OMB Office of Management and Budget OPPS Outpatient prospective payment system OT Occupational therapy PA Physician assistant PAMA Protecting Access to Medicare Act of 2014 (Pub. L. 113-93) PAMPA Patient Access and Medicare Protection Act (Pub. L. 114-115) PC Professional component PCIP Primary Care Incentive Payment PE Practice expense PE/HR Practice expense per hour PEAC Practice Expense Advisory Committee PECOS Provider Enrollment, Chain, and Ownership System PFS Physician Fee Schedule PLI Professional Liability Insurance PMA Premarket approval PPM Provider-Performed Microscopy PQRS Physician Quality Reporting System PPIS Physician Practice Expense Information Survey PPS Prospective Payment System PT Physical therapy PT Proficiency Testing PT/INR Prothrombin Time/International Normalized Ratio PY Performance year QA Quality Assessment QC Quality Control QCDR Qualified clinical data registry QRUR Quality and Resources Use Report RBRVS Resource-based relative value scale RFA Regulatory Flexibility Act RHC Rural health clinic RIA Regulatory impact analysis RUC American Medical Association/Specialty Society Relative (Value) Update Committee RUCA Rural Urban Commuting Area RVU Relative value unit SBA Small Business Administration SGR Sustainable growth rate SIM State Innovation Model SLP Speech-language pathology SMS Socioeconomic Monitoring System SNF Skilled nursing facility TAP Technical Advisory Panel TC Technical component TIN Tax identification number TCM Transitional Care Management UAF Update adjustment factor UPIN Unique Physician Identification Number USPSTF United States Preventive Services Task Force VBP Value-based purchasing VM Value-Based Payment Modifier Addenda Available Only Through the Internet on the CMS Web Site The PFS Addenda along with other supporting documents and tables referenced in this final rule are available through the Internet on the CMS Web site at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html . Click on the link on the left side of the screen titled, “PFS Federal Regulations Notices” for a chronological list of PFS Federal Register and other related documents. For the CY 2017 PFS Final Rule, refer to item CMS-1654-F. Readers who experience any problems accessing any of the Addenda or other documents referenced in this rule and posted on the CMS Web site identified above should contact Jessica Bruton at (410) 786-5991. CPT (Current Procedural Terminology) Copyright Notice Throughout this final rule, we use CPT codes and descriptions to refer to a variety of services. We note that CPT codes and descriptions are copyright 2015 American Medical Association. All Rights Reserved. CPT is a registered trademark of the American Medical Association (AMA). Applicable Federal Acquisition Regulations (FAR) and Defense Federal Acquisition Regulations (DFAR) apply. I. Executive Summary and Background A. Executive Summary 1. Purpose This major final rule revises payment polices under the Medicare Physician Fee Schedule (PFS) and makes other policy changes related to Medicare Part B payment. These changes will be applicable to services furnished in CY 2017. In addition, this final rule includes the following provisions: Payment policy changes for Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs); expansion of the Medicare Diabetes Prevention Program model; policy changes related to the Medicare Shared Savings Program; and release of pricing data submitted to CMS by Medicare Advantage (MA) organizations; and medical loss ratio reports submitted by MA plans and Part D plans. These additional policies are addressed in section III. of this final rule. 2. Summary of the Major Provisions The statute requires us to establish payments under the PFS based on national uniform relative value units (RVUs) that account for the relative resources used in furnishing a service. The statute requires that RVUs be established for three categories of resources: Work, practice expense (PE); and malpractice (MP) expense; and, that we establish by regulation each year's payment amounts for all physicians' services paid under the PFS, incorporating geographic adjustments to reflect the variations in the costs of furnishing services in different geographic areas. In this major final rule, we establish RVUs for CY 2017 for the PFS, and other Medicare Part B payment policies, to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services, as well as changes in the statute. In addition, this final rule includes summaries of public comments and final policies regarding: • Potentially Misvalued Codes. • Telehealth Services. • Establishing Values for New, Revised, and Misvalued Codes. • Target for Relative Value Adjustments for Misvalued Services. • Phase-in of Significant RVU Reductions. • Chronic Care Management (CCM) and Transitional Care Management (TCM) Supervision Requirements in Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs). • FQHC-Specific Market Basket. • Appropriate Use Criteria for Advanced Diagnostic Imaging Services. • Reports of Payments or Other Transfers of Value to Covered Recipients: Solicitation of Public Comments. • Release of Part C Medicare Advantage Bid Pricing Data and Part C and Part D Medical Loss Ratio (MLR) Data. • Prohibition on Billing Qualified Medicare Beneficiary Individuals for Medicare Cost-Sharing. • Recoupment or Offset of Payments to Providers Sharing the Same Taxpayer Identification Number. • Accountable Care Organization (ACO) Participants Who Report Physician Quality Reporting System (PQRS) Quality Measures Separately. • Medicare Advantage Provider Enrollment. • Expansion of the Diabetes Prevention Program (DPP) Model. • Medicare Shared Savings Program. • Value-Based Payment Modifier and the Physician Feedback Program. • Physician Self-referral Updates. • Designated Health Services. 3. Summary of Costs and Benefits The statute requires that annual adjustments to PFS RVUs may not cause annual estimated expenditures to differ by more than $20 million from what they would have been had the adjustments not been made. If adjustments to RVUs would cause expenditures to change by more than $20 million, we must make adjustments to preserve budget neutrality. These adjustments can affect the distribution of Medicare expenditures across specialties. In addition, several changes in this final rule will affect the specialty distribution of Medicare expenditures. When considering the combined impact of work, PE, and MP RVU changes, the projected payment impacts would be small for most specialties; however, the impact would be larger for a few specialties. We have determined that this major final rule is economically significant. For a detailed discussion of the economic impacts, see section VI. of this final rule. B. 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 PFS relies on national relative values that are established for work, PE, and MP, which are adjusted for geographic cost variations. These values are multiplied by a conversion factor (CF) to convert the RVUs into payment rates. The concepts and methodology underlying the PFS were enacted as part of the Omnibus Budget Reconciliation Act of 1989 (Pub. L. 101-239, enacted on December 19, 1989) (OBRA '89), and the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508, enacted on November 5, 1990) (OBRA '90). The final rule published on November 25, 1991 (56 FR 59502) set forth the first fee schedule used for payment for physicians' services. We note that throughout this major final rule, unless otherwise noted, the term “practitioner” is used to describe both physicians and nonphysician practitioners (NPPs) who are permitted to bill Medicare under the PFS for services furnished to Medicare beneficiaries. 1. Development of the Relative Values a. Work RVUs The work RVUs established for the initial fee schedule, which was implemented on January 1, 1992, were developed with extensive input from the physician community. A research team at the Harvard School of Public Health developed the original work RVUs for most codes under a cooperative agreement with the Department of Health and Human Services (HHS). In constructing the code-specific vignettes used in determining the original physician work RVUs, Harvard worked with panels of experts, both inside and outside the federal government, and obtained input from numerous physician specialty groups. As specified in section 1848(c)(1)(A) of the Act, the work component of physicians' services means the portion of the resources used in furnishing the service that reflects physician time and intensity. We establish work RVUs for new, revised and potentially misvalued codes based on our review of information that generally includes, but is not limited to, recommendations received from the American Medical Association/Specialty Society Relative Value Update Committee (RUC), the Health Care Professionals Advisory Committee (HCPAC), the Medicare Payment Advisory Commission (MedPAC), and other public commenters; medical literature and comparative databases; as well as a comparison of the work for other codes within the Medicare PFS, and consultation with other physicians and health care professionals within CMS and the federal government. We also assess the methodology and data used to develop the recommendations submitted to us by the RUC and other public commenters, and the rationale for their recommendations. In the CY 2011 PFS final rule with comment period (75 FR 73328 through 73329), we discussed a variety of methodologies and approaches used to develop work RVUs, including survey data, building blocks, crosswalk to key reference or similar codes, and magnitude estimation. More information on these issues is available in that rule. b. Practice Expense RVUs Initially, only the work RVUs were resource-based, and the PE and MP RVUs were based on average allowable charges. Section 121 of the Social Security Act Amendments of 1994 (Pub. L. 103-432, enacted on October 31, 1994), amended section 1848(c)(2)(C)(ii) of the Act and required us to develop resource-based PE RVUs for each physicians' service beginning in 1998. We were required to consider general categories of expenses (such as office rent and wages of personnel, but excluding malpractice expenses) comprising PEs. The PE RVUs continue to represent the portion of these resources involved in furnishing PFS services. Originally, the resource-based method was to be used beginning in 1998, but section 4505(a) of the Balanced Budget Act of 1997 (Pub. L. 105-33, enacted on August 5, 1997) (BBA) delayed implementation of the resource-based PE RVU system until January 1, 1999. In addition, section 4505(b) of the BBA provided for a 4-year transition period from the charge-based PE RVUs to the resource-based PE RVUs. We established the resource-based PE RVUs for each physicians' service in a final rule, published on November 2, 1998 (63 FR 58814), effective for services furnished in CY 1999. Based on the requirement to transition to a resource-based system for PE over a 4-year period, payment rates were not fully based upon resource-based PE RVUs until CY 2002. This resource-based system was based on two significant sources of actual PE data: The Clinical Practice Expert Panel (CPEP) data; and the AMA's Socioeconomic Monitoring System (SMS) data. (These data sources are described in greater detail in the CY 2012 final rule with comment period (76 FR 73033). Separate PE RVUs are established for services furnished in facility settings, such as a hospital outpatient department (HOPD) or an ambulatory surgical center (ASC), and in nonfacility settings, such as a physician's office. The nonfacility RVUs reflect all of the direct and indirect PEs involved in furnishing a service described by a particular HCPCS code. The difference, if any, in these PE RVUs generally results in a higher payment in the nonfacility setting because in the facility settings some costs are borne by the facility. Medicare's payment to the facility (such as the outpatient prospective payment system (OPPS) payment to the HOPD) would reflect costs typically incurred by the facility. Thus, payment associated with those facility resources is not made under the PFS. Section 212 of the Balanced Budget Refinement Act of 1999 (Pub. L. 106-113, enacted on November 29, 1999) (BBRA) directed the Secretary of Health and Human Services (the Secretary) to establish a process under which we accept and use, to the maximum extent practicable and consistent with sound data practices, data collected or developed by entities and organizations to supplement the data we normally collect in determining the PE component. On May 3, 2000, we published the interim final rule (65 FR 25664) that set forth the criteria for the submission of these supplemental PE survey data. The criteria were modified in response to comments received, and published in the Federal Register (65 FR 65376) as part of a November 1, 2000 final rule. The PFS final rules published in 2001 and 2003, respectively, (66 FR 55246 and 68 FR 63196) extended the period during which we would accept these supplemental data through