Medicare Program; Refinements to Geographic Adjustment Factor Values and Other Policies Under the Physician Fee Schedule; Proposed Rule DEPARTMENT OF HEALTH AND HUMAN SERVICES
Federal RegisterJun 24, 1994
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SUMMARY: This proposed rule discusses changes to the geographic
adjustment factor values and fee schedule payment areas, proposed
relative value units for certain physician services, revisions to
payment policies for specific physician services, and a change to the
Medicare Volume Performance Standard. This proposed rule also discusses
implementation of the Omnibus Budget Reconciliation Act of 1993 (Public
Law 103-66) provision regarding payment for antigens. This provision
places antigens under the physician fee schedule and subjects them to
charge limits. This proposed rule solicits public comments on the
proposed changes.
DATES: Comments will be considered if we receive them at the
appropriate address, as provided below, no later than 5 p.m. on August
23, 1994.
ADDRESSES: Mail written comments (1 original and 3 copies) to the
following address: Health Care Financing Administration, Department of
Health and Human Services, Attention: BPD-789-P, P.O. Box 7519,
Baltimore, MD 21207-0519.
If you prefer, you may deliver your written comments to one of the
following addresses:
Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue
SW., Washington, DC 20201, or
Room 132, East High Rise Building, 6325 Security Boulevard,
Baltimore, MD 21207.
Because of staffing and resource limitations, we cannot accept
comments by facsimile (FAX) transmission. In commenting, please refer
to file code BPD-789-P. Comments received timely will be available for
public inspection as they are received, generally beginning
approximately 3 weeks after publication of a document, in Room 309-G of
the Department's offices at 200 Independence Avenue SW., Washington,
DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m.
(phone: (202) 690-7890).
Copies: To order copies of the Federal Register containing this
document, send your request to: New Orders, Superintendent of
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Federal Depository Libraries and at many other public and academic
libraries throughout the country that receive the Federal Register.
FOR FURTHER INFORMATION CONTACT: For further information concerning the
proposed refinements to the geographic adjustment factor values and
changes to the geographic practice cost indices and payment areas,
contact Bob Ulikowski of the Health Care Financing Administration,
(410) 966-5721. For issues related to the proposed relative value units
for certain physician services and payment policies for specific
physician services and supplies, contact Elizabeth Holland of the
Health Care Financing Administration, (410) 966-1309.
SUPPLEMENTARY INFORMATION: To assist readers in referencing sections
contained in this proposed rule, we are providing the following table
of contents:
Table of Contents
I. Background
A. Legislative History
B. Recent Federal Register Publications
II. Specific Proposals for CY 1995
A. GPCI Changes
1. Development of the GPCIs
2. Proposed Revised GPCIs
a. Work GPCIs
b. Practice Expense GPCIs
c. Malpractice GPCIs
3. Impact of Revised GPCIs
B. Payment Area (Locality) Changes
C. Work RVUs--RVUs for Carrier-Priced and Non-Medicare CPT Codes
1. Methodology (Includes Table 1--AMA RUC Recommendations and
HCFA's Proposed RVUs)
2. RUC Recommendations That Were Not Accepted
a. Reconstructive and Cosmetic Plastic Surgery
b. Maxillofacial Surgery (CPT Codes 21137 through 21139 and
21181)
c. Respiratory System--Laryngoplasty (CPT Code 31582) for
Laryngeal Stenosis, with Graft or Core Mold, Including Tracheotomy
d. Vascular--Penile Revascularization (CPT Code 37788), Artery
with or without Vein Graft
e. Vestibuloplasty (CPT Codes 40840 through 40845)
f. Urology
g. Ophthalmology
h. Newborn Care
3. Comment Process for Proposed RVUs
4. Establishment of Practice Expense and Malpractice Expense
RVUs
D. Separate Payment for Physician Care Plan Oversight Services
1. Background
2. Physicians Eligible To Receive Payment
3. Level of Payment
4. Budget Neutrality
5. Conditions for Payment
E. Payment for Multiple Surgical Procedures
F. Application of Site-of-Service Payment Differential
G. Bundled Services
1. Generation and Interpretation of Automated Data (CPT Codes
78890 and 78891)
2. Noninvasive Ear or Pulse Oximetry (CPT Code 94760)
H. RVUs for Doppler Echocardiography (CPT Code 93325)
I. Nuclear Medicine
J. End-Stage Renal Disease (ESRD)
1. Hospital Inpatient Dialysis on the Same Day as an Evaluation
and Management Service
2. Payment for Outpatient ESRD-Related Services under the
Physician Fee Schedule
a. Development of the Monthly Capitation Payment (MCP)
b. Proposed Inclusion of the MCP under the Physician Fee
Schedule
K. Services Considered to Be Medicare Part A Services
III. Implementation of the Omnibus Budget Reconciliation Act of 1993
(Public Law 103-66)--Payment for Antigens (Allergen Immunotherapy)
A. Background and Legislative Change
B. CPT and HCPCS Codes
C. Proposed RVUs
D. Budget Neutrality
E. Transition
IV. Change in the MVPS Calculation for FY 1996
V. Changes to the Regulations
VI. Collection of Information Requirements
VII. Response to Comments
VIII. Regulatory Impact Analysis
A. Regulatory Flexibility Act
B. Effects of Implementing Proposed Policy Changes to GPCIs
C. Payment Area (Locality) Changes
D. Effects of Proposed Work RVUs for Carrier-Priced and Non-
Medicare CPT Codes
E. Effects of Proposed Payment Policy Revisions
1. Separate Payment for Physician Care Plan Oversight Services
2. Payment for Multiple Surgical Procedures
3. Application of Site-of-Service Payment Differential
4. Bundled Services
a. Generation and Interpretation of Automated Data (CPT Codes
78890 and 78891)
b. Noninvasive Ear or Pulse Oximetry (CPT Code 94760)
5. RVUs for Doppler Echocardiography (CPT Code 93325)
6. Nuclear Medicine
7. ESRD--Hospital Inpatient Dialysis on the Same Day as an
Evaluation and Management Service
8. Services Considered to be Medicare Part A Services
F. Effects of Payment for Antigens (Allergen Immunotherapy)
G. Change in the MVPS Calculation for FY 1996
H. Rural Hospital Impact Statement
Text of Proposed Regulations
Addenda
Addendum A--1994 Geographic Practice Cost Indices by Medicare
Carrier and Locality
Addendum B--1996 Geographic Practice Cost Indices by Medicare
Carrier and Locality
Addendum C--1995 Geographic Practice Cost Indices by Medicare
Carrier and Locality
Addendum D--Changes in Geographic Adjustment Factor 1996 vs. 1994
Addendum E--1996 Geographic Practice Cost Indices and Geographic
Adjustment Factors for States with Multiple Localities
Addendum F--1995 Geographic Practice Cost Indices and Geographic
Adjustment Factors for States with Multiple Localities
Addendum G--Reference Set with 1994 Work RVUs
Addendum H--Procedure Codes Subject to the Site-of-Service
Differential
In addition, because of the many organizations and terms to
which we refer by acronym in this final rule, we are listing those
acronyms and their corresponding terms in alphabetical order below:
AMA--American Medical Association
ASC--Ambulatory surgical center
CF--Conversion factor
CFR--Code of Federal Regulations
CHER--Center for Health Economics Research
CMD--Carrier medical director
CMSA--Consolidated Metropolitan Statistical Area
CPT--[Physicians'] Current Procedural Terminology (4th Edition,
1994, copyrighted by the American Medical Association)
CRNA--Certified registered nurse anesthetist
CY--Calendar year
ESRD--End-Stage Renal Disease
FMR--Fair market rental
FY--Fiscal year
GAF--Geographic adjustment factor
GAO--General Accounting Office
GPCI--Geographic practice cost index
HCFA--Health Care Financing Administration
HCPCS--HCFA Common Procedure Coding System
HHA--Home health agency
HHS--[Department of] Health and Human Services
HUD--[Department of] Housing and Urban Development
JCAI--Joint Council of Allergy and Immunology
MCP--Monthly capitation payment
MEI--Medicare Economic Index
MSA--Metropolitan Statistical Area
MVPS--Medicare volume performance standards
NF--Nursing facility
NTIS--National Technical Information Service
OBRA--Omnibus Budget Reconciliation Act
PC--Professional component
RFA--Regulatory Flexibility Act
RUC--[AMA Specialty Society] Relative [Value] Update Committee
RVU--Relative value unit
SNF--Skilled Nursing Facility
TC--Technical component
UI--Urban Institute
I. Background
A. Legislative History
The Medicare program was established in 1965 by the addition of
title XVIII to the Social Security Act (the Act). Until January 1,
1992, Medicare paid for physicians' services based on a reasonable
charge system. This system led to payment variations among types of
services, physician specialties, and geographic areas. Thus, the
Congress included a physician payment reform provision in the Omnibus
Budget Reconciliation Act of 1989 (OBRA '89), Public Law 101-239,
enacted on December 19, 1989.
Section 6102 of OBRA '89 amended title XVIII of the Act by adding a
new section 1848, ``Payment for Physicians' Services.'' This section
contains three major elements:
(1) A fee schedule for the payment of physicians' services;
(2) A Medicare volume performance standard (MVPS) for the rates of
increase in Medicare expenditures for physicians' services; and
(3) Limits on the amounts that nonparticipating physicians can
charge beneficiaries. The Act requires that payments under the fee
schedule be based on national uniform relative value units (RVUs) based
on the resources used in furnishing a service. Section 1848(c) of the
Act requires that national RVUs be established for physician work,
practice expense, and malpractice. The Omnibus Budget Reconciliation
Acts of 1990 (OBRA '90) and 1993 (OBRA '93), Public Laws 101-508 and
103-66, enacted on November 5, 1990, and August 10, 1993, respectively,
contained several modifications and clarifications to the OBRA '89
provisions that established the physician fee schedule.
Section 1848(e)(1)(C) of the Act requires us to review and, if
necessary, adjust the geographic practice cost indices (GPCIs) at least
every 3 years. This section also requires us to phase in the adjustment
over 2 years and implement only one-half of any adjustment if more than
1 year has elapsed since the last GPCI revision. The GPCIs were first
implemented in 1992 and have not been reviewed since that time. Thus,
we are required to complete the first GPCI review and implement only
one-half of any adjustment by 1995 and one-half in 1996.
The Act requires that payments vary among fee schedule areas
according to geographic indices. In general, the fee schedule areas
that existed under the prior reasonable charge system were retained
under the fee schedule. A detailed discussion of fee schedule areas can
be found in the June 5, 1991 proposed rule (56 FR 25832) and in the
November 25, 1991 final rule (56 FR 59514). We are required by section
1848(e)(1)(A) of the Act to develop separate indices to measure
relative cost differences among fee schedule areas compared to the
national average for each of the three fee schedule components. While
requiring that the practice expense GPCIs and malpractice GPCIs reflect
the full relative cost differences, the Act requires that the work
indices reflect only one-quarter of the relative cost differences
compared to the national average.
B. Recent Federal Register Publications
We published a final rule on November 25, 1991, (56 FR 59502) to
implement section 1848 of the Act by establishing a fee schedule for
physicians' services furnished on or after January 1, 1992. In the
November 1991 final rule (56 FR 59511), we stated our intention to
update RVUs for new and revised codes in the American Medical
Association's (AMA) Physicians' Current Procedural Terminology (CPT)
through an ``interim RVU'' process every year. Our first update to the
RVUs was published on November 25, 1992, as a final notice with a 60-
day comment period on new and revised RVUs only (57 FR 55914).
On July 14, 1993, we published a proposed rule (58 FR 37994) to
announce our intention to revise the refinement process used to
establish physician work RVUs and to revise payment policies for
specific physician services and supplies. On December 2, 1993, we
published a final rule (58 FR 63626) announcing revised payment
policies and RVUs for 1994 (we solicited comments on new and revised
RVUs).
II. Specific Proposals for Calendar Year (CY) 1995
A. GPCI Changes
1. Development of the GPCIs
The GPCIs were developed by a joint effort of the Urban Institute
(UI) and the Center for Health Economics Research (CHER) under contract
to HCFA. Indices were developed that measured the relative cost
differences among areas compared to the national average in a market
basket of goods. In this case, the market basket consists of the
resources used in operating a private medical practice. The resource
inputs are: physician work or net income; employee wages; office rent;
medical equipment, supplies, and other miscellaneous expenses; and
malpractice insurance. Employee wages, rents, and miscellaneous
expenses are combined to comprise the practice expense component of the
GPCIs. The weights of these components in the current and the proposed
revised GPCIs are as follows:
------------------------------------------------------------------------
Percentage of
practice expense
Input component -------------------
Current Revised
GPCI GPCI
------------------------------------------------------------------------
Physician Work...................................... 54.2 54.2
Practice Expense.................................... 40.2 41.0
Employee Wages.................................... 15.7 16.3
Rent.............................................. 11.1 10.3
Miscellaneous Expenses............................ 13.4 14.4
Malpractice......................................... 5.6 4.8
-------------------
Total......................................... 100.0 100.0
------------------------------------------------------------------------
The resource inputs and their weights were obtained from the AMA's
Socioeconomic Characteristics of Medical Practice. The weights for the
current GPCIs are from the AMA's 1987 survey, while the weights for the
revised GPCIs are from the AMA's 1989 survey. The 1987 weights were the
latest available when the current GPCIs were being developed. The 1989
weights were used in revising the Medicare Economic Index (MEI)
discussed in the November 1992 final rule (57 FR 55899). The MEI is a
measure of annual increases in the cost of operating a private medical
practice and is used in the annual update of the fee schedule
conversion factor (CF). Since the GPCIs and the MEI use the same
resource inputs to measure practice expenses--the GPCIs measure
relative costs among areas while the MEI measures the national annual
rate of increase in costs--we believe the same weights should be used.
Once the components and their weights were determined, data sources
had to be found that were widely and consistently available in all fee
schedule areas to measure costs. After examining many sources, the
following proxies were selected as the best available sources for
measuring each component of the current GPCIs:
Physician work--The median hourly earnings, based on a 20-
percent sample of 1980 census data, of workers in six professional
specialty occupation categories (engineers, surveyors, and architects;
natural scientists and mathematicians; teachers, counselors, and
librarians; social scientists, social workers, and lawyers; registered
nurses and pharmacists; writers, artists, and editors) with 5 or more
years of college. Adjustments were made to produce a standard
occupational mix in each area. The actual reported earnings of
physicians were not used to adjust geographical differences in fees
because these fees are, in large part, the determinants of the
earnings. We believe that the earnings of physicians will vary among
areas to the same degree that the earnings of other professionals vary.
Employee wages--Median hourly wages of clerical workers,
registered nurses, licensed practical nurses, and health technicians
were also based on a 20-percent sample of 1980 census data.
Office rents--Residential apartment rental data produced
annually by the Department of Housing and Urban Development (HUD) were
used because there were insufficient data on commercial rents across
all fee schedule areas.
Medical equipment, supplies, and other miscellaneous
expenses--UI and CHER assumed that this component is represented by a
national market and that costs do not vary appreciably among areas.
This component's index is 1.000 for all areas to indicate no variation
from the national average.
Malpractice--Premiums in 1985 and 1986 for a mature
``claims made'' policy (a policy that covers malpractice claims during
the covered period) providing $100,000/$300,000 of coverage were used.
Adjustments were made to incorporate the costs of $1 million/$3 million
coverage and mandatory patient compensation fund requirements. Premium
data were collected for physicians in three risk classes: low-risk
(general practitioners who do not do surgery), moderate risk (general
surgeons), and high-risk (orthopedic surgeons).
The areas selected for measurement purposes were the Metropolitan
Statistical Areas (MSAs). Non-MSA areas within a State were aggregated
into one residual area. Using MSAs for measurement satisfied the
criteria of (1) Homogeneity in resource input prices within the area,
and (2) a large enough size so that market areas are self-contained to
minimize border crossing; that is, physicians would not move their
offices a few miles to secure higher payments and patients would tend
to receive services within their area.