March 1, 2005. In the CY 2007 PFS final rule with comment period (71 FR 69624), we revised the methodology for calculating direct PE RVUs from the top-down to the bottom-up methodology beginning in CY 2007. We adopted a 4-year transition to the new PE RVUs. This transition was completed for CY 2010. In the CY 2010 PFS final rule with comment period, we updated the practice expense per hour (PE/HR) data that are used in the calculation of PE RVUs for most specialties (74 FR 61749). In CY 2010, we began a 4-year transition to the new PE RVUs using the updated PE/HR data, which was completed for CY 2013. c. Malpractice RVUs Section 4505(f) of the BBA amended section 1848(c) of the Act to require that we implement resource-based MP RVUs for services furnished on or after CY 2000. The resource-based MP RVUs were implemented in the PFS final rule with comment period published November 2, 1999 (64 FR 59380). The MP RVUs are based on commercial and physician-owned insurers' malpractice insurance premium data from all the states, the District of Columbia, and Puerto Rico. For more information on MP RVUs, see section II.B.2. of this final rule. d. Refinements to the RVUs Section 1848(c)(2)(B)(i) of the Act requires that we review RVUs no less often than every 5 years. Prior to CY 2013, we conducted periodic reviews of work RVUs and PE RVUs independently. We completed five-year reviews of work RVUs that were effective for calendar years 1997, 2002, 2007, and 2012. Although refinements to the direct PE inputs initially relied heavily on input from the RUC Practice Expense Advisory Committee (PEAC), the shifts to the bottom-up PE methodology in CY 2007 and to the use of the updated PE/HR data in CY 2010 have resulted in significant refinements to the PE RVUs in recent years. In the CY 2012 PFS final rule with comment period (76 FR 73057), we finalized a proposal to consolidate reviews of work and PE RVUs under section 1848(c)(2)(B) of the Act and reviews of potentially misvalued codes under section 1848(c)(2)(K) of the Act into one annual process. In addition to the five-year reviews, beginning for CY 2009, CMS and the RUC have identified and reviewed a number of potentially misvalued codes on an annual basis based on various identification screens. This annual review of work and PE RVUs for potentially misvalued codes was supplemented by the amendments to section 1848 of the Act, as enacted by section 3134 of the Affordable Care Act, that require the agency to periodically identify, review and adjust values for potentially misvalued codes. e. Application of Budget Neutrality to Adjustments of RVUs As described in section VI.C. of this final rule, in accordance with section 1848(c)(2)(B)(ii)(II) of the Act, if revisions to the RVUs cause expenditures for the year to change by more than $20 million, we make adjustments to ensure that expenditures did not increase or decrease by more than $20 million. 2. Calculation of Payments Based on RVUs To calculate the payment for each service, the components of the fee schedule (work, PE, and MP RVUs) are adjusted by geographic practice cost indices (GPCIs) to reflect the variations in the costs of furnishing the services. The GPCIs reflect the relative costs of work, PE, and MP 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 based on a statutory formula by CMS's 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 MP × GPCI MP)] × CF. 3. Separate Fee Schedule Methodology for Anesthesia Services Section 1848(b)(2)(B) of the Act specifies that the fee schedule amounts for anesthesia services are to be based on a uniform relative value guide, with appropriate adjustment of an anesthesia conversion factor, in a manner to ensure that fee schedule amounts for anesthesia services are consistent with those for other services of comparable value. Therefore, there is a separate fee schedule methodology for anesthesia services. Specifically, we establish a separate conversion factor for anesthesia services and we utilize the uniform relative value guide, or base units, as well as time units, to calculate the fee schedule amounts for anesthesia services. Since anesthesia services are not valued using RVUs, a separate methodology for locality adjustments is also necessary. This involves an adjustment to the national anesthesia CF for each payment locality. 4. Most Recent Changes to the Fee Schedule Section 220(d) of the Protecting Access to Medicare Act of 2014 (Pub. L. 113-93, enacted on April 1, 2014) (PAMA) added a new subparagraph (O) to section 1848(c)(2) of the Act to establish an annual target for reductions in PFS expenditures resulting from adjustments to relative values of misvalued codes. If the estimated net reduction in expenditures for a year is equal to or greater than the target for that year, the provision specifies that reduced expenditures attributable to such adjustments shall be redistributed in a budget-neutral manner within the PFS. The provision specifies that the amount by which such reduced expenditures exceed the target for a given year shall be treated as a reduction in expenditures for the subsequent year for purposes of determining whether the target for the subsequent year has been met. The provision also specifies that an amount equal to the difference between the target and the estimated net reduction in expenditures, called the target recapture amount, shall not be taken into account when applying the budget neutrality requirements specified in section 1848(c)(2)(B)(ii)(II) of the Act. The PAMA amendments originally made the target provisions applicable for CYs 2017 through 2020 and set the target for reduced expenditures at 0.5 percent of estimated expenditures under the PFS for each of those 4 years. Subsequently, section 202 of the Achieving a Better Life Experience Act of 2014 (Division B of Pub. L. 113-295, enacted December 19, 2014) (ABLE) accelerated the application of the target, amending section 1848(c)(2)(O) of the Act to specify that target provisions apply for CYs 2016, 2017, and 2018; and setting a 1 percent target for reduced expenditures for CY 2016 and a 0.5 percent target for CYs 2017 and 2018. The implementation of the target legislation was finalized in the CY 2016 PFS final rule with comment period, and revisions are discussed in section II.G. of this final rule. Section 1848(c)(7) of the Act, as added by section 220(e) of the PAMA, specified that for services that are not new or revised codes, if the total RVUs for a service for a year would otherwise be decreased by an estimated 20 percent or more as compared to the total RVUs for the previous year, the applicable adjustments in work, PE, and MP RVUs shall be phased in over a 2-year period. Section 220(e) of the PAMA required the phase-in of RVU reductions of 20 percent or more to begin for 2017. Section 1848(c)(7) of the Act was later amended by section 202 of the ABLE Act to require instead that the phase-in must begin in CY 2016. The implementation of the phase-in legislation was finalized in the CY 2016 PFS final rule with comment period and revisions in this year's rulemaking are discussed in section II.H. of this final rule. II. Provisions of the Final Rule for PFS A. Determination of Practice Expense (PE) Relative Value Units (RVUs) 1. Overview Practice expense (PE) is the portion of the resources used in furnishing a service that reflects the general categories of physician and practitioner expenses, such as office rent and personnel wages, but excluding malpractice expenses, as specified in section 1848(c)(1)(B) of the Act. As required by section 1848(c)(2)(C)(ii) of the Act, we use a resource-based system for determining PE RVUs for each physicians' service. We develop PE RVUs by considering the direct and indirect practice resources involved in furnishing each service. Direct expense categories include clinical labor, medical supplies, and medical equipment. Indirect expenses include administrative labor, office expense, and all other expenses. The sections that follow provide more detailed information about the methodology for translating the resources involved in furnishing each service into service-specific PE RVUs. We refer readers to the CY 2010 PFS final rule with comment period (74 FR 61743 through 61748) for a more detailed explanation of the PE methodology. 2. Practice Expense Methodology a. Direct Practice Expense We determine the direct PE for a specific service by adding the costs of the direct resources (that is, the clinical staff, medical supplies, and medical equipment) typically involved with furnishing that service. The costs of the resources are calculated using the refined direct PE inputs assigned to each CPT code in our PE database, which are generally based on our review of recommendations received from the RUC and those provided in response to public comment periods. For a detailed explanation of the direct PE methodology, including examples, we refer readers to the Five-Year Review of Work Relative Value Units under the PFS and Proposed Changes to the Practice Expense Methodology proposed notice (71 FR 37242) and the CY 2007 PFS final rule with comment period (71 FR 69629). b. Indirect Practice Expense per Hour Data We use survey data on indirect PEs incurred per hour worked in developing the indirect portion of the PE RVUs. Prior to CY 2010, we primarily used the practice expense per hour (PE/HR) by specialty that was obtained from the AMA's Socioeconomic Monitoring Surveys (SMS). The AMA administered a new survey in CY 2007 and CY 2008, the Physician Practice Expense Information Survey (PPIS). The PPIS is a multispecialty, nationally representative, PE survey of both physicians and nonphysician practitioners (NPPs) paid under the PFS using a survey instrument and methods highly consistent with those used for the SMS and the supplemental surveys. The PPIS gathered information from 3,656 respondents across 51 physician specialty and health care professional groups. We believe the PPIS is the most comprehensive source of PE survey information available. We used the PPIS data to update the PE/HR data for the CY 2010 PFS for almost all of the Medicare-recognized specialties that participated in the survey. When we began using the PPIS data in CY 2010, we did not change the PE RVU methodology itself or the manner in which the PE/HR data are used in that methodology. We only updated the PE/HR data based on the new survey. Furthermore, as we explained in the CY 2010 PFS final rule with comment period (74 FR 61751), because of the magnitude of payment reductions for some specialties resulting from the use of the PPIS data, we transitioned its use over a 4-year period from the previous PE RVUs to the PE RVUs developed using the new PPIS data. As provided in the CY 2010 PFS final rule with comment period (74 FR 61751), the transition to the PPIS data was complete for CY 2013. Therefore, PE RVUs from CY 2013 forward are developed based entirely on the PPIS data, except as noted in this section. Section 1848(c)(2)(H)(i) of the Act requires us to use the medical oncology supplemental survey data submitted in 2003 for oncology drug administration services. Therefore, the PE/HR for medical oncology, hematology, and hematology/oncology reflects the continued use of these supplemental survey data. Supplemental survey data on independent labs from the College of American Pathologists were implemented for payments beginning in CY 2005. Supplemental survey data from the National Coalition of Quality Diagnostic Imaging Services (NCQDIS), representing independent diagnostic testing facilities (IDTFs), were blended with supplementary survey data from the American College of Radiology (ACR) and implemented for payments beginning in CY 2007. Neither IDTFs, nor independent labs, participated in the PPIS. Therefore, we continue to use the PE/HR that was developed from their supplemental survey data. Consistent with our past practice, the previous indirect PE/HR values from the supplemental surveys for these specialties were updated to CY 2006 using the Medicare Economic Index (MEI) to put them on a comparable basis with the PPIS data. We also do not use the PPIS data for reproductive endocrinology and spine surgery since these specialties currently are not separately recognized by Medicare, nor do we have a method to blend the PPIS data with Medicare-recognized specialty data. Previously, we established PE/HR values for various specialties without SMS or supplemental survey data by crosswalking them to other similar specialties to estimate a proxy PE/HR. For specialties that were part of the PPIS for which we previously used a crosswalked PE/HR, we instead used the PPIS-based PE/HR. We continue previous crosswalks for specialties that did not participate in the PPIS. However, beginning in CY 2010, we changed the PE/HR crosswalk for portable X-ray suppliers from radiology to IDTF, a more appropriate crosswalk because these specialties are more similar to each other for work time. For registered dietician services, the resource-based PE RVUs have been calculated in accordance with the final policy that crosswalks the specialty to the “All Physicians” PE/HR data, as adopted in the CY 2010 PFS final rule with comment period (74 FR 61752) and discussed in more detail in the CY 2011 PFS final rule with comment period (75 FR 73183). We have incorporated the available utilization data for interventional cardiology, which became a recognized Medicare specialty during 2014. We finalized the use of a proxy PE/HR value for interventional cardiology in the CY 2016 final rule with comment period (80 FR 70892), as there are no PPIS data for this specialty, by crosswalking the PE/HR from Cardiology, since the specialties furnish similar services in the Medicare claims data. Comment: A commenter questioned the validity of the PPIS survey data since it is nearly 10 years old. Several other commenters stated that CMS' estimated per-minute labor cost inputs are lower than actual labor costs. Response: We have previously identified several concerns regarding the underlying data used in determining PE RVUs in the CY 2014 PFS final rule (78 FR 74246-74247). Even when we first incorporated the survey data into the PE methodology, many in the community expressed serious concerns over the accuracy of this or other PE surveys as a way of gathering data on PE inputs from the diversity of providers paid under the PFS. However, we currently lack another source of comprehensive data regarding PE costs, and as a result, we continue to believe that the PPIS survey data is the best data currently available. We continue to seek the best broad-based, auditable, routinely-updated source of information regarding PE costs. c. Allocation of PE to Services To establish PE RVUs for specific services, it is necessary to establish the direct and indirect PE associated with each service. (1) Direct Costs The relative relationship between the direct cost portions of the PE RVUs for any two services is determined by the relative relationship between the sum of the direct cost resources (that is, the clinical staff, medical supplies, and medical equipment) typically involved with furnishing each of the services. The costs of these resources are calculated from the refined direct PE inputs in our PE database. For example, if one service has a direct cost sum of $400 from our PE database and another service has a direct cost sum of $200, the direct portion of the PE RVUs of the first service would be twice as much as the direct portion of the PE RVUs for the second service. (2) Indirect Costs Section II.A.2.b. of this final rule describes the current data sources for specialty-specific indirect costs used in our PE calculations. We allocated the indirect costs to the code level on the basis of the direct costs specifically associated with a code and the greater of either the clinical labor costs or the work RVUs. We also incorporated the survey data described earlier in the PE/HR discussion. The general approach to developing the indirect portion of the PE RVUs is as follows: • For a given service, we used the direct portion of the PE RVUs calculated as previously described and the average percentage that direct costs represent of total costs (based on survey data) across the specialties that furnish the service to determine an initial indirect allocator. That is, the initial indirect allocator is calculated so that the direct costs equal the average percentage of direct costs of those specialties furnishing the service. For example, if the direct portion of the PE RVUs for a given service is 2.00 and direct costs, on average, represented 25 percent of total costs for the specialties that furnished the service, the initial indirect allocator would be calculated so that it equals 75 percent of the total PE RVUs. Thus, in this example, the initial indirect allocator would equal 6.00, resulting in a total PE RVU of 8.00 (2.00 is 25 percent of 8.00 and 6.00 is 75 percent of 8.00). • Next, we added 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 a work RVU of 4.00 and the clinical labor portion of the direct PE RVU was 1.50, we would add 4.00 (since the 4.00 work RVUs are greater than the 1.50 clinical labor portion) to the initial indirect allocator of 6.00 to get an indirect allocator of 10.00. In the absence of any further use of the survey data, the relative relationship between the indirect cost portions of the PE RVUs for any two services would be determined by the relative relationship between these indirect cost allocators. For example, if one service had an indirect cost allocator of 10.00 and another service had an indirect cost allocator of 5.00, the indirect portion of the PE RVUs of the first service would be twice as great as the indirect portion of the PE RVUs for the second service. • Next, we incorporated the specialty-specific indirect PE/HR data into the calculation. In our example, if, based on the survey data, the average indirect cost of the specialties furnishing the first service with an allocator of 10.00 was half of the average indirect cost of the specialties furnishing the second service with an indirect allocator of 5.00, the indirect portion of the PE RVUs of the first service would be equal to that of the second service. (3) Facility and Nonfacility Costs For procedures that can be furnished in a physician's office, as well as in a facility setting, where Medicare makes a separate payment to the facility for its costs in furnishing a service, 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. In calculating the PE RVUs for services furnished in a facility, we do not include resources that would generally not be provided by physicians when furnishing the service. For this reason, the facility PE RVUs are generally lower than the nonfacility PE RVUs. (4) Services With Technical Components (TCs) and Professional Components (PCs) Diagnostic services are generally comprised of two components: A professional component (PC) and a technical component (TC). The PC and TC may be furnished independently or by different providers, or they may be furnished together as a “global” service. When services have separately billable PC and TC components, the payment for the global service equals the sum of the payment for the TC and PC. To achieve this, we use a weighted average of the ratio of indirect to direct costs across all the specialties that furnish the global service, TCs, and PCs; that is, we apply the same weighted average indirect percentage factor to allocate indirect expenses to the global service, PCs, and TCs for a service. (The direct PE RVUs for the TC and PC sum to the global.) (5) PE RVU Methodology For a more detailed description of the PE RVU methodology, we refer readers to the CY 2010 PFS final rule with comment period (74 FR 61745 through 61746). We also direct interested readers to the file called “Calculation of PE RVUs under Methodology for Selected Codes” which is available on our Web site under downloads for the CY 2017 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html . This file contains a table that illustrates the calculation of PE RVUs as described below for individual codes. (a) Setup File First, we create a setup file for the PE methodology. The setup file contains the direct cost inputs, the utilization for each procedure code at the specialty and facility/nonfacility place of service level, and the specialty-specific PE/HR data calculated from the surveys. (b) 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. Step 2: Calculate the aggregate pool of direct PE costs for the current year. We set the aggregate pool of PE costs equal to the product of the ratio of the current aggregate PE RVUs to current aggregate work RVUs and the proposed aggregate work RVUs. Step 3: Calculate the aggregate pool of direct PE costs for use in ratesetting. This is the product of the aggregate direct costs for all services from Step 1 and the utilization data for that service. Step 4: Using the results of Step 2 and Step 3, use the conversion factor to calculate a direct PE scaling factor to ensure that the aggregate pool of direct PE costs calculated in Step 3 does not vary from the aggregate pool of direct PE costs for the current year. Apply the scaling factor to the direct costs for each service (as calculated in Step 1). Step 5: Convert the results of Step 4 to an RVU scale for each service. To do this, divide the results of Step 4 by the CF. Note that the actual value of the CF used in this calculation does not influence the final direct cost PE RVUs, as long as the same CF is used in Step 4 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. (c) Create the Indirect Cost PE RVUs Create indirect allocators. Step 6: Based on the survey data, calculate direct and indirect PE percentages for each physician specialty. Step 7: Calculate direct and indirect PE percentages at the service level by taking a weighted average of the results of Step 6 for the specialties that furnish the service. Note that for services with TCs and PCs, the direct and indirect percentages for a given service do not vary by the PC, TC, and global service. We use an average of the 3 most recent years of available Medicare claims data to determine the specialty mix assigned to each code. As we stated in the CY 2016 final rule with comment period (80 FR 70894), we believe that the 3-year average will mitigate the need to use dominant or expected specialty instead of the claims data. Because we incorporated CY 2015 claims data for use in the CY 2017 proposed rates, we believe that the finalized PE RVUs associated with the CY 2017 PFS final rule provide a first opportunity to determine whether service-level overrides of claims data are necessary. Currently, in the development of PE RVUs we apply only the overrides that also apply to the MP RVU calculation. Since the proposed PE RVUs include a new year of claims into the 3-year average for the first time, we solicited comment on the proposed CY 2017 PFS rates and whether or not the incorporation of a new year of utilization data into a 3-year average mitigates the need for alternative service-level overrides such as a claims-based approach (dominant specialty) or stakeholder-recommended approach (expected specialty) in the development of PE (and MP) RVUs for low-volume codes. Prior year RVUs are available at several locations on the PFS Web site located at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/ . Comment: Several commenters contended that even a multi-year average of claims data to determine the mix of specialties that furnish the services creates distortions and wide variability for low volume services, particularly those services with fewer than 100 annual Medicare claims. Commenters stated that low volume codes that use a specialty override appear to have stable PE and MP RVUs, while other low volume codes without overrides continue to shift from year to year. Given these fluctuations, commenters suggested that CMS implement service-level overrides to determine the specialty mix for these low volume procedures. These commenters provided a list of nearly 2000 codes and suggested specialty overrides. Response: We appreciate commenters' interest in relatively stable PE and MP RVUs and for continuing to highlight the challenges faced when determining the specialty allocation for low volume services. Since we did not make a proposal regarding specialty overrides for low volume services, we do not believe that it would be appropriate to establish overrides for several thousand codes at this time. However, given the continued concerns, we will consider the issue, including these specific recommendations, for future rulemaking. 