The law requires, however, that the GPCIs reflect cost differences
among fee schedule areas. Section 1848(j)(2) of the Act defines a fee
schedule payment area as a locality that existed under the prior
reasonable charge system. These reasonable charge localities were
established by Medicare carriers on the basis of their knowledge of
physician charging patterns and have changed little since the inception
of the program in 1965. There is little consistency among carriers in
locality structure. Some States contain a single locality, while others
contain as many as 32 localities. Localities are unique to Medicare and
do not necessarily correspond directly to political boundaries
(counties or cities), geographic areas, or to the MSA/non-MSA
structure. It was thus necessary to map Medicare localities to the MSA
and non-MSA aggregation of GPCI data. Where localities crossed MSA
boundaries, MSA indices were converted to Medicare locality indices by
population weights.
Detailed discussions of the methodology and data sources of the
current GPCIs can be obtained by requesting the following studies from
the National Technical Information Service (NTIS) by calling 1-800-553-
NTIS, or (703) 487-4650 in Springfield, Virginia:
The Urban Institute GPCI report ``The Geographic Medicare
Index: Alternative Approaches,'' NTIS PB89-216592.
The supplement to ``The Geographic Medicare Index:
Alternative Approaches,'' NTIS PB91-113506. This interim version was
published in the September 4, 1990 notice for the model fee schedule
(55 FR 36238).
The Urban Institute report ``Refining the Malpractice
Geographic Practice Cost Index,'' February 1991, NTIS PB91-155218. The
related diskette is NTIS PB91-507491. This is the final version of the
current GPCIs as published in the November 1991 final rule (56 FR
59785).
2. Proposed Revised GPCIs
The separate sections below on the revised GPCI components each
contain a brief description of the differences in the current and the
proposed revised GPCIs. The main criticism of the existing GPCIs is
that they are outdated because they are based on old data; for example,
1980 census data and 1985 and 1986 malpractice premiums, the most
recent data available when the GPCIs were established. The revised
GPCIs are based on the most current data available. As discussed in the
brief descriptions of the revised indices, some minor changes from the
current GPCI methodology were made in calculating some of the revised
indices.
One methodological change was made that applied across all indices.
As mentioned earlier, under the current GPCIs, where Medicare
localities crossed MSA boundaries, MSA indices were converted to
locality indices by population weights. Medicare expenditure weights
were not used because the expenditures under the reasonable charge
system contained large differences unrelated to relative cost
differences among areas. In calculating the proposed revised GPCIs,
where localities crossed MSA boundaries, locality indices were
calculated by weights based on full fee schedule RVUs, which do reflect
relative cost differences among areas. Full fee schedule RVUs were used
rather than actual 1993 payments because some fee schedule payments are
still affected by the transition and, thus, still reflect some
reasonable charge payment levels and will continue to do so until the
fee schedule transition period is over in 1996. The advantages of RVU
weighting are that (1) The GPCIs will more closely reflect physician
practice costs in the area where the services are furnished, whereas
population weights reflect costs where the population lives, and (2)
budget neutrality is preserved when combining multiple localities into
larger areas, such as statewide localities.
a. Work GPCIs. Data from the 1990 20-percent sample of census data
of median hourly earnings for the same six categories of professional
specialty occupations as used in the current work GPCIs were used in
calculating the revised work GPCIs. The current work GPCIs were
calculated using 1980 census data of earnings for professionals with 5
or more years of college. That sample was no longer available in the
1990 census. The 1990 census educational classifications are by highest
degree earned, rather than the 1980 census classification by years of
schooling. Thus, it was not possible to obtain earnings exactly
comparable to the 1980 data.
For 1990, data are available for all education and advanced degree
samples, but not for 5 or more years of college. We elected to use the
all education sample because its larger sample sizes make it more
stable and accurate in less populous areas. Although it could be argued
that physicians' earnings might more closely approximate the earnings
of professionals with advanced degrees, the differences between the all
education and advanced degree indices were negligible in all but a few
of the smallest localities. We believe that the small sample size of
advanced degree occupations in these small localities may produce
inaccurate results.
The current work GPCIs utilize MSA-wide median wages for each
county within an MSA. That is, all counties within an MSA are assigned
the MSA-wide median wage even if there are wage variations within the
MSA. We believe that this is appropriate for all but Consolidated
Metropolitan Statistical Areas (CMSAs), the largest of the MSAs, such
as New York. In these CMSAs, we replaced metropolitan-wide earnings
with county-specific earnings. We believe that this change is
appropriate because costs are, in fact, higher in central city areas
(for example, Manhattan and San Francisco) than in the rest of the
CMSA. County earnings better account for cost variations within these
large metropolitan areas.
The work GPCIs reflect only one-fourth of the relative cost
differences as required by law.
b. Practice expense GPCIs--(1) Employee Wage Indices. Data from the
1990 20-percent sample of census data of median hourly earnings for the
same categories of medical and clerical occupations used in the current
practice expense GPCIs were used in the revised practice expense GPCIs.
These revised GPCIs use 1990 rather than 1980 census data. As with the
work GPCIs, county level data were used for CMSAs to better reflect the
cost variations within these large metropolitan areas.
(2) Office Rent Indices. As with the current practice expense
GPCIs, HUD fair market rental (FMR) data for residential rents were
again used as the proxy for physician office rents. The revised
practice expense GPCIs reflect the final 1994 HUD FMRs. Like the work
GPCIs and the employee wage index of the practice expense GPCIs, county
level data were used in CMSAs to recognize the variations within the
CMSA. This has the general effect of increasing the rent indices of
Medicare localities comprised solely or primarily of central cities
areas of CMSAs, for example, Manhattan and San Francisco.
The major criticism of the practice expense GPCIs rent index is
that residential rather than commercial rent data were used. As
mentioned earlier, for constructing the GPCIs we needed data that were
widely and consistently available across all fee schedule areas. As
with the current GPCIs, in revising the GPCIs, we again searched for
private sources of commercial rent data that were widely and
consistently available.
The private sources we found were not adequate. None of the sources
contained data for nonmetropolitan areas, nor did any contain data for
all metropolitan areas. The sources do not reflect the average
commercial space in the area, but rather the particular type of space
most relevant to the needs of the particular source's clients. In
addition, the sample sizes were small. A comparison of the average
rental for any particular city showed significant variation depending
on the source. Also, we are not confident that the private commercial
rent data that is available is representative of the type of office
space used by physicians. In any case, the GPCIs measure relative
differences among areas. We believe that commercial rents will
generally vary among areas as residential rents vary.
No national data are readily available for physician office rent.
Thus, some proxy must be used for this portion of the index. In
addition, commercial rent data are not available for all areas from
published statistical sources. We believe that the HUD FMR data remain
the best available data for constructing the office rental index. They
are available for all areas, are updated on an annual basis, and are
consistent among areas and from year to year. Moreover, physicians
frequently locate in areas and office space that are residential rather
than commercial, for example, in apartment complexes and small strip
commercial centers adjacent to residential areas. Residential rents
may, in fact, be a better measure of the differences among areas in the
physician office market than a general commercial rental index.
In any case, we are continuing to search for alternative sources of
commercial rent data. We are currently analyzing rental data from the
U.S. Postal Service, the General Services Administration, and the
Internal Revenue Service. We are examining these data to assess their
suitability for constructing rental indices.
(3) Medical Equipment, Supplies, and Other Miscellaneous Expenses.
As mentioned earlier, the GPCIs assume that this component has a
national market and that input prices do not vary among geographic
areas. We were unable to find any data sources that demonstrated price
differences by geographic area. Anecdotal and interview data with
suppliers and manufacturers were inconclusive. While some price
differences may exist, they are more likely to be based on volume
discounts rather than on geographic areas. Generally, it appears that
manufacturers' prices do not vary among areas except for shipping
costs. Since manufacturers and suppliers are located all over the
country, shipping costs on the mainland do not vary significantly.
We did consider an add-on for shipping costs to Alaska, Hawaii, and
Puerto Rico to recognize the added shipping distance. We decided
against an add-on because there were no data to indicate how much the
costs of shipping medical equipment and supplies to these areas
increased their costs. We were able to ascertain that commercial
shippers like United Parcel Service and Federal Express generally
charge about 10 percent more to ship to Puerto Rico and about 20
percent more to ship to Alaska and Hawaii from the mainland. Medical
equipment and supplies represent about 7 percent of physician practice
costs. Even if shipping costs are 5 percent of the total equipment and
supply costs, which we believe to be a high estimate, recognizing a 20-
percent increase in shipping costs would increase payment levels by
only 0.07 percent (.20 x .05 x .07 = .0007). The medical equipment,
supplies, and miscellaneous expense index for all areas will continue
to be 1.000 in the revised GPCIs.
c. Malpractice GPCIs. Malpractice premium data for a $1 million/$3
million mature ``claims made'' policy were collected and mandatory
patient compensation funds were considered. However, more recent and
comprehensive malpractice insurance data were used in calculating the
revised malpractice GPCIs. The revised malpractice GPCIs are based on
1990 through 1992 premium data. Malpractice premiums are volatile and
may change significantly from year to year. We decided to use the most
recent 3-year average rather than the most recent single year to reduce
the volatility and present a more accurate indication of malpractice
premium trends over time.
We collected data on more specialties and from more insurers than
were used to construct the current index. We collected data on 20
specialties, rather than on 3 as in the current malpractice GPCIs. The
current malpractice GPCI data were largely drawn from a single
nationwide insurer (St. Paul Fire and Marine) and were supplemented by
several State-specific carriers in States in which St. Paul did not
offer coverage. Subsequent analyses suggest that these data may no
longer be representative of insurers operating in many States. For the
revised malpractice GPCIs, data were collected from insurers that
represent the great majority of the market in each State--about 82
percent on average with 60 percent as the lowest State market share. We
believe that the more recent and comprehensive data greatly improve the
accuracy of the malpractice GPCIs.
Detailed discussions of the technical aspects of the GPCIs
including constructing a Laspereyes-type economic index, a discussion
of other data sources that were examined and found to be inadequate
and, therefore, not used, and many more detailed tables showing the
differences among various alternatives for each of the GPCI studies can
be obtained by requesting the following studies from NTIS by calling 1-
800-553-NTIS, or (703) 487-4650 in Springfield, Virginia:
``Updating the Geographic Practice Cost Index: Revised
Cost Shares.'' Debra A. Dayhoff, John E. Schneider, and Gregory C.
Pope. NTIS PB94-161072.
``Updating the Geographic Practice Cost Index: The
Physician Work GPCI.'' Gregory C. Pope and Debra A. Dayhoff. NTIS PB94-
161080.
``Updating the Geographic Practice Cost Index: The
Practice Expense GPCI.'' Gregory C. Pope, Debra A. Dayhoff, Angella R.
Merrill, and Killard W. Adamache. NTIS PB94-161098.
``Updating the Geographic Practice Cost Index: The
Malpractice GPCI.'' Stephen Zuckerman and Stephen Norton. NTIS PB94-
161106.
3. Impact of Revised GPCIs
The proposed GPCIs would be implemented in a budget-neutral manner.
They would not change the total national fee schedule payments that
would have been made in 1995 had the current GPCIs been retained. The
revised GPCIs will redistribute payments among fee schedule payment
areas. The general geographic effects of this redistribution can be
demonstrated by referring to Addenda A through F.
Fee schedule payments are the product of the RVUs, the GPCIs, and
the CF. The current GPCIs were used in computing the original 1992
budget-neutral fee schedule CF. Updating the GPCIs changes the relative
position of fee schedule areas compared to the national average. Since
the changes represented by the proposed GPCIs could result in total
payments either greater or less than what would have been paid if the
GPCIs were not revised, it was necessary to rescale the proposed GPCIs
to assure that their implementation is budget-neutral on a national
basis. That is, the same total physician fee schedule payments would be
made using the proposed GPCIs as would have been made were the current
GPCIs retained.
We calculated that the proposed GPCIs would have resulted in
slightly lower total national payments under the fee schedule. Since
the law requires that each of the fee schedule component RVUs--work,
practice expense, and malpractice--are separately adjusted by their
respective GPCIs, we adjusted each of the GPCI components separately.
To assure budget-neutrality, it was necessary to increase the proposed
work GPCIs by 0.073 percent; to increase the practice expense GPCIs by
0.125 percent; and to increase the malpractice GPCIs by 2.307 percent.
As all areas received the same percentage adjustments, the adjustments
do not change the new relative positions among areas indicated by the
proposed GPCIs.
Addendum A contains the current GPCIs. Addendum B contains the
proposed fully revised GPCIs that would be effective in 1996. Addendum
C contains the transition GPCIs for 1995, that is, one-half of the
effect of the revised GPCIs, as required by section 1848(e)(1)(C) of
the Act. For example, the current GPCIs for Birmingham, Alabama from
Addendum A are: work, 0.981; practice expense, 0.913; and malpractice,
0.824. The revised 1996 GPCIs for Birmingham from Addendum B are: work,
0.994; practice expense, 0.912; and malpractice, 0.927. Thus, the
proposed work GPCI for Birmingham represents an increase of about 1.3
percent, the revised practice expense GPCI represents a decrease of
about 0.1 percent, and the revised malpractice GPCI represents an
increase of about 12.5 percent. The 1995 transition GPCI changes shown
in Addendum C would be about one-half of these amounts.
Because the three GPCI components have different weights, the
overall effect of the changes cannot be estimated by summing the
effects of the work, practice expense, and malpractice changes. For
example, summing the changes would indicate an increase for Birmingham
of 13.7 percent.
The overall effect of all three revised GPCI components on an area
can be estimated by a comparison of area geographic adjustment factors
(GAFs). The GAF for an area is the weighted composite of the three
components. Using the revised practice cost weights in the table in
section II.A.l, the current GAF for Birmingham is 0.946
((.981 x .542)+(.913 x .410)+(.824 x .048)). The revised GAF is 0.957.
Thus, the overall effect of the revised GPCIs on Birmingham would be to
generally increase full fee schedule payments by about 1.2 percent.
This is an estimate of the general overall effect on total payments
across the entire Birmingham fee schedule area. Payment effects would
vary for specific services as the component RVU weights for services
vary from the GPCI component weights. (The closer the service component
RVU weights are to the GPCI component weights, the closer the effect
would be to the estimated GAF effect.) The effects on payments to
individual physicians would vary depending on each physician's mix and
volume of services. These are full fee schedule effects and do not
reflect the 1992 through 1995 transition payment rules under which some
payments are a blend of the fee schedule and the prior reasonable
charge system.
To facilitate a comparison of the overall effect of the current and
revised GPCIs, Addendum D contains a comparison of existing and revised
fee schedule area GAFs in descending order of change. As this Addendum
shows, no area GAF would increase by more than 7.8 percent or decrease
by more than about 8.4 percent under the revised GPCIs. Thus, area full
fee schedule payments would generally change by no more than about 8
percent under the revised GPCIs. Most areas would change by
considerably less than this amount. About 75 percent of the areas would
change by about 3 percent or less. Also, because of the 2-year
transition, the effects in 1995 (the transition year) would be no more
than one-half of the change indicated in Addendum D.
A comparison of the GAFs yields a more comprehensive comparison of
the effects of the revised GPCIs than does a comparison of the changes
in the individual GPCIs. For example, the work GPCIs for San Francisco,
California would increase from 1.038 to 1.068, an increase of 2.9
percent. The malpractice GPCIs for San Francisco would decrease from
1.370 to 0.596, a decrease of 56.5 percent. However, as mentioned
earlier, the work component would represent about 54 percent, and the
malpractice component would represent about 5 percent of total resource
costs. Thus, the 2.9-percent increase in the work GPCIs would generally
increase payments by about 1.6 percent, while the 57-percent decrease
in the malpractice GPCIs would generally decrease payments by about 2.8
percent, not 56.5 percent, in San Francisco. Overall, the San Francisco
GAF would change from 1.163 to 1.153, a decrease of only about 0.9
percent.
Again we stress that the GPCIs measure relative cost differences
among areas compared to the national average. The national average cost
is represented by a value of about 1.000. (The value is not exactly
1.000 because of the budget neutrality rescaling discussed earlier.) A
revised GPCI showing a decrease from the current value does not
necessarily mean that absolute costs of an individual physician or
absolute area costs have decreased. Instead, it means that costs in
that area have decreased compared to national average costs. For
example, a change in the malpractice GPCI from 0.990 to 0.950 does not
necessarily mean that malpractice premiums for that area have
decreased. Instead, it means that the more recent and comprehensive
1990 through 1992 malpractice data show that premiums in that area have
decreased from 99 percent to 95 percent of the national average from
the 1985 through 1986 premium data years.
We have included two additional informational tables in Addenda E
and F. Addendum E contains 1996 revised statewide GPCIs and GAFs for
States currently containing multiple payment areas. Addendum F contains
1995 transitional GPCIs and GAFs for these States. We are providing
these tables so that States with multiple payment areas that are
considering requesting a single statewide area can evaluate the effects
of a change. These GPCIs are informational only and would have no
effect unless a State changes to a single payment area.
B. Payment Area (Locality) Changes
As stated earlier, section 1848(j)(2) of the Act defines a
physician fee schedule payment area as the locality existing under the
reasonable charge system. This section did not, however, delete section
1842 of the Act, which gives us the authority to set localities. Thus,
we believe that section 1848(j)(2) allows us to retain existing
localities to facilitate changing to the physician fee schedule, but
does not preclude us from making locality changes if warranted.
There is little consistency among carriers in locality structure.
In the June 1991 proposed rule (56 FR 25832) and the November 1991
final rule (56 FR 59514) on the physician fee schedule, we stated that
until we decide on ultimate large-scale changes, the only locality
changes we would consider would be requests for converting individual
States with multiple localities to a single statewide locality if ``* *
* overwhelming support from the physician community for the changes can
be demonstrated.'' This willingness to consider applications from
physicians in a State for conversion to a statewide locality, if
overwhelming support on the part of winning and losing physicians has
been demonstrated, reflects our belief that statewide localities
generally are preferable to the present Medicare localities because
they simplify program administration and encourage physicians to
practice in rural areas by reducing urban/rural payment differentials.
We explained to States inquiring about conversions to a statewide
payment area that these conversions involve taking a weighted average
of the existing locality GPCIs to form a new statewide GPCI. This means
that there may be ``losing'' (usually urban) areas, as well as
``winning'' (usually rural) areas within a State if a conversion is
made. Overall, the change is budget neutral within the State. We
further informed these States that a simple resolution passed by the
State medical society is not sufficient proof of overwhelming support
for the change among both rural and urban physicians. To assist States
in deciding whether to convert to a statewide payment area, we
published an informational list of projected statewide GPCIs in the
June 1991 proposed rule (56 FR 25972). A slightly revised list of
projected statewide GPCIs was published in the December 1993 final rule
(58 FR 63638).
In most cases, States have been unable to generate the support of
the losing physicians for the change. However, three States--Minnesota,
Nebraska, and Oklahoma--were converted to statewide localities in 1992.
(These conversions were announced in the November 1991 final rule (56
FR 59514).) Two additional States--North Carolina and Ohio--were
converted to statewide localities in 1994. (These conversions were
announced in the December 1993 final rule (58 FR 63638).)
We have since received formal petitions for statewide payment areas
from Iowa and Pennsylvania. Only Iowa, however, presented evidence
demonstrating sufficient support from ``losing'' areas to support the
change. The Iowa Medical Society presented evidence that about 75
percent of its members, including about 70 percent of members in
``losing'' areas, support a statewide payment area. Therefore, we
propose to convert Iowa to a statewide payment area effective January
1, 1995.
Section 1842 of the Act gives us the authority to set payment
localities. We plan to review the existing payment locality structure
for possible comprehensive changes in 1996. In the meantime, we will
continue to consider statewide localities for those States in which
physicians express a desire for a change. To ensure that the views of
all physicians in an area are solicited and not just the views of
physicians who are members of the State medical societies, we will, of
course, announce any proposed changes in the criteria for establishing
localities or proposed changes to payment areas as part of the
rulemaking process for the physician fee schedule.
C. Work RVUs--Carrier-Price and Non-Medicare CPT Codes
Several State Medicaid programs and commercial insurers have
expressed interest in developing a resource-based fee schedule for
physician services. To assist them, we are developing work RVUs for
services not currently included in the Medicare physician fee schedule.
These codes are currently noncovered, bundled, or carrier-priced under
Medicare. We have no intention of changing our current payment policy
regarding these services but, rather, wish to develop RVUs for these
services to facilitate the adoption of the physician fee schedule by
other payers.
1. Methodology (Includes Table 1--AMA RUC Recommendations and HCFA's
Proposed RVUs)
As described in the November 1991 final rule on the 1993 fee
schedule (56 FR 59511), we established a process, considering
recommendations received from the AMA Relative Value Update Committee
(RUC), for establishing interim RVUs for codes. RUC was formed in
November 1991 and grew out of a series of discussions between the AMA
and the major national medical specialty societies. RUC is comprised of
26 members; 22 are representatives of major specialty societies. The
remaining members represent the AMA, the American Osteopathic
Association, and the AMA's CPT Editorial Panel. The work of RUC is
supported by an advisory committee made up of representatives of 65
specialty societies in the AMA House of Delegates. RUC uses a small
group survey method to produce work RVUs that are voted on by RUC, with
a two-thirds vote required for acceptance. RUC then submits to us those
accepted RVUs as recommended values.
In December 1993, we received work RVU recommendations for
approximately 90 codes from RUC. Physician panels consisting of carrier
medical directors (CMDs) and HCFA staff reviewed the RUC
recommendations by comparing them to other services on the fee schedule
for which work RVUs had been established previously. The panels also
considered the relationships among the codes for which we received RUC
recommendations.
Work RVUs were not assigned to CPT code 54440 (plastic operation of
penis for injury) for reasons discussed below. We propose allowing
carriers to price this procedure. Also, we are not proposing RVUs for
18 preventive medicine procedures (CPT codes 99381 through 99404) for
which we received RUC recommendations. We anticipate that these CPT
codes will be revised and expect to receive new RUC recommendations for
the revised codes. In addition, we received recommended RVUs for
several transplant codes in December 1993. Since we were aware that RUC
planned to address other transplant procedures in a subsequent meeting,
we decided not to take action on the recommendations from the earlier
meeting at this time. Instead, we plan to review the RUC RVUs for all
transplant services during our refinement meeting scheduled for June
1994. Of the remaining CPT codes, based on the review described above
by carrier medical directors and HCFA staff, we propose accepting the
RUC recommendations for approximately 50 percent of the codes and
propose decreasing the RUC recommendations for approximately 50 percent
of the codes.
Table 1 is a listing of those codes for which we received
recommended work RVUs. This table includes the following information:
HCPCS (HCFA Common Procedure Coding System) code (Level 1
HCPCS code). This is the CPT code for a service.
Description. This is an abbreviated version of the
narrative description of the code.
RUC-recommended work RVUs. This column identifies the work
RVUs recommended by RUC.
HCFA proposed work RVUs. An asterisk identifies codes for
which a discussion can be found in the narrative.
Table 1.--AMA RUC Recommendations and HCFA's Proposals
------------------------------------------------------------------------
RUC HCFA
HCPCS\1\ Description recommended proposed
work RVUs work RVUs
------------------------------------------------------------------------
11950... Therapy for contour defects......... 1.23 \2\0.85
11951... Therapy for contour defects......... 1.73 \2\1.20
11952... Therapy for contour defects......... 2.47 \2\1.71
11954... Therapy for contour defects......... 2.71 \2\1.87
15775... Hair transport punch grafts......... 5.31 \2\4.00
15776... Hair transport punch grafts......... 7.44 \2\5.60
15850... Removal of sutures.................. 0.79 0.79
19396... Design custom breast implant........ 2.96 \2\1.70
21137... Reduction of forehead............... 11.84 \2\9.50
21138... Reduction of forehead............... 14.81 \2\11.85
21139... Reduction of forehead............... 17.77 \2\14.22
21150... Reconstruct midface, lefort......... 24.68 24.68
21151... Reconstruct midface, lefort......... 27.64 27.64
21154... Reconstruct midface, lefort......... 29.61 29.61
21155... Reconstruct midface, lefort......... 33.56 33.56
21159... Reconstruct midface, lefort......... 41.45 41.45
21160... Reconstruct midface, lefort......... 45.40 45.40
21172... Reconstruct orbit/forehead.......... 27.14 27.14
21175... Reconstruct orbit/forehead.......... 32.57 32.57
21179... Reconstruct entire forehead......... 21.71 21.71
21180... Reconstruct entire forehead......... 24.68 24.68
21181... Contour cranial bone lesion......... 15.30 \2\9.50
21182... Reconstruct cranial bone............ 31.58 31.58
21183... Reconstruct cranial bone............ 34.55 34.55
21184... Reconstruct cranial bone............ 37.51 37.51
21188... Reconstruction of midface........... 21.71 21.71
30400... Reconstruction of nose.............. 9.87 \2\8.85
30410... Reconstruction of nose.............. 13.82 \2\9.95
30420... Reconstruction of nose.............. 16.62 \2\12.76
30430... Revision of nose.................... 7.40 \2\5.60
30435... Revision of nose.................... 13.57 \2\9.65
31582... Revision of larynx.................. 20.18 \2\16.32
31588... Revision of larynx.................. 11.95 11.95
31590... Reinnervate larynx.................. 6.43 6.43
31755... Repair of windpipe.................. 14.85 14.85
36460... Transfusion service, fetal.......... 6.66 6.66
37788... Revascularization, penis............ 22.70 \2\15.00
40840... Reconstruction of mouth............. 9.87 \2\8.40
40842... Reconstruction of mouth............. 9.87 \2\8.40
40843... Reconstruction of mouth............. 13.82 \2\11.76
40844... Reconstruction of mouth............. 18.26 \2\15.54
40845... Reconstruction of mouth............. 21.32 \2\18.14
50320... Removal of donor kidney............. 22.37 \2\16.16
54440... Repair of penis..................... 11.84 \2\0.00
54670... Repair of testis injury............. 6.50 \2\5.33
55870... Electroejaculation.................. 3.95 \2\0.30
61556... Incise skull/sutures................ 21.59 21.59
61557... Incise skull/sutures................ 21.71 21.71
61558... Excision of skull/sutures........... 24.68 24.68
61563... Excision of skull tumor............. 26.16 26.16
62115... Reduction of skull defect........... 20.73 20.73
62116... Reduction of skull defect........... 22.70 22.70
62117... Reduction of skull defect........... 25.66 25.66
62120... Repair skull cavity lesion.......... 22.59 22.59
63700... Repair of spinal herniation......... 15.79 15.79
63702... Repair of spinal herniation......... 17.77 17.77
63704... Repair of spinal herniation......... 19.74 19.74
63706... Repair of spinal herniation......... 22.70 22.70
69300... Revise external ear................. 10.86 \2\5.50
78351... Bone mineral, dual photon........... 0.30 0.30
92015... Refraction.......................... 0.53 \2\0.38
92310... Contact lens fitting................ 1.18 1.18
92314... Prescription of contact lens........ 0.79 \2\0.64
92340... Fitting of spectacles............... 0.37 0.37
92341... Fitting of specatacles.............. 0.51 \2\0.44
92342... Fitting of spectacles............... 0.59 \2\0.51
92370... Repair & adjust spectacles.......... 0.49 \2\0.17
99431... Initial care, normal newborn........ 1.23 \2\0.74
99432... Newborn care not in hospital........ 1.28 \2\1.15
99433... Normal newborn care, hospital....... 0.64 \2\0.44
99440... Newborn rsuscitation................ 2.96 \2\0.92
------------------------------------------------------------------------
\1\All numeric CPT HCPCS Copyright 1993 American Medical Association.
\2\Discussion of HCFA rationale for proposed work RVUs follows this
table.
2. RUC Recommendations That Were Not Accepted
The following is a summary of our rationale for not accepting
particular RUC recommendations for assignment of RVUs for CPT codes
that will appear in the 1995 CPT. It is arranged by type of service in
CPT code order. In this summary, all references to assignment of RVUs
pertain only to work RVUs unless we specify that they pertain to
practice expense RVUs, malpractice expense RVUs, or total RVUs.
a. Reconstructive and cosmetic plastic surgery. (1) Subcutaneous
injection of ``filling'' material (CPT codes 11950 through 11952 and
11954). The four CPT codes in this series are based on the amount of
``filling'' material that ranges from less than 1 cc (CPT code 11950)
to over 10 ccs (CPT code 11954). RUC recommended RVUs for each of these
CPT codes of 1.23, 1.73, 2.47, and 2.71, respectively. We agree with
the relative relationship among the CPT codes proposed by RUC but
believe that the recommended RVUs are too high. We agree with RUC's use
of CPT codes 11900 and 11901 (injection into skin lesions codes) as
reference procedures. However, we do not believe that contouring
involves as much work as RUC indicates. RUC recommended 1.23 RVUs for
CPT code 11950, which is the injection of 1 cc or less. These RVUs are
50 percent higher than the RVUs for CPT code 11901 (0.81 RVUs), which
involve the injection of more than seven lesions. We do not believe
that the difference in RVUs is as great as RUC recommends. We also used
CPT code 20610 (injection into a major joint or bursa) as another
reference code. This procedure involves 0.80 RVUs. Recognizing that CPT
code 11950 involves more work than either of the two reference codes,
we propose assigning it 0.85 RVUs. To determine RVUs for the other
three codes, we first accepted RUC's relative relationships for the
family of CPT codes. We then multiplied the ratio of .85 to 1.23 (69
percent) by the RUC-recommended RVUs for CPT codes 11951, 11952, and
11954, which resulted in RVUs of 1.20, 1.71, and 1.87, respectively.
(2) Punch grafts for hair transplants (CPT codes 15775 and 15776).
We agree with RUC's use of CPT code 15050 (pinch graft) as a reference
service for valuing these CPT codes. However, we believe that the
recommended RVUs, 5.31 for CPT code 15775 and 7.44 for CPT code 15776,
are too high. The reference CPT code 15050 has a 90-day global period,
and the hair transplant codes have no global period. Using the Harvard
research team's data for intraservice work and same day preoperative
and postoperative work, we first reduced the RVUs for CPT code 15050 to
2.43 to make the global period comparable to that of the hair
transplant codes. Because we believe that the work of CPT code 15775 is
greater than that of a pinch graft but not double the work as RUC
contends, we propose establishing 4.00 RVUs for CPT code 15775. We used
the RUC relative relationships between these two codes to develop 5.60
RVUs for CPT code 15776.
(3) Preparation of moulage for custom breast implant (CPT code
19396). RUC recommended 2.96 RVUs based on a multiple of the RVU
assigned to CPT code 99241 (office consultation for a new or
established patient). We agree with RUC's use of an evaluation and
management code as a reference service but believe this procedure is
comparable to CPT code 99204 (a new patient office visit lasting about
45 minutes). Also RUC's recommended 2.96 RVUs are higher than those of
CPT code 31622 (a bronchoscopy) although preparation of a moulage is of
lower intensity. Therefore, we propose establishing 1.70 RVUs for this
procedure.
(4) Rhinoplasty (CPT codes 30400, 30410, 30420, 30430, and 30435).
We propose decreasing all of RUC's recommended work RVUs for these CPT
codes. RUC's survey data indicated that these services require an
average of six post-hospital visits, including two level 4 office
visits (CPT code 99214). We believe that these data overestimate past
hospital work; this, in turn, contributed to an overestimation of the
total work. In developing an RVU for CPT code 30400, we used three
procedures as reference services: thyroid lobectomy (CPT code 60220,
9.97 RVUs), appendectomy (CPT code 44950, 6.13 RVUs), and septoplasty
(CPT code 30520, 5.61 RVUs). We believe that the work of CPT code 30400
is less than that of CPT code 60220 but more than that of both CPT
codes 44950 and 30520. Therefore, we are proposing 8.85 RVUs for CPT
code 30400. These RVUs are comparable to the RVUs recommended by the
Harvard research team rather than the RVUs recommended by RUC.