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 labor PE RVUs; and the work RVUs. For most services the indirect allocator is: Indirect PE percentage * (direct PE RVUs/direct percentage) + work RVUs. There are two situations where this formula is modified: • If the service is a global service (that is, a service with global, professional, and technical components), then the indirect PE allocator is: Indirect percentage (direct PE RVUs/direct percentage) + clinical labor PE RVUs + work RVUs. • If the clinical labor PE RVUs exceed the work RVUs (and the service is not a global service), then the indirect allocator is: Indirect PE percentage (direct PE RVUs/direct percentage) + clinical labor PE RVUs. ( Note: For global services, the indirect PE allocator is based on both the work RVUs and the clinical labor PE RVUs. We do this to recognize that, for the PC service, indirect PEs will be allocated using the work RVUs, and for the TC service, indirect PEs will be allocated using the direct PE RVUs and the clinical labor PE RVUs. This also allows the global component RVUs to equal the sum of the PC and TC RVUs.) For presentation purposes, in the examples in the download file called “Calculation of PE RVUs under Methodology for Selected Codes”, the formulas were divided into two parts for each service. • The first part does not vary by service and is the indirect percentage (direct PE RVUs/direct percentage). • The second part is either the work RVU, clinical labor PE RVU, or both depending on whether the service is a global service and whether the clinical PE RVUs exceed the work RVUs (as described earlier in this step). Apply a scaling adjustment to the indirect allocators. Step 9: Calculate the current aggregate pool of indirect PE RVUs by multiplying the result of step 8 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 work time for the service, and the specialty's utilization for the service across all services furnished by the specialty. Step 14: Using the results of Step 12 and Step 13, calculate the specialty-specific indirect PE scaling factors. Step 15: Using the results of Step 14, calculate an indirect practice cost index at the specialty level by dividing each specialty-specific indirect scaling factor by the average indirect scaling factor for the entire PFS. Step 16: Calculate the indirect practice cost index at the service level to ensure the capture of all indirect costs. Calculate a weighted average of the practice cost index values for the specialties that furnish the service. ( Note: For services with TCs and PCs, we calculate the indirect practice cost index across the global service, PCs, and TCs. Under this method, the indirect practice cost index for a given service (for example, echocardiogram) does not vary by the PC, TC, and global service.) Step 17: Apply the service level indirect practice cost index calculated in Step 16 to the service level adjusted indirect allocators calculated in Step 11 to get the indirect PE RVUs. (d) Calculate the Final PE RVUs Step 18: Add the direct PE RVUs from Step 5 to the indirect PE RVUs from Step 17 and apply the final PE budget neutrality (BN) adjustment. The final PE BN adjustment is calculated by comparing the sum of steps 5 and 17 of to the proposed aggregate work RVUs scaled by the ratio of current aggregate PE and work RVUs. This adjustment ensures that all PE RVUs in the PFS account for the fact that certain specialties are excluded from the calculation of PE RVUs but included in maintaining overall PFS budget neutrality. (See “Specialties excluded from ratesetting calculation” later in this section.) (e) Setup File Information • Specialties excluded from ratesetting calculation: For the purposes of calculating the PE RVUs, we exclude certain specialties, such as certain NPPs paid at a percentage of the PFS and low-volume specialties, from the calculation. These specialties are included for the purposes of calculating the BN adjustment. They are displayed in Table 1. Table 1—Specialties Excluded From Ratesetting Calculation Specialty code Specialty description 49 Ambulatory surgical center. 50 Nurse practitioner. 51 Medical supply company with certified orthotist. 52 Medical supply company with certified prosthetist. 53 Medical supply company with certified prosthetist-orthotist. 54 Medical supply company not included in 51, 52, or 53. 55 Individual certified orthotist. 56 Individual certified prosthetist. 57 Individual certified prosthetist-orthotist. 58 Medical supply company with registered pharmacist. 59 Ambulance service supplier, e.g., private ambulance companies, funeral homes, etc. 60 Public health or welfare agencies. 61 Voluntary health or charitable agencies. 73 Mass immunization roster biller. 74 Radiation therapy centers. 87 All other suppliers ( e.g., drug and department stores). 88 Unknown supplier/provider specialty. 89 Certified clinical nurse specialist. 96 Optician. 97 Physician assistant. A0 Hospital. A1 SNF. A2 Intermediate care nursing facility. A3 Nursing facility, other. A4 HHA. A5 Pharmacy. A6 Medical supply company with respiratory therapist. A7 Department store. B2 Pedorthic personnel. B3 Medical supply company with pedorthic personnel. • Crosswalk certain low volume physician specialties: Crosswalk the utilization of certain specialties with relatively low PFS utilization to the associated specialties. • Physical therapy utilization: Crosswalk the utilization associated with all physical therapy services to the specialty of physical therapy. • Identify professional and technical services not identified under the usual TC and 26 modifiers: Flag the services that are PC and TC services but do not use TC and 26 modifiers (for example, electrocardiograms). This flag associates the PC and TC with the associated global code for use in creating the indirect PE RVUs. For example, the professional service, CPT code 93010 (Electrocardiogram, routine ECG with at least 12 leads; interpretation and report only), is associated with the global service, CPT code 93000 (Electrocardiogram, routine ECG with at least 12 leads; with interpretation and report). • Payment modifiers: Payment modifiers are accounted for in the creation of the file consistent with current payment policy as implemented in claims processing. For example, services billed with the assistant at surgery modifier are paid 16 percent of the PFS amount for that service; therefore, the utilization file is modified to only account for 16 percent of any service that contains the assistant at surgery modifier. Similarly, for those services to which volume adjustments are made to account for the payment modifiers, time adjustments are applied as well. For time adjustments to surgical services, the intraoperative portion in the work time file is used; where it is not present, the intraoperative percentage from the payment files used by contractors to process Medicare claims is used instead. Where neither is available, we use the payment adjustment ratio to adjust the time accordingly. Table 2 details the manner in which the modifiers are applied. Table 2—Application of Payment Modifiers to Utilization Files Modifier Description Volume adjustment Time adjustment 80, 81, 82 Assistant at Surgery 16% Intraoperative portion. AS Assistant at Surgery—Physician Assistant 14% (85% * 16%) Intraoperative portion. 50 or LT and RT Bilateral Surgery 150% 150% of work time. 51 Multiple Procedure 50% Intraoperative portion. 52 Reduced Services 50% 50%. 53 Discontinued Procedure 50% 50%. 54 Intraoperative Care only Preoperative + Intraoperative Percentages on the payment files used by Medicare contractors to process Medicare claims Preoperative + Intraoperative portion. 55 Postoperative Care only Postoperative Percentage on the payment files used by Medicare contractors to process Medicare claims Postoperative portion. 62 Co-surgeons 62.5% 50%. 66 Team Surgeons 33% 33%. We also make adjustments to volume and time that correspond to other payment rules, including special multiple procedure endoscopy rules and multiple procedure payment reductions (MPPRs). We note that section 1848(c)(2)(B)(v) of the Act exempts certain reduced payments for multiple imaging procedures and multiple therapy services from the BN calculation under section 1848(c)(2)(B)(ii)(II) of the Act. These MPPRs are not included in the development of the RVUs. For anesthesia services, we do not apply adjustments to volume since we use the average allowed charge when simulating RVUs; therefore, the RVUs as calculated already reflect the payments as adjusted by modifiers, and no volume adjustments are necessary. However, a time adjustment of 33 percent is made only for medical direction of two to four cases since that is the only situation where a single practitioner is involved with multiple beneficiaries concurrently, so that counting each service without regard to the overlap with other services would overstate the amount of time spent by the practitioner furnishing these services. • Work RVUs: The setup file contains the work RVUs from this final rule. (6) Equipment Cost Per Minute The equipment cost per minute is calculated as: (1/(minutes per year * usage)) * price * ((interest rate/(1−(1/((1 + interest rate)^ life of equipment)))) + maintenance) Where: minutes per year = maximum minutes per year if usage were continuous (that is, usage = 1); generally 150,000 minutes. usage = variable, see discussion below. price = price of the particular piece of equipment. life of equipment = useful life of the particular piece of equipment. maintenance = factor for maintenance; 0.05. interest rate = variable, see discussion below. Usage: We currently use an equipment utilization rate assumption of 50 percent for most equipment, with the exception of expensive diagnostic imaging equipment, for which we use a 90 percent assumption as required by section 1848(b)(4)(C) of the Act. Stakeholders have often suggested that particular equipment items are used less frequently than 50 percent of the time in the typical setting and that CMS should reduce the equipment utilization rate based on these recommendations. We appreciate and share stakeholders' interest in using the most accurate assumption regarding the equipment utilization rate for particular equipment items. However, we believe that absent robust, objective, auditable data regarding the use of particular items, the 50 percent assumption is the most appropriate within the relative value system. We welcome the submission of data that illustrates an alternative rate. Maintenance: This factor for maintenance was finalized in the CY 1998 PFS final rule (62 FR 33164). We continue to investigate potential avenues for determining equipment maintenance costs across a broad range of equipment items. Comment: One commenter stated that the cost of maintaining imaging equipment exceeds the cost of general medical equipment, and that for imaging modalities the median maintenance cost is approximately 10 percent of the equipment purchase price. The commenter stated that the current 5 percent equipment maintenance rate continues to be an inadequate and outdated reflection of actual maintenance costs. The commenter also stated that information on maintenance costs is readily available to CMS through both public and private sources. The commenter did not identify these sources. Response: As we previously stated in the CY 2016 final rule with comment period (80 FR 70897), we agree with the commenter that we do not believe the annual maintenance factor for all equipment is exactly 5 percent, and we concur that the current rate likely understates the true cost of maintaining some equipment. We also believe it likely overstates the maintenance costs for other equipment. When we solicited comments regarding sources of data containing equipment maintenance rates, commenters were unable to identify an auditable, robust data source that could be used by CMS on a wide scale. As a result, in the absence of publicly available datasets regarding equipment maintenance costs or another systematic data collection methodology for determining maintenance factor, we do not believe that we have sufficient information at present to adopt a variable maintenance factor for equipment cost per minute pricing. We continue to investigate potential avenues for determining equipment maintenance costs across a broad range of equipment items. Interest Rate: In the CY 2013 PFS final rule with comment period (77 FR 68902), we updated the interest rates used in developing an equipment cost per minute calculation. The interest rate was based on the Small Business Administration (SBA) maximum interest rates for different categories of loan size (equipment cost) and maturity (useful life). The interest rates are listed in Table 3. (See 77 FR 68902 for a thorough discussion of this issue.) We did not propose any changes to these interest rates for CY 2017. Table 3—SBA Maximum Interest Rates Price Useful life Interest rate (%) <$25K <7 Years 7.50 $25K to $50K <7 Years 6.50 >$50K <7 Years 5.50 <$25K 7+ Years 8.00 $25K to $50K 7+ Years 7.00 >$50K 7+ Years 6.00 d. Changes to Direct PE Inputs for Specific Services This section focuses on specific PE inputs. The direct PE inputs are included in the CY 2017 direct PE input database, which is available on our Web site under downloads for the CY 2017 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. (1) PE Inputs for Digital Imaging Services Prior to the CY 2015 PFS rulemaking cycle, the RUC provided a recommendation regarding the PE inputs for digital imaging services. Specifically, the RUC recommended that we remove supply and equipment items associated with film technology from a previously specified list of codes since these items were no longer typical resource inputs. The RUC also recommended that the Picture Archiving and Communication System (PACS) equipment be included for these imaging services since these items are typically used in furnishing imaging services. However, since we did not receive any invoices for the PACS system prior to that year's proposed rule, we were unable to determine the appropriate pricing to use for the inputs. For CY 2015, we finalized our proposal to remove the film supply and equipment items, and to create a new equipment item as a proxy for the PACS workstation as a direct expense (79 FR 67561-67563). We used the price associated with ED021 (computer, desktop, w-monitor) to price the new item, ED050 (PACS Workstation Proxy), pending receipt of invoices to facilitate pricing specific to the PACS