In developing RVUs for CPT code 30410, we used major thoracotomy
with exploration and biopsy (CPT code 32100, 10.18 RVUs) as a reference
service. We believe that CPT code 30410 involves less work than a
thoracotomy (CPT code 32100) and, therefore, prefer Harvard research
team's recommended 9.95 RVUs, rather than the RUC recommendation of
13.82 RVUs. We used CPT codes 30410 and 30520 (septoplasty) as the
reference services for CPT code 30420 by summing the RVUs of the two
services after applying the multiple-surgery rule to reduce the RVUs
for the lesser valued service (CPT code 30520) by 50 percent. This
resulted in 12.76 RVUs for CPT code 30420.
The reference service we used for CPT code 30430 was a septoplasty
(CPT code 30520, 5.61 RVUs). We believe a septoplasty requires slightly
more work than CPT code 30430. Therefore, we propose assigning 5.60
RVUs. These RVUs are comparable to the Harvard research team's 5.60
RVUs, rather than RUC's recommendation of 7.40 RVUs.
Because we believe that CPT code 30435 involves a similar level of
work to CPT code 30410 (9.95 RVUs), we used RUC's rank ordering of
these two codes (RUC rated CPT code 30435 slightly lower than CPT code
30410) and, therefore, propose establishing 9.65 RVUs for CPT code
30435.
(5) Otoplasty (CPT code 69300). The full CPT description for this
CPT code is ``otoplasty, protruding ear, with or without size
reduction.'' In valuing this procedure, we interpreted the description
as describing a unilateral procedure. However, the RUC vignette
described a bilateral procedure, and RUC recommended 10.86 RVUs. We
believe that the work for this procedure is approximately half of a
complete rhinoplasty (CPT code 30410, 9.95 RVUs), less than an
appendectomy (CPT code 44950, 6.13 RVUs) and slightly less than a
septoplasty (CPT code 30520, 5.61 RVUs). Therefore, we propose
establishing 5.50 RVUs for CPT code 69300. Also, we propose to
establish a global period of 90 days as recommended by RUC.
b. Maxillofacial surgery--(CPT codes 21137 through 21139 and
21181). We believe that the RUC-recommended RVUs for procedures
associated with forehead reductions (CPT codes 21137 through 21139) are
too high but are correct in relation to each other. For CPT code 21137,
RUC recommended 11.84 RVUs. We disagree, since a total lobectomy (CPT
code 60220), which we believe is more complicated, is assigned 9.97
RVUs. We believe that the work involved in performing CPT code 21137 is
95 percent of that required for a total lobectomy. Therefore, we
propose lowering the RVUs for CPT code 21137 by 5 percent resulting in
9.50 RVUs.
Since we agree with the RUC's recommended relationship among the
procedures, we propose reducing proportionately the RVUs for CPT codes
21138 and 21139. This results in an assignment of 11.85 RVUs for CPT
code 21138 and 14.22 RVUs for CPT code 21139.
We propose lowering the 15.30 RVUs recommended by RUC for CPT code
21181 (reconstruction by contouring of benign tumor of cranial bones)
to 9.50 making them the same for CPT code 21137. We believe this
procedure is similar to that of CPT code 21137 and is more of a
functional repair than a cosmetic repair and, therefore, the work
involved is not as intense.
c. Respiratory System--Laryngoplasty (CPT code 31582) for laryngeal
stenosis, with graft or core mold, including tracheotomy. We disagree
with RUC's recommended 20.18 RVUs for CPT code 31582. We believe the
work of CPT code 31582 is similar to that of CPT code 31780 (excision
of tracheal stenosis and anastomosis), which has 16.32 RVUs. Therefore,
we propose lowering the RVUs for CPT code 31582 to 16.32. This
comparison is validated by a comparison with CPT code 31580 (11.19
RVUs), which involves 30 to 60 minutes less operative time and a
shorter inpatient stay. A decrease of 5.13 RVUs adequately accounts for
this difference.
d. Vascular--Penile revascularization (CPT code 37788), artery with
or without vein graft. We disagree with RUC's recommended 22.70 RVUs.
We believe this procedure is not much more difficult than CPT code
35656 (femoral-popliteal bypass graft), which is assigned 14.00 RVUs.
Thus, we propose adding 1.00 RVU to the RVUs for CPT code 35656, which
results in 15.00 RVUs for CPT code 37788.
e. Vestibuloplasty (CPT codes 40840 through 40845). We believe the
RUC-recommended RVUs for the vestibuloplasty CPT codes 40840 (9.87),
40842 (9.87), 40843 (13.82), 40844 (18.26), and 40845 (21.32) are high
in relation to other oral procedures. However, we do agree with the
work relationship among the procedures. We believe that CPT code 40840
(anterior vestibuloplasty) is no more difficult than CPT code 14060
(adjacent tissue transfer or rearrangement, eyelids, nose, ears and/or
lips; defect 10 square cm or less), which is assigned 8.40 RVUs.
Therefore, we propose assigning 8.40 RVUs to CPT code 40840. This
conclusion is supported by our belief that CPT code 40842 (unilateral
posterior vestibuloplasty) is similar in nonoperative work to CPT code
40654 (complex lip repair) (5.19 RVUs). We consider the greater
operative work (about 60 minutes) of CPT code 40842 to be worth the
additional 3.21 RVUs that would give it the same total RVUs (8.40) as
CPT code 40840. Since we agree with the relationship established by RUC
among CPT codes 40843 through 40845 and CPT codes 40840 and 40842, we
propose retaining that relationship by applying a reduction of 14.9
percent for each CPT code yielding 11.76 RVUs for CPT code 40843, 15.54
RVUs for CPT code 40844, and 18.14 RVUs for CPT code 40845.
f. Urology.
(1) Donor nephrectomy with preparation and maintenance of homograft
from a living donor (CPT code 50320). We disagree with RUC's
recommended 22.37 RVUs. We believe this procedure is equivalent to CPT
code 50220 (nephrectomy including partial ureterectomy, including rib
resection), which has 16.16 RVUs. Therefore, we would assign 16.16 RVUs
to CPT code 50320.
(2) Plastic operation of penis for injury (CPT code 54440). We do
not believe that the description for this procedure is sufficient to
differentiate this procedure from the other plastic operation
procedures of the penis (CPT codes 54352, 54360, 54380, 54385, and
54390), which have RVUs that range from 11.52 to 24.11. In addition,
the description of the intraservice work furnished by RUC states that
``the variations and severity of the injuries differ and each repair is
predicated on the type of injury * * * No case is the same * * * .''
Thus, we do not believe there is sufficient clinical documentation to
support RUC's recommended 11.84 RVUs, which would place it in the
family of plastic operations of the penis.
Based on the description, we believe that the work reported for CPT
code 54440 could be as justifiably compared to that of CPT code 13101
(complex repair, trunk, 2.6 cm to 7.5 cm), a procedure with 3.91 RVUs,
as with the more complex family above. However, because of the lack of
specificity in the CPT code description, we propose continuing allowing
carriers to price this procedure.
(3) Suture or repair of testicular injury (CPT code 54670). RUC
recommended 6.50 RVUs. We propose decreasing the RVUs for CPT code
54670 to 5.33 based on the determination that the work involved is
comparable to the higher end of the spectrum of work associated with
CPT code 13132 (complex repair, forehead, cheeks, chin, mouth, neck,
axillae, genitalia, hands and/or feet, 2.6 cm to 7.5 cm) (4.26 RVUs)
and should be valued 25 percent more than CPT code 13132.
(4) Electroejaculation (CPT code 55870). RUC recommended 3.95 RVUs.
We propose decreasing the RVUs to 0.30. We believe that the work is
similar to a level 1 emergency department visit (CPT code 99281), which
has 0.28 RVUs. Also, the work is much less difficult than an ultrasound
of the rectum (CPT code 76872), which has 0.70 RVUs or a diagnostic
anoscopy (CPT code 46600), which has 0.51 RVUs. We believe that the
time estimates furnished in the RUC recommendation are too high. If
more intraoperative work than a proctoscopy is required, such as a
catheterization to retrieve semen, we propose that the appropriate
unusual services CPT modifier -22 be reported.
g. Ophthalmology. (1) Determination of refractive state (CPT code
92015). RUC recommended 0.53 RVUs for this procedure, slightly less
than the 0.56 RVUs for its reference service CPT code 99213 (a 15-
minute office visit for an established patient). The RUC survey data,
however, indicate that the intraservice time is 11 minutes. Because 11
minutes correlates more closely to CPT code 99212 (a 10-minute office
visit for established patient), we used CPT code 99212 (0.38 RVUs) as
the reference service. Because we believe a determination of the
refractive state to have slightly less intensity (work per unit time),
we propose establishing 0.38 RVUs for CPT code 92015.
(2) Prescription of optical and physical characteristics and
fitting of contact lens and direction of fitting by an independent
technician, except for aphakia (CPT code 92314). We accepted the RUC
recommendation of 1.18 RVUs for the prescription and fitting of corneal
lens, both eyes, except for aphakia (CPT code 92310). These RVUs are 93
percent of the published 1.27 RVUs for CPT code 92312, which is the
same service for aphakic patients. By accepting the RUC recommendation
for CPT code 92310, we created a relationship between CPT codes that
describe the same procedure except that one is ``for aphakia'' and one
is ``except for aphakia.'' To be consistent in valuing the nonaphakic
CPT codes at 93 percent of the comparable aphakic CPT codes, we propose
reducing the RUC recommendation of 0.79 RVUs for CPT code 92314 to 0.64
RVUs by multiplying the RVUs of corresponding CPT code 93216 (0.69
RVUs) by 93 percent.
(3) Fitting of spectacles, except for aphakia (CPT codes 92340
through 92342). In this family of CPT codes, RUC recommended that the
fitting of monofocal spectacles except for aphakia (CPT code 92340)
should be assigned the same RVUs as CPT code 92352 (0.37 RVUs), which
is the same service for aphakic patients. We agree with this
equivalence. Also, we propose establishing 0.51 RVUs for CPT code 92342
using the published 0.51 RVUs for CPT code 92353, which is the
corresponding CPT code for aphakia. This results in a decrease from the
RUC-recommended 0.59 RVUs. For the bifocal service (CPT code 92341), we
propose establishing 0.44 RVUs for this CPT code by identifying the
midpoint between the RVUs for CPT codes 92340 (0.37 RVUs) and 92342
(0.51 RVUs). RUC recommended 0.51 RVUS, which is valued between the
monofocal and multifocal services. Our proposal agrees with this rank
order.
(4) Repair and refitting of spectacles, except for aphakia (CPT
code 92370). RUC recommended 0.49 RVUs. We reject RUC's use of CPT code
99213 (office or other outpatient visit for the evaluation and
management of an established patient, 0.56 RVUs) as a reference service
because the median intraservice time of CPT code 92370 is 10 minutes
and this procedure involves considerably less intensity than the work
described under CPT code 99213. Since we believe the work intensity to
be half that of an evaluation and management service, we propose
establishing 0.17 RVUs for CPT code 92370, the same work value as CPT
code 99211 (a 5 minute visit).
h. Newborn care. (1) History and examination of the normal newborn
infant (CPT code 99431). RUC recommended 1.23 RVUs for this CPT code.
We believe these recommended RVUs, which are 15 percent higher than a
level 1 hospital admission (CPT code 99221, 1.07 RVUs), are too high.
We generally agree with the description of the work furnished to RUC
but do not agree that the vignette used in the survey is consistent
with the CPT code. The vignette states that issues such as feeding,
immunizations, and car safety are discussed with both parents. We do
not believe these services are included in this CPT code. We also
disagree that the examination of a normal newborn requires more mental
effort and judgment than the admission of a sick child or adult to the
hospital. Therefore, we propose reducing the RVUs to 0.74, which is
similar to a level two new patient visit (CPT code 99202).
(2) Normal newborn care in other than a hospital or birthing room
including physical examination of baby and conference(s) with parent(s)
(CPT code 99432). RUC recommended 1.28 RVUs for this CPT code, which is
0.05 RVUs higher than the recommended RVUs for normal newborn care in
the hospital (CPT code 99431). Unlike the CPT code for normal newborn
care in the hospital, this CPT code does include counseling. Therefore,
we are not proposing to decrease the RVUs of CPT code 99432 as much as
we are proposing to decrease the RVUs of CPT code 99431. We agree with
the reference CPT code 99203 (level 3 office visit with a new patient
(1.15 RVUs). We propose assigning the same RVUs of 1.15 to this normal
newborn care code.
(3) Subsequent hospital care for the evaluation and management of a
normal newborn, per day (CPT code 99433). RUC recommended 0.65 RVUs for
this CPT code. We disagree with these RVUs that are based on a
comparison to a level 1 subsequent hospital care (CPT code 99231),
which has 0.56 RVUs. The specialty society recommendation to RUC states
that the work of the two CPT codes is the same but that more mental
effort and judgment are needed. We disagree with this conclusion
because we believe the intensity of work for a normal newborn is less
than the intensity of work for a sick person in the hospital.
Therefore, we propose assigning 0.44 RVUs to this CPT code.
(4) Newborn resuscitation (CPT code 99440). RUC recommended 2.96
RVUs based on a comparison to an hour of critical care (CPT code 99291,
3.68 RVUs) and surveyed intraservice time of 45 minutes. We believe
this recommendation is too high because the 45 minutes of intraservice
time does not correspond to the actual time spent resuscitating the
infant. We believe the survey has inadvertently included stand-by time
for the C-section delivery that should be reported under CPT code
99360. We agree that the critical care CPT code 99291 is the
appropriate reference but believe a more typical time for newborn
resuscitation would be 10 to 15 minutes. Therefore, we propose
establishing 0.92 RVUs based on 15 minutes of physician work time
compared to the critical care CPT code 99291 (3.68 RVUs) (3.68/4=0.92).
3. Comment Process for Proposed RVUs
We will consider timely comments received on these proposed RVUs in
developing final RVUs to be announced in the Federal Register in the
fall of 1994, to be effective January 1, 1995.
While we welcome comments in any format, we have found from past
experience that the most useful comments have followed a particular
format. We prefer receiving a clinical description of the service in
question, and how the work of that service is analogous to one or more
suitable reference services. Reference services should be commonly
performed services with established work RVUs that are also fairly well
understood outside their specialty. We have included a list of
suggested reference services in Addendum G. On this list we have
included the following services:
Services that are commonly performed.
Services that span the entire spectrum of work RVUs.
At least three services furnished by each of the major
specialties.
If none of these services is suitable, we recommend choosing
another service from the physician fee schedule and explaining why it
is a better reference procedure.
The clinical analogy for many services can be strengthened by
dividing the service into the following three time segments and
comparing these segments with the respective segments of the reference
services:
Preservice work--Work performed before the actual
procedure such as review of records, solicitation of informed consent,
and preparation of equipment. For surgical procedures with global
periods, include estimates of the number, time, and type of visits from
the day before surgery until the time the patient enters the operating
room. The visit when the decision to operate is made and those visits
preceding it should not be included.
Intraservice work--The actual performance of the
procedure. For evaluation and management services, this would be
described as ``face-to-face'' time. For surgical procedures, include
the entire time period from when the patient enters the operating room
until the patient is discharged from the recovery room.
Postservice work--Analysis of data collected from the
encounter, preparation of a report, and communication of the results.
For surgical procedures with global periods, include the number, time,
and type of surgeon visits from the time the patient leaves the
recovery room until the end of the global period. Also, distinguish
inpatient from outpatient visits.
In making these estimations, we encourage detailed clinical
information such as data derived from operating logs, operative
reports, and medical charts concerning the length of service, the
amount of work performed before and after the service, and the length
of stay in the hospital. The usefulness of these data is greatly
enhanced if they are presented with comparable data for reference
services. Also, we encourage evidence of why the data presented are
nationally representative of the average work involved in providing the
service.
The concept of work involves more than just time; it is the product
of time and ``intensity''. Intensity is best compared by breaking it
into the following elements:
Mental effort and judgment--Compare the service in
question with a reference service as to the amount of clinical data
that needs to be considered, the fund of knowledge required, the range
of possible decisions, the number of factors considered in making a
decision, and the complexity of how these factors interact.
Technical skill and physical effort--One useful measure of
skill is the point in training when a resident is expected to be able
to perform the procedure. Physical effort can be compared by dividing
services into tasks and making direct comparisons of tasks. In making
comparisons, it is necessary to show that the differences in physical
effort are not reflected accurately by differences in the time
involved; if they are, considerations of physical effort amount to
double counting.
Psychological stress--Two kinds of psychological stress
are usually associated with physician work. The first is the pressure
involved when outcome is heavily dependent on skill and judgment and a
mistake has serious consequences. The second relates to unpleasant
conditions connected with the work that are not affected by skill or
judgment. These circumstances would include situations with high rates
of mortality or morbidity regardless of skill or judgment, difficult
patients or families, or physician physical discomfort. Of the two
forms of stress, only the former is fully accepted as an aspect of
work; many consider the latter to be a highly variable function of
physician personality.
Intensity often varies significantly in the course of furnishing a
service. One common mistake is to ``anchor,'' to treat points of
maximum intensity during the service as the basis for comparing
services. It is unlikely that the maximum is an accurate reflection of
the average intensity of a service: a lengthy procedure that is simple
except for a few moments of extreme intensity is probably less work
than one of equal length during which a fairly high level of intensity
is maintained throughout.
4. Establishment of Practice Expense and Malpractice Expense RVUs
To the extent possible, we would use Medicare charge data
to establish practice expense and malpractice expense RVUs for these
codes. The RVUs would be calculated according to the statutory formula
that requires us to apply historical practice cost shares to a base
allowed charge for the service. To determine the practice cost shares,
we would use data from the AMA's Socioeconomic Monitoring Survey for
physician specialties.
If Medicare charge data do not exist, are insufficient, or are
unreliable for reasons such as variations in interpretation of the
code, we propose to establish practice expense and malpractice expense
RVUs by one of several extrapolation techniques. For example, if we
have already established RVUs on the basis of reliable charge data for
an analogous procedure with similar practice expenses, we propose to
use the charges for the analogous code. If there is no analogous code,
we would impute the practice expense and malpractice expense RVUs from
the work RVUs. Essentially, we would derive the total RVUs from the
work RVUs and then apply the practice cost shares for the specialty
most closely associated with the procedure to determine the practice
expense and malpractice expense RVUs. For example, if a procedure has
6.00 work RVUs, and the specialty practice cost percentages for the
specialty furnishing the service are 60-percent work, 30-percent
practice expenses, and 10-percent malpractice, then the total RVUs are
10.00 (6/.60), the practice expense RVUs would be 3.00 (.30 x 10), and
the malpractice expense RVU would be 1.00 (.10 x 10).
D. Separate Payment for Physician Care Plan Oversight Services
1. Background
Under current Medicare policy, separate payment is not made for
physician care plan oversight services. While the services are covered,
they are considered part of the physician work involved in other
services, both visits and procedures; payment for the visit or
procedure encompasses payment for these services. We continue to
believe that most of the tasks associated with care plan oversight are
of this type and are accounted for in the pre- and post-work RVU
components for the visit. However, we are aware that, in certain
situations, physicians furnish significant medical management services
for which our current policy may not provide adequate payment.
In the July 1993 Federal Register, we solicited comments regarding
a possible policy change to pay separately for case management
services. We received comments from specialty groups and individuals
indicating that physicians spend considerable time furnishing these
services to patients. Most commenters believed that we should pay
separately for these services and supported the use of the CPT codes
for care plan oversight (99375 and 99376), which were established in
1994. We believe the term ``care plan oversight'' more accurately
describes the services referred to in our proposed rule than the term
``case management.''
The CPT defines care plan oversight (CPT code 99375) as ``physician
supervision of patients under care of home health agencies, hospice or
nursing facility patients (patient not present) requiring complex or
multidisciplinary care modalities involving regular physician
development and/or revision of care plans, review of subsequent reports
of patient status, review of related laboratory and other studies,
communication (including telephone calls) with other health care
professionals involved in patient's care, integration of new
information into the medical treatment plan and/or adjustment of
medical therapy, within a 30-day period; 30-60 minutes.'' The second
code, CPT code 99376, is for services requiring more than 60 minutes of
physician time. These codes are included in the 1994 fee schedule as
codes that are bundled into the visits or other procedures; separate
payment for them is not allowed.
We propose to allow separate payment for care plan oversight
services furnished in 1995 but only for the oversight of beneficiaries
who are receiving Medicare covered home health care services. We do not
propose to recognize separate payment for care plan oversight for
beneficiaries in hospices, beneficiaries under the care of a home
health agency (HHA) but not receiving covered home health care, and
beneficiaries residing in skilled nursing facilities (SNFs) and nursing
facilities (NFs). Our reasons follow.
With respect to patients who are under the care of HHAs who are not
receiving Medicare covered HHA benefits, we do not believe that many
cases require the type of complex care plan oversight for which we are
proposing to pay. Some of these patients are not homebound and could
see the physician in the office (although absences from the house to
receive medical treatment do not affect a patient's ``homebound''
status for purposes of qualifying for home health benefits). Other
patients are receiving nonskilled services and do not require
substantive care plan oversight. With respect to hospice patients, we
do not believe that we should allow a separate payment for care plan
oversight services furnished to these patients because payment for
these services is included in the prospective rates paid to the
hospices. Separate payment for complex medical management would result
in a duplication of Medicare payments for these services when furnished
to hospice patients.
As to SNF and NF patients, the work RVUs for the SNF and NF
evaluation and management codes for new or established patients were
specifically increased in 1993 by 0.21 for CPT code 99301, 0.63 for CPT
code 99302, 0.91 for CPT code 99303, 0.07 for CPT code 99311, 0.22 for
CPT code 99312, and 0.21 for CPT code 99313 to account for care plan
oversight performed in conjunction with those visits. Physicians are
required to see patients in SNFs for an initial comprehensive
assessment at least once every 30 days for the first 90 days and at
least once every 60 days thereafter. Also, physicians are required to
perform reassessments annually and after any episodes when the
patient's condition changes significantly. Therefore, the frequency of
visits and payment for periodic reassessments ensure that physicians
receive payment for care plan oversight services furnished to SNF
patients.
Although the home visit codes were also increased in 1993, we do
not believe that a similar conclusion can be made for HHA patients
since there is no direct correlation between those patients and the
home visit codes. Further, the amount of care plan oversight required
for HHA patients can be considerable. While we currently wish to limit
payment for care plan oversight services to those furnished to patients
receiving HHA services that are covered by Medicare, we will reconsider
our decision to pay for these services in other situations in the
future if we find good cause to do so.
Since the conditions for which we would pay for these services
differ from the CPT definition, we propose to establish a new alpha-
numeric code (level 2 HCPCS code).
2. Physicians Eligible to Receive Payment
We believe, in general, only one physician is responsible for
signing the plan of care for HHA patients. Furthermore, because the
complex care plan oversight services for which we would pay require at
least 30 minutes per month per patient, we believe that only one
physician per month would meet our requirements. This policy conforms
with the CPT instructions that only one physician may report services
for a given period of time. We consider the care plan oversight
services that are directly related to a surgical procedure and
furnished during the global period of the surgery to be included in the
global fee for the procedure. However, surgeons can be paid for care
plan oversight during the global fee period if the service is not
related to the surgery. (Modifier -24 with documentation would be used
to report these services.) We expect that most of these services would
be reported by primary care physicians.
We would not allow payment to a physician who has a significant
ownership interest in, or a significant financial or contractual
relationship with, an HHA (see Sec. 424.22(d) regarding the limitations
on certification of home health services).
3. Level of Payment
We propose to establish one level of payment for all care plan
oversight services requiring at least 30 minutes per month. We do not
propose to establish a second level of payment for care plan oversight
activities requiring 60 or more minutes, as indicated by the CPT
definitions, because we believe that the typical case for which we
propose payment requires 30 to 60 minutes per month.
We believe the physician work involved in care plan oversight is
similar to that described as hospital discharge day service (CPT code
99238), and we would assign the same level of RVUs to the code we
establish for care plan oversight. Currently CPT code 99238 is assigned
1.63 total RVUs (1.07 work, 0.52 practice expense, and 0.06
malpractice). We propose to subject these services to the CF for
nonsurgical services other than primary care. We will make a final
determination, based upon our review of the public comments, in the
final rule.
4. Budget Neutrality
As indicated above, we do not consider care plan oversight to be a
new service. Medicare payment to the physician for covered visits and
procedures has always included payment for covered care plan oversight
services. Medicare has never paid separately for these covered services
under the physician fee schedule. We also believe our long-standing
policy of bundling care plan oversight into the primary service
furnished by the physician has reflected physicians' historic billing
practices in this regard. Since we do not consider care plan oversight
to be a new service but rather an ``unbundling'' of the service from
payment for existing services, we consider this a change requiring a
budget neutrality adjustment.
Section 1848(c)(2)(B) of the Act provides that adjustments in RVUs
may not cause total fee schedule payments to differ by more than $20
million from what they would have been had the adjustments not been
made. We believe it is appropriate to adjust RVUs across all physician
services to pay an additional amount for this service under the
conditions described below.
We would consider this adjustment to be ``interim'' for three
years, during which time we would monitor the use of this service. If
the use of this service is determined to be significantly higher than
expected, we would make an additional adjustment to achieve budget
neutrality.
5. Conditions for Payment
We propose to allow separate payment for care plan oversight for a
patient receiving HHA services that are covered by Medicare. The care
plan oversight services must require recurrent physician supervision of
therapy (patient not present) involving 30 or more minutes of the
physician's time in a 30-day period. The patient must require complex
or multidisciplinary care modalities involving regular physician
development or revision of care plans, review of subsequent reports of
patient status, review of related laboratory and other studies,
communication (including telephone calls) with other health care
professionals involved in the patient's care, integration of new
information into the medical treatment plan, or adjustment of medical
therapy. Since the conditions for which we would pay for these services
differ from the CPT definition, we would establish a level 2 HCPCS code
with the aforementioned definition.
We would allow payment to one physician per patient during a 30-day
period. We would not allow payment to a physician who has a significant
financial or contractual relationship with an HHA (Sec. 424.22(d)).
Furthermore, we would not allow payment unless the physician has seen
the patient within the 6-month period before the 30-day period for
which the physician first bills for care plan oversight to ensure
physician involvement in establishing the plan of care.
We would pay for this service during a global period of another
service if the care plan oversight is documented to be unrelated to the
surgery and identified by modifier -24. However, we would not pay for
this service during the same month a physician bills for the hospital
discharge under CPT code 99238 because the payment for CPT code 99238
includes payment for care plan oversight.
Physicians must document in their records the care plan oversight
services they furnish, including the duration of time spent on the
services for which payment is claimed. We plan to conduct post-pay
monitoring on the use of these codes. The monitoring may be performed
on a sample basis or focused on physicians who are high users of the
code. The purpose of the monitoring would be, in part, to furnish
additional provider education on the proper use of the code and the
conditions for which Medicare recognizes payment.
While we are proposing to establish an allowance for home health
care plan oversight under the physician fee schedule, we have two major
concerns that need to be resolved before we would implement the
proposal. The first concern relates to the interaction of this proposal
with another initiative to improve the Medicare home health benefit. We
have begun a major review of this benefit and will be working with
beneficiary and provider groups and other interested parties. Our
examination will include the recent rapid cost growth as well as
options for simplifying the benefit. Another purpose of this initiative
is to examine options for assuring the quality of care and enhancing
outcomes. Some of these options may require legislation. While this
proposed rule is intended to reimburse physicians for carrying out
responsibilities currently mandated by Medicare, the new home health
initiative will also examine all home health requirements, including
care plan oversight. One specific issue is the extent to which nurse
practitioners and clinical nurse specialists can substitute for
physicians in overseeing certain aspects of patient care. The OBRA '89
amendments, for example, permit nurse practitioners and clinical nurse
specialists to certify and recertify SNF care when working in
collaboration with a physician. Therefore, we would like comments from
beneficiaries, their families, consumer groups, physicians, nurses, and
HHA providers regarding the following issues:
To what extent are physicians involved in developing,
monitoring, and altering the plan of care? What specific management
activities do they perform and for what proportion of their caseload do
these activities require 30 or more minutes each month?
Which patient characteristics or services require
physician case management and which do not?
Can some patients who require case management be safely
managed by nurses or nurse practitioners rather than physicians, and if
so, what are their characteristics?
Are there any lessons relevant to home health from the SNF
experience in which nurse practitioners and clinical nurse specialists
have been permitted to certify SNF care?
We will consider the responses to these questions as well as
recommendations resulting from the home health initiative when deciding
whether to adopt or modify this proposal to reimburse physicians
separately for care plan oversight services effective January 1, 1995.
Our second major concern relates to the impact of the provision on
beneficiaries, that is, additional beneficiary liability due to the
coinsurance payments for care plan oversight. Since we would implement
this in a budget-neutral manner by reducing the RVUs for all other
services, the coinsurance amounts for all other physician services
would actually decrease. We estimate that the average HHA beneficiary
will be liable only for approximately $16 in coinsurance for care plan
oversight services per year. We believe that approximately 75 percent
of these beneficiaries have some type of supplemental insurance that
will cover the additional coinsurance amount.
Also, we are aware of concerns that beneficiaries may be liable for
additional out-of-pocket expenses for services that they may not
realize are being provided because the work in care plan oversight does
not necessarily require a face-to-face encounter between the patient
and the physician. We will work with HHA and physician groups to
encourage providers to inform beneficiaries that physicians may bill
and that Medicare will pay for these services when the specified
conditions are met. Our discussions with medical societies indicate
that physicians would do this as a matter of course. In addition, we
would advise beneficiaries of this change in policy through special
mailings or in the Explanation of Medicare Benefits.
We considered requiring beneficiaries to designate a particular
physician as the provider of care plan oversight. However, designating
a physician would not qualify that physician for payment if the
conditions were not met and could, therefore, place an unnecessary
burden on the patient or the patient's family. In addition, it would be
difficult and costly for the carriers to administer.
Our reason for proposing separate payment for care plan oversight
is to provide fair compensation for services physicians are already
required to perform. Also, it has been suggested that paying for these
services could be an incentive for greater physician involvement in the
care of HHA beneficiaries.
We request comments on all aspects of our proposal, and are
particularly interested in receiving comments from beneficiaries, their
families, beneficiary advocacy groups, physicians, and HHAs on
beneficiary liability concerns.
E. Payment for Multiple Surgical Procedures
We propose to revise our regular multiple surgery reduction rules
to base payment on the lesser of the actual charge or 100 percent of
the fee schedule amount for the procedure with the highest fee schedule
payment and to base payment on the lesser of the actual charge or 50
percent of the fee schedule amount for the second through the fifth
surgical procedures when the procedures are performed on the same
patient on the same day by the same surgeon. Surgical procedures beyond
the fifth procedure would be priced by carriers ``by report'' based on
documentation of the services furnished.
We currently reduce payment for subsequent surgeries when a
physician performs more than one surgery on a patient on the same day.
We also reduce payment for the second procedure when a physician does a
bilateral procedure (for example, bilateral knee replacements). We
implemented the multiple and bilateral surgery reduction policies when
the fee schedule was implemented in 1992 because carriers had
historically reduced payment when more than one surgery was performed
by a physician for a patient on the same day. The carriers and we
believed that there was less physician work involved when a physician
did multiple procedures on the same day than when the surgeries were
performed separately.
We currently have three different sets of multiple surgery rules:
special dermatology rules, special endoscopy rules, and standard
multiple surgery rules. The special dermatology rules base payment for
the highest priced procedure on the lesser of the actual charge or 100
percent of the fee schedule amount, base payment for the second through
fifth procedures on the lesser of the actual charge or 50 percent of
the fee schedule amount, and base payment for subsequent procedures
``by report.'' The special endoscopy rules base payment for the highest
priced procedure on the lesser of the actual charge or 100 percent of
the fee schedule amount (unless the regular multiple procedure rules
apply to it) and base payment for subsequent procedures in the same
endoscopy family on the incremental increase in payment over the base
code. We are not proposing changes to the special dermatology rules or
the endoscopy rules.