workstation. Subsequent to establishing payment rates for CY 2015, we received information from several stakeholders regarding pricing for items related to the digital acquisition and storage of images. We received invoices from one stakeholder that facilitated a proposed price update for the PACS workstation in the CY 2016 PFS proposed rule, and we updated the price for the PACS workstation to $5,557 in the CY 2016 PFS final rule with comment period (80 FR 70899). In addition to the workstation used by the clinical staff for acquiring the images and furnishing the technical component (TC) of the services, a stakeholder also submitted more detailed information regarding a workstation used by the practitioner interpreting the image in furnishing the professional component (PC) of many of these services. As we stated in the CY 2015 PFS final rule with comment period (79 FR 67563), we generally believe that workstations used by these practitioners are more accurately considered indirect costs associated with the PC of the service. However, we understand that the professional workstations for interpretation of digital images are similar in principle to some of the previous film inputs incorporated into the global and technical components of the codes, such as the view box equipment. Given that the majority of these services are reported globally in the nonfacility setting, we believe it is appropriate to include these costs as direct inputs for the associated HCPCS codes. Based on our established methodology in which single codes with professional and technical components are constructed by assigning work RVUs exclusively to the professional component and direct PE inputs exclusively to the technical components, these costs would be incorporated into the PE RVUs of the global and technical component of the HCPCS code. We stated in the CY 2016 PFS final rule with comment period that the costs of the professional workstation may be analogous to costs related to the use of film previously incorporated as direct PE inputs for these services. We also solicited comments on whether including the professional workstation as a direct PE input for these codes would be appropriate, given that the resulting PE RVUs would be assigned to the global and technical components of the codes. Commenters responded by indicating their approval of the concept of a professional PACS workstation used for interpretation of digital images. We received invoices for the pricing of a professional PACS workstation, as well as additional invoices for the pricing of a mammography-specific version of the professional PACS workstation. The RUC also included these new equipment items in its recommendations for the CY 2017 PFS rulemaking cycle. Based on our analysis of submitted invoices, we proposed to price the professional PACS workstation (ED053) at $14,616.93. We did not propose a change in price for the current technical PACS workstation (ED050), which will remain at a price of $5,557.00. The price of the professional PACS workstation is based upon individual invoices submitted for the cost of a PC Tower ($1531.52), a pair of 3 MP monitors ($10,500.00 in total), a keyboard and mouse ($84.95), a UPS power backup devices for TNP ($1098.00), and a switch for PACS monitors/workstations ($1402.46). We proposed to add the professional PACS workstation to many CPT codes in the 70000 series that use the current technical PACS workstation (ED050) and include professional work for which such a workstation would be used. We did not propose to add the equipment item to add-on codes since the base codes would include minutes for the item. We also did not propose to add the item to codes that are therapeutic in nature, as the professional PACS workstation is intended for use in diagnostic services. We therefore did not propose to add the item to codes in the Radiation Therapy section (77261 through 77799) or the Nuclear Medicine Cardiology section (78414-78499). We also did not propose to add the item to image guidance codes where the dominant provider is not a radiologist (77002, 77011, 77071, 77077, and 77081) according to the most recent year of claims data, since we believe a single workstation would be more typical in those cases. We identified approximately 426 codes to which we proposed to add a professional PACS workstation. Please see Table 4 for the full list of affected codes. For the professional PACS workstation, we proposed to assign equipment time equal to the intraservice work time plus half of the preservice work time associated with the codes, since the work time generally reflects the time associated with the professional interpretation. We proposed half of the preservice work time for the professional PACS workstation because we do not believe that the practitioner would typically spend all of the preservice work period using the equipment. For older codes that do not have a breakdown of physician work time by service period, and only have an overall physician work time, we proposed to use half the total work time as an approximation of the intraservice work time plus one half of the preservice work time. In our review of services that contained an existing PACS workstation and had a breakdown of physician work time, we found that half of the total time was a reasonable approximation for the value of intraservice work time plus one half of preservice work time where no such breakdown existed. We also considered using an equipment time formula of the physician intraservice time plus 1 minute (as a stand-in for the physician preservice work time). We solicited public comment on the most accurate equipment time formula for the professional PACS workstation. We solicited public comment on the proposed list of codes that would incorporate the professional PACS workstation. We were interested in public comment on the codes for which a professional PACS workstation should be included, and whether one of these professional workstations should be included for codes outside the 70000 series. In cases within the 70000 series where radiologists are not the typical specialty reporting the code, such as CPT codes 77002 and 77011, we asked whether it would be appropriate to add one of the professional PACS workstations to these services. The following is a summary of the comments we received on the proposed addition of the professional PACS workstation, the pricing of the workstation, the list of codes that would incorporate the professional PACS workstation, and the equipment minutes to assign to the workstation. Comment: Commenters supported the general concept of the professional PACS workstation and its addition to the proposed list of codes. Commenters stated that the professional PACS workstation is an essential component of diagnostic imaging procedures due to the switch from film to digital technology, and the professional workstation would be an appropriate inclusion as a direct PE input for these services. Response: We appreciate the support from the commenters for the addition of the professional PACS workstation. Comment: Many commenters addressed the subject of the proper pricing of the professional PACS workstation. Several commenters requested that CMS increase the price of the workstation to include a third and fourth monitor (for speech recognition) priced at $1,715.98, an Admin Monitor (the extra working monitor) priced at $279.27, and a Powerscribe Microphone priced at $424.00. Commenters stated that speech recognition equipment is typical for a professional PACS workstation, and that physicians typically employed a monitor with greater resolution than what would be typically used for other purposes (such as for electronic health records). Related comments contended that the proposed pricing of the workstation remained significantly less than what the average imaging facility spends on PACS technology. Other commenters disagreed with these sentiments and supported the pricing of the professional PACS workstation at the proposed rate of $14,616.93. Response: We appreciate the feedback from the commenters regarding the proper pricing of the professional PACS workstation. When proposing a price for the professional PACS workstation, we did not include the cost of the additional monitors and the Powerscribe microphone because these items represent indirect costs under the established PE methodology and the functionality would unlikely have been included in the previously existing film inputs the professional PACS workstation is replacing. Generally, we believe that monitors used to access electronic health records and microphones used for dictation are often used by practitioners who furnish a range a PFS services, are not allocable to particular services or patients, and therefore, are included in the administrative cost category of practice expense, and therefore, are allocated to individual codes through indirect PE RVUs. Comment: Many commenters stated that CMS should expand the list of codes with a professional PACS workstation. Commenters generally focused on three of the criteria proposed by CMS: The exclusion of the workstation from add-on services, the exclusion of therapeutic (as opposed to diagnostic) services, and the exclusion of codes outside the 70000 series. Commenters stated that add-on codes should be incorporated into the professional PACS workstation list, as they require additional time to perform, and therefore, more time with the technical PACS workstation for the technician, as well as additional time for the review and interpretation performed by the physician using the professional PACS workstation. Commenters also indicated that many therapeutic services would also require a professional PACS workstation, and disagreed with limiting the workstation to diagnostic services only. Finally, commenters supplied extensive lists of additional codes, both inside and outside of the 70000 series, where they stated that the inclusion of a professional PACS workstation was warranted. Response: We appreciate the feedback from the commenters in helping to define the criteria for inclusion of the professional PACS workstation, along with more specific recommendations about which codes should include the workstation. After considering these comments, we will be adding the professional PACS workstation to additional suggested codes. We took the following into account in making these additions: • We did not add the professional PACS workstation to any code that currently lacks a technical PACS workstation (ED050) or lacks a work RVU. We continue to believe that procedures which do not include a technical workstation, or do not have physician work, would not require a professional workstation. • We did not add the professional PACS workstation to add-on codes. Because the base codes include equipment minutes for the workstation, we continue to believe it would be duplicative to add additional equipment time for the professional PACS workstation in the add-on code. • We agree with commenters that because the clinical utility of the PACS workstation is not necessarily limited to diagnostic services, there may be therapeutic codes where it would be reasonable to assume its use to be typical. We believe that in these specific cases, the use of the professional PACS workstation has been established to be typical for the code in question by the specialties furnishing the service, as a result of the evidence provided in the comments submitted in response to our proposal. We have added the workstation to many of the therapeutic codes requested by commenters, specifically codes listed outside the 70000 series, where use of the professional PACS station is typical. • Within the 70000 series, we reviewed each of the codes submitted by commenters. Most of these codes did not fall within one of the categories where we proposed to add the professional PACS workstation in the proposed rule: They lacked a technical PACS workstation, they were add-on codes, or they were diagnostic procedures for which radiology is not the dominant specialty providing the service. We continue to believe that the professional PACS workstation should not be added to codes that do not fall into these categories, since we believe that the image must be captured in order to for it to be interpreted, that the use of the PACS workstation in the base code reported with add-on codes would accurately capture the associated resources used, and that the PACS professional workstation is only typically used by radiologists. Based on comments, we are adding the professional workstation to only one code in the 70000 series, CPT code 73562, as it includes a technical PACS workstation, is not an add-on code, and is typically furnished by radiologists. • For codes in the 80000 and 90000 series, we are concerned about whether it is appropriate to include the technical PACS workstation into many of these services. PACS workstations were created for imaging purposes, but many of these services that include a technical PACS workstation do not appear to make use of imaging. Although we are not removing the