The standard multiple surgery rules that apply to most other
surgical procedures require carriers to rank the procedures by payment
amount in descending order and base payment for the highest priced
procedure on the lesser of the actual charge or 100 percent of the fee
schedule payment. Carriers base payment for the second procedure at 50
percent; the third, fourth, and fifth procedures at 25 percent each;
and procedures subsequent to the fifth procedure ``by report.'' In
addition, the bilateral procedure policy (a variation of multiple
surgery but treated as a different policy) requires carriers to base
payment for the first procedure on the lesser of the actual charge or
100 percent of the fee schedule payment and to base payment for the
second procedure on the lesser of the actual charge or 50 percent of
the fee schedule payment for the code.
Many physicians have objected to the standard multiple procedure
reductions. They believe the work included in the global payment for
the surgery is not reduced when they do more than one procedure on the
same day and, therefore, that they should be paid the full global fee
for all procedures they perform on a patient on the same day. As a
result of these comments, we contracted for a study of the work in
multiple and bilateral surgical procedures. This study was performed by
the research team at the Harvard School of Public Health that furnished
the data on which the work RVUs for many services in the fee schedule
are based. The results of this study are available from NTIS by calling
1-800-553-NTIS, or (703) 487-4650 in Springfield, Virginia and
requesting the following study:
``A National Study of Resource Based Relative Value Scales
for Physician Services: MFS Refinement Final Report; Phase IV.'' Hsiao,
Braun, Dunn, Cohen, Dernberg, Sacher, and Stamenovic. Department of
Health Policy and Management, Harvard School of Public Health. HCFA
contract 500-92-0025. July 30, 1993. NTIS PB94-115094.
The Harvard study found that when more than one procedure is
performed on the same day, the level of physician work for each
subsequent procedure is approximately 50 percent of what the work would
have been had each procedure been the only procedure performed that
day. This finding implies that an appropriate multiple surgery
reduction would be to pay 100 percent for the highest priced procedure
and 50 percent for the second and subsequent procedures. In addition,
the Harvard study found that when the physician performs a bilateral
procedure, the work required by the second procedure is only 40 percent
of the work that would have been required had both procedures not been
done on the same day.
Based on the findings of this study, we propose to revise the
current multiple surgery policy to base payment on the lesser of the
actual charge or 100 percent of the fee schedule for the highest priced
service and the lesser of the actual charge or 50 percent of the fee
schedule for the second through the fifth services. Under this proposed
change, the standard multiple surgery policy would be identical to the
current special dermatology policy that now applies to some dermatology
services. This change would also simplify Medicare policy because we
would have two rather than three multiple surgery policies since the
services now under the special dermatology policy and those under the
standard multiple surgery policy would be under the same multiple
surgery policy.
Carriers would continue to pay for surgical procedures subsequent
to the fifth procedure on a ``by report'' basis. We believe that this
review of the documentation for procedures after the fifth procedure is
necessary to ensure proper coding and payment for these services. The
frequency of more than five surgeries performed by the same physician
on the same day is very small, and the study did not look at these
occurrences. Moreover, our CMDs advise us that review of these
occurrences often results in a determination that the services are
incorrectly coded, or, rarely, a finding that the case is an
extraordinarily difficult situation in which more payment may be
appropriate than the multiple surgery rules would otherwise permit.
Therefore, we continue to believe that ``by report'' review and payment
is appropriate for the sixth and subsequent procedures performed on the
same day.
We are not proposing any changes to the current policy for payment
of bilateral procedures at this time, notwithstanding the findings of
the Harvard study that it may be appropriate to decrease our payment
from 150 percent to 140 percent when the service is bilateral. As we
indicated above, the bilateral policy is a variation of the multiple
surgery policy. We prefer to retain a consistent policy of payment at
50 percent for a second surgical procedure performed on the same day as
another surgery even when the second procedure is the same CPT code as
the first.
F. Application of Site-of-Service Payment Differential
Services that are performed more than 50 percent of the time in
office settings are subject to a payment limit if they are performed in
hospital outpatient departments and inpatient settings. For these
procedures, the practice expense RVUs are reduced by 50 percent. This
limitation reflects the fact that practice expenses are lower for
services performed in hospital settings using hospital equipment,
personnel, and space. Because procedures that are on the list of
Medicare-approved ASC procedures are generally furnished less than 50
percent of the time in office settings, these procedures are not
subject to this reduction.
We used 1989 data to establish the current list of ASC procedures
subject to this site-of-service limitation. We propose to update this
list using 1993 data to be effective for services furnished on or after
January 1, 1995. To avoid any concern about the statistical validity of
the data for low volume procedures, we would exclude any procedure
performed less than 100 times annually. However, if the procedure is
part of a ``family'' of codes that are otherwise on the site-of-service
list, we would include it even if the volume is less than the 100-
procedure threshold. (The current list excludes all procedures with
volumes less than 1,000 in 1989.)
In addition, we propose to add certain procedures to the list that
were proposed for removal from the list of approved ASC procedures.
(The proposed notice listing the proposed deletions was entitled
``Proposed Additions to and Deletions from the Current List of Covered
Procedures for Ambulatory Surgical Centers'' and was published in the
Federal Register on December 14, 1993 (58 FR 65357).) If these
procedures are ultimately not removed from the ASC list by the time we
publish the final rule, the procedures would not be included as
additions to the list.
The procedures we propose to add to the site-of-service list based
on the more current data and the criteria outlined above are in
Addendum H. We propose removing the following procedures from the site-
of-service list:
------------------------------------------------------------------------
HCPCS Description
------------------------------------------------------------------------
29530........... Strapping of knee.
36425........... Establish access to vein.
36500........... Insertion of catheter, vein.
64425........... Injection for nerve block.
64640........... Injection treatment of nerve.
92018........... New eye exam and treatment.
96440........... Chemotherapy, intracavitary.
99275........... Confirmatory consultation.
------------------------------------------------------------------------
G. Bundled Services
1. Generation and Interpretation of Automated Data (CPT Codes 78890 and
78891)
The CPT states that CPT codes 78890 and 78891 should be reported in
addition to a primary procedure. The Medicare charge data show that in
1992 (the latest year for which we have complete data), CPT codes 78890
and 78891 were billed in addition to a primary procedure only 12.7
percent and 2.5 percent of the time, respectively. The data indicate
that these codes are being used incorrectly.
In addition, the work involved in the primary procedures with which
CPT codes 78890 and 78891 have been billed includes the generation and
interpretation of automated data. The RVUs for these primary
procedures, for example, nuclear medicine procedures and cardiac stress
tests, include a data component.
Therefore, we propose to bundle payment for CPT codes 78890 and
78891 into the payment for the primary procedure and assign a ``B''
status indicator to show that payment would be bundled into the payment
for another service. By bundling these CPT codes, we avoid paying twice
for the same service. We do not believe that separate payment should be
made for these codes. We would redistribute the RVUs associated with
CPT codes 78890 and 78891 across all codes.
2. Noninvasive Ear or Pulse Oximetry (CPT Code 94760)
At present, we allow separate payment for pulse oximetry testing
(CPT code 94760) under the fee schedule. However, we believe this is a
simple monitoring test that should be considered part of the larger
procedure with which it is performed. Pulse oximetry is performed
either as part of anesthesia monitoring or as part of a study or
assessment such as sleep studies and pulmonary function tests.
Therefore, we propose to assign a ``B'' status indicator to CPT code
94760. Thus, payment for this procedure would be bundled into the RVUs
of the procedure requiring the pulse oximetry testing. Because pulse
oximetry may be performed in conjunction with a variety of physician
services, we propose to implement this in a budget-neutral manner by
redistributing the current RVUs across all services.
H. RVUs for Doppler Echocardiography (CPT Code 93325)
We are proposing to redistribute the RVUs assigned to CPT code
93325 (Doppler color flow velocity mapping). In 1992, the procedure was
classified as a technical component (TC) service only (without a
professional component (PC)). As a result of the refinement process for
physician work RVUs, for 1993 we assigned 0.07 physician work RVUs to
the code, and we established a PC for the procedure. We redistributed
slightly more than half of the practice expense and malpractice RVUs to
the PC from the TC. As a result, the PC was assigned 0.07 work RVUs,
1.44 practice expense RVUs, and 0.13 malpractice RVUs, and the TC was
assigned 1.40 practice expense and 0.12 malpractice RVUs. While
physicians and other entities billing for the complete or global
services were unaffected by this change, physiological laboratories
billing the TC saw their payments reduced by more than one-half. As a
result of comments received, we propose to adjust the practice expense
and malpractice RVUs as follows:
------------------------------------------------------------------------
Practice
Modifier Work expense Malpractice Total
------------------------------------------------------------------------
-26................... 0.07 0.04 0.01 0.12
TC.................... 0.00 2.79 0.24 3.03
Global................ 0.07 2.83 0.25 3.15
------------------------------------------------------------------------
The practice expense and malpractice RVUs were determined by using
practice expense data for cardiovascular disease specialists and
extrapolating from the work RVUs using the methodology discussed in the
November 1991 final rule (56 FR 59569).
I. Nuclear Medicine
The American College of Nuclear Physicians and The Society of
Nuclear Medicine have brought a matter to our attention involving
certain nuclear medicine multiple diagnostic procedures. The issue was
not previously addressed in our regulations or instructions. The
organizations noted that most carriers are denying payment for one of
the procedures when both are performed on the same day. They also
believed that, for patients with certain malignancies, it is necessary
to perform a whole body planar study before a SPECT study, both to
determine if tomography is needed and to deduce the region to be
selectively imaged. They proposed that the CPT modifier -51 for
multiple procedures be used in these situations, which would result in
full fee schedule payment for the procedure with the highest payment
level and a 50-percent payment for the second procedure. The procedures
in question follow:
CPT code 78306 (Bone imaging; whole body) when followed by
CPT code 78320 (Bone imaging; SPECT).
CPT code 78802 (Radionuclide localization of tumor; whole
body) when followed by CPT code 78803 (Tumor localization; SPECT).
CPT code 78806 (Radionuclide localization of abscess;
whole body) when followed by CPT code 78807 (Radionuclide localization
of abscess; SPECT).
We propose to implement the suggestion for the 1995 physician fee
schedule.
J. End-Stage Renal Disease (ESRD)
1. Hospital Inpatient Dialysis on the Same Day as an Evaluation and
Management Service
Presently, under the physician fee schedule we pay for the
physician services associated with dialysis (CPT codes 90935, 90937,
90945, and 90947) in hospital inpatient settings. (In outpatient
settings, these services are included in the monthly capitation fee
(CPT codes 90918 through 90922).) Hospital inpatient dialysis is
considered to be a global service; that is, a single fee is paid for
all necessary services normally furnished with the procedure. Hospital
inpatient dialysis has been assigned a 0-day global period. This means
that payment is not made for a visit by the same physician on the same
day that he or she bills the dialysis service unless the visit was not
related to the treatment of the patient's ESRD and the service was not,
and could not have been, furnished during the dialysis treatment.
In general, for evaluation and management services furnished in
hospital settings, only one evaluation and management service can be
billed per day. This includes, for example, multiple hospital visits on
the same day and a hospital visit and inpatient psychotherapy service.
One of the few exceptions that existed was ventilation management;
however, effective January 1, 1994, payment is not made for both
ventilation management and a hospital visit on the same day as stated
in the December 1993 final rule (58 FR 63640). We consider physician
dialysis services to be an evaluation and management service and
believe dialysis should be treated similarly to all other evaluation
and management services. Like ventilation management, dialysis
management consists of evaluating the patient, making medical
decisions, and writing orders for therapy to be furnished by hospital
staff. Therefore, we propose to pay for either an evaluation and
management code or a dialysis code, but not both, on the same day.
Thus, physicians would no longer be paid for dialysis in addition to an
evaluation and management service, even if the evaluation and
management service is billed under CPT modifier -25.
In selecting the level of evaluation and management service to
bill, physicians may, as indicated above, bill either the hospital
visit or the dialysis service. Moreover, in selecting the level of the
hospital visit that may be billed, the physician could consider the
management of dialysis in determining the appropriate level of
evaluation and management code. If it is appropriate, the physician may
also bill the applicable prolonged service code in addition to the
evaluation and management code. If a dialysis service and an evaluation
and management service performed on the same day are both billed, the
dialysis service may be paid, but the evaluation and management service
will be rejected.
We propose implementing the proposal in a budget neutral manner by
redistributing the payment for an evaluation and management service
performed on the same day as dialysis into the payment for the dialysis
service. We would determine the current evaluation and management
payment allowed when dialysis and evaluation and management are
performed on the same day and make the appropriate adjustments to the
work, practice expense, and malpractice RVUs to each of the four
dialysis codes so that the payments remain budget neutral.
The following example using CPT code 90935 illustrates the proposed
methodology for increasing the work, practice expense, and malpractice
RVUs:
Determine the aggregate allowed amounts and allowed
services for CPT code 90935 (hemodialysis with a single physician
evaluation).
Determine the aggregate allowed amounts for the evaluation
and management services performed on the same day as CPT code 90935.
Divide the aggregate allowed payment for CPT code 90935
and evaluation and management services performed on the same day by the
product of the sum of the national CF and the aggregate allowed
services for CPT code 90935. This computation results in the increased
total RVUs for CPT code 90935.
Apportion the additional RVUs to the work, practice
expense, and malpractice RVUs currently assigned to CPT code 90935
based on the current RVU shares.
2. Payment for Outpatient ESRD-Related Services Under the Physician Fee
Schedule
a. Development of the monthly capitation payment (MCP). The MCP was
implemented in 1983 in accordance with section 1881(b)(3) of the Act.
It is a prospective, comprehensive, monthly payment for all outpatient
ESRD-related physicians' services. The payment amount was originally
set based on the most current reasonable charge data available (fiscal
year (FY) 1981) for internists' office visits for established patients
adjusted by a factor for home dialysis patients, reflecting the fact
that physician effort for a home patient is 70 percent that of a
facility patient. The payment amounts for the original MCP ranged from
a minimum of $144 to a maximum of $220 reflecting the geographical
variation in physicians' billing patterns. In 1985, the General
Accounting Office (GAO) found that the relative physician effort for
home dialysis patients should have been 26 percent of the effort for a
patient dialyzed in a facility (GAO study GAO/HRD-85-14). Accordingly,
in 1986, the MCP was reduced resulting in a current range of payment
amounts from a minimum of $132 to a maximum of $203 and an average of
approximately $180. These services are reported with CPT codes 90918
through 90921.
b. Proposed inclusion of the MCP under the physician fee schedule.
We are proposing to include the MCP (CPT codes 90918 through 90921)
under the physician fee schedule. Physicians' services are defined in
section 1848(j)(3) of the Act as items and services described in, among
other provisions, section 1861(s)(1). Those section 1861(s)(1)
physicians' services include services furnished to beneficiaries with
ESRD. However, at the inception of the fee schedule, we relied on the
authority in section 1848(j)(3) to exclude these services from the fee
schedule, in part because the authority to pay a comprehensive monthly
rate for services to ESRD patients was derived from section 1881(b)(3).
We now propose instead to include the physicians' monthly routine
professional services furnished to ESRD patients in the fee schedule.
We believe, and understand that the nephrologists agree, that payment
for these services should be established in the same way as all other
physicians' services.
We are not proposing RVUs for these codes at this time. While the
Harvard Phase I study assigned a work RVU of 1.60 RVUs to the service,
concerns were expressed about the vignette used to survey the
procedure. In light of these concerns and since RUC is currently
reviewing the work for this service, we are not proposing an RVU now.
Rather, we are requesting comments from nephrologists and other
interested parties on the work RVU for this service and the basis for
their recommendations. Commenters may consider the original Harvard
RVU, the results of the RUC process, and any other information in
making their recommendations. We plan to take these comments and the
RVU proposed by RUC into account in establishing an interim final work
RVU for the service for 1995. As with all interim RVUs, the RVU will be
subject to comment and may be modified based on these comments for
services furnished in 1996.
We propose to base the practice expense and malpractice expense
RVUs on current payment allowances by applying the nephrologists'
practice expense shares to the current allowance. We would apply the
nonsurgical update to these codes. The MCP is paid to physicians for
physicians' services. Therefore, this change will have no impact on
payments to ESRD facilities for facility services.
K. Services Considered To Be Medicare Part A Services
Therapeutic apheresis (CPT code 36520) is included in the current
fee schedule as a professional service with work RVUs. However, after
further consideration, we do not believe this service requires
physician work but rather that it is performed by the physician's
staff. Moreover, because this procedure is usually performed in a
hospital by hospital staff, payment is part of the Part A payment to
the hospital. Therefore, we propose to remove the physician work RVUs
for this code from the fee schedule and make this code an ``incident-
to'' service on the fee schedule. The practice expense and malpractice
expense RVUs for CPT code 36520 were originally calculated on a
historical charge basis. We recalculated those RVUs for the ``incident-
to'' code using the historical charges for this procedure. We propose
to assign the following RVUs for this ``incident-to'' service: Practice
expense--1.87; malpractice expense--0.12; total RVUs--1.99. Under this
proposed rule, the code could be billed for the service only if it is
performed in the office. The savings resulting from this proposal would
be included in the budget-neutrality calculations for CY 1995.
III. Implementation of Omnibus Budget Reconciliation Act of 1993--
Payment for Antigens (Allergen Immunotherapy)
A. Background and Legislative Change
Under allergen immunotherapy, patients with allergies are injected
subcutaneously with extracts of the specific agents to which they are
allergic. At the outset, small amounts are injected, but the dosage is
gradually increased until a maintenance level is achieved and the
patient is desensitized. The allergen extracts used for this therapy
are called antigens.
Medicare coverage for antigens prepared by a physician is
established in section 1861(s)(2)(G) of the Act, and they are currently
paid for under the reasonable charge payment method. Unlike many other
services for which Medicare payment is made to physicians, antigens
were not included within the scope of services paid under the Medicare
physician fee schedule. This was changed by section 13518 of OBRA '93.
Subject to the Secretary's discretion, that section made services
covered under section 1861(s)(2)(G) of the Act--that is, antigens
prepared by a physician--subject to the Medicare physician fee
schedule. This change is effective for services furnished beginning
January 1, 1995.
In this proposed rule, we describe the RVUs and other policy
provisions that we plan to implement in bringing antigens under the
Medicare physician fee schedule.
B. CPT and HCPCS Codes
There are five J codes (level 2 HCPCS codes) that represent
antigens in the 1994 HCPCS. Those codes are:
------------------------------------------------------------------------
HCPCS code Description
------------------------------------------------------------------------
J0220........... Injection, allergy desensitization, aqueous
preparation.
J0230........... Injection, allergy desensitization, Allpyral.
J0240........... Injection, allergy desensitization, emulsion not
specified.
J7010........... Vial of allergy vaccine, single dose.
J7020........... Vial of allergy vaccine, multiple dose.
------------------------------------------------------------------------
These codes are infrequently used and do not represent a
significant number of Medicare-allowed charges. (In 1993, there were
only about 380,000 allowed services, representing $2.3 million.)
Instead of using these J codes, most physicians bill for antigens under
appropriate CPT codes. We are proposing to eliminate the use of these
antigen J codes, thereby requiring all physicians to bill under the CPT
codes.
To understand the antigen CPT codes and their use by allergists, we
consulted with the Joint Council of Allergy and Immunology (JCAI). The
JCAI is an organization of allergists and immunologists whose sponsors
are the American Academy of Allergy and Immunology and the American
College of Allergy and Immunology.
Within the CPT codes there are currently three types of codes. The
first type is the injection-only code. It does not include the extract
or the preparation of the extract. CPT code 95115 represents a single
injection, and CPT code 95117 represents multiple (that is, two or
more) injections. Because they do not include antigen extract, these
codes are already being paid under the Medicare physician fee schedule
and have been paid in that manner since fee schedule payments began in
January 1992.
The second type of antigen code is the extract/extract preparation
code. These codes represent the preparation of the antigen, the antigen
extract itself, and the physician's assessment of the history and skin
testing to determine which antigens to use, in which concentrations,
and in what volumes. These codes include CPT code 95144 (single dose
vials) and CPT code 95165 (multiple dose vials). However, for stinging
insect venoms, the extract/extract preparation codes are the following:
CPT code 95145, multiple dose vials for single venom.
CPT code 95146, multiple dose vials for two venoms.
CPT code 95147, multiple dose vials for three venoms.
CPT code 95148, multiple dose vials for four venoms.
CPT code 95149, multiple dose vials for five venoms.
Also, a final extract/extract preparation CPT code is 95170
(multiple dose vials of whole body extract of biting insect or other
arthropod). For all of these codes, the biller is required to specify
the number of doses for which he or she is billing. For the venom
extracts, if a code represents more than one venom, when there is one
dose of each venom furnished, that constitutes one overall dose for the
code. In other words, in order for there to be one dose of a multiple
venom code, there has to be one dose of each of the venoms.
The third type of antigen code is the complete service code. These
codes include the injection as well as the extract and the extract
preparation. The complete service codes include:
CPT code 95120, single injection, including extract. This
code is equivalent to CPT code 95115 plus CPT code 95165 (one dose).
CPT code 95125, multiple injections, including extract.
This code is equivalent to CPT code 95117 plus CPT code 95165 (two
doses). We have been advised that the complete CPT codes (95120 and
95125) never equal the single dose vial CPT code 95144 plus CPT code
95115 or CPT code 95117 because there are virtually no circumstances
when an allergist who is administering an injection should be doing so
from a single dose vial. Supposedly, all allergists administering the
shots themselves do so from multiple dose vials. They mix and furnish
single dose vials only for administration by some other physician and
that other physician would be billing an injection-only code--either
CPT code 95115 or 95117.)
CPT code 95130, injection for single stinging insect
venom. This code is equivalent to CPT code 95115 plus CPT code 95145
(one dose of one venom).
CPT code 95131, injections for two stinging insect venoms.
This code is equivalent to CPT code 95117 plus CPT code 95146 (one dose
each of two venoms--which is equal to one overall dose of code CPT code
95146).
CPT code 95132, injections for three stinging insect
venoms. This code is equivalent to CPT code 95117 plus CPT code 95147
(one dose each of three venoms--which is equal to one overall dose of
CPT code 95147).
CPT code 95133, injections for four stinging insect
venoms. This code is equivalent to CPT code 95117 plus CPT code 95148
(one dose each of four venoms--which is equal to one overall dose of
CPT code 95148).
CPT code 95134, injections for five stinging insect
venoms. This code is equivalent to CPT code 95117 plus CPT code 95149
(one dose each of five venoms--which is equal to one overall dose of
CPT code 95149).
The first two types of CPT code (that is, injection-only and
extract/extract preparation) are frequently used in situations when the
allergist who prepares and furnishes the extract does not perform the
injection. In many cases, those injections may be furnished by primary
care physicians to whom the allergist has sent the extract for a
particular patient. In those instances, the injection code is billed by
the primary care physician and the extract/extract preparation code is
billed by the allergist. About 50 percent of allergists also use these
two types of codes in tandem, rather than billing the complete service
code. In other words, they bill separately for the two services that
they furnish. The complete service codes are billed by the other half
of the allergists when they furnish both the injection and the extract.
We are proposing to no longer permit payment under the complete
service codes. Although approximately half of the allergists are using
these codes, we believe that it is virtually impossible to guarantee
accurate payment under them. As has been recommended to us by JCAI,
payment for the complete codes should be the same as payment for the
equivalent component codes. However, in our judgment, that cannot be
accomplished under the ``complete'' codes. For example, CPT code 95120
is equivalent to CPT code 95115 plus CPT code 95165, one dose. Thus, we
would recommend single or constant RVUs for CPT code 95120--equalling
one injection and one dose of extract. Presumably, if on the same day
an allergist provides a 10-dose vial to a patient and also gives one
dose of it in one injection, the allergist could bill either CPT code
95120 and CPT code 95165 (nine doses), or the allergist could bill CPT
code 95115 (single injection) plus CPT code 95165 (10 doses). The
payment result would be the same, but we believe that the first
approach is too complicated and prone to errors on the part of both
physicians and Medicare carriers. Similarly, we are not entirely
convinced that no allergists furnishing injections would bill for CPT
code 95144 (single dose vial of extract). Under our payment system, a
complete service code must have a one per dose price. However, that is
not possible if more than one option for furnishing the complete
service is available and those options have different resource costs.
If indeed an allergist does furnish and inject from a single dose vial,
then the pricing of the complete service is not easily determined. The
price for the complete service could be the sum of the injection plus a
dose from a multiple dose vial or the sum of the injection plus a dose
from a single dose vial. The permutations of what the complete codes
could represent are numerous and, therefore, no single appropriate
price could be established. Finally, we believe the terminology of CPT
codes 95120 and 95125 is confusing and could lead some nonallergists to
bill these codes if they provide allergenic extract furnished by an
allergist who has also billed for the extract using CPT code 95144 or
CPT code 95165. Therefore, we propose keeping billing and pricing
simple by having only component billing and eliminating the use of the
complete codes. Commenters recommending retaining the complete codes
should address our concerns about establishing one fair price for each
complete code (although the code might represent more than one means of
delivering the service and those means have different resource costs).
C. Proposed RVUs
We are proposing to accept the RVUs that have been recommended to
us by JCAI. The JCAI recommendations include not only RVUs for the
antigen codes, but also RVUs for the injection-only codes. The JCAI
recommendations for the injection-only codes are slightly less than the
1994 RVUs for those codes. The proposed RVUs are:
----------------------------------------------------------------------------------------------------------------
Practice Malpractice
CPT Code Work expense expense Total
----------------------------------------------------------------------------------------------------------------
95115............................................... ............. .37.......... .02.......... .39.
95117............................................... ............. .49.......... .02.......... .51.
95144............................................... .06/dose..... .13/dose..... .01/dose..... .20/dose.
95165............................................... .06/dose..... .10/dose..... .01/dose..... .17/dose.
95145............................................... .06/dose..... .34/dose..... .03/dose..... .43/dose.
95146............................................... .06/dose..... .62/dose..... .03/dose..... .71/dose.
95147............................................... .06/dose..... .92/dose..... .03/dose..... 1.01/dose.
95148............................................... .06/dose..... .92/dose..... .03/dose..... 1.01/dose.
95149............................................... .06/dose..... 1.15/dose.... .03/dose..... 1.24/dose.
95170............................................... .06/dose..... .35/dose..... .03/dose..... .44/dose.
----------------------------------------------------------------------------------------------------------------
D. Budget Neutrality
Section 13518 of OBRA '93 requires that, in 1995, we spend the same
for antigens under the fee schedule that we would have spent for them
under the current payment system. Because of the variations in the
current payment system, it is impossible to implement this budget
neutrality requirement. Currently, there is wide variation in the way
in which Medicare carriers pay for antigens. Some pay per dose. Some
pay on the basis of volume, and still others pay on the basis of volume
and concentration. There is no single reliable and uniform unit of
service across all carriers. This means, therefore, that we are unable
to precisely relate current frequencies to those that would occur under
the fee schedule and, in the absence of doing so, we are unable to
guarantee budget neutrality within the antigen category. We believe,
however, that the allowances being proposed are reasonable, and we have
no basis for concluding that they would result in either increased or
decreased expenditures compared with the existing system.
Since CPT codes 95115 and 95117 (injection-only) are currently paid
under the physician fee schedule and since we propose changes in the
allowances for these services, we are subjecting these RVU changes to
the overall budget neutrality adjustment for fee schedule changes (that
is, the $20 million threshold).
E. Transition
Because of the wide variation in the carriers' current descriptions
of antigen services, we are not proposing transition to the full fee
schedule. Instead, antigen fee schedule payments would, from the
outset, be based on the full fee schedule amount. In our judgment, it
is appropriate to transition payments only when the units of service
are the same, or at least roughly the same, under the old and new
payment systems. In this way, one would be transitioning payments only,
not the definitions of the services. Since we have no assurance that
most carriers use the antigen definitions to be used under the fee
schedule, we propose no transition from those prior carrier payment
amounts.
IV. Change in the MVPS Calculation for FY 1996
We propose changing the method for calculating the MVPS for FY 1996
by expanding the medical and other health services in the performance
standard to include clinical laboratory tests performed in hospital
outpatient settings. Currently, the performance standard includes
clinical laboratory services performed in physicians' offices and in
independent laboratories.
The MVPS, as defined in the December 29, 1989 notice (54 FR 53819),
currently excludes clinical laboratory services furnished in hospital
outpatient departments because the hospital cost reports related to
these services were not readily available under data collection systems
in place at the time. Because we now have the capacity to use this
information, and because physicians are responsible for the volume and
intensity of tests performed regardless of the setting, we propose to
include clinical laboratory services furnished in hospital outpatient
departments in the MVPS calculation beginning in FY 1996. The physician
fee schedule update would, therefore, be affected by this change
beginning CY 1998.
V. Changes to the Regulations
In Sec. 410.152(b)(4), concerning payment under Part B, we would
recognize that payment may be based on other payment methodologies (for
example, the physician fee schedule) than simply on a reasonable change
basis.
In Sec. 414.2 (``Definitions''), we would add the definition of
``antigens'' under the definition of ``physicians' services.''
In Sec. 414.4 (``Fee schedule areas''), in paragraph (b), we would
add Iowa as an additional statewide fee schedule area.
We would add a new Sec. 414.39 (``Special rules for payment of care
plan oversight'').
In Sec. 414.314 (``Monthly capitation payment method''), we would
revise paragraph (c) (``Determination of payment amount'') to indicate
that the MCP is paid under the Medicare physician fee schedule
described in part 414. We would also remove paragraph (d)
(``Publication of payment amount'') of this section because the MCP
rate would be published with all other physician services paid under
the physician fee schedule.
VI. Collection of Information Requirements
This document does not impose information collection and
recordkeeping requirements. Consequently, it need not be reviewed by
the Office of Management and Budget under the authority of the
Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.).
VII. Response to Comments
Because of the large number of items of correspondence we normally
receive on Federal Register documents published for comment, we are not
able to acknowledge or respond to them individually. We will consider
all comments we receive by the date and time specified in the DATES
section of this preamble, and, if we proceed with a subsequent
document, we will respond to the comments in the preamble to that
document.
VIII. Regulatory Impact Analysis
A. Regulatory Flexibility Act
We generally prepare a regulatory flexibility analysis that is
consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
through 612) unless the Secretary certifies that a rule would not have
a significant economic impact on a substantial number of small
entities. For purposes of the RFA, all physicians are considered to be
small entities.
This proposed rule would not have a significant economic impact on
a substantial number of small entities. Nevertheless, we are preparing
a regulatory flexibility analysis because the provisions of this rule
are expected to have varying effects on the distribution of Medicare
physician payments across specialties and across geographic areas. We
anticipate that virtually all of the approximately 500,000 physicians
who furnish covered services to Medicare beneficiaries would be
affected by one or more provisions of this rule. In addition,
physicians who are paid by private insurers for non-Medicare services
would be affected to the extent that they are paid by private insurers
that choose to use the proposed RVUs. However, with few exceptions, we
expect that the impact would be limited.
If these proposals result in increases in Medicare payment amounts,
beneficiary liability would also increase because the coinsurance
amounts would increase. In addition, if nonparticipating physicians do
not accept assignment, the amount that they may bill above the fee
schedule amount would also increase because the limiting charge for the
service would increase. If a proposal results in a decrease in Medicare
payment amounts or the bundling of payment for one service into payment
for another, beneficiary liability would decrease.
With respect to the proposal to include the MCP under the Medicare
physician fee schedule, we are unable to estimate the impact at this
time because we are not proposing RVUs for the service.
Section 1848(c)(2)(B) of the Act requires that adjustments to RVUs
in a year may not cause the amount of expenditures for the year to
differ by more than $20 million from the amount of expenditures that
would have been made if these adjustments had not been made. If this
threshold is exceeded, we make adjustments to the RVUs in order to
preserve budget neutrality. The proposals discussed in sections B
through F below would have no impact on total Medicare expenditures
because the effects of these changes would be neutralized in the
establishment of RVUs for 1995.
In accordance with the provisions of Executive Order 12866, this
proposed rule was reviewed by the Office of Management and Budget.