technical PACS workstation from these codes at this time, we do not believe that a professional PACS workstation should be added to these procedures. We will consider the inclusion of both PACS workstations for future rulemaking. Comment: Several commenters addressed the topic of equipment time for the professional PACS workstation. Commenters requested that CMS allocate the entire preservice physician work time associated with the codes, as opposed to the proposed half of the preservice physician work time. Commenters stated that although certain physician work activities in the preservice period may not directly involve the professional workstation, even when the physician is engaged in these parallel work activities, the professional workstation is “open” to the patient at hand and cannot be used for other patients. Commenters also disagreed with the proposal to use half the total time for older codes in which there is no separation of preservice and intraservice period times. Commenters stated that using the entire physician work time would be the best option since there is no accurate way to estimate the service period times, and that it would avoid potential confusion in equipment formulas in the future. Response: We continue to believe that the professional PACS workstation is more accurately assigned equipment time by using half of the preservice physician work time rather than the full preservice physician work time. As we stated in the proposed rule, we do not believe that the practitioner would typically spend all of the preservice work period using the equipment. Commenters agreed that the physician may not need the professional workstation for the full preservice period, but contended that the equipment would be “open” and unavailable for use by other physicians or for other patients. We disagree with this argument on clinical practice and methodological grounds. We do not agree that the professional PACS workstation would necessarily be unavailable for use by other physicians when the physician in question is not using the machine, Additionally, we note that the number of minutes assigned to the predecessor film inputs did not generally include the full number of pre-service minutes. Finally, our PE methodology is based on the resources typically used to furnish the procedure, and we typically assign time for equipment items based on when it cannot be used by another practitioner or for another patient due to its use in the given procedure. We continue to believe that half of the preservice physician work time (along with the full physician intraservice work time) is a good approximation of the time in the preservice period that the professional PACS workstation will typically be in use. As we stated in the proposed rule, we do not believe that the practitioner would typically spend all of the preservice time using the equipment, and would also spend preservice time on other activities, such as scrubbing and dressing, for example. For older codes where there is no breakdown of work time values by service period, we do not agree with commenters that the professional PACS workstation should use the total work time. The comments do not provide a persuasive rationale for using the total work time instead of our proposed alternative, developed for consistency with codes for which we do have work time breakdowns by service period. Therefore, in the absence of service period work time detail, we continue to believe that half of the total work time is a reasonable proxy for the small number of old codes affected by this issue. We are not concerned about the potential for confusion in the future with differing equipment time formulas, as the addition of the professional PACS workstation to these codes is a one-time inclusion that will not affect the future review of this equipment. Finally, we believe that there is a difference in the pattern of equipment usage for the professional PACS workstation between diagnostic and therapeutic codes. Generally, the intraservice work for diagnostic imaging codes describes the review of images, while the intraservice work for therapeutic services describes a broader range of activities. Therefore, although we used an equipment formula of half the preservice physician work time and the full intraservice physician work time for the diagnostic procedures, we do not believe that this same time formula would be appropriate for therapeutic procedures since the professional PACS workstation would not be in use during the intraservice portion of these services. Therefore, we will use an equipment time formula of half the preservice physician work time and half the postservice physician work time for the therapeutic codes to which we are adding a professional PACS workstation, which we believe is more consistent with the descriptions of work for the codes in question. Consistent with our ongoing efforts to improve payment accuracy for these costs, we seek recommendations from the RUC and other stakeholders on a more precise allocation methodology for equipment minutes for these procedures. After consideration of comments received, we are finalizing our proposal to add a professional PACS workstation (ED053) to the equipment database and price it at the proposed rate of $14,616.93. We are dividing the codes that will contain a professional PACS workstation into diagnostic and therapeutic categories. For diagnostic codes, we are assigning equipment minutes equal to half the preservice physician work time and the full intraservice physician work time. For the relatively smaller group of diagnostic codes with no service period time breakdown, we are assigning equipment time equal to half of the total physician work time. For therapeutic codes, we are assigning equipment minutes equal to half the preservice physician work time and half the postservice physician work time for the second group. There are no therapeutic codes on our current list which lack a service period time breakdown. The following table lists all of the codes that include a professional PACS workstation for CY 2017, along with the equipment minutes for the workstation. Table 4—Codes With Professional PACS Workstation in the Direct PE Input Database HCPCS Procedure type ED053 Minutes 10030 Therapeutic 23 10035 Therapeutic 15 19081 Therapeutic 19 19083 Therapeutic 17 19085 Therapeutic 19 19281 Therapeutic 18 19283 Therapeutic 19 19285 Therapeutic 18 19287 Therapeutic 19 22510 Therapeutic 32 22511 Therapeutic 32 22513 Therapeutic 32 22514 Therapeutic 32 32555 Therapeutic 19 32557 Therapeutic 19 36221 Therapeutic 34 36222 Therapeutic 34 36223 Therapeutic 34 36224 Therapeutic 34 36225 Therapeutic 34 36226 Therapeutic 34 36251 Therapeutic 31 36252 Therapeutic 31 36253 Therapeutic 31 36254 Therapeutic 31 36598 Therapeutic 13 37184 Therapeutic 30 37187 Therapeutic 25 37188 Therapeutic 23 37191 Therapeutic 22 37192 Therapeutic 23 37193 Therapeutic 23 37197 Therapeutic 26 37220 Therapeutic 34 37221 Therapeutic 34 37224 Therapeutic 34 37225 Therapeutic 34 37226 Therapeutic 34 37227 Therapeutic 34 37228 Therapeutic 34 37229 Therapeutic 34 37230 Therapeutic 34 37231 Therapeutic 34 37236 Therapeutic 31 37238 Therapeutic 31 37241 Therapeutic 26 37242 Therapeutic 31 37243 Therapeutic 38 37244 Therapeutic 38 47531 Therapeutic 20 47532 Therapeutic 22 47533 Therapeutic 26 47534 Therapeutic 26 47535 Therapeutic 19 47536 Therapeutic 16 47537 Therapeutic 19 47538 Therapeutic 22 47539 Therapeutic 26 47540 Therapeutic 26 47541 Therapeutic 26 49083 Therapeutic 18 49405 Therapeutic 28 49406 Therapeutic 28 49407 Therapeutic 28 49418 Therapeutic 27 49440 Therapeutic 29 49441 Therapeutic 29 49442 Therapeutic 29 49446 Therapeutic 22 49450 Therapeutic 20 49451 Therapeutic 20 49452 Therapeutic 20 49460 Therapeutic 20 49465 Therapeutic 13 50382 Therapeutic 28 50384 Therapeutic 24 50385 Therapeutic 27 50386 Therapeutic 25 50387 Therapeutic 22 50389 Therapeutic 15 50430 Therapeutic 23 50431 Therapeutic 20 50432 Therapeutic 25 50433 Therapeutic 25 50434 Therapeutic 23 50435 Therapeutic 18 50693 Therapeutic 25 50694 Therapeutic 25 50695 Therapeutic 25 58340 Therapeutic 7 62302 Therapeutic 17 62303 Therapeutic 17 62304 Therapeutic 17 62305 Therapeutic 18 70015 Diagnostic 12 70030 Diagnostic 3 70100 Diagnostic 3 70110 Diagnostic 4 70120 Diagnostic 3 70130 Diagnostic 4 70134 Diagnostic 4 70140 Diagnostic 3 70150 Diagnostic 4 70160 Diagnostic 3 70190 Diagnostic 3 70200 Diagnostic 4 70210 Diagnostic 3 70220 Diagnostic 4 70240 Diagnostic 3 70250 Diagnostic 4 70260 Diagnostic 7 70300 Diagnostic 2 70310 Diagnostic 3 70320 Diagnostic 3 70328 Diagnostic 3 70330 Diagnostic 22 70332 Diagnostic 6 70336 Diagnostic 20 70350 Diagnostic 3 70355 Diagnostic 5 70360 Diagnostic 3 70370 Diagnostic 4 70371 Diagnostic 9 70380 Diagnostic 3 70390 Diagnostic 5 70450 Diagnostic 12 70460 Diagnostic 15 70470 Diagnostic 18 70480 Diagnostic 13 70481 Diagnostic 13 70482 Diagnostic 14 70490 Diagnostic 13 70491 Diagnostic 13 70492 Diagnostic 14 70540 Diagnostic 14 70542 Diagnostic 19 70543 Diagnostic 19 70544 Diagnostic 13 70545 Diagnostic 18 70546 Diagnostic 18 70547 Diagnostic 13 70548 Diagnostic 20 70549 Diagnostic 25 70551 Diagnostic 21 70552 Diagnostic 23 70553 Diagnostic 28 70554 Diagnostic 43 71010 Diagnostic 4 71015 Diagnostic 3 71020 Diagnostic 4 71021 Diagnostic 4 71022 Diagnostic 4 71023 Diagnostic 5 71030 Diagnostic 4 71034 Diagnostic 5 71035 Diagnostic 3 71100 Diagnostic 5 71101 Diagnostic 4 71110 Diagnostic 4 71111 Diagnostic 5 71120 Diagnostic 3 71130 Diagnostic 3 71250 Diagnostic 18 71260 Diagnostic 17 71270 Diagnostic 13 71275 Diagnostic 28 71550 Diagnostic 15 71551 Diagnostic 30 71552 Diagnostic 28 71555 Diagnostic 33 72020 Diagnostic 3 72040 Diagnostic 4 72050 Diagnostic 6 72052 Diagnostic 6 72070 Diagnostic 4 72072 Diagnostic 3 72074 Diagnostic 3 72080 Diagnostic 3 72081 Diagnostic 6 72082 Diagnostic 7 72083 Diagnostic 8 72084 Diagnostic 9 72100 Diagnostic 4 72110 Diagnostic 6 72114 Diagnostic 6 72120 Diagnostic 4 72125 Diagnostic 18 72126 Diagnostic 12 72127 Diagnostic 12 72128 Diagnostic 18 72129 Diagnostic 12 72130 Diagnostic 12 72131 Diagnostic 18 72132 Diagnostic 12 72133 Diagnostic 12 72141 Diagnostic 23 72142 Diagnostic 26 72146 Diagnostic 23 72147 Diagnostic 26 72148 Diagnostic 23 72149 Diagnostic 26 72156 Diagnostic 28 72157 Diagnostic 28 72158 Diagnostic 28 72159 Diagnostic 31 72170 Diagnostic 5 72190 Diagnostic 3 72191 Diagnostic 28 72192 Diagnostic 12 72193 Diagnostic 12 72194 Diagnostic 12 72195 Diagnostic 30 72196 Diagnostic 26 72197 Diagnostic 30 72198 Diagnostic 28 72200 Diagnostic 3 72202 Diagnostic 3 72220 Diagnostic 3 72240 Diagnostic 19 72255 Diagnostic 18 72265 Diagnostic 18 72270 Diagnostic 23 72275 Diagnostic 36 72285 Diagnostic 9 72295 Diagnostic 9 73000 Diagnostic 3 73010 Diagnostic 3 73020 Diagnostic 3 73030 Diagnostic 5 73040 Diagnostic 6 73050 Diagnostic 3 73060 Diagnostic 4 73070 Diagnostic 3 73080 Diagnostic 4 73085 Diagnostic 6 73090 Diagnostic 3 73092 Diagnostic 3 73100 Diagnostic 4 73110 Diagnostic 4 73115 Diagnostic 6 73120 Diagnostic 4 73130 Diagnostic 4 73140 Diagnostic 3 73200 Diagnostic 18 73201 Diagnostic 11 73202 Diagnostic 12 73206 Diagnostic 35 73218 Diagnostic 25 73219 Diagnostic 25 73220 Diagnostic 30 73221 Diagnostic 23 73222 Diagnostic 23 73223 Diagnostic 35 73225 Diagnostic 31 73501 Diagnostic 4 73502 Diagnostic 5 73503 Diagnostic 6 73521 Diagnostic 5 73522 Diagnostic 6 73523 Diagnostic 7 73525 Diagnostic 6 73551 Diagnostic 4 73552 Diagnostic 5 73560 Diagnostic 4 73562 Diagnostic 5 73564 Diagnostic 6 73565 Diagnostic 4 73580 Diagnostic 6 73590 Diagnostic 4 73592 Diagnostic 3 73600 Diagnostic 4 73610 Diagnostic 4 73615 Diagnostic 6 73620 Diagnostic 4 73630 Diagnostic 4 73650 Diagnostic 3 73660 Diagnostic 3 73700 Diagnostic 18 73701 Diagnostic 11 73702 Diagnostic 12 73706 Diagnostic 35 73718 Diagnostic 20 73719 Diagnostic 25 73720 Diagnostic 30 73721 Diagnostic 23 73722 Diagnostic 24 73723 Diagnostic 32 73725 Diagnostic 33 74000 Diagnostic 4 74010 Diagnostic 3 74020 Diagnostic 4 74022 Diagnostic 4 74150 Diagnostic 14 74160 Diagnostic 17 74170 Diagnostic 21 74174 Diagnostic 33 74175 Diagnostic 28 74176 Diagnostic 25 74177 Diagnostic 28 74178 Diagnostic 33 74181 Diagnostic 15 74182 Diagnostic 28 74183 Diagnostic 35 74185 Diagnostic 33 74210 Diagnostic 5 74220 Diagnostic 5 74230 Diagnostic 12 74240 Diagnostic 7 74241 Diagnostic 7 74245 Diagnostic 9 74246 Diagnostic 7 74247 Diagnostic 18 74249 Diagnostic 9 74250 Diagnostic 5 74251 Diagnostic 33 74260 Diagnostic 6 74261 Diagnostic 43 74262 Diagnostic 48 74263 Diagnostic 42 74270 Diagnostic 7 74280 Diagnostic 23 74283 Diagnostic 19 74290 Diagnostic 4 74400 Diagnostic 18 74410 Diagnostic 6 74415 Diagnostic 6 74430 Diagnostic 4 74440 Diagnostic 5 74455 Diagnostic 4 74485 Diagnostic 6 74710 Diagnostic 4 74712 Diagnostic 68 74740 Diagnostic 5 75557 Diagnostic 45 75559 Diagnostic 58 75561 Diagnostic 50 75563 Diagnostic 66 75571 Diagnostic 13 75572 Diagnostic 25 75573 Diagnostic 38 75574 Diagnostic 35 75600 Diagnostic 6 75605 Diagnostic 11 75625 Diagnostic 11 75630 Diagnostic 13 75635 Diagnostic 50 75658 Diagnostic 13 75705 Diagnostic 20 75710 Diagnostic 11 75716 Diagnostic 13 75726 Diagnostic 11 75731 Diagnostic 11 75733 Diagnostic 13 75736 Diagnostic 11 75741 Diagnostic 13 75743 Diagnostic 16 75746 Diagnostic 11 75756 Diagnostic 11 75791 Diagnostic 33 75809 Diagnostic 5 75820 Diagnostic 7 75822 Diagnostic 11 75825 Diagnostic 11 75827 Diagnostic 11 75831 Diagnostic 11 75833 Diagnostic 14 75840 Diagnostic 11 75842 Diagnostic 14 75860 Diagnostic 11 75870 Diagnostic 11 75872 Diagnostic 11 75880 Diagnostic 7 75885 Diagnostic 14 75887 Diagnostic 14 75889 Diagnostic 11 75891 Diagnostic 11 75893 Diagnostic 6 75901 Diagnostic 11 75902 Diagnostic 13 75962 Diagnostic 6 75966 Diagnostic 13 75978 Diagnostic 6 75984 Diagnostic 8 75989 Diagnostic 12 76000 Diagnostic 3 76010 Diagnostic 3 76080 Diagnostic 6 76098 Diagnostic 3 76100 Diagnostic 6 76101 Diagnostic 6 76102 Diagnostic 6 76120 Diagnostic 5 76376 Diagnostic 8 76380 Diagnostic 10 76390 Diagnostic 28 76506 Diagnostic 10 76536 Diagnostic 12 76604 Diagnostic 9 76700 Diagnostic 14 76705 Diagnostic 11 76706 Diagnostic 13 76770 Diagnostic 13 76775 Diagnostic 11 76776 Diagnostic 13 76800 Diagnostic 14 76801 Diagnostic 18 76805 Diagnostic 18 76811 Diagnostic 35 76813 Diagnostic 23 76815 Diagnostic 8 76816 Diagnostic 18 76817 Diagnostic 13 76818 Diagnostic 35 76819 Diagnostic 28 76820 Diagnostic 13 76821 Diagnostic 13 76825 Diagnostic 45 76826 Diagnostic 11 76830 Diagnostic 13 76831 Diagnostic 30 76856 Diagnostic 13 76857 Diagnostic 10 76870 Diagnostic 10 76872 Diagnostic 20 76873 Diagnostic 40 76881 Diagnostic 18 76885 Diagnostic 20 76886 Diagnostic 15 76936 Diagnostic 71 76942 Diagnostic 19 76970 Diagnostic 8 77012 Diagnostic 11 77014 Diagnostic 9 77021 Diagnostic 53 77053 Diagnostic 5 77054 Diagnostic 5 77058 Diagnostic 50 77059 Diagnostic 55 77072 Diagnostic 3 77074 Diagnostic 5 77075 Diagnostic 6 77076 Diagnostic 12 77084 Diagnostic 15 78012 Diagnostic 8 78013 Diagnostic 13 78014 Diagnostic 13 78015 Diagnostic 31 78016 Diagnostic 49 78018 Diagnostic 29 78070 Diagnostic 13 78071 Diagnostic 18 78072 Diagnostic 23 78075 Diagnostic 38 78102 Diagnostic 18 78103 Diagnostic 22 78104 Diagnostic 20 78135 Diagnostic 48 78140 Diagnostic 40 78185 Diagnostic 16 78190 Diagnostic 40 78195 Diagnostic 30 78201 Diagnostic 16 78202 Diagnostic 20 78205 Diagnostic 20 78206 Diagnostic 25 78215 Diagnostic 13 78216 Diagnostic 22 78226 Diagnostic 13 78227 Diagnostic 18 78230 Diagnostic 19 78231 Diagnostic 23 78232 Diagnostic 28 78258 Diagnostic 27 78261 Diagnostic 21 78262 Diagnostic 25 78264 Diagnostic 13 78265 Diagnostic 18 78266 Diagnostic 23 78278 Diagnostic 18 78290 Diagnostic 18 78291 Diagnostic 31 78300 Diagnostic 15 78305 Diagnostic 22 78306 Diagnostic 11 78315 Diagnostic 11 78320 Diagnostic 24 78579 Diagnostic 8 78580 Diagnostic 13 78582 Diagnostic 15 78597 Diagnostic 13 78598 Diagnostic 13 78600 Diagnostic 16 78601 Diagnostic 18 78605 Diagnostic 21 78606 Diagnostic 22 78607 Diagnostic 29 78610 Diagnostic 10 78630 Diagnostic 24 78635 Diagnostic 36 78645 Diagnostic 32 78647 Diagnostic 15 78650 Diagnostic 40 78660 Diagnostic 16 78700 Diagnostic 17 78701 Diagnostic 18 78707 Diagnostic 22 78708 Diagnostic 32 78709 Diagnostic 40 78710 Diagnostic 21 78740 Diagnostic 30 78761 Diagnostic 20 78800 Diagnostic 28 78801 Diagnostic 32 78802 Diagnostic 24 78803 Diagnostic 43 78804 Diagnostic 35 78805 Diagnostic 25 78806 Diagnostic 23 78807 Diagnostic 37 79440 Diagnostic 24 G0106 Diagnostic 24 G0120 Diagnostic 24 G0297 Diagnostic 18 G0365 Diagnostic 20 G0389 Diagnostic 9 (2) Standardization of Clinical Labor Tasks As we noted in the CY 2015 PFS final rule (79 FR 67640-67641), we continue to make improvements to the direct PE input database to provide the number of clinical labor minutes assigned for each task for every code in the database instead of only including the number of clinical labor minutes for the preservice, service, and postservice periods for each code. In addition to increasing the transparency of the information used to set PE RVUs, this improvement would allow us to compare clinical labor times for activities associated with services across the PFS, which we believe is important to maintaining the relativity of the direct PE inputs. This information would facilitate the identification of the usual numbers of minutes for clinical labor tasks and the identification of exceptions to the usual values. It would also allow for greater transparency and consistency in the assignment of equipment minutes based on clinical labor times. Finally, we believe that the information can be useful in maintaining standard times for particular clinical labor tasks that can be applied consistently to many codes as they are valued over several years, similar in principle to the use of physician preservice time packages. We believe such standards would provide greater consistency among codes that share the same clinical labor tasks and could improve relativity of values among codes. For example, as medical practice and technologies change over time, changes in the standards could be updated simultaneously for all codes with the applicable clinical labor tasks, instead of waiting for individual codes to be reviewed. In the following paragraphs, we address a series of issues related to clinical labor tasks, particularly relevant to services currently being reviewed under the misvalued code initiative. (a) Clinical Labor Tasks Associated With Digital Imaging In CY 2015 PFS rulemaking, we noted that the RUC recommendation regarding inputs for digital imaging services indicated that, as each code is reviewed under the misvalued code initiative, the clinical labor tasks associated with digital technology (instead of film) would need to be addressed. When we reviewed that recommendation, we did not have the capability of assigning standard clinical labor times for the hundreds of individual codes since the direct PE input database did not previously allow for comprehensive adjustments for clinical labor times based on particular clinical labor tasks. Therefore, consistent with the recommendation, we proposed to remove film-based supply and equipment items but maintain clinical labor minutes that were assigned based on film technology. As noted in the paragraphs above, we continue to improve the direct PE input database by specifying for each code the minutes associated with each clinical labor task. Once completed, this work would allow adjustments to be made to minutes assigned to particular clinical labor tasks related to digital technology that occur in multiple codes, consistent with the changes that were made to individual supply and equipment items. In the meantime, we believe it would be appropriate to establish standard times for clinical labor tasks associated with all digital imaging services for purposes of reviewing individual services at present, and for possible broad-based standardization once the changes to the direct PE input database facilitate our ability to adjust time across services. During the CY 2016 PFS rulemaking cycle, we proposed appropriate standard minutes for five different clinical labor tasks associated with services that use digital imaging technology. In the CY 2016 PFS final rule with comment period (80 FR 70901), we finalized appropriate standard minutes for four of those five activities, which are listed in Table 5. Table 5—Clinical Labor Tasks Associated With Digital Imaging Technology Clinical labor task Typical minutes Availability of prior images confirmed 2 Patient clinical information and questionnaire reviewed by technologist, order from physician confirmed and exam protocoled by radiologist 2 Review examination with interpreting MD 2 Exam documents scanned into PACS. Exam completed in RIS system to generate billing process and to populate images into Radiologist work queue 1 We did not finalize standard minutes for the activity “Technologist QC's images in PACS, checking for all images, reformats, and dose page.” We agreed with commenters that this task may require a variable length of time depending on the number of images to be reviewed. We stated that it may be appropriate to establish several different standard times for this clinical labor task for a low/medium/high quantity of images to be reviewed, in the same fashion that the clinical labor assigned to clean a surgical instrument package has two different standard times depending on the use of a basic pack (10 minutes) or a medium pack (30 minutes). We solicited public comment and feedback on this subject, with the anticipation of including a proposal in the CY 2017 proposed rule. We received many comments suggesting that this clinical labor activity should not have a standard time value. Commenters stated that the number of minutes varies significantly for different imaging modalities; and the time is not simply based on the quantity of images to be reviewed, but also the complexity of the images. The commenters recommended that time for this clinical labor activity should be assigned on a code by code basis. We agree with the commenters that the amount of clinical labor needed to check images in a PACS workstation may vary depending on the service. However, we do not believe that this precludes the possibility of establishing standards for clinical labor tasks as we have done in the past by creating multiple standard times, for example, those assigned to cleaning different kinds of scopes. We continue to believe that the use of clinical labor standards provides greater consistency among codes that share the same clinical labor tasks and can improve relativity of values among codes. We proposed to establish a range of appropriate standard minutes for the clinical labor activity, “Technologist QCs images in PACS, checking for all images, reformats, and dose page.” These standard minutes will be applied to new and revised codes that make use of this clinical labor activity when they are reviewed by us for valuation. We proposed 2 minutes as the standard for the simple case, 3 minutes as the standard for the intermediate case, and 4 minutes as the standard for the complex case. We proposed the simple case of 2 minutes as the standard for the typical procedure code involving routine use of imaging. These values are based upon a review of the existing minutes assigned for this clinical labor activity; we have determined that 2 minutes is the duration for most services and a small number of codes with more complex forms of digital imaging have higher values. We proposed to use 2 minutes for services involving routine X-rays (simple), 3 minutes for services involving CTs and MRIs (intermediate), and 4 minutes for the most highly complex services, which would exceed these more typical cases. We solicited comments regarding the most accurate category—simple, intermediate, or complex for existing codes, and in particular what criteria might be used to identify complex cases systematically. The following is summary of the comments we received regarding the ongoing standardization of clinical labor tasks, and our specific proposal regarding the clinical labor task, “Technologist QCs images in PACS, checking for all images, reformats, and dose page.” Comment: Many commenters restated their opposition to the principle of establishing standard values for clinical labor tasks. Commenters contended that clinical labor tasks were highly variable across different specialties, that the standardization process would disrupt the relativity of direct PE inputs across the PFS, and that the proposed standard times were too low and underestimated the staffing time needed to carry out the tasks in question. Commenters stressed that each code should be evaluated on an individual basis. One commenter expressed support for the overall concept regarding efforts to streamline the time for clinical labor activities. Response: We note the objections raised by the commenters to the process of standardizing time values for clinical labor tasks. However, as we have stated previously, we believe the establishment of standards can provide greater consistency among codes that share the same clinical labor tasks, as well as improve relativity of values among codes. We also note that we do evaluate each code on an individual basis for direct PE inputs, and establishing clinical labor standards assists in that process of individual review. We continue to allow clinical labor times above the standard values for individual services, provided that there is a compelling rationale to explain why that particular service requires additional clinical labor time above and beyond the standard. We believe that establishing a range of standard minutes for this particular digital imaging clinical labor task will provide clarity and help maintain relativity across a wide range of imaging services. Comment: One commenter requested a broad study of the actual clinical labor times associated with digital imaging. Response: We appreciate the importance of incorporating robust, auditable, and routinely updated data sources for use in the determination of RVUs. We welcome