B. Effects of Implementing Proposed Changes to GPCIs
The revised GPCIs would be implemented in a budget-neutral manner.
They would not change the total national physician fee schedule
payments that would have been made in 1995 had the current GPCIs been
retained. The revised GPCIs would merely redistribute payments among
fee schedule payment areas. The general geographic effects of this
redistribution are set forth in Addendum D.
The overall effect of the GPCI changes cannot be estimated by
summing the effects of the work, practice expense, and malpractice
changes. Merely summing the changes would result in an incorrect
increase or decrease. The effects are not additive because each of the
three GPCI components have different weights. A complete discussion,
with examples, of the revised GPCIs can be found in section II.A.3. of
this proposed rule.
Again, we stress that the GPCIs measure relative cost differences
among areas compared to the national average. The national average cost
is represented by a value of about 1.0. (It is not exactly 1.0 because
of budget-neutrality rescaling.) A revised GPCI showing a decrease from
the current value does not necessarily mean that absolute costs of an
individual physician or absolute costs in an area have decreased.
Rather, it means that costs in that area have decreased compared to
national average costs. In other words, national average costs
increased more than did area costs.
C. Payment Area (Locality) Changes
The change to convert Iowa to a statewide payment area effective
January 1, 1995, would be made on a budget-neutral basis within the
State. However, some modest redistribution in payments could occur
within the State. From our past experience, redistribution of payments
would flow from urban areas, which usually have had higher GPCIs before
the change, to rural areas, which usually have had lower GPCIs before
the change. We estimate this redistribution to be generally in the
range of 1 to 3 percent. These estimates represent aggregate effects
among the areas of the State. The effect on individual physicians would
vary depending on factors such as the mix and volume of their services
to Medicare beneficiaries.
D. Effects of Proposed Work RVUs for Carrier-Priced and Non-Medicare
CPT Codes
We are proposing to create RVUs for 11 CPT codes for services not
covered by Medicare and for 60 codes for services that are currently
carrier-priced. An example of a service not covered by Medicare is CPT
code 92340 (fitting of monofocal spectacles, except for aphakia). In
general, the services that are currently carrier-priced are rarely
furnished to Medicare beneficiaries. An example of a carrier-priced
service is CPT code 99431 (history and examination of the normal
newborn infant). This effort would benefit State Medicaid programs and
private insurers that base their payment, in whole or in part, on the
Medicare physician fee schedule. We are not able to estimate the total
national impact of the creation of these RVUs because we do not know
the frequency of the use of RVUs by payers other than Medicare. Also,
we do not know how third-party payments based on our RVUs would compare
to the payments currently made by these payers.
E. Effects of Proposed Payment Policy Revisions
1. Separate Payment for Physician Care Plan Oversight Services
We propose to pay for care plan oversight services for patients
receiving HHA services that are covered by Medicare. We propose to
establish a fee schedule payment amount based on 1.63 RVUs, which, by
applying the nonsurgical CF, results in a monthly payment amount of
approximately $54.
Preliminary studies based on HHA utilization data indicate that
payment for this service would be allowed for approximately 5.25
million claims per year and would result in increased Medicare
expenditures of approximately $210 million for 1995. Thus, we estimate
that a reduction of approximately 0.7 percent in the RVUs for other
services would be required to offset this amount to retain budget
neutrality. We would consider this adjustment to be ``interim'' for
three years, during which time we would monitor utilization of this
service. If utilization is significantly higher than our estimate, we
would make an additional adjustment to achieve budget neutrality.
If we implement this policy, beneficiaries overall would not
sustain any change in coinsurance amounts or out-of-pocket costs.
Because we are making this a budget-neutral change, we would therefore
be reducing the allowed fee for all other physician services in order
to pay for care plan oversight. We estimate that the average HHA
beneficiary would be liable for approximately $16 in coinsurance for
care plan oversight services each year. Since an estimated 75 percent
of beneficiaries have either Medigap policies or Medicaid coverage for
the coinsurance amounts, only a limited number of beneficiaries would
see any financial impact due to this change. Approximately 10 percent
of beneficiaries receive services from nonparticipating physicians.
These beneficiaries would be liable for any amount that exceeds the
Medicare-approved amount up to the limiting charge for this service. We
believe the additional monthly amount because of the limiting charge
provision would be approximately $8. Any impact on physicians who do
not furnish this service would result from our reducing the RVUs for
other physician services to achieve budget neutrality.
2. Payment for Multiple Surgical Procedures
We propose to revise our method of payment for multiple surgical
procedures performed on the same patient on the same day by the same
physician. We currently have three different sets of multiple surgery
rules. We are not proposing to change the dermatology or endoscopy
multiple surgery rules. We are proposing to revise only the standard
multiple surgery rule that currently requires carriers to rank the
procedures by payment amount and base payment on the highest priced
procedure at the lesser of actual charges or 100 percent of the fee
schedule amount; the second procedure at 50 percent; the third, fourth,
and fifth procedures at 25 percent; and procedures subsequent to the
fifth procedure ``by report'' based on documentation of the services
furnished.
We propose to revise the current standard multiple surgery policy
to base payment to physicians on the lesser of actual charges or 100
percent for the highest priced procedure, and the lesser of actual
charges or 50 percent for the second through fifth procedures.
Procedures performed subsequent to the fifth procedure would continue
to be paid ``by report'' based on documentation of the services
furnished. Under this proposed change, the standard multiple surgery
policy would be the same as the current policy that applies to multiple
dermatology procedures. This change in payment policy would simplify
carrier payment procedures because we would have two, rather than
three, multiple surgery policies.
Preliminary studies of 1992 utilization and cost data indicate that
this change to the 100/50/50/50/50 percent payment policy would result
in increased Medicare payments of approximately $37 million, were it
not for the budget-neutrality adjustment to all RVUs that we would make
if we implement this change. Our preliminary estimate is that this
change would require a reduction in all RVUs of about 0.1 percent. This
estimate may change in the final rule based on a review of 1993
utilization and the level of the updates for 1995.
If we implement this proposal, beneficiary liability would increase
because the coinsurance for the third through fifth services would
increase. This would occur because physicians who perform multiple
procedures that are now paid on the basis of the lesser of the actual
charge or 25 percent of the fee schedule payment for the third through
fifth procedures would be paid twice as much for the third through
fifth procedures performed on the same day for a patient, and the
coinsurance is a fixed percent of the amount Medicare pays. In
addition, the amount that nonparticipating physicians may bill over the
fee schedule amount if they do not accept assignment would also
increase because the limiting charge is a percent of the fee schedule
amount. However, beneficiary liability may be reduced slightly in the
aggregate as a result of slightly lower payments for other services.
Physicians who do not perform the surgical procedures to which this
policy applies may have the RVUs for the services they perform slightly
reduced as a result of this policy change.
3. Application of Site-of-Service Payment Differential
We propose to revise the current list of surgical procedures
subject to the site-of-service limitation using 1993 data. The revised
list would be effective for services furnished beginning January 1,
1995. To avoid any concern about the statistical validity of the data
for low volume procedures, we would exclude any procedure performed
less than 100 times a year unless the procedure is part of a ``family''
of codes that meets the requirements to be on the site-of-service list.
We are proposing to add approximately 230 codes and remove 8 codes from
the site-of-service list based on 1993 data and criteria. Were it not
for budget-neutrality adjustments, we estimate that these additions
would result in an $11.9 million reduction in Medicare payments.
4. Bundled Services
The proposed bundling of the following services would mean that
physicians who are currently billing for and receiving separate payment
for the services would no longer do so.
a. Generation and interpretation of automated data (CPT codes 78890
and 78891). These two codes should be billed in addition to the primary
procedure, but in CY 1992, CPT codes 78890 and 78891 were billed in
combination with another procedure only 12.7 and 2.5 percent of the
time, respectively. The data indicate that these codes are being
reported incorrectly. We would implement the proposal to bundle these
codes into the codes for the primary procedure in a budget-neutral
manner by redistributing the RVUs currently assigned to CPT codes 78890
and 78891 across all codes. The expenditure for these services in CY
1992 was $1.6 million for approximately 38,000 services. The effect of
this change on individual physicians would be minimal.
b. Noninvasive ear or pulse oximetry (CPT code 94760). We propose
that payment for this procedure be considered bundled into the RVUs of
the procedure requiring the pulse oximetry testing. We would implement
this proposal in a budget-neutral manner by redistributing the 0.27
RVUs currently assigned to CPT code 94760 across all services. The
expenditure for this procedure in CY 1992 was $5.3 million for 4
million services. Since both the RVUs and the current frequency for
code 94760 are small, any effect of redistributing the RVUs over all
services would be minimal.
5. RVUs for Doppler Echocardiography (CPT Code 93325)
We are proposing to redistribute the RVUs assigned to CPT code
93325 (Doppler color flow velocity mapping). This procedure was
originally classified as a TC service only, without a PC. As a result
of the refinement process for 1993, we established a PC for the
procedure primarily at the expense of the TC. While physicians and
other entities billing for the complete or global services were
unaffected by this change, physiological laboratories billing the TC
saw their payments reduced by more than one-half.
If adopted, this proposed rule would approximately double the fee
schedule payment amount for the TC of CPT code 93325 when the service
is furnished in nonhospital settings. Payment for the PC of the
procedure in settings such as hospitals, in which the PC only is
billed, would be reduced by over 90 percent. Global payments for
procedures furnished in physicians' offices and other nonhospital
settings would be unaffected by adoption of this proposed rule.
6. Nuclear Medicine
It is our understanding that many carriers currently do not pay for
the second procedure of certain nuclear medicine multiple diagnostic
procedures. However, we believe that patients with certain malignancies
may require multiple nuclear medicine diagnostic procedures. Under this
proposal, carriers would pay the full fee schedule payment for the
procedure with the highest payment and 50 percent for the second
procedure. We believe that the overall effect of this proposal would be
minimal. If there are carriers that currently pay in full for the
second procedure, payments for these services would be reduced.
Further, there would be a slight increase in payments by carriers that
currently do not pay for the second procedure.
7. ESRD--Hospital Inpatient Dialysis on the Same Day as an Evaluation
and Management Service
We consider physician dialysis services to be an evaluation and
management service and believe dialysis should be treated similarly to
all other evaluation and management services. Therefore, we propose to
pay for either an evaluation and management code or a physician
dialysis code, but not both, when furnished on the same day. According
to CY 1992 data, evaluation and management services were furnished on
the same day as dialysis services approximately 263,500 times and
allowed amounts for these services approximated $9.5 million. Our
proposal would be implemented in a budget-neutral manner because the
RVUs for the evaluation and management codes would be redistributed
across the four dialysis codes. This change would increase payments for
the four dialysis services.
8. Services Considered To Be Medicare Part A Services
Therapeutic apheresis (CPT code 36520) is currently performed in
the office setting 5.39 percent of the time, in the inpatient hospital
setting 62.09 percent of the time, and in the outpatient hospital
setting 30.47 percent of the time. In 1992, total expenditures for
therapeutic apheresis in these settings were $1,904,036. By designating
this service as an ``incident-to'' service and allowing payment only
when the service is performed in the office setting, we estimate that
an additional $1.8 million would be saved. These savings would be
included in the budget neutrality calculations and, thus, redistributed
among the other services under the fee schedule. We do not anticipate
that this proposal would have an impact on hospitals.
F. Effects of Payment for Antigens (Allergen Immunotherapy)
Effective for services furnished beginning January 1, 1995, we are
proposing to eliminate the use of HCPCS antigen J codes and require all
physicians to bill for allergy therapy services using the CPT codes
described in detail in section III of this preamble. We are also
proposing to no longer permit payment under the CPT allergy complete
service codes that are used by approximately half of the allergists.
Because of the variations in the current payment system, we are
unable to precisely relate current frequencies to those that would
occur under the fee schedule. Therefore, we are unable to ensure budget
neutrality within the antigen category. We believe, however, that the
allowances being proposed are reasonable and we have no basis for
concluding that the RVUs would result in a significant change in
expenditures compared with the existing system.
G. Change in the MVPS Calculation for FY 1996
We believe that clinical laboratory services performed in hospital
outpatient settings should be included in the MVPS beginning in FY
1996. Under present law, these services would be included in the
``other nonsurgical'' MVPS category. This proposal would affect the
update beginning in CY 1998, which is based on the 1996 MVPS. Based on
current assumptions, this change would result in estimated savings of
$25 million in FY 1998, $75 million in FY 1999, and $125 million in FY
2000.
H. Rural Hospital Impact Statement
Section 1102(b) of the Act requires the Secretary to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 603 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area and has fewer than 50 beds.
This proposed rule would have little direct effect on payments to
rural hospitals since this rule would change only payments made to
physicians and certain other practitioners under Part B of the Medicare
program and would make no change in payments to hospitals under Part A.
We do not believe the changes would have a major, indirect effect on
rural hospitals.
Therefore, we are not preparing an analysis for section 1102(b) of
the Act since we have determined, and the Secretary certifies, that
this rule would not have a significant impact on the operations of a
substantial number of small rural hospitals.
List of Subjects
42 CFR Part 410
Health facilities, Health professions, Kidney diseases,
Laboratories, Medicare, Rural areas, X-rays.
42 CFR Part 414
Administrative practice and procedure, Health facilities, Health
professions, Medicare, Physicians, Reporting and recordkeeping
requirements.
42 CFR chapter IV would be amended as set forth below:
PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS
A. Part 410 is amended as set forth below:
1. The authority citation for part 410 continues to read as
follows:
Authority: Secs. 1102, 1832, 1833, 1834, 1835, 1861(r), (s),
(aa), (cc), and (ff), 1871, and 1881 of the Social Security Act (42
U.S.C. 1302, 1395k, 13951, 1395m, 1395n, 1395x(r), (s), (aa), (cc),
and (ff), 1395hh, and 1395rr).
Subpart E--Payment of SMI Benefits
2. In Sec. 410.152, the introductory text of paragraph (b) is
republished and paragraph (b)(4) is revised to read as follows:
Sec. 410.152 Amounts of payment.
* * * * *
(b) Basic rules for payment. Except as specified in paragraphs (c)
through (h) of this section, Medicare Part B pays the following
amounts:
* * * * *
(4) For services furnished by a person or an entity other than
those specified in paragraphs (b)(1) through (b)(3) of this section, 80
percent of the reasonable charges or other payment basis for the
services.
* * * * *
PART 414--PAYMENT FOR PART B MEDICAL AND OTHER HEALTH SERVICES
B. Part 414 is amended as set forth below:
Subpart A--General Provisions
1. The authority citation for part 414, subpart A continues to read
as follows:
Authority: 1102, 1832, 1833, 1834, 1842, 1848, 1861(b) and (s),
1862, 1866, 1871, and 1881 of the Social Security Act as amended (42
U.S.C. 1302, 1395k, 13951, 1395m, 1395u, 1395w-4, 1395x(b) and (s),
1395y, 1395cc, 1395hh, and 1395rr).
2. In Sec. 414.2, in the definition of ``Physicians' services'', a
new paragraph (6) is added to read as follows:
Sec. 414.2 Definitions.
* * * * *
Physicians' services * * *
(6) Antigens, as described in section 1861(s)(2)(G) of the Act.
* * * * *
3. In Sec. 414.4, paragraph (b) is revised to read as follows:
Sec. 414.4 Fee schedule areas.
* * * * *
(b) Statewide areas. HCFA recognizes statewide fee schedule areas
for Iowa, Minnesota, Nebraska, North Carolina, Ohio, and Oklahoma.
* * * * *
4. A new Sec. 414.39 is added to read as follows:
Sec. 414.39 Special rules for payment of care plan oversight.
(a) General. Except as specified in paragraph (b) of this section,
payment for care plan oversight is included in payment for visits and
other services under the physician fee schedule.
(b) Exception. Separate payment is made under the following
conditions for beneficiaries who receive HHA services that are covered
by Medicare:
(1) The care plan oversight services require recurrent physician
supervision of therapy involving 30 or more minutes of the physician's
time in a 30-day period.
(2) Only one physician per patient may receive payment for a 30-day
period. The physician must have furnished a service requiring a face-
to-face encounter with the patient at least once during the 6
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