stakeholder information on the availability of such data, while we continue to consider the best means of acquiring such data. Comment: Several commenters addressed our specific proposal for the clinical labor task, “Technologist QCs images in PACS, checking for all images, reformats, and dose page.” Commenters requested that, short of no standard times at all, the establishment of categories for this clinical labor task should be as follows: Simple (2 min); intermediate (3 min), complex (4 min) and highly complex (5 min). Response: We appreciate the suggestion from the commenters to adopt a categorization system very similar to our proposal, with the addition of an extra category for highly complex services valued at 5 minutes. We agree with this addition to our proposal, as it will allow for additional specificity in classifying different types of imaging services, including those that are unusually complex. However, we note that we proposed to define the simple case of 2 minutes as the standard for the typical procedure code involving routine use of imaging, and we believe only a small number of codes with more complex forms of digital imaging would typically involve more time for the task. We proposed to use 2 minutes for services involving routine X-rays (the simple case), and 3 minutes for services involving CTs and MRIs (the intermediate case). We seek recommendations from the RUC and other stakeholders and we intend to request feedback from commenters through future rulemaking to assist in identifying what we believe would be the small number of services that fall into the complex (4 min) and highly complex (5 min) categories, and the specific basis used to set the two categories apart from one another. In the meantime, we will consider individual codes on a case by case basis for this clinical labor task. After considering the comments received, we are finalizing a range of appropriate standard minutes for the clinical labor activity, “Technologist QCs images in PACS, checking for all images, reformats, and dose page” as follows: Simple (2 min); intermediate (3 min), complex (4 min) and highly complex (5 min). We are also finalizing our criteria for determining the simple and intermediate categories as proposed. (b) Pathology Clinical Labor Tasks As with the clinical labor tasks associated with digital imaging, many of the currently assigned times for the specialized clinical labor tasks associated with pathology services are not consistent across codes. In reviewing past RUC recommendations for pathology services, we have not identified information that supports the judgment that the same tasks take significantly more or less time depending on the individual service for which they are performed, especially given the high degree of specificity with which the tasks are described. We continue to believe that, in general, a clinical labor task will tend to take the same amount of time to perform for one individual service as the same clinical labor task when it is performed in a clinically similar service. Therefore, we developed standard times for clinical labor tasks that we have used in finalizing direct PE inputs in recent years, starting in the CY 2012 PFS final rule with comment period (76 FR 73213). These times were based on our review and assessment of the current times included for these clinical labor tasks in the direct PE input database. We proposed in the CY 2016 PFS proposed rule to establish standard times for a list of 17 clinical labor tasks related to pathology services, and solicited public feedback regarding our proposed standards. Many commenters stated in response to our proposal that they did not support the standardization of clinical labor activities across pathology services. Commenters stated that establishing a single standard time for each clinical labor task was infeasible due to the differences in batch size or number of blocks across different pathology procedures. Several commenters indicated that it might be possible to standardize across codes with the same batch sizes, and urged us to consider pathology-specific details, such as batch size and block number, in the creation of any future standard times for clinical labor tasks related to pathology services. As we stated in the CY 2016 PFS proposed rule, we developed the proposed standard times based on our review and assessment of the current times included for these clinical labor tasks in the direct PE input database. We believe that, generally speaking, clinical labor tasks with the same description are comparable across different pathology procedures. We believe this to be true based on the comparability of clinical labor tasks in non-pathology services, as well as the high degree of specificity with which most clinical labor tasks for pathology services are described relative to clinical labor tasks associated with other PFS services. We concurred with commenters that accurate clinical labor times for pathology codes may be dependent on the number of blocks or batch size typically used for each individual service. However, we also believe that it is appropriate and feasible to establish “per block” standards or standards varied by batch size assumptions for many clinical labor activities that would be comparable across a wide range of individual services. We have received detailed information regarding batch size and number of blocks during review of individual pathology services on an intermittent basis in the past. We requested regular submission of these details on the PE worksheets supplied by the RUC as part of the review process for pathology services, as a means to assist in the determination of the most accurate direct PE inputs. We also stated our belief that many of the clinical labor activities for which we proposed to establish standard times were tasks that do not depend on number of blocks or batch size. Clinical labor activities such as “Clean room/equipment following procedure” and “Dispose of remaining specimens” would typically remain standard across different services without varying by block number or batch size, with the understanding that additional time may be required above the standard value for a clinical labor task that is part of an unusually complex or difficult service. As a result, we ultimately finalized standard times for 6 of the 17 proposed clinical labor activities in the CY 2016 final rule with comment period (80 FR 70902). We have listed the finalized standard times in Table 6. We are taking no further action on the remaining 11 clinical labor activities in this final rule, pending further action by the RUC (see below). Table 6—Standard Times for Clinical Labor Tasks Associated With Pathology Services Clinical labor task Standard clinical labor time (minutes) Accession specimen/prepare for examination 4 Assemble and deliver slides with paperwork to pathologists 0.5 Assemble other light microscopy slides, open nerve biopsy slides, and clinical history, and present to pathologist to prepare clinical pathologic interpretation 0.5 Clean room/equipment following procedure (including any equipment maintenance that must be done after the procedure) 1 Dispose of remaining specimens, spent chemicals/other consumables, and hazardous waste 1 Prepare, pack and transport specimens and records for in-house storage and external storage (where applicable) 1 We remain committed to the process of establishing standard clinical labor times for tasks associated with pathology services. This may include establishing standards on a per-block or per-batch basis, as we indicated during the previous rulemaking cycle. However, we are aware that the PE Subcommittee of the RUC is currently working to standardize the pathology clinical labor activities they use in making their recommendations. We believe the RUC's efforts to narrow the current list of several hundred pathology clinical labor tasks to a more manageable number through the consolidation of duplicative or highly similar activities into a single description may serve PFS relativity and facilitate greater transparency in PFS ratesetting. We also believe that the RUC's standardization of pathology clinical labor tasks would facilitate our capacity to establish standard times for pathology clinical labor tasks in future rulemaking. Therefore, we did not propose any additional changes to clinical labor tasks associated with pathology services. (3) Equipment Recommendations for Scope Systems During our routine reviews of direct PE input recommendations, we have regularly found unexplained inconsistencies involving the use of scopes and the video systems associated with them. Some of the scopes include video systems bundled into the equipment item, some of them include scope accessories as part of their price, and some of them are standalone scopes with no other equipment included. It is not always clear which equipment items related to scopes fall into which of these categories. We have also frequently found anomalies in the equipment recommendations, with equipment items that consist of a scope and video system bundle recommended, along with a separate scope video system. Based on our review, the variations do not appear to be consistent with the different code descriptions. To promote appropriate relativity among the services and facilitate the transparency of our review process, during review of recommended direct PE inputs for the CY 2017 PFS proposed rule, we developed a structure that separates the scope and the associated video system as distinct equipment items for each code. Under this approach, we proposed standalone prices for each scope, and separate prices for the video systems that are used with scopes. We would define the scope video system as including: (1) A monitor; (2) a processor; (3) a form of digital capture; (4) a cart; and (5) a printer. We believe that these equipment components represent the typical case for a scope video system. Our model for this system is the “video system, endoscopy (processor, digital capture, monitor, printer, cart)” equipment item (ES031), which we proposed to re-price as part of this separate pricing approach. We obtained current pricing invoices for the endoscopy video system as part of our investigation of these issues involving scopes, which we proposed to use for this re-pricing. We understand that there may be other accessories associated with the use of scopes; we proposed to separately price any scope accessories, and individually evaluate their inclusion or exclusion as direct PE inputs for particular codes as usual under our current policy based on whether they are typically used in furnishing the services described by the particular codes. We also proposed standardizing refinements to the way scopes have been defined in the direct PE input database. We believe that there are four general types of scopes: Non-video scopes; flexible scopes; semi-rigid scopes, and rigid scopes. Flexible scopes, semi-rigid scopes, and rigid scopes would typically be paired with one of the video scope systems, while the non-video scopes would not. The flexible scopes can be further divided into diagnostic (or non-channeled) and therapeutic (or channeled) scopes. We proposed to identify for each anatomical application: (1) A rigid scope; (2) a semi-rigid scope; (3) a non-video flexible scope; (4) a non-channeled flexible video scope; and (5) a channeled flexible video scope. We proposed to classify the existing scopes in our direct PE database under this classification system, to improve the transparency of our review process and improve appropriate relativity among the services. We plan to propose input prices for these equipment items through future rulemaking. We proposed these changes only for the reviewed codes that make use of scopes; this applies to the codes in the Flexible Laryngoscope family (CPT codes 31572, 31573, 31574, 31575, 31576, 31577, 31578, 31579) (see section II.L) and the Laryngoplasty family (CPT codes 31551, 31552, 31553, 31554, 31580, 31584, 31587, 31591, 31592) (see section II.L) along with updated prices for the equipment items related to scopes utilized by these services. We also solicited comment on this separate pricing structure for scopes, scope video systems, and scope accessories, which we could consider proposing to apply to other codes in future rulemaking. The following is a summary of the comments we received on this separate pricing structure for scopes, scope video systems, and scope accessories. Comment: Many commenters addressed our general proposal to reclassify scopes and their related equipment items. Commenters expressed their support for the decision to remove the scopes from the proposed scope packages, and the proposed definition of the scope video system based on the current endoscopy video system equipment item (ES031). There were no comments opposing the general principle behind reclassifying scopes and scope equipment. Response: We appreciate the support from the commenters [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2016-26668. Public record. Not